Financial postings for Warehouse transfersThis functionality is specific for India. CENVAT impact When the transfer of goods is between two locations with the same Excise Control Code(ECC number), there is no excise impact. When the goods are transferred between two warehouses with different ECC number, the impact on CENVAT credit is as follows:
The financial postings for the CENVAT credit when goods are transferred from one warehouse to other is explained with an example. Note The ledger accounts for each excise tax code are defined in the Posting Data for Tax Codes (tfgld0171s000) session. The Supplier Control account is defined in the Accounts by Financial BP Group (tfacp0110m100) session. Goods worth 100 transferred from Warehouse A to Warehouse B at INR 150 with Excise duty at 16 per cent. Step 1. Entries in books of A
Step 2. Entries in books of B
The net effect of CENVAT credit is cancelled with above entries. VAT IMPACT When there is a transfer between two locations in two different states, the impact on VAT is as follows: The rate of VAT in excess of 4 per cent (includes CST at 3 per cent) is claimable in the state transferring goods. The 4 per cent of VAT must be reversed, and 4 per cent must be expensed tax. Step 1. In books of Transferor Goods are purchased in Hyderabad for INR 100; VAT INR 12 @ 12 per cent and transferred to Bangalore. The financial postings are as follows:
Step 2. Transferred to Bangalore office
Step 3. In books of Bangalore office The entries for input tax credit in the books of Bangalore office:
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||