Wrong totaling of closing bl in excise return
This query is : Resolved
15 March 2013
Dear CCI MEMBERS,
I have a query regarding WRONG TOTALING IN closing balance of FG as per ER1 .
Opening Balance 448
Quantity
Manufactured
Quantity 598
Cleared 599
Closing Balance 347
448+598-599=447
DIFFERENCE OF 100 UNITS
I WANT TO KNOW THE IMPACT OF WRONG TOTALING,FOR THE PAST FEW MONTHS IN ER1 THE SAME IS MISTAKE IS CARRIED FORWARDED IN THE ER1 RETUNS
I have a query regarding WRONG TOTALING IN closing balance of FG as per ER1 .
Opening Balance 448
Quantity
Manufactured
Quantity 598
Cleared 599
Closing Balance 347
448+598-599=447
DIFFERENCE OF 100 UNITS
I WANT TO KNOW THE IMPACT OF WRONG TOTALING,FOR THE PAST FEW MONTHS IN ER1 THE SAME IS MISTAKE IS CARRIED FORWARDED IN THE ER1 RETUNS
15 March 2013
You can rectify your mistake in return with letter to range superintendent.
Message likes :
1 times
19 March 2013
one more thing Mr Arun other than any legal impact is there any financial effect like over valuation or under valuation of stock in that above question.
03 August 2025
The wrong totaling of closing balance in your ER1 excise return means your reported stock quantity is off by 100 units every month for the past few months. Here's how it impacts you:
1. Legal Impact:
Excise authorities may treat this as a discrepancy in your records.
Since it is a consistent error over multiple returns, it could invite scrutiny or penalties if not rectified.
However, if you proactively inform the excise range officer with a detailed letter explaining the mistake and submit corrected returns, it reduces chances of penalties.
2. Financial Impact:
Closing balance is part of your inventory valuation.
A 100-unit difference monthly means your stock valuation is understated or overstated depending on whether closing stock is shown less or more.
This will affect your cost of goods sold and consequently your profit figures in financial statements.
It can also impact the excise duty liability as excise duty is paid on cleared goods; incorrect stock might suggest mismatch in duty payments.
What to do now?
Draft a letter to the Excise Superintendent explaining the error.
File revised ER1 returns for the affected months with correct stock figures.
Adjust your financial accounts to reflect the correct stock quantities and values.
Maintain proper reconciliation going forward to avoid recurrence.
1. Legal Impact:
Excise authorities may treat this as a discrepancy in your records.
Since it is a consistent error over multiple returns, it could invite scrutiny or penalties if not rectified.
However, if you proactively inform the excise range officer with a detailed letter explaining the mistake and submit corrected returns, it reduces chances of penalties.
2. Financial Impact:
Closing balance is part of your inventory valuation.
A 100-unit difference monthly means your stock valuation is understated or overstated depending on whether closing stock is shown less or more.
This will affect your cost of goods sold and consequently your profit figures in financial statements.
It can also impact the excise duty liability as excise duty is paid on cleared goods; incorrect stock might suggest mismatch in duty payments.
What to do now?
Draft a letter to the Excise Superintendent explaining the error.
File revised ER1 returns for the affected months with correct stock figures.
Adjust your financial accounts to reflect the correct stock quantities and values.
Maintain proper reconciliation going forward to avoid recurrence.
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