Difference between Non-cenvatable and Centvatable

[former_member506481]

Hi experts,

Can anybody answer my following queries

1. Difference between Non-cenvatable and Centvatable material's procurement cycle

2. What are the accouniting entries passed during Non-cenvatble material's procurement cycle

thanks in advance

Regards

jai

[former_member712038 · Accepted solution]

Hi,

1. Cenvatable means we will get credit from the governent for the amount we paid for excise. Non-cenvatable means we have to bare the expenses. We will not get any credit from the government.

2. Accounting entries will be normal while posting non-cenvatable material, since we will not define any G/L for respective conditon types in the tax codes. The amout calculated for excise will be directly hit the inventory G/L of that material.

Regards

Kanak

[Former Member]

Hi

Cenvatable means that you can take credit of the excise duty paid, when you are running the excise utilization. For eg, you have paid CVD, in case of imports, then, the entry passed for Excise invoice posting would be

BED DR

ECESS ON BED DR

SECESS ON BED DR

CVD CLEARING A/C CR

Non Cenvatable means that, any excise or duty paid, is an expense for the company and in India, it is a normal practice to load it on the cost of the material. For e,g, the customs duty paid on imports has a non cenvatable part also. The accounting entry passed in MIGO for the same would be

STOCK A/C DR

GR/IR A/c CR

CUSTOMS CLEARING A/C CR

In the case of imports, when you create a Customs Invoice, the system would pass the following entry

CVD CLEARING A/c DR

CUSTOMS CLEARING A/C DR

CUSTOMS VENDOR A/C CR

So, you bifurcate the cenvatable and non cenvatable part based on the duty applicable.

Thanks & Regards

Sanil K Bhandari

[Former Member]

what is the english word for cenvatable?