Excise and vat

Dear friends ,

I have been working in a Service Providing Company. I dont have clear idea in the subject like Excise and VAt .

I like to get the following matter clear .

suppose a Manufacturing company has purchased an Item valuing as follows .

value of goods	10000
add : packing	250
assessable value	10250
excise duty @ 12.36%	1266.9
total	11516.9
add vat @ 4%	461

value of invoice	11978

Now the company making value addition with the aforesaid item purchased .

Now , after value addition , Company is selling its product to two different customer ( either / or ) .

May be within West Bengal or to outside state.

if Invoice made to Customer within West Bengal :

value of goods	15000
add : packing	250
assessable value	15250
excise duty @ 12.36%	1884.9
total	17134.9
add vat @ 4%	685

value of invoice	17820

*** Here value of Goods includes component of Excise and Vat previously charged by the seller of the goods .

if Invoice made to Customer outside state :

value of goods	15000
add : packing	250
assessable value	15250
excise duty @ 12.36%	1884.9
total	17134.9
add CST @ 2 %	343
against C Form
value of invoice	17478

Kindly suggest

1) the Accounting Entry for the whole transaction

2) Tax Incidence ( Excise and Vat and CST ) .

If , any Insurance and forwarding Charge is there would it put any impact on Accounting as well as Taxability ?

Regards ,

Debashis Banerjee .

ANSWER 1 :

CASE 1 : ( WITHIN WEST BENGAL SALES )

Customer A/c Dr. 17,820

To Goods A/c 15,000

To packing material A/c 250

To Exice Duty A/c 1,885

To Vat Payable A/c 685

CASE 2 : ( OUTSIDE WEST BENGAL SALES )

Entry would remain same except for the VAT PAYABLE A/c . It would be replaced by CST PAYABLE A/c . Amounts would change .

ANSWER 2 :

CASE 1 : Output VAT = 685 , Input VAT = 461 and so balance payable = 685 - 461 = 224

CASE 2 : Output CST = 343 , Input VAT = 461 and so there is a VAT REFUND and CST Liability and hence net CST PAYABLE = Nil and balance VAT REFUND = 461-383 = 118

ANSWER 3 :

In case if there is insurance charges incurred then it will form a part of the INVOICE VALUE , however there would be no EXCISE DUTY OR VAT/CST calculated on it .

In case if there is forwarding charges incurred in Local sales ( Within the state ) then VAT will be calculated on it i.e

(Basic + Packing + Excise Duty + Forwarding) * VAT RATE

In case if there is forwarding charges incurred in Outside the state sales then there will be no CST calculated on it .

Ok ...