Excise on capital goods utilize 100%, how to return 50% back

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

14 November 2016 Resp. Sir,

1. We bought ASSET and by oversight have utilized EXCISE full (100%) for OCT 1617 and file ER1.
2. Now we wish to return it 50% passing JV.
3. Please let me know how to pass JV Entry in the books of accounts in NOV 1617

For example:

Dr Cr
???? A/c 100
Excise (Cenvat) A/c 100

Please advise

Regards

KAVIRAJA ADDANGADI

KAVIRAJA ADDANGADI (Expert)
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14 November 2016 you have got Option to Declare 50% this year , balance 50% in Next Year or 100% in Next year.50% credit is available in current year and balance in subsequent financial year or years except in case of SSI.

Querist : Anonymous

Querist : Anonymous (Querist)

14 November 2016 Resp. Sir,

I have by mistake UTILISE 100% in last month i.e.OCT 1617
Hence we now in this month wold like to return back 50% by passing journal entry.

Now , I request you to please tell JOURNAL ENTRY to be pass in Accounts

Which account to be Debited &
Excise (Cenvat) is to be Credited obviously

Please advice,

Regards,

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Asha Kanta Sharma

Asha Kanta Sharma

(Expert)
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21 July 2024 To correct the mistake of utilizing 100% of the Excise (Cenvat) credit in the previous month and to return 50% of it in the current month through a journal entry, you can follow these steps:

### Journal Entry:

Assuming the Excise (Cenvat) credit was utilized in October 2017 and you want to reverse 50% of it in November 2017, the journal entry would be:

1. **Debit Excise (Cenvat) A/c**: 50 (this amount represents the 50% of the credit you wish to reverse)

2. **Credit ?? A/c**: 50 (this represents the account to which you are crediting the reversed amount; typically, it could be an expense account or a balance sheet account depending on your specific accounting treatment)

### Example Entry:

Assuming you are crediting an expense account for the reversed amount:

**Journal Entry:**

| Date | Particulars | Debit (Rs.) | Credit (Rs.) |
|----------|----------------------------|-------------|--------------|
| Nov 2017 | Expense Account (?? A/c) | 50 | |
| | Excise (Cenvat) A/c | | 50 |

### Explanation:

- **Excise (Cenvat) A/c (Credit)**: This entry represents the reversal of 50% of the Excise (Cenvat) credit that was utilized incorrectly in October 2017. By crediting this account, you reduce the amount of credit utilized.

- **Expense Account (Debit)**: You debit this account to reflect the adjustment of expenses or any appropriate account where you want to allocate this reversal.

### Additional Considerations:

- Ensure that your accounting entries comply with the relevant accounting standards and regulations applicable to your business.

- Document the reason for this journal entry for audit and compliance purposes.

- It's advisable to consult with a tax advisor or accountant to ensure correct treatment based on your specific circumstances and accounting practices.

By correctly reversing the excess utilization of Excise (Cenvat) credit, you can rectify the mistake and ensure accurate reporting in your financial records.