Hi Frns,
Kindly help in resolving below issue:
Suppose i have manufactured 100 units chairs in which there were 10 chairs which got scrapped.
now, when i sold these chairs. i got 90,000 for finished chairs(1000 each) and 2500 for these 10 scrap chairs(250 each).
Now my question is if i have input credit of say Rs. 1000, can i use it against the sale of this scrap.
kindly let me know all the accounting entries related to excise in his particular case.
regards,
monika
Yes, the credit of excise duty paid(i.e. Input Credit) can be taken and utilized for payment of excise duty liability.The provisions relating to credit taking and utilising are given in Rule3 of Cenvat Credit Rules,2004...pls refer to them.
Excise duty will be paid on scrap of Rs. 2500/-.
Gupta Sachdeva & Co. Chartered Accountants
New Delhi
CA Final
View Details
CAclubindia
