treatment of Scrap Finished Good stock in Rg-1

[Asked by Guest]

Res. Sir,

we are having manufacturing unit and my query is that

1) Manufactured stock produced on 1.5.15 and we had given effect in Rg-1 as well as Excise Filed Return but after 2 month unsold stock which are being damaged on 25.7.15 and we have scraped that material physically but in RG-1 and production register in which treatment should be shown how to reduce production qty. ?

pls. suggest .....

regards,

Manan pandya

[Rajagopalan Ranganathan]

Sir,

Deduct the damaged stock from finished goods folio and add the same to scrap folio of your R.G.1 and peoiduction registers.

[YAGAY and SUN]

Dear Manan,

If required, before transferring it to scrap folio, please go for remission of duty from the Jurisdictional Authorities since goods are not fit for sale/removal.

Regards,

YAGAY and SUN

(Management, Business & Indirect Tax Consultants)

thank you sir,

for your reply.

sir,

if i do deduct stock from my finished goods stock and same to generate mfg. /prod. of scrap in RG- 1 in that case should i show less Production in current month in ER-1 ?AS a stock adjustment in to Mfg. ?

pls. clear my doubt.

regards,

Manan Pandya

AI Summary

Inventory adjustment for damaged finished goods: deduct from finished goods and record as scrap, adjust returns accordingly.
Deduct damaged finished goods from the finished goods folio and record them in the scrap folio of R.G.-1 and production registers; consider seeking remission of duty from jurisdictional authorities before transfer, and reflect the reduction as a corresponding production adjustment in the ER-1 return so reported production matches physically saleable stock.