A factory is registered in both Excise and Vat
Hence it gets input of Vat which is adjusted with Output Vat
Also it gets input of Excise and Service tax (called Cenvat) which is adjusted with Output Excise

It is normally of 3 types

TYPES OF CENVAT
Cenvat on Input Services
Cenvat on Inputs(Excise on Goods Used for Production like Raw Material,Consumables and Packing Materials)
Cenvat on Capital Goods

Note:-
No Input is available of
1.CST on Purchases and Expenses
2.Swachh Bharat Cess on Expense Bills
3.Krishi Kalyan Cess on Expense Bills
4.Excise and Vat on Goods not used in Production like Office Expenses

Since no Input is available of these 3,we do not make their Input accounts

EXCISE ENTRIES ASSIGNMENT

Details of Purchases

Purchase Raw Material

                           A LTD  
Particulars Amount
Purchase 96000
Excise 12.5% 12000
Total 108000
Vat 5% 5400
Total 113400

-a-

Entry

Purchase Local 5% A/c Dr 96000
Input Excise(Cenvat on Inputs) Dr 12000
Input Vat 5% Dr 5400
                   To A 113400
(input of Vat and Excise is available in case of goods used for production)

-ea-

Purchase Raw Material

                          B LTD  
Particulars Amount
Purchase 32000
Excise 12.5% 4000
Total 36000
CST 2% 720
Total 36720

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Entry

Purchase 2% Central A/c Dr 32720
Input Excise(Cenvat on Inputs) Dr 4000
                    To B 36720
(input of Excise is available in case of goods used for production,however no input of CST)

-ea-

Purchase Packing Material

                          C LTD  
Particulars Amount
Purchase 16000
Vat 5% 800
Total 16800

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Entry

Purchase Local 5% A/c Dr 16000
Input Vat 5% Dr 800
                   To C 16800
(input of Vat and Excise is available in case of goods used for production)

-ea-

Details of Office Expenses

                      D LTD  
Particulars Amount
Stationary 6000
Excise 12.5% 750
Total 6750
Vat 5% 337.5
Total 7087.5

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Entry

Stationary Exp Dr 7087.5
                        To E 7087.5
(input of Vat and Excise is NOT available in case of goods NOT used for production)

-ea-

                         E LTD  
Particulars Amount
Professional Charges 20000
Service Tax @ 14% 2800
Swachh Bharat Cess @ 0.5% 100
Krishi Kalyan Cess @ 0.5% 100
Total 23000

-a-

Entry

Professional Expense Dr 20200 
Input Service Tax (Cenvat on Input Services) Dr 2800
                           To Max and Co 23000 
(No Input of both KKC and Swachh Bharat Cess for Excise Manufacturers)

-ea-

Details of Machines

                          F LTD  
Particulars Amount
Machines(Factory) 140000
Excise 12.5% 17500
Total 157500
Vat 5% 7875
Total 165375

-a-

Entry

Machine Dr 147875
Input Excise on Machines 1/2(Cenvat on Capital Goods Current Year) 8750
Input Excise on Machines 1/2 Deffered (Cenvat on Capital Goods Deferred) 8750
                                 To H 165375
(Excise on Machines is available in 2 Years ,1/2 every year)
(Assuming Input of Vat on Machines is not available in State like Harayana)

OR

Machine Dr 140000
Input Excise on Machines 1/2(Cenvat on Capital Goods Current Year) 8750
Input Excise on Machines 1/2 Deffered (Cenvat on Capital Goods Deferred) 8750
Input Vat on Machines 1/3 ( Capital Goods Current Year)2625
Input Vat on Machines 2/3 ( Capital Goods Defered) 5250
                                     To H 165375
(Assuming Input of Vat on Machines is available in State like Delhi where it is available in 3 years 1/3 every year)

-ea-

                      I LTD  
Particulars Amount
Machines(Office) 35000
Excise 12.5% 4375
Total 39375
Vat 5% 1968.75
Total 41343.75

-a-

Entry

Machine Dr 41343.75
               To I LTD 41343.75
(Since Machine used in office and not for production,no input in this case)

-ea-

Sales Finished Goods

                        XLTD  
Particulars Amount
Sales (Bottles) 600000
Excise 12.5% 75000
Total 675000
Vat 5% 33750
Total 708750

-a-

Entry

X Dr 708750
          To Sales (Bottles) 600000
          To Output ED (Bottles) 12.5% 75000
          To Output Vat 5% 33750
(For every item manufactured,separate sales and output ed a/c is preferred)

-ea-

Sales Scrap

                       Y LTD  
Particulars Amount
Sales 80000
Excise 10000
Total 90000
Vat 5% 4500
Total 94500

-a-

Entry

Y Dr 94500
        To Sales (Scrap) 80000
        To Output ED (Scrap) 12.5% 10000
        To Output Vat 5% 4500
(For every item manufactured,separate sales and output ed a/c is preferred)

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ADJUSTMENT ENTRY FOR OUTPUT AND INPUT ED

-a-

OUTPUT ED (Bottles) Dr 75000
OUTPUT ED (Scrap) Dr 10000
              To Input Excise(Cenvat on Inputs) Dr 16000
              To Input Service Tax (Cenvat on Input Services) Dr 8750
              To Input Excise on Machines 1/2(Cenvat on Capital Goods Current Year) 2800
              To ED Payable 57450

-ea-

What is Vat Payable?

-a-

Output Vat 5% Der 38250
                To Input Vat 5% Dr 6200
               To Input Vat on Machines 1/3 ( Capital Goods Current Year)2625
               To Vat Payable 32050

-ea-

Question:-

Suppose Company had a Balance of 20000 in PLA Account
It Deposited 40000 more
Pass Entries

-a-

PLA DR 40000
        To Bank 40000

(PLA IS A CURRENT ASSET IN TALLY HAVING OPENING BALANCE OF 20000)


ED PAYABLE Dr 57450
To PLA 57450
What is the Balance left after adjusting Excise Duty Payable

(Balance left in PLA=20000+40000-57450=2550)

-ea-

 

 

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CA Maninder Singh
CA Maninder Singh is a Chartered Accountant for the past 6 years. He provides courses for Practical Accounts, Taxation and Efiling at teachoo.com .
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