07 August 2010
I want to know if we make provision for Non moviing stock due to non use / old or obselecnce, we have to make necessary entries i mean reerse the cenvat credit for the provision for stock if yes how it is done. secondly will this have to intimate VAT dept as we file quarerly stock statment with the department. Another important thing is while computing the Income tax will this provision are to be offered for tax.
07 August 2010
Cenvat credit and Input VAt are not part of inventory cost as per AS-2, so no question of reversal of the same arise if the NRV is less than cost of such items. Also, regarding I.tax submission, as such no separate provision is made for obsolescence in value of stock since the same is taken care of by the natural process of inventory valuation, i.e. cost or NRV which ever is lower is considered for valuation of stocks, and hence there is no need of separate disclosure.
Regarding intimation to VAT, obsolete qunatity shall continue to be reflected in QSS at NRV or 0 value. No separate intimation is required unless specifically required in the respective state VAT legislation.
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