Excise Accounting PDF

8/13/2019 Excise Accounting PDF

1/50

Excise Accounting

in Tally 9


2/50

Tally (India) Pvt. Ltd. 2007

Contents of this document, the design and layout is the intellectual property of Tally (India) Private Limited. Names of companies and

persons used in this publication are hypothetical and have been used for illustrative purposes. No part of this publication can be

reproduced or transmitted in any form or by any means without the prior written permission of Tally (India) Private Limited. Breach of

this condition is liable for legal action.

Important:Information in this document is subject to change without prior notice and does not represent any commitment on the part

of Tally (India) Private Limited.

This publication is being issued and released on the condition and understanding that the information, comments and views it contains

are merely for guidance and must not be taken as having the authority of or being binding in any way on the author, editors, publishers,

printers and distributors who do not owe any responsibility whatsoever for any loss, damage or distress to any persons, whether or not a

bonafide user, on account of any action taken or not taken on the basis of this publication. Despite all the care taken, errors or omissions

may have crept inadvertently into this publication. Tally (India) Private Limited shall be obliged if any such error or omission is brought

to their notice for possible correction in a future edition. All disputes are subject to the jurisdiction of the competent courts in

Bangalore.

Trademarks:Tally, POWER OF SIMPLICITY are registered trademarks of Tally Solutions FZ-LLC.

Use of other names including product features is duly acknowledged and they continue to belong to their respective owners.

Version: Excise Accounting in Tally 9/1.1/Training/August 2007


3/50

i

Contents

IntroductionExcise Duty....................................................................................................................................................................... 1

Basic Excise Duty ....................................................................................................................................................... 2

Special Duty of Excise ................................................................................................................................................ 2

Additional Duty of Excise (AED)................................................................................................................................ 2

Education Cess on Excise Duty .................................................................................................................................. 2

Secondary and Higher Education Cess on Excisable Goods ..................................................................................... 2

Customs Duty ................................................................................................................................................................... 3

Basic Customs Duty .................................................................................................................................................... 3

Additional Customs Duty ............................................................................................................................................ 3

Special Additional Duty on Customs Duty ................................................................................................................. 3Education Cess on Customs Duty............................................................................................................................... 4

Secondary and Higher Education Cess on imported goods ....................................................................................... 4

Basis of Calculation of Duties .................................................................................................................................... 5

1. Creation of Masters

1.1 Company Setup ....................................................................................................................................................... 6

1.2 Ledger Classifications.......................................................................................................................................... 10

1.2.1 Party Ledgers.................................................................................................................................................. 10

1.2.2 Sales and Purchases Ledger.......................................................................................................................... 11

1.2.3 VAT Tax Ledgers ............................................................................................................................................ 12

1.2.4 Excise Duty Ledgers ....................................................................................................................................... 13

1.3 Stock Items ............................................................................................................................................................ 31

2. Transactions

2.1 Purchases................................................................................................................................................................ 33

2.2 Sales ........................................................................................................................................................................ 45


4/50

1

Introduction

The basic scheme of taxation in India envisages levy of indirect taxes on excisable goods manu-factured/ produced/ imported into India. These Indirect taxes are generally administered by thecentral government and the revenue from such levies is deposited to their credit.

There are basically two broad categories of duties, which are applicable whenever goods areimported into or exported out or manufactured in India:

Excise Duty

Customs Duty

Businesses engaged in manufacturing / production of excisable goods or imports of goods intoIndia are liable to pay Excise duty / Customs Duty, as applicable.

This manual provides a step-by-step walkthrough for accounting of various duties of excise andcustoms applicable to manufacturers and importers.

Excise Duty

Excise Dutyor Duty of Exciseis a tax on goods produced or manufactured in India and intendedfor home consumption i.e., sale in India. The Excise Duty is chargeable at the time of productionor manufacturing. However, for convenience it is charged at the time of removal.

