Accounting in dealer return

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AKSHAYA KUMAR PARIJA (Querist)
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15 July 2014 Dear Experts,

We are a dealer of Excisable product, during purchase & sales, we post respective ledger like Basic Excise 12% (Purchase) & Basic Excise 12% (Sales)separately.

We are making Quaterly return, at the end of each quater we have to transfer the balance of above ledger to a single neutral ledger account.

Please tell me what will be the name of that ledger account & under which group i will take it.

Regd,

Vishnu Saboo

Vishnu Saboo (Expert)
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15 July 2014 why u transfering it in neutral account?

AKSHAYA KUMAR PARIJA

AKSHAYA KUMAR PARIJA (Querist)
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17 July 2014 Dear Experts,

If not transferring to neutral account, excise on purchase under current asset group & excise on sales under current liabilities continues even after ending of the financial year.

How long we will carry the balance.

Vishnu Saboo

Vishnu Saboo (Expert)
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17 July 2014 so u utilizing cenvat availed against ur liability.

following are entries which normally being done.
at the time of purchases
Material Dr
Cenvat Dr
To party

at the time of sale
Party Dr
To Sales (including of ED, if ED showing seperately then ED recovered account may be credited)
ED paid Ac Dr (P&L)
To ED payable (B/S)

to set off liability if enough cenvat is available

Ed payable Dr
to Cenvat

if not enough credit
1) Pla Dr
To Bank A/c
2) ED payable Dr
To cenvat (to extent credit available)
To PLA

AKSHAYA KUMAR PARIJA

AKSHAYA KUMAR PARIJA (Querist)
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18 July 2014 Dear Arun Babu,

As you write the ledger PLA (Personal Ledge Account) would maintain, where excise is payable as well as paid, but in case of a Dealer no excise payment made, only pass on of Cenvat Credit availed during purchase, a manufacturer can maintain the ledger PLA.

My question was what will be the name of neutral ledger account ?

I think this will be "Excise Deposit" under current assets.

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