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Excise duty

Anand (NA) (97 Points)

29 June 2015

After availing the CENVAT.

Is that possible in any senario to show the Excise Duty Paid as Indirect Expense in the P&L.

or elese this (excise duty paid should be grouped under direct expense ?)

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11 Replies

CMA Poornima Madhava (CMA) (13097 Points)
Replied 29 June 2015

Cenvat credit is a current asset a/c and it is to be adjusted against excise duty payable (on sales). It does not appear in P&L a/c

Anand (NA) (97 Points)
Replied 29 June 2015

Excise duty paid on purchase bills can be taken as indirect expense ?

CMA Poornima Madhava (CMA) (13097 Points)
Replied 29 June 2015

If cenvat credit is not availed, then it is part of purchase cost only (not indirect exp)

Anand (NA) (97 Points)
Replied 29 June 2015

for example Rs.100 Excise duty. from purchase bills

Rs.10 ST from telephone bills

Balance Rs.90. shall we take this as indirect expense

CMA Poornima Madhava (CMA) (13097 Points)
Replied 29 June 2015

U mean output service tax payable is Rs.10 & excise duty on purchase bill is Rs.100 and hence the balance credit balance in cenvat a/c. If so, since u have already utlized part of the cenvat credit, balance cannot be transferred to P&L as indirect exps. U can show the balance as cenvat credit under current assets. Hope this is clear.

Anand (NA) (97 Points)
Replied 29 June 2015

what to do with excise duty paid on stock transfer invoice

CMA Poornima Madhava (CMA) (13097 Points)
Replied 29 June 2015

u mean u have transferred goods to yr branch on stock transfer basis and charged duty on that? If so, it is your liability and need to pay to govt after adjusting any cenvat credit in the a/c. when such goods are sold from the branch, no need to charge ED again

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Igor (Student CA Final ) (28 Points)
Replied 29 June 2015

As rightly said by Mrs Poornima, you can show the excess balance of cenvat credit (excise on purchase bills Rs.90 as mentioned in your example after adjusting ST assuming it is output ST) under current assets and utilize the same in future.

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Madhusudhanan. S (Articles) (26 Points)
Replied 30 June 2015

@ Anand: If you are a manufacturer of goods. You will have to provide for ED payable on closing stock. The difference between Ed on closing & opening stock will be on shown in P&L as Expenses. Since ED payable forms part of the cost the ED portion will be added to the cost of the inventory. For further clarification refer ICAI Guidance note on Accounting Treatment for Excise Duty

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