Accounting entries

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

23 August 2011
As earlier stated in query that X company is manufactuere of pahramceuticals formulation. X company purchases all raw material in their factory situated at Tijara, Rajasthan and transferred all manufactured goods in form of finished Goods by paying excise duty from balance of cenvat credit and service tax input to their H.O. cum sales depot situated at Delhi. Registration of Excise is only in Rajasthan not in Delhi. But sales tax registration are separate in Rajasthan and Delhi and X company filling their return separately in Rajasthan and Delhi. In Rajsthan Sales tax return only stock transfer is reflected on which CST is not payable. In Delhi sales tax return CST & VAT paid on interstate sales and Vat Sales. In my opinion following entries should be made in books of Tijara Factory and Head office Books.

In Books of Tijara Factory

1. Example when X Company purchase raw material for Rs. 1122/-

Purchase A/c Dr 1000
Cenvat Receivable 100
CST A/c 22
To Party A/c Cr 1122/-
2. When manufactured goods in form of finished goods transfer to H.O cum Sales Depot

H.O. A/c Dr 1100/-
To Stock Tranfer 1000/-
To Excise duty payable 100/-

3. Excise payable set off

Excise duty payable A/c Dr 100
To Cenvat Receivable A/c CR 100

In Books of H.O cum sales Depot

1. When stock received from Factory

Stock transfer A/c 1100/-
To Tijara Unit (Factory) 1100/-

(This stock transfer is the stock of Delhi Depot from which sales are made)

2. When Sales made from Sales Depot

Party A/c Dr 1100
To Sales Cr 1100

Sales price of product are inclusive of excise hence bill raised to Debtors are inclusive of excise .

1. Kindly suggest from the above entries how excise duty can be booked as expenses in books of Tijara Factory and Delhi sales depot where delhi sales depot not registered with excise department.
2. Trial Ledger of Tijara Factory & Delhi sales depot are separately and combined balance sheet will be made of X Company.

Kindly suggest your accounting entries on above referred transaction.

Thanks n regard

CA. Saurabh Agrawal

CA. Saurabh Agrawal (Expert)
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25 August 2011 When X company purchase goods, entry will be:
Purchase a/c Dr.
Input cenvat credir a/c Dr.
Vat/Cst a/c Dr.
To Party a/c.

when x company transfer the finidhed goods to the depot it has to pay excise duty (if applicable on finished goods) then entry will be;

Depot A/c Dr.
To Ho a/c
To Excise duty payable a/c
To CSt a/c

Then you to set off inut excise & output exice at the month endby following entry:

Excise duty paybale a/c
To input cenvat credit a/c
To Cash/bank a/c (for shortfall if any)

When goods are sold at depot HO will pass entry:

Ho A/c dr.
To sales a/c

Bank a/c Dr.
To Depot A/c

you can't calim excise duty as expense when duty are paid from cenvat credit.

Tell me in case any further clarification.

Other views are welcomed.

Querist : Anonymous

Querist : Anonymous (Querist)

25 August 2011 thanks very much
As earlier stated in query that X company is manufactuere of pahramceuticals formulation. X company purchases all raw material in their factory situated at Tijara, Rajasthan and transferred all manufactured goods in form of finished Goods by paying excise duty from balance of cenvat credit and service tax input to their H.O. cum sales depot situated at Delhi. Registration of Excise is only in Rajasthan not in Delhi. But sales tax registration are separate in Rajasthan and Delhi and X company filling their return separately in Rajasthan and Delhi. In Rajsthan Sales tax return only stock transfer is reflected on which CST is not payable. In Delhi sales tax return CST & VAT paid on interstate sales and Vat Sales. In my opinion following entries should be made in books of Tijara Factory and Head office Books.

In Books of Tijara Factory

1. Example when X Company purchase raw material for Rs. 1122/-

Purchase A/c Dr 1000
Cenvat Receivable 100
CST A/c 22
To Party A/c Cr 1122/-
2. When manufactured goods in form of finished goods transfer to H.O cum Sales Depot

H.O. A/c Dr 1100/-
To Stock Tranfer 1000/-
To Excise duty payable 100/-

3. Excise payable set off

Excise duty payable A/c Dr 100
To Cenvat Receivable A/c CR 100

In Books of H.O cum sales Depot

1. When stock received from Factory

Stock transfer A/c 1100/-
To Tijara Unit (Factory) 1100/-

(This stock transfer is the stock of Delhi Depot from which sales are made)

2. When Sales made from Sales Depot

Party A/c Dr 1100
To Sales Cr 1100

Sales price of product are inclusive of excise hence bill raised to Debtors are inclusive of excise .

1. Kindly suggest from the above entries how excise duty can be booked as expenses in books of Tijara Factory and Delhi sales depot where delhi sales depot not registered with excise department.
2. Trial Ledger of Tijara Factory & Delhi sales depot are separately and combined balance sheet will be made of X Company.

Kindly suggest your accounting entries on above referred transaction.

Thanks n regard

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