09 November 2010
Dear Experts plz go through the below mentioned journal entries and suggest me that what value of the sales will appear in the trading account our company a manufacturer units sold goods on credit to Glaxo Smith Kline Consumer Ltd and charged excise and vat there on as mentioned follow Glaxo Smith Kline Consumer Ltd ---a/C Dr Rs 80563 To Sales--------------Rs 74400 To Excise Duty @4%----Rs 2976 To education Cess@2%on excise-Rs59.52 To H.Edu cess@1%on excise-Rs ---29.26 To AP VAT@4%--------Rs 3098.61
what value of sales will appear in the trading account i think it will be net sales value only not the total value of the bill. Thanks & Regrds Shambhu Jha
Your opinion for not including tax in valuation of sales is correct, to the extent your ques. is limited to accounts only.
But from income tax Act point of view as per section 145A one need to value Sales, purchases , stock including taxes i.e taxes is to be routed through Trading and p&l A/c.
One should note that there is no effect to profit or loss no matter which poliocy is followed
But one can Follow the policy as per your opinion and for income tax purpose one can show through reconciliation statement that there is no difference in profits/loss.
CAclubindia
