we are manufacturers cum exporter. we manufacture goods and export its. when we export goods we submit triplicate excise invoice in excise. and booked sales form excise invoice. But our auditors ask me why you book sales form excise invoice. He told that we have to booked sales as per shiping bill Amount. e.g we sales goods make excise invoice of Rs. 115/- and we book sale with Rs. 112.36/- now auditor telling that as per shipping bill Amt. spouse that USD 2@60 =120 So Please advise me which is correct process.
24 July 2024
The process of booking export sales amount involves aligning your accounting entries with the actual transaction values documented in your shipping documents (like the shipping bill) and the excise invoice. Here’s how you can approach this:
### Understanding the Scenario
1. **Excise Invoice Amount (Rs. 115):** - This is the invoice value raised for the goods manufactured and exported, as per your internal accounting and excise documentation.
2. **Shipping Bill Amount (USD 2 @ 60 = Rs. 120):** - This represents the value declared in the shipping bill, which is in foreign currency (USD) converted to Indian Rupees (INR) at the prevailing exchange rate (Rs. 60 per USD).
### Key Points to Consider
- **Excise Invoice:** This document is primarily used for excise duty purposes and internal accounting. It reflects the value of goods as per your manufacturing cost and internal pricing.
- **Shipping Bill:** This document is crucial for customs clearance and represents the actual value of the goods declared for export purposes, including any foreign exchange components (if applicable).
### Correct Process for Booking Sales Amount
Based on standard accounting practices and to reconcile your export sales correctly:
1. **Invoice Amount for Accounting:** - Use the amount mentioned in your excise invoice (Rs. 115 in your example) to book the sales in your accounting records initially. This reflects the invoiced value from your company’s perspective.
2. **Verification with Shipping Bill:** - Ensure that the value declared in the shipping bill (converted to INR) matches or is reasonably close to the excise invoice amount. Typically, there might be minor differences due to exchange rate fluctuations or other factors, but they should be reconcilable.
3. **Auditor’s Perspective:** - Your auditor is correct in emphasizing the importance of aligning your sales booking with the actual transaction value declared in the shipping bill. This ensures accuracy and compliance with both internal controls and statutory requirements.
### Conclusion
To address your auditor’s query and ensure compliance:
- **Reconcile:** Ensure that the excise invoice amount (Rs. 115) aligns closely with the value declared in the shipping bill (Rs. 120 in INR equivalent). - **Documentation:** Maintain clear records of both the excise invoice and the shipping bill for each export transaction. - **Accounting Entry:** Book the sales amount initially based on the excise invoice, and verify and reconcile with the shipping bill amounts during your accounting period closure.
By following these steps, you ensure that your export sales are accurately recorded, compliant with regulatory requirements, and aligned with your auditor’s expectations. This approach helps in maintaining transparency and accuracy in your financial reporting related to export transactions.
CAclubindia
