Write off RM, FG, WIP
This query is : Resolved
ramesh vadnala
(Querist)
07 May 2010
We are loss making company for lost 5 year & written off all the stocks (RM, FG, WIP) in the books. is there any effect in excise with this transaction if effect is there how do it, please clarify.
ramesh vadnala
(Querist)
14 May 2010
Please Relay
03 August 2025
Regarding the write-off of stocks (Raw Materials, Finished Goods, Work-in-Progress) in your excise records, here’s what you should know:
Excise Implications of Writing Off Stocks (RM, FG, WIP)
Stock Write-Off and Excise Duty Liability
Excise duty is generally payable on manufactured goods (Finished Goods).
If you write off Finished Goods (FG) due to loss, damage, obsolescence, etc., excise duty implications depend on whether duty was already paid or not.
Raw Materials (RM) and Work-in-Progress (WIP)
Excise duty is not applicable on Raw Materials and WIP as these are inputs or in-process goods.
So, writing off RM or WIP does not attract excise duty.
Finished Goods (FG)
If duty was already paid on Finished Goods and you write off the stock (due to loss/damage), you can adjust this stock in your records.
If you had paid duty earlier but now the goods are lost/written off, you can claim refund or drawback subject to proper documentation and rules.
If the goods were never cleared (sold), no additional duty is payable.
Procedural Requirements
Maintain proper records of the write-off: Stock registers, board resolutions, inventory valuation reports.
File appropriate excise returns reflecting the reduced stock.
In some cases, you may be required to inform the Excise Department about the write-off.
Follow guidelines as per Central Excise Act and rules.
Summary:
Stock Type Excise Duty Impact on Write-Off
Raw Material (RM) No excise duty involved; no impact
Work-in-Progress No excise duty involved; no impact
Finished Goods (FG) Excise duty paid earlier can be claimed back/refunded subject to rules; no fresh duty on write-off
Excise Implications of Writing Off Stocks (RM, FG, WIP)
Stock Write-Off and Excise Duty Liability
Excise duty is generally payable on manufactured goods (Finished Goods).
If you write off Finished Goods (FG) due to loss, damage, obsolescence, etc., excise duty implications depend on whether duty was already paid or not.
Raw Materials (RM) and Work-in-Progress (WIP)
Excise duty is not applicable on Raw Materials and WIP as these are inputs or in-process goods.
So, writing off RM or WIP does not attract excise duty.
Finished Goods (FG)
If duty was already paid on Finished Goods and you write off the stock (due to loss/damage), you can adjust this stock in your records.
If you had paid duty earlier but now the goods are lost/written off, you can claim refund or drawback subject to proper documentation and rules.
If the goods were never cleared (sold), no additional duty is payable.
Procedural Requirements
Maintain proper records of the write-off: Stock registers, board resolutions, inventory valuation reports.
File appropriate excise returns reflecting the reduced stock.
In some cases, you may be required to inform the Excise Department about the write-off.
Follow guidelines as per Central Excise Act and rules.
Summary:
Stock Type Excise Duty Impact on Write-Off
Raw Material (RM) No excise duty involved; no impact
Work-in-Progress No excise duty involved; no impact
Finished Goods (FG) Excise duty paid earlier can be claimed back/refunded subject to rules; no fresh duty on write-off
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- Late Filing Fee Waiver for Q1 Form 144 (Earlier 27Q) – Transition to Income-tax Act, 2025
- GST input credit on commercial property
- Working on Gold wastage during Melting of old gold jewellery
- GST REFUND ISSUE ON PURCHASE OF PLANT AND MACHINERY
- TDS on Dashcam rent and allied services
- GSTR-9C filing
- Import Order Cancelled.
- Form 144 TDS Return Validation Error – Mandatory Fields
- How do you manage client document collection and follow-ups in your CA/CS practice?
- Royalty payments to the Mining Department for procurement of murum - GST input
- Subject: Legal Remedy for Removal of Income Tax Demand for AY 2024–25 – Charitable Trust
- Expert Help Required for TDS Refund 100000 Through TRACES – AY 2022–23
- IMPORT PURCHASE ENTRY PASSED IN BOOKS OF ACCOUNT
- FAST DS 26 Undisclosed Foreign Asset Disclosure Scheme 2026
- Regime change
- Tally: Imported bank entries do not show up in manual reconciliation
- Confused About My Career After 12th — Cyber Security, AI or Finance? Need Guidance
- FAST-DS 2026 Under Tax Law - No recourse or support for person declaring via this scheme?
- Guidance Needed: Linking Multiple Form 26QB Payments and Responding to ITD Defaulter Notice
- How to pay remaining amount of TDS after due date?
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
Subscribe to Pro
Join an elite circle of professionals
CAclubindia