It is basically an indirect tax, which the manufacturer or producer passes on to the ultimateconsumer. The levy and collection of Duty of Excise is provided under authority of the Central

Excise Act, 1944 at the rates specified under Central Excise Tariff Act, 1985. The duty iscommonly referred as the Basic Excise Duty. In addition to this duty a few items like fibre, yarn,etc., also attract Additional Excise Duty under Additional Duties of Excise (Textiles and Textile

Articles) Act, 1975. The additional Duties of Excise (Goods of Special Importance) Act, 1957 andMiscellaneous Cess Acts provide authority for collection of Additional Excise Duty and Cessrespectively on several manufactured items over and above Basic Excise Duty.

The Duties levied under Central Excise Act are:


5/50

Introduction

2

Basic Excise Duty

Basic Excise Duty is levied under Sec. 3 of Central Excise Act, 1944 on all excisable goods other

than salt, at rates set forth in the schedule to Central Excise Tariff Act, 1985. The present generalrate is 16% and there is a partial exemption for a few products. It is also termed as CENVAT.

Special Duty of Excise

Special Duty of Excise is leviable on items covered in Schedule II to Central Excise Tariff, likeaerated soft drinks, Polyester Filament Yarn (PFY), Air conditioners, pan masala, cars, etc.Relevant provisions of the Finance Act every year specify whether SED shall be or shall not belevied and collected in the relevant financial year.

Additional Duty of Excise (AED)

Additional Excise is levied on some goods of special importance under Additional Duties of Excise(Goods of Special Importance) Act, 1957. This is levied in lieu of Sales Tax and shared betweenCentral and State Governments.

TheAdditional Dutyis in addition to Excise Duty. Rules, procedures, penalties, etc. for collectingthese duties are same as basic duty. This duty is different from Additional Duty under Customs

Act, which is often called Countervailing Duty.

Some items covered are textile articles like cotton fabrics, silk and wool fabrics, man-made fibres,terry fabrics, metallised yarn, embroidery, sugar, etc.

Education Cess on Excise Duty

The Finance (No. 2) Act, 2004 states that Education Cess is Duty of Excise, to be calculated onaggregate of all duties of excise including special Excise Duty or any other duty of excise, butexcluding Education Cess on excisable goods). All provisions of Central Excise Act, includingthose relating to refunds, exemptions and penalties will apply to education cess.

Presently, the rate of Educational Cess is 2% i.e., if Excise Duty rate is 16%, Education Cess willbe 0.32%.

Secondary and Higher Education Cess on Excisable Goods

The Finance Act 2007 imposed an additional Cess termed Secondary and Higher Education Cess@ 1% of the aggregate of duties of excise on excisable goods. This Cess is in addition to theexisting Education Cess of 2% and is calculated in the same manner as Education Cess. The

Existing Education Cess (2%) and Secondary and Higher Education Cess (1%) are to beexcluded while calculating both the Cesses.


6/50

Introduction

3

Customs Duty

Customs Duty is a tax on import into India and export out of India. The levy and collection of

Customs Duty are specified in the schedules to the Customs Tariff Act, 1975. In addition to basicCustoms Duty, Special Additional Duty (SAD) at the rates specified and Countervailing Duty(CVD) equal to Excise Duty is also payable.

The Duties levied under Customs Act are:

Basic Customs Duty

Basic Customs Duty is levied under section 12 of Customs Act. Generally, it is charged as a per-centage of Assessable Value. The rate of Customs Duty varies for different items (i.e., either atstandard rate or at preferential rate).

In order to promote Indian agriculture and Indian automobile sector, duties on some articles are

charged at higher rates, for instance the Customs Duty on new motor cars/ two wheeler is 60%,whereas on second hand motor cars/ two wheelers it is 100%.

Additional Customs Duty

Additional Customs Duty is usually known as Countervailing Duty (CVD) and is levied undersection 3(1) Customs Tariff Act. It is basically imposed when the excisable goods are imported, inorder to counter balance the Excise Duty, which is otherwise leviable on similar goods if manufac-tured within the State i.e., if the goods are not produced or manufactured in India, the Excise Dutythat would be leviable on those like goods, if they were produced in India is taken as the measure.

