Valuation of closing stock

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Querist : Anonymous

Querist : Anonymous (Querist)

31 October 2010 If a company is pure trading company , registered under central excise act & just passing on excise duty according to QTY. should we include excise duty in valuation of closing stock ?

CA Shailesh Kumar Bhagat

CA Shailesh Kumar Bhagat (Expert)
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01 November 2010 Yes , stock valuation should be inclusive of excise duty.

CA Navin Jain

CA Navin Jain (Expert)
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01 November 2010 Agree,As per AS-2, Excise Duty is included in closing stock

Querist : Anonymous

Querist : Anonymous (Querist)

01 November 2010 But, purchases and sales both are exclusive of excise duty. They are just pass on the duty which is paid on purchases and if balance then shown under assets side. so how it can be included in closing stock?

Kishanlal Paliwal

Kishanlal Paliwal (Expert)
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01 November 2010 One is required to provide for the liability of duties at the time of valuation since the duties & taxes payable on the stock in hand is the charge on stock.

The duty liability so provided on closing stock is knocked off against duty liability on opening stock and indirectly nullifies the difference in the rate of charging the duty at two different point of time.

Regards
K.L.Paliwal

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