Financial postings for AS SUCH sale of capital goods

This functionality is specific for India.

The financial postings for the reversal of CENVAT credit and for sale of the AS SUCH capital goods are explained with the following example.

Example Capital goods are purchased for INR 100 with Excise duty as INR 16 and sold for INR 120, CENVAT credit for INR 8.

Note

The ledger accounts are defined for each excise tax code in the Posting Data for Tax Codes (tfgld0171s000) session. The Supplier Control and Customer control account are defined in the Accounts by Financial BP Group (tfacp0110m100) session.

Step 1. On purchase of Capital goods you can avail 50per cent of the CENVAT credit and the balance is transferred to Deferred account.

Debit/ Credit	Ledger Account	Amount
Debit	Capital Goods	INR 100
Debit	CENVAT Credit Available	INR 8
Debit	CENVAT Credit Deferred	INR 8
Credit	Supplier's control	INR 116

Step 2. On AS SUCH Sale of Capital goods :

Debit/ Credit	Ledger Account	Amount
Debit	CENVAT Credit Available (capital goods)	INR 8
Credit	CENVAT Credit Deferred (capital goods)	INR 8

Debit/ Credit	Ledger Account	Amount
Debit	Customer Control	INR 136
Credit	CENVAT credit available (capital goods)	INR 16
Credit	Capital goods	INR 100
Credit	Profit on sale of capital goods	INR 20