The rate of Excise Duty is considered for quantifying CVD payable on similar products manufac-tured or produced in India. In case, if different rates are chargeable on the good, the highest rate

among those rates is to be considered. The duty is leviable on value of goods plus basic CustomsDuty payable plus any other sum chargeable on that commodity under any law in addition to andin the same manner as duty of customs (i.e., NCCD of Customs), but excluding Anti DumpingDuty, Special Additional Duty and Safeguard Duty.

For instance, if the Customs Value of goods is Rs. 20,000, Customs Duty is 30% and Excise Dutyon similar goods manufactured in India is 16%. Then, basic Customs Duty is Rs 6,000/-. Addi-tional Customs Duty (CVD) is payable on value plus Basic Customs Duty, i.e., on Rs 26,000/- [Rs20,000+6,000]. Thus, CVD payable is Rs 4,160 (16% of Rs 26,000).

Special Additional Duty on Customs Duty

Special Additional Duty is levied to provide a common base to domestic goods which have to

suffer sales tax. Special Additional Duty is computed on the aggregate of the following compo-nents excluding Anti Dumping Duty and Safeguard Duty.

1. Assessable value

2. Basic Duty of Customs

3. Surcharge

4. Additional duty of Customs (CVD)


7/50

Introduction

4

Consider the example explained in the above paragraph. If the Special Additional Duty (SAD) ispayable @ 4% then the SAD will be calculated on Rs. 30,160/- (Customs Duty + CVD + SAD i.e.,20,000+6,000+4,160) = 1206.40/-

Education Cess on Customs Duty

The Finance (No. 2) Act, 2004 states that Education Cess on Customs Duty is a duty ofcustoms, to be calculated on aggregate of custom duties on imported goods but excludingsafeguard duty, Countervailing duty on subsidised Articles, Anti Dumping Duty levied underCustoms Tariff Act and the Education Cess on imported goods.

All provisions, rules and regulations of Customs Act, including those relating to refund, exemptionfrom duty and imposition of penalty will apply to Education Cess on imported goods.

Presently, the rate of Educational Cess is 2%. For example, if the value of an item is Rs.1000,Customs Duty is 20% and Excise Duty is 16%, the calculation will be as follows:

The duty is worked out as shown:

Thus, the total duty payable will be Rs. 4,037.57/- i.e., Customs Duty Rs. 2,000/-, CVD - Rs1,958.40/- and Education Cess Rs. 79.17/-.

Secondary and Higher Education Cess on imported goods

The Finance Act 2007 has imposed an additional Cess termed Secondary and Higher EducationCess @ 1% of the aggregate of duties of customs on imported goods. This Cess is in addition to

the existing Education Cess of 2% and is calculated in the same manner as Education Cess. TheExisting Education Cess (2%) and Secondary & Higher Education Cess (1%) are to be excludedwhile calculating both the Cesses.

Consider the above example, the 1% of Secondary & Higher Education Cess will be Rs. 39.58/-(i.e., 1% on Rs. 3,958.40)

Sl.No. Particulars Rate ofDuty

Amount(in Rs.)

