Live Course on Drafting of Appeal and Reply of Penalty Notice by CA Sachin Sinha. Register Now!!

Whether excise duty included in sales?

08 March 2010

dear friends,

Whether excise duty collected from the customer is considered as sales and included in the sales accounts in books of account?

Also whether the excise duty collected when paid to the government is considered as expense in the books of accounts?

Please give the reference of Accounting standard if there is any..

Thanks in advance..

Regards

Chintan

Reply
Follow
Share

5 Replies

CMA.Baskar.V (Cost Accountant) (400 Points)
Replied 08 March 2010

hi Chintan Shah,

Excise duty charged on Sales not considered at Sales according to accouting principle. Because, excise duty amount is liability amount, we need to pay to government on due date and it is balance item.

Moreover, it should not be considered as expenses at time payment.

with regards,

CMA.Baskar.V

1 Like

Vinay Chopra (CA ) (197 Points)
Replied 20 March 2010

hi, you can go through Guidance note on Excise duty for better clarification. It is stated therin that excise duty collected on sales should be disclosed by way of deduction from sales in the financial statements.

Rajat Singhal CA,CS,CFA (Senior Manager (F&A)) (254 Points)
Replied 20 March 2010

Hello chintan,

In our company while preparing the financial statements, we use to disclose the gross sales including the amount of excise duty & fromthis amount excise duty is deducted to get the net sales.

So, neither it is include in the sales at the time of collection nor it is considered as expense at the time of payment.

Please refer to the Guidance note on excise duty.