Financial postings for Purchase returns

This functionality is specific for India.

When purchased excisable goods are returned to the supplier, the receipts for these goods must be maintained separately. You must reverse the transactions for utilized amounts of CENVAT credit.

The financial postings for CENVAT credit, when the purchased goods are returned, are explained with the following example:

Example: 10 items of item A are purchased at INR100 each, with excise duty at 16 per cent, of which, six items are accepted and four are returned.

Note

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

Step 1. On purchase of goods Cenvat credit availed

Debit/ Credit	Ledger Account	Amount
Debit	Purchase	INR 1000
Debit	CENVAT Credit Available	INR 160
Credit	Supplier control	INR 1160

Step 2. On Purchase returns the cenvat credit amount reversed

Debit/ Credit	Ledger Account	Amount
Debit	Supplier control	INR 464
Credit	CENVAT Credit Available	INR 64
Credit	Purchase returns	INR 400