A. Assessable Value 10,000.00

B. Customs Duty 20% 2,000.00

C. Sub-total for calculating CVD (A+B) 12,000.00

D. Countervailing Duty (CVD)+Cess @ 2% on CVD 16.32% 1,958.40

E. Sub-total for calculating Cess (B+D) 3,958.40

F. Educational Cess 2% 79.17


8/50

Introduction

5

Basis of Calculation of Duties

Excise Duty

Customs Duty

Sl.No. Duties of Excise Basis of Calculation

1. Basic Excise Duty BED On Assessable Value

2. Special Excise Duty SED On Assessable Value

3. Additional Duty of Excise Goods of Special Importance

AED [GSI] On Assessable Value

4. Additional Duty of Excise T&TW AED [T&TW] On Assessable Value

5. National Calamity Contingent Duty NCCD On(BED+SED+AED[GSI]+AED[T&TW]

6. Educational Cess On(BED+SED+AED[GSI]+AED([T&TW]+NCCD)

7. Sec. & Higher Educational Cess On(BED+SED+AED[GSI]+AED([T&TW]+NCCD)

Sl.No. Duties of Customs Basis of Calculation

1. Basic Customs Duty BCD On Assessable Value2. Countervailing Duty CVD On Assessable Value + BCD

3. Educational Cess On (BCD+CVD) excluding CVDon subsidised Articles

4. Sec. & Higher Educational Cess On (BCD+CVD) excluding CVDon subsidised Articles & aboveEducation Cess


9/50

6

1. Creation of Masters

Tally 9 facilitates smooth and error free Excise Accounting for manufacturers and dealers,engaged in manufacturing / trading of excisable goods. It ensures better transparency and greaterlevels of compliance with the statutes. It takes a one-time configuration in ledger masters in Tally

for Excise Accounting to be activated.

1.1 Company Setup

Consider the following example which illustrates creation of a new company in Tally 9 for ExciseAccounting in Tally.

M/s. Steelage Industries (P) Ltd.,is leading manufacturers of Engine Valves in Bangalore.

Step 1: Create/ Alter Company screen

In the Company Creation screen,

Select Indiain the Statutory compliance forfield

Specify the Stateand Pin Codedetails

SelectAccounts with Inventory in the Maintainfield


10/50

Creation of Masters

7

The completed Company Creationscreen is displayed as shown.

Figure 1.1 Company Creation screen

Press Enterto accept.

Step 2: F11: Statutory & Taxation features

Go toGateway of Tally>pressF11: Features>Statutory & Taxation

1. Set Enable Value Added Tax(VAT)and Set/Alter VAT DetailstoYes


11/50

Creation of Masters

8

The Statutory & Taxationscreen is displayed as shown.

Figure 1.2 F11 - Statutory and Taxation screen

2. Press Enter and theVAT Details screen appears

3. Select Karnatakain theStatefield4. Select Regular in theType of Dealer field

5. Enter the date of applicability in theRegular VAT Applicable From field

The VAT Detailsscreen is displayed as shown.

Figure 1.3 VAT Details screen

6. Specify the VAT TIN numbers, Inter-state Sales Tax NumberandPAN/ Income-TaxNo. details


12/50

Creation of Masters

9

The completed F11: Statutory & Taxation screen is displayed as shown.

Figure 1.4 F11: Statutory & Taxation screen

7. Press Enterto accept


13/50

Creation of Masters

10

1.2 Ledger Classifications

Create necessary Purchases, Sales, Party ledgers & Excise Duty, Customs Duty ledgers and

Stock Items as explained below:

1.2.1 Party Ledgers

Go to Gateway of Tally >Accounts Info. >Ledgers >Create

The completed Ledger Creation screen ofSterling Steel Industries is displayed as shown.

Figure 1.5 Ledger Creation screen of Sterling Steel Industries

Press Enterto accept

Create M/s. Decora Equipmentsledger in the similar manner.

Ledger Under Maintain balancesbill-by-bill

Inventory Valuesare affected

Sterling Steel Industries Sundry Creditors Yes No

Decora Equipments Sundry Debtors Yes No


14/50

Creation of Masters

11

1.2.2 Sales and Purchases Ledger

Go toGateway of Tally >Accounts Info. >Ledgers >Create

The completed Ledger Creation screen ofSales Excisable Goodsis displayed as shown.

Figure 1.6 Ledger Creation screen of Sales Excisable Goods


Similarly, create purchase ledger.

Ledger Under Inventory valuesare affected

Used in VATReturns

VAT/Tax Class

SalesExcisableGoods

SalesAccounts

Yes Yes Sales @ 4%

PurchasesExcisable Goods

PurchaseAccounts

Yes Yes Purchases @4%

If VAT is not applicable, then set Used in the VAT Returns to No.


15/50

Creation of Masters

12

1.2.3 VAT Tax Ledgers


The completed Input VAT @ 4% ledger screen is displayed as shown.

Figure 1.7 Input VAT Ledger Creation screen

Press Enterto accept.

Similarly, create Output VAT @ 4%ledger.

