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CENTVAT

amar preet singh (professional) (229 Points)

18 March 2009

I HAVE TAKEN CENVAT CREDIT BUT I HAVE NOT MADE ANY CENTVAT CREDIT ENTRY SEPERATELY I.E. SUPPOSE I HAVE PURCHASE MACHINERY FOR RS. 200000/- I HAVE MADE ENTRY FOR THIS IS LIKE THIS

DR. MACHINERY 200000/-

CR. CASH 200000/-

NOW I ADJUST OUTPUT SERVICE WITH THE CENTVAT .

WHAT KINDOF ENTRY SHOULD I MAKE FOR SERVICE TAX SO THERE NO ANY LIABILITY OF SERVICE TAX TO BE SHOWN IN BALANCE SHEET

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3 Replies

CA CS CIMA Prakash Somani (Landmark Group) (23502 Points)
Replied 18 March 2009

You should rectify the entry already made and park correct entry and then for output service. Because until you shown cenvat credit in your account how can you get cenvat???

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(Guest)

First pass the following rectification entry....

CENVAT receivable Capital Goods DR.

To Machinery

Then Pass an adjustment entry....

Service Tax Payable Dr..

TO CENVAT receivable Capital Goods

Amt will be credit actually taken. Balance will be shown as CENVAT Credit receivable.

>>Vipul Garg

S. Banerjee (Practising Cost Accountant. Core area- Central Excise. Service Tax Costing system installation including maintenance of Cost Records and Cost Audit and Management Audit mainly Revenue leakages Audit) (622 Points)
Replied 21 March 2009

Mr. Singh,

The journal will be like:

CENVAT A/C Dr 50% of the Total Centtral Excise Duties*.

CENVAT Receivable A/C Dr -do-

To Machinery A/c Total Cnetral Excise Duties*.

(It is assumed that you have purchased the Machinery during the F.Y. 2008-09).

* including all Cesses.

Hope this entry should be passed, if it be wrong, welcome the experts opinion/suggestions.

Thanks,

S. Banerjee