Tax and Accounting Treatment of Taxable Consumer Goods Entrusted for Processing (3)

Special treatment of entrusted processing of gold and silver jewelry

The Notice of the Ministry of Finance of People's Republic of China (PRC), State Taxation Administration of The People's Republic of China, on Relevant Issues Concerning the Adjustment of Consumption Tax on Gold and Silver Jewelry (Caishuizi [1994] No.095) stipulates that if a unit or individual other than the gold and silver jewelry business unit approved by the People's Bank of China is entrusted to process gold and silver jewelry products, the entrusted party is the taxpayer. Changed the original rule that the entrusting party is a taxpayer and the entrusted party withholds and pays taxes. Due to the change of taxpayers, the accounting treatment method has also changed accordingly.

First, the income obtained by the production enterprise from the entrusted processing of gold and silver jewelry products should be included in the product sales income, and the consumption tax should be accrued according to the regulations, and the subject of "product sales tax and surcharge" should be debited and the subject of "tax payable-consumption tax payable" should be credited.

Second, commodity wholesale and retail enterprises due to commissioned processing of gold, silver and jewelry products income should be included in other business income, according to the provisions of the provision of consumption tax, debit "other business income" subjects, credited "tax payable-consumption tax payable" subjects.

Three, the inlaid jewelry produced by the entrusting party and recovered from the taxed jewelry and jade shall not be deducted from the consumption tax paid by the entrusted processing and recycling jewelry and jade.

Here are some examples:

Enterprise A entrusts enterprise B to process a batch of taxable consumer goods. The material cost provided by enterprise A is 50,000 yuan, and the processing fee paid to enterprise B is 4000 yuan. Both enterprise A and enterprise B are general VAT taxpayers. While paying the processing fee, Enterprise A paid the value-added tax 680 yuan that the processing fee should bear. Taxable consumer goods do not have the sales price of similar consumer goods of Party B.. After enterprise A recycles taxable consumer goods entrusted for processing, one-third of them are used for direct external sales, and two-thirds are used for enterprises to continue to produce taxable consumer goods. The applicable tax rate for taxable consumer goods processed on commission is 10%.

Calculation of withholding and paying consumption tax by enterprise B:

Taxable value of composition = (50000+4000) ÷ (1-10%) = 60000 yuan.

Withholding and paying consumption tax = 60000× 10% = 6000 yuan.

The accounting entries are as follows: When withholding consumption tax is withheld:

Debit: Accounts receivable 6000

Loan: taxes payable-consumption tax payable 6000.

After receiving the processing fee and output tax:

Debit: Bank deposit 4680

Credit: other business income is 4000 yuan.

Taxes payable-VAT payable (output tax) 680

The accounting treatment of enterprise A is: when providing processing materials:

Borrow: 50,000 products are commissioned for processing.