Ledger Under Type of

Duty/Tax

VAT/Tax

Class

Inventory

Values areaffected

Percent-

age ofCalcula-tion

Method

of Cal-culation

Input VAT @ 4% Duties &Taxes

VAT Input VAT@ 4%

No 4% On VATRate

Output VAT @ 4% Duties &Taxes

VAT Output VAT@ 4%

No 4% On VATRate


16/50

Creation of Masters

13

1.2.4 Excise Duty Ledgers

Basic Excise Duty Ledger


In the Ledger Creation screen,

1. Type Basic Excise Dutyin the Namefield

2. Select Duties & Taxesin the Underfield

3. Select Excisein the Type of Duty/Taxfield

Ledger Under Type ofDuty/Tax

DutyHead

InventoryValues areaffected

Percent-age of Cal-culation

Method ofCalcula-tion

Basic Excise Duty Duties& Taxes

Excise ExciseDuty

No 16% On TotalSales

Special ExciseDuty

Duties& Taxes

Excise SpecialDuty

No 4% On TotalSales

Education Cesson Excise Duty

Duties& Taxes

Excise Cess onDuty

No 2% Surchargeon Tax

Secondary and

Higher EducationCess on ExciseDuty

Duties

& Taxes

Excise Cess on

Duty

No 1% Surcharge

on Tax


17/50

Creation of Masters

14

The Ledger Creation screen for Basic Excise Dutyis displayed as shown.

.

Figure 1.8 Ledger Creation screen for Basic Excise Duty

4. Select Excise Dutyin the Duty Headfield

Types of Duty/Tax refers to the nature of duty or tax chargeable on the pur-chase/ sales turnover.

In Tally, there are basically four Duty/ Tax types:

CST

This tax type is used in tax ledgers for calculating tax on

sales/ purchases made in the course of Interstate trade or

commerce.

Excise

This duty type is used in duty ledgers for calculating duty

amount on the value of goods manufactured in India.

VATThis tax type is used in tax ledgers for calculating sales tax on

local sales/ purchases made within the respective state.

Others

This tax type is used in tax ledgers for calculating tax (if any)

other than the types mentioned above, which are applicable

on the sales.


18/50

Creation of Masters

15



Duty Head refers to the type of Excise duty or Customs Duty applicable onthe goods manufactured and imported respectively.

In Tally, there are basically six Duty Head types:

Additional Duty

This duty head is used when any duty in addition to the basic

duty under Excise/ Customs is chargeable on the aggregate of

duty value.

Cess on Customs Duty

This duty head is used when any duty is to be calculated on

aggregate of custom duties on imported goods. For example,

Education Cess on Customs Duty, Secondary and Higher Edu-

cation Cess on Imported Goods

Cess on Duty

This duty head is used when any duty is to be calculated on

aggregate of all duties of excise including Special Excise Duty

or any other duty of excise applicable on manufactured

goods. For example, Education Cess on Excise Duty, Second-

ary and Higher Education Cess on Excisable goods, NCCD etc.


19/50

Creation of Masters

16

5. Set Inventory values are affectedto No

6. Specify 16%in the Percentage of Calculationfield and press Enter

7. Select On Total Salesin the Method of Calculationfield



Customs Duty

This duty head is used when the duty amount is to be calcu-lated on the Assessable Value or on Current sub-total of the

imported goods.

Excise Duty

This duty head is used when the duty amount is to be calcu-

lated on the Assessable Value of the manufactured goods.

Special Duty

This duty head is used when the duty amount is to be calcu-

lated on the Assessable Value of the manufactured goods or

imported goods. For example, Special Duty of Excise, Special

Additional Duty on Customs Duty, AED [GSI], AED [T & TA],

AED [T & TW] etc.


20/50

Creation of Masters

17

The completed Ledger Creation screen for Basic Excise Dutyis displayed as shown.

Figure 1.11 Completed Ledger Creation screen for Basic Excise Duty


Type of Duty under Method of Calculation refers to the calculationcriteria on the basis of which the duty/ tax is to be computed. In Tally, there

are basically two calculation types, when the Duty head is selected as

Excise Duty.

On Total Sales

This method is used when the computation of duty/ tax is to

be done on the total turnover or the sale value.

