Excise duty - Goods scrapped - Not returned by the Customer.

1492 views 3 replies

Scenario:

A manufacturer sells goods to the customer and accounts for the Excise duty on the same to Excise duty payable account.  But the goods gets damaged in transit.  The manufacturer asks the customer not to send back the goods as the transportation costs are higher than the value of the damaged material but agrees to give full credit to the customer account. 

Questions: 

  1. What should happen to the excise duty? 
  2. Should the Excise duty be accounted to Excise duty expense account? 
  3. Does this apply on VAT also?

 

 

 

Replies (3)

01. Excise duty should be treated as expenses.

02. Yes it should be expensed off.

03. Yes.

WHAT IS EXCISE DUTY & HOW THIS TREATED.

1) Excise duty is a duty on Production and not a duty on Sales.

2)In the given case , Excise duty paid can be adjusted against available input credit on inputs /capital goods/input services if such available to manufacturer. Hence,such need not be treated as Expense item.

3) Vat is payable in all cases on basic+ excise duty+ed cess.

 


CCI Pro

Leave a Reply

Your are not logged in . Please login to post replies

Click here to Login / Register