1. Localizations for India Implementation Guide
  2. Example of Credit Redistribution From Excise to Cenvat Accounts

Example of Credit Redistribution From Excise to Cenvat Accounts

You run the Credit Distribution program to redistribute cenvat credit against excise tax. Suppose that you have a debit balance in your cenvat account of INR 100, and you generate an invoice to pay INR 20 for excise tax.

This example shows the accounting entries in the Excise - MODVAT/PLA Summary File table (F75I310Y) and the Account Ledger table (F0911):

Existing distribution

When you redistribute the excise amount to the cenvat account, the system debits the cenvat account and credits the excise payable account:

Credit redistribution

After you reconcile the excise and cenvat accounts at the end of the month, the balances in the F75I310Y and F0911 tables are:

Reconciled accounts