Tax based on Item Rate

This method is used when the computation of duty/ tax is to

be done on the rate of the Stock Item.


21/50

Creation of Masters

18

Special Excise Duty Ledger


In the Ledger Creation screen,1. Type Special Excise Dutyin the Namefield



4. Select Special Dutyin the Duty Headfield

The Ledger Creation screen for Special Excise Dutyis displayed as shown.

Figure 1.12 Ledger Creation screen for Special Excise Duty





22/50

Creation of Masters

19

The completedLedger Creation screen for Special Excise Dutyis displayed as shown.

Figure 1.13 Completed Ledger Creation screen for Special Excise Duty


Education Cess on Excise Duty Ledger



1. Type Educ. Cess on Excise Dutyin the Namefield

2. Select Duties & Taxes in the Underfield


4. Select Cess On Dutyin the Duty Headfield


23/50

Creation of Masters

20

The Ledger Creation screen for Educ. Cess on Excise Dutyis displayed as shown.

Figure 1.14 Ledger Creation screen for Educ. Cess on Excise Duty

5. Set Inventory values are affectedto No6. Specify 2%in the Percentage of Calculationfield and press Enter

7. Select Surcharge on Taxin the Method of Calculationfield


24/50

Creation of Masters

21

The Ledger Creation screen for Educ. Cess on Excise Dutyis displayed as shown.


Types of Dutyunder Method of Calculation refers to the calculation criteria

on the basis of which the duty/ tax is to be computed. In Tally, there are

basically two calculation types, when the Duty head is selected as Cess on

Duty.

Additional Duty

This method is used when the Cess is calculated on Excise

Duty, which is computed on the Assessable Value of the

goods. This is in addition to the basic duty.

Surcharge on Tax

This method is used when the Cess is calculated on the Excise

Duty, Special duty and Additional duty. This is computed as

an additional charge on the applicable duties of Excise/

Customs.


25/50

Creation of Masters

22

The completed Ledger Creation screen for Educ. Cess on Excise Dutyis displayed as shown.




26/50


27/50

Creation of Masters

24

Customs Duty Ledgers

Basic Customs Duty Ledger



1. Type Basic Customs Dutyin the Namefield




DutyHead

InventoryValuesareaffected

Percent-age ofCalcula-tion


Basic CustomsDuty

Duties& Taxes

Excise CustomsDuty

No 25% On TotalSales

CountervailingDuty (CVD)

Duties& Taxes

Excise CustomsDuty

No 4% On TotalSales

Education Cesson Customs Duty

Duties& Taxes

Excise Cess onCustomsDuty


Secondary andHigher EducationCess on CustomsDuty

Duties& Taxes

Excise Cess onCustomsDuty



28/50

Creation of Masters

25

The Ledger Creation screen for Basic Customs Dutyis displayed as shown.

Figure 1.18 Ledger Creation screen for Basic Customs Duty

4. Select Customs Dutyin the Duty Headfield


29/50

Creation of Masters

26




6. Specify 25%in the Percentage of Calculationfield and press Enter7. Select On Total Salesin the Method of Calculationfield


30/50

Creation of Masters

27



The completed Basic Customs Dutyledger screen is displayed as shown.

Figure 1.21 Completed Basic Customs Duty ledger screen



31/50

Creation of Masters

28

Countervailing Duty (CVD) Ledger

As explained in the earlier chapter, Countervailing Duty(CVD) is calculated on the Assessablevalue of goods plus basic customs duty plus National Calamity Contingent Duty (NCCD ofCustoms). Hence, to facilitate computation of CVD on current sub-total, define the following con-figuration in F12.

Step 1: F12: Configure

Go to Gateway of Tally >F12: Configure> Invoice / Orders Entry

Set Calculate Tax on current Sub-TotaltoYes

Figure 1.22 F12: Configuration - CVD

You can also enable the above settings during voucher entry.


