Availing Partial CENVAT Credit on Purchases

Here we are describing the steps to avail CENVAT Credit on purchases from Manufacturer - later by recording a separate Debit Note.

In this case first purchase invoice will be recorded without availing credit and later a separate Debit Note will be recorded to avail the CENVAT credit. While availing the CENVAT Credit user can avail Full or Partial credit.

Following is the procedure to avail Partial CENVAT Credit on Purchases

Example: On 12-6-2008 ABC Company purchased 100 Water Containers – 20 ltrs @ Rs. 100 per container from Lanco Manufacturers (Manufacturer).

 

On 15-6-2008, CENVAT Credit availed on Assessable value Rs. 5000 against the purchase made on 12-6-2008

Record a Purchase Voucher

Go to Gateway of Tally > Accounting Vouchers > F9: Purchase

  1. In Voucher Type sub form select Excise – Purchases as the voucher type.

  2. Ensure that the Purchase Voucher is in Item Invoice Mode.

  3. Enter the Date as 12-6-2008.

  4. In Supplier Invoice No. field enter the Invoice No. as LM/5598.

  5. In Party’s A/c Name field select the supplier i.e. Lanco Manufacturers from the List of Ledger Accounts.

  6. In Nature of Purchase field First Stage Dealer is displayed automatically.

  7. In Purchase Ledger field select the ledger Purchase of Raw Materials from List of Ledger Accounts.

  8. VAT/Tax Class field automatically gets updated with the VAT/Tax class as selected in the purchase ledger, which can be changed.

  9. In Name of Item field select the Stock Item i.e. Water Container – 20 Ltrs

  10. In Quantity field enter the quantity as 100

  11. In Rate field enter the rate as Rs. 100.

  12. Amount will be displayed automatically.

  13. Select Basic Excise Duty @ 16% (Excise Duty Type ledger)  tax amount will be calculated automatically

  14. Select Education Cess @ 2%  and Secondary Education Cess @ 1% (Excise Duty Type ledgers)  ledgers

  15. Select Input VAT @ 4% ledger. Amount will be calculated and displayed automatically

  16. Enable Show Statutory Details to Yes to view statutory details.

  17. In the Bill-wise details screen accept the default details

  18. Enter Narration if any

 

  1. Press Enter to save

Note: When the CENVAT Credit is not availed, such the duty amount will get apportioned to the Stock Item cost.

Record a Debit Note (to avail CENVAT Credit)

In Tally.ERP 9 Release 3.0, in CENVAT Availing Debit Note, a new option Copy Details from previous Ledger(s) has been provided in Excise Duty Allocation screen to copy Invoice Number/ Bill of entry No. & Date, Party Name, Name of Item, Quantity, and Assessable Value of a CENVAT Ledger to other the CENVAT ledgers selected in the voucher. This option helps the users in copying the duty details of previous ledger to subsequent ledger instead of entering the details manually.

Ensure for Debit Note, Voucher Class is created and in Voucher Type Class screen Use Class for Excise/CENVAT Adjustments option is set to Yes

Go to Gateway of Tally > Accounting Vouchers > Ctrl + F9: Debit Note

  1. In Change Voucher Type screen in Class field select CENVAT Availing from the Voucher Class List

  2. Enter the Date as 15-6-2008

  3. In Excise Unit field select ABC Company

  1. In Nature of Purchase field select Manufacturer

  2. In Debit field select Basic Excise Duty (CENVAT) to view Excise Duty Allocation screen

  3. In Excise Duty Allocation screen

  4. In Type of Ref select New Ref

  5. In Invoice No./Bill of Entry No. & Date field enter the reference name  in the purchase voucher

  6. In Party Name field select Lanco Manufacturers from the List of Ledger Accounts

  7. In the Name of Item field select Water Container – 20 Ltrs

  8. In Quantity field enter 50

  9. In the Assessable Value field enter Rs. 10,000

  10. In the Rate field the rate of duty defined in the ledger will be defaulted (if the rate of duty is not defined during ledger creation enter the applicable rate of duty)

  11. Specify the partial credit availed i.e. Rs. 800 in the Amount field

 

Note: In case of availing partial CENVAT Credit, credit can be availed partially based on the number of items purchased.

  1. In Debit field select Education Cess (CENVAT) to view Excise Duty Allocation screen

  2. In Excise Duty Allocation screen

  3. Set the option Copy Details from Previous Duty Ledger (s) to Yes and press enter.

The duty details like - Invoice Number/Bill of Entry No.& Date, Party Name, Name of Item, Quantity & Assessable Value (to calculate the Education Cess) & Cess Amount will be calculated displayed automatically.

Note: If you does not want to copy the details of previous ledger retain No to the option Copy Details from Previous Duty Ledger(s) & manually enter the duty details for the ledger selected.

The completed Duty Details for Education Cess (CENVAT) will be displayed as shown

 

Note: The option Copy Details from Previous Duty Ledger (s) will be displayed only during creation of voucher. This option will not be displayed in Voucher Alteration mode.

  1. Similarly, in Debit field select  Secondary Education Cess (CENVAT) to view Excise Duty Allocation screen

  2. In Excise Duty Allocation screen

  1. Set the option Copy Details from Previous Duty Ledger (s) to Yes and press enter. \

The duty details like - Invoice Number/Bill of Entry No.& Date, Party Name, Name of Item, Quantity & Assessable Value (to calculate the Education Cess) & Cess Amount will be calculated displayed automatically.

Note: If you does not want to copy the details of previous ledger retain No to the option Copy Details from Previous Duty Ledger(s) & manually enter the duty details for the ledger selected.

The completed Duty Details for Secondary Education Cess (CENVAT) will be displayed as shown

 

  1. In the Credit field select Purchase of Raw Materials ledger to view Inventory Allocation screen

  2. In the Inventory Allocation screen

  3. In Name of Item field select the stock item Water Container – 20 Ltrs

  4. In the Amount column enter the total amount (of Basic Excise Duty, Education Cess and Secondary Education Cess) Rs. 824

  1. Press Enter to view Excise Duty Allocation screen

  2. In the Excise Duty Allocation screen

  3. Select Agst Ref in Type of Ref field

  4. In Name field select bill LM/5598 dated 12-6-2008 (Basic Excise Duty @ 16%) from the List of Pending Tax Bills

  5. In the Amount field enter Rs.800 (is the amount which is availed as CENVAT Credit against the Basic Excise Duty).

  6. Select Agst Ref in Type of Ref field

  7. In Name field select bill LM/5598 dated 12-6-2008 (Education Cess @ 2%) from the List of Pending Tax Bills

  8. In the Amount field enter Rs.16 (is the amount which is availed as CENVAT Credit against the Education Cess).

  9. Select Agst Ref in Type of Ref field

  10. In Name field select bill LM/5598 dated 12-6-2008 (Secondary Education Cess @ 2%) from the List of Pending Tax Bills

  11. In the Amount field enter Rs. 8 (is the amount which is availed as CENVAT Credit against the Secondary Education Cess).

 

  1. Enter Narration if any

 

  1. Press Enter to save.