Can CENVAT paid or Input Tax paid on goods purchased be excluded for the purpose of valuation of inventory adhering to the principle "taxes that are subsequently reimbursed" ?
Jishnu Surendran (Finance Manager) (312 Points)
15 March 2013Can CENVAT paid or Input Tax paid on goods purchased be excluded for the purpose of valuation of inventory adhering to the principle "taxes that are subsequently reimbursed" ?
CA Poojit Khajuria
(Practice)
(99 Points)
Replied 16 March 2013
Cenvat or Input tax paid on goods purchased has to be included for Valuation of Inventory...............
CMA Shilpa Shinde
(COST ACCOUNTANT)
(217 Points)
Replied 23 March 2013
Dear Jinshu Surendran,
When Excise Duty paid Input is used to manufacture goods on which Excise Duty is payable, Excise duty credit (CENVAT) can be availed. Hence, in such case excise duty on Purchases should not included in Valuation of Inventory to avoid cascading tax effect.
Jishnu Surendran
(Finance Manager)
(312 Points)
Replied 25 March 2013
Thanks to all,
but I'll go with Shilpa's answer.....Excise Duty and Input Tax paid on goods can be considered as taxes that are subsequently reimbursed under AS 2
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