32/50

Creation of Masters

29

Step 2: Create CVD Ledger


In the Ledger Creation screen,1. Type Countervailing Duty(CVD)in the Namefield

2. Select Duties & Taxes in the Underfield


4. Select Customs Dutyin the Duty Headfield




The completed Ledger Creation screen forCountervailing Duty (CVD)is displayed as shown.

Figure 1.23 Ledger Creation screen for Countervailing Duty (CVD)



33/50

Creation of Masters

30

Education Cess on Customs Duty


In the Ledger Creation screen,1. Type Educ. Cess on Customs Dutyin the Namefield



4. Select Cess on Customs Dutyin the Duty Headfield



7. Select Surcharge on Taxin the Method of Calculationfield

The completed Ledger Creation screen forEducation Cess on Customs Dutyis displayed as

shown.

Figure 1.24 Ledger Creation screen for Education Cess on Customs Duty



34/50


35/50

Creation of Masters

32

Go to Gateway of Tally >Inventory Info. >Stock Items >Create

In the Stock Item creation screen,

1. Type Hot Rolled Coils 100mmin the Namefield2. Select Primaryfrom the List of Groups in the Underfield

3. Select MT(Metric Tonnes) in the Unitsfield

The completed Stock Item Creationscreen is displayed as shown.

Figure 1.26 Stock Item Creation


Similarly, create other Stock Items.


36/50

33

2. Transactions

2.1 Purchases

Consider the following example to illustrate Excise Purchases transactions.

Illustration 1

On 2nd April 2007, M/s. Steelage Industries purchased the following goods from M/s. SterlingSteel Industries vide Bill No. 483.

The same is accounted as shown.

Particulars Quantity Rate Amount

(in MT) (in Rs.) (in Rs.)

Hot Rolled Coils - 100mm 400 500 200,000.00

Assessable Value 200,000.00

Basic Excise Duty 16% 32,000.00

Special Excise Duty 4% 8,000.00

Total Duty Value 40,000.00

Education Cess 2% 800.00

Sec. & Higher Education Cess 1% 400.00

Total Cess Value 1,200.00

Total Amount 241,200.00

Value Added Tax (VAT) 4% 9,648.00

Total Invoice Amount 250,848.00


37/50

Transactions

34

Create Purchase Invoice

Go to Gateway of Tally >Accounting Vouchers > press F9: Purchase

1. Press F2and change the date to 02/04/20072. Specify 483as the Supplier Invoice No.and the Dateas 02/04/2007

3. Select Sterling Steel Industriesin Partys A/c Namefield and pressEnter

4. Select Purchases Excisable Goods in the Purchase Ledger field and the VAT/Tax Class field is automaticallyprefilled asPurchases @ 4%

5. Select Hot Rolled Coils 100mm in the Name of the Itemfield

6. Type the Quantityas 400, Rateas 500 and press Enter to accept theAmount

7. Select Basic Excise Dutyfrom List of Ledger Accounts and press Enterto acceptthe rate and duty amount

Figure 2.1 Purchase Voucher screen with Basic Excise Duty entry

8. Select Special Excise Dutyand press Enterto accept the rate and duty amount

9. Select Educ. Cess on Excise Duty and press Enter to accept the rate and cess

amount


38/50

Transactions

35

ThePurchase Voucherscreen with Educ. Cess on Excise Dutyis displayed as shown.

Figure 2.2 Purchase Voucherscreen with Educ. Cess on Excise Duty

10. Select Sec. & Higher Educ. Cess on Excise Duty and press Enterto accept the rateand cess amount

11. Select Input VAT @ 4% ledger and press Enter, the VAT amount i.e., Rs. 9,648appears by default

12. In the Bill-wise Details screen, specify the Type of Ref as New Ref and type483 intheName field

13. Press Enterto accept the screen

14. Type the details of the transaction in the Narrationfield


39/50

Transactions

36

The completed Purchase Voucherscreen is displayed as shown.

Figure 2.3 Purchase Voucher screen



40/50

Transactions

37

Illustration 2

On 3rdApril 2007, M/s. Steelage Industries purchased the following goods from M/s. Southern

Metalloys Pvt. Ltd., Bangalore (vide Bill No.12).

