Professional Documents
Culture Documents
Mining and Prospecting
Mining and Prospecting
Chapter 25
25
Mining
Mining and
and prospecting
prospecting
allowances
allowances
Mining expenditure
Qualifying mining expenditure (QME) in related of
working of mine, would be given mining allowances
as a revenue expense against gross income.
Preferential treatment for (QME) is to assist operator
to be more competitive and efficient in mining
business.
Mining allowance > income, current year business
losses will be available against any other income.
Qualifying Mining Expenditure (QME)
Acquisition of
NOT
land which Expenditure incurred
contain of mine. ‘in connection’ or ‘in preparation
for’ working of mine
REMEMBER THAT!!
Definitions
Estimated life : No. of years for the life of mine fixed from
time to time by DG.
Residual expenditure : Total QME incurred in respect of
mine before the date by operator, reduce the amount of mining
allowance and recovered expenditure.
QME XX
Less: mining allowance (X)
: recovered expenditure (X)
RE X
Residual life : No. of years of estimated life of mine
remaining at that date.
Mine : Source of minerals over which mining are,
have been or may lawfully be carried on.
Minerals : mineral and mineral substances.
Mining operations : operations that include every
method or process which minerals are won or
obtained.
MINING
Mining allowance for accounting period,
more or less than 12 months
Mining allowance are determine as follows:
RE at the end of period shall be divided by residual life at
beginning of that period.
Resulting figure shall be increase or decrease in the same
proportion as the length of that accounting period bears to a
period of 12months and shall then constitute the amount of
the deduction.
For existing mining business, any new acquisition of
mine that YA<12months, no apportionment by time
is required. Full year MA is given.