Regarding e1 sale accounting treatment

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Chaitanya Saxena (Querist)

16 October 2014 Suppose X (UP) purchases goods from Y (Maharashtra) through Z (UP) via E-1 sale. Z charges in Bill Rs.100 from Y & Y, in turn, supplies the goods to X at Rs.150 (adding his margin).
My question is:
Rs. 100 is purchase of UP i.e same state.
Remaining amount of Rs. 50 is purchase from Y (Maharashtra) i.e. different state.
So, what will be the accounting entry for purchase of Rs. 150 ? Plz help.

kalpesh bafana

kalpesh bafana (Expert)

18 October 2014 If X purchases goods from Y(MH) in this case x is only Account for the Bill Raised by Z i.e. Rs.150/-.
There is no need to accounted a Bill of Y(MH) to X as this bill is already accounted by Z & on the basis of this purchases Z is raised bill to X including Margin of Rs.50/- hence total BIll charged by Z Rs.100+50=150/-
In this sale X gives C-form of Rs.150/- to Z & Z gives C-form of Rs.100/- to Y and then Y gives E-1 form to Z.

Chaitanya Saxena

Chaitanya Saxena (Querist)

14 November 2014 Thank you for the answer sir.
My case is as follows - I am in UP, and have ordered goods from Kolkata dealer who have delivered them via Ghaziabad(UP)manufacturer party. The Ghaziabad party has charged UPVAT/ CENVAT in their tax-invoice issued to Kolkata party as a customer and has defined me as a consignee. The invoice issued by the Kolkata party to me as a customer, inclusive of their margin, has not charged any taxes. It is rather clear that CENVAT will be available to me, but I am not sure of the treatment for ITC as my direct purchase is from the Kolkata dealer not from the Ghaziabad manufacturer?
Also, tell who is required to issue which form (Form C/ E1 Form)?
Eagerly waiting for reply...

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