The same is accounted as shown:

Create necessary Purchases, Party ledgers and the following Duty ledgers to execute the abovetransaction.



Iron Bars 500 30 15,000.00



AED [GSI] 8% 1,200.00


NCCD 1% 36.00



Total Cess Value 144.00

Total Amount (1+2+3) 18,744.00

As explained earlier, the Local Sales Tax/ VAT is not applicable whenAdditional duty is chargeable.


41/50

Transactions

38

Excise Duty Ledgers


The completed Ledger Creation screen for Additional Duty of Excise (GSI) is displayed asshown.

Figure 2.4 Ledger Creation screen for Additional Duty of Excise (GSI)



Duty Head InventoryValues areaffected

Percent-age of Cal-culation


AdditionalDuty of Excise(GSI)

Duties& Taxes

Excise SpecialDuty

No 8% On TotalSales

NationalCalamity Con-tingent Duty(NCCD)

Duties& Taxes

Excise Cess onDuty



42/50

Transactions

39

The completed Ledger Creation screen for National Calamity Contingent Duty (NCCD) isdisplayed as shown.

Figure 2.5 Ledger Creation screen for National Calamity Contingent Duty (NCCD)



43/50

Transactions

40

Create Purchase Invoice

Setup:

Press F12, set Allow selection of VAT/Tax Class during entrytoYes.The F12: Configurescreen is displayed as shown.

Figure 2.6 F12: Configure for Selecting of VAT Class


44/50

Transactions

41

Go to Gateway of Tally >Accounting Vouchers > pressF9: Purchase

The completed Purchase Voucherscreen with AED, NCCD entry is displayed as shown.

Figure 2.7 Purchase Voucher screen with AED, NCCD entry



45/50

Transactions

42

Illustration 3

On 4thApril 2007, M/s. Steelage Industries imported the following goods from M/s. Spring Steels

Pte Ltd., Germany (vide Bill No.24/2007).

The same is accounted as shown:

Create necessary Purchases and Party ledgers to execute the above transaction.

Create Purchase Invoice:

Go to Gateway of Tally >Accounting Vouchers >press F9: Purchase

1. Press F2and change date to 04/04/2007

2. Specify 24/2007as the Supplier Invoice No.and the Dateas 04/04/2007

3. Select Spring Steels Pte Ltd., in Partys A/c Name and pressEnter

4. Select Purchases Excisable Goods in the Purchase Ledger field and the VAT/Tax Class asImports

5. Select Copper Alloy Strips in the Name of Itemfield

6. Type the Quantityas 100, Rateas 150 and press Enter to accept theAmount

7. Select Basic Customs Dutyand press Enterto accept the rate and duty amount

8. Select Countervailing Duty (CVD) and press Enter to accept the rate and dutyamount



Copper Alloy Strips 100 150 15,000.00


Basic Customs Duty 25% 3,750.00

Countervailing Duty 4% 750.00



Sec. & Higher Education Cess 1% 45.00Total Cess Value 135.00



46/50

Transactions

43

ThePurchase Voucherscreen with CVD entry is displayed as shown.

Figure 2.8 Purchase Voucher screen with CVD entry

You will find that CVD is calculated on the Assessable value plus duty value i.e., 4% on 18,750/-(15,000+3,750) = Rs. 750/-.

9. Select Educ. Cess on Customs Duty and press Enterto accept the rate and cessamount

10. Select Sec. & Higher Educ. Cess on Customs Duty and press Enterto accept therate and cess amount

11. In the billwise details screen, specify the Type of Ref as New Ref and press Entertoaccept 24/2007 in theName field

12. Press Enterto accept the screen



47/50

Transactions

44

The completedPurchase Voucherscreen is displayed as shown.

Figure 2.9 Purchase Voucher


The above invoice can also be entered in multi-currency.


48/50

Transactions

45

2.2 Sales

Consider the following example to illustrate Excise Sales transactions.

Illustration 4

On 5thApril 2007, M/s. Steelage Industries sells the following goods to M/s. Decora Equipments,Bangalore.

The same is accounted as shown.

Step 1 : Create Sales Invoice

Go to