We are a dealer of Excisable product, during purchase & sales, we post respective ledger like Basic Excise 12% (Purchase) & Basic Excise 12% (Sales)separately.
We are making Quaterly return, at the end of each quater we have to transfer the balance of above ledger to a single neutral ledger account.
Please tell me what will be the name of that ledger account & under which group i will take it.
If not transferring to neutral account, excise on purchase under current asset group & excise on sales under current liabilities continues even after ending of the financial year.
17 July 2014
so u utilizing cenvat availed against ur liability.
following are entries which normally being done. at the time of purchases Material Dr Cenvat Dr To party
at the time of sale Party Dr To Sales (including of ED, if ED showing seperately then ED recovered account may be credited) ED paid Ac Dr (P&L) To ED payable (B/S)
to set off liability if enough cenvat is available
Ed payable Dr to Cenvat
if not enough credit 1) Pla Dr To Bank A/c 2) ED payable Dr To cenvat (to extent credit available) To PLA
As you write the ledger PLA (Personal Ledge Account) would maintain, where excise is payable as well as paid, but in case of a Dealer no excise payment made, only pass on of Cenvat Credit availed during purchase, a manufacturer can maintain the ledger PLA.
My question was what will be the name of neutral ledger account ?
I think this will be "Excise Deposit" under current assets.
CAclubindia
