jewllery manufacturing entries

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This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

30 March 2010 i am engaged in jewellery manufacturing on small scale. my primary buuisness is to make jewellery i take orders from retail jewellers for which they provide gold alongwith issue voucher in my name(e.g x gms of 22ct gold) after completing my work i return the furnished ornament to respective jeweller for which again they issue me receipt voucher mentioning the amt of gold returned alongwith my labour charges on thatmuch amt of gold deducting the tds @1%.
in all this transaction i don't issue any kind of vouchers to jeweller .
my query is that
1> is it necessary for me to issue any vouchers
2>do i need to collect any other chgs (e.g service tax) other then my labour chgs .
3> how to pass acc entries for this (including tds)
i ve not formed any company to do this work all income from this work are shown in my personal file . is it advisable to form company for this work.

shakuntala chhangani

shakuntala chhangani (Expert)

01 April 2010 Hi, it is not necessary for u to issue any voucher as u r just doing labour work unless and until ur turnover exceeds Rs. 40 lacs in which case tax audit will be applicable and u need to maintain proper books of accounts. turnover here meanslabour chgs.
upto p.y 2009-10 u need not chg. service tax if ur turnover does not exceed Rs. 8 lacs. From 2010-11, it is raised to 10 lacs.
no entry will be passed when u receive gold as it does not belong to u. however, d same can be recorded in memorandum books. when the labour chgs become due, pass d entry-
Party A/C Dr. XX
To Labour Chgs A/C XX
when the same is paid by the party, pass the entry -
Cash / Bank A/c Dr. XX
To party A/c XX
Take the help of a CA to decide about whether u need to form a co. or not. These points can not be decided on the basis of our reply as we don't know all the practical issues of a particular case.
In case u hv any further doubt, revert back to me.
Regards, CA Shakuntala Chhangani

Querist : Anonymous

Querist : Anonymous (Querist)

02 April 2010 thank u for replying

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