Excise-job worker-accounting entry

1476 views 3 replies

CA Lalit Kandoi

Chartered accountant

1053 Points Joined January 2010

When we purchased the goods, then we book Cenvat credit on such purchase.When we send such such goods to the job worker, then no reversal is required as per Cenvat Credit Rule.But if job worker not return such goods after processing within 180 days then we have to reverse the Cenvat credit already booked and pay to the government as per Cenvat Credit Rule.

Now my question is what is the accounting entry in the case of such reversal of Cenvat Credit on 180th day?

And what is the accounting entry when we receive the processed goods from Job worker?

Entrie only regarding Cenvat Receivable (Input)

Replies (3)

Rahul Jalan

Chartered Accountant

121 Points Joined October 2010

At the time of reversal of CENVAT credit entries would be 1. Purchase A/C Dr To Cenvat Credit payable 2. Cenvat credit payable Dr. To cenvat credit receivable/PLA and at the time of receipt of goods entry would be Cenvat Credit receivable A/C Dr. To purchase( or P&L) A/C

CA Lalit Kandoi

Chartered accountant

1053 Points Joined January 2010

Sir

Yha fir hum Purchase A/c ko increase kr denge kya?

I think about Excise Duty A/c Dr and Cenvat Credit Payable credit

am i wrong?

Rahul Jalan

Chartered Accountant

121 Points Joined October 2010

Yes that can also be done... Excise duty is a direct cost ... Had not the cenvat credit been booked earlier , the purchases would have increased by the amount of excise duty paid on purchase... So u can show it in either way.. There is no accounting standard or guidance note governing this situation...