20 August 2014
Hi, my company is having 6 factories and there are sale & purchase of semi-finished and packing material products between these factories.
CURRENT PRACTICE: We pass 3 entries because we have Head Office (HO) and 2 factories.
1. at HO we pass Buying Factory A/c - - Dr To Selling Factory A/c
2. at Selling Factory we pass HO A/c - - Dr To Buying Factory
3. at Buying Factory we pass Selling Factory A/c - - Dr To HO A/c
My question is whether this long procedure is right & is it required? Why we cannot pass only 2 entries showing buy & sell at Factory itself without involving HO because anyhow we need to prepare individual financials of factories. Is there any alternative for this?
And the same practice we follow for TDS, there we transfer TDS of all factories to HO as follows -
1. at HO we pass TDS A/c - - Dr To Bank A/c
After this entry we pass
2. at HO again we pass Factory A/c - - Dr To TDS A/c
3. at Factory we pass TDS A/c - - Dr To HO A/c
My question is same is it right or there is an alternative like directly paying from factory bank a/c and passing the entry without involving Head Office (HO)?
20 August 2014
Pass only 2 entries without involving HO. For TDS pay directly from factory under single TAN, furnish the details of TDS and remittance to HO quarterly, let HO file consolidated quarterly return.