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Provision of excise duty on FG

This query is : Resolved 
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(Querist)
28 July 2010 Why do we provide excise duty on closing stk of fg? and what is the journal entry for the same?
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CA Sanat Pyne

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CA Sanat Pyne (Expert)
28 July 2010 there is no need to provide excise duty on finished goods.
Excise duty will be applicable on the goods when it mooves from the factory for sale.
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srinath

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srinath (Expert)
28 July 2010 as per guidance note on excise duty issued by ICAI excise duty should be provided once the goods are manufactured and should be included in the value of finished goods

the reason behind this is duty arises on manufacture but the payment is postoned til it is removed. the taxable event is manufacture and not removal

the entry would be
stock a/c dr
to excise duty payable
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Manan Vora

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Manan Vora (Querist)
28 July 2010 @ srinath thank you so much now the concept is much clearer in my mind!
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