Accounting in case of branch trfr

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This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

26 March 2013 Dear Experts,

We are engaged in the manufacturing of Excisable goods.

We have a factory in Karnataka & HO in Mumbai. We trfr some material to our HO with a excise invoice and those materials are sold from our HO after collecting the applicable VAT.

As per my opinion the entry to be passed are as follows:
In the books of Factory.
HO A/c .............Dr 11,236.00
To Branch(HO)Trfr A/c 10,000.00
To Excise Duty @ 12.36% 1,236.00

In the books of HO
Branch(Fact) Trfr A/c......Dr 11,236.00
To HO A/c 11,236.00

But when I pass the entry as above, Branch Trfr A/cs does not tally.

So, Please guide me how to pass the entry in the above case.

Thanks & Regards.

Dintakurthi Tirumala

Dintakurthi Tirumala (Expert)

26 March 2013 You are doing the mistake while passing entries in the books of HO, Because of you are splitting the excise duty in Factroy books but you are not splitting the excise duty in HO books so thus Excise duty amount will differ between both the books. You are passing following entry in Factory books

HO a/c dr 11,236
TO Branch(HO) Trfr a/c 10000
TO Excise duty@12.36% a/c 1236

It means excise duty payment liability transferring by splitting and separate identity

But in HO books you passing following entry

Brach(fact) Trfr a/c dr 11236
To Factory a/c 11236

It means you are not splitting excise duty and no separate identity of excies duty thus have the difference of exciess duty between the books of Factory and HO for branch transfers

So pass the following entry in the books of HO then branch transfers will tally

In the Books of HO

Branch(fact) trfr a/c dr 10000
Excise duty a/c dr 1236
To Factory a/c 11236

It means you splitted the exices duty in HO books and separate identity of excise duty and it tallys with the books of factory branch transfers.

If you want to compare your entries which is previously passed then combined figure of brach(HO) transfer in the books of factory + Excise duty on such transfer with the Brach(fact) trfr a/c in the books of HO then it will be tally.

I.e Brach(HO) trfr a/c in books of factory + Excise duty on such transfer = Brach(fact) trafe a/c in HO books

10000 + 1236 = 11236.

Check it and still you have any doubt please ask.

OM SAI SRI SAI JAI JAI SAI

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