Excise duty reconciliation basic
- 2. Excise Duty Excise Duty is on Manufactured Goods. Central Excise Act, Central Excise tariff Act, Central Excise Valuation Rules.
- 3. When we are liable to pay Excise Duty? When we remit the same? To whom do we Pay? Does only Company required to pay Excise Duty? How do we come to know the rate for particular item to be charged? What will be the consequences if we not Excise duty pay?
- 4. As per the CARO, an auditor is required to report whether there is any disputed or undisputed dues with department. In the Tax audit report we need to report CENVAT credit receivable, CENVAT credit utilized and assessable value for the year is required to be disclosed.
- 6. Consider we are in the manufacturing industry, lets pass the entries for certain transaction. 1. Purchase raw material for 10,000 Purchase a/c Dr 10,000 Cenvat credit receivable a/c Dr 1,250 To S. Creditors a/c 11,250 2. Sale of FG for 15,000 S. Debtor a/c Dr 16,875 To sales a/c 15,000 To Excise duty@12.5% BED a/c 1,875
- 7. At end of the month we will pass the following entry 3. Excise duty Payable a/c Dr 1,250 To Cenvat Credit Receivable a/c 1,250 4. Excise duty@12.5 BED Dr1,875 To Excise duty Payable a/c 1,875 5. Personal Ledger A/c (PLA) Dr 625 To Bank a/c 625 6. Excise duty Payable a/c Dr 625 To Personal Ledger a/c(PLA) 625
- 8. Personal Ledger Account As we suppose to pay government when we remove goods from the factory, for convenience we credit every payable to PLA account and once in a month we pay to the department. This is the account that we maintain with the department.
- 9. Disputed dues Department will send the notice to Assesse and if assesse is not agreed for the same then there will be a dispute. We need to disclose the same in the CARO and tax audit report.
- 10. Tax audit report: We need to state how much CENVAT credit availed, utilized and assessable value for the year. We also need to state if there is any Excise audit conducted by the department and also any qualification given by them. Inventory Valuation: As per AS 2 we need to include excise duty to the closing stock, why? As it is a cost to the company we need to include it in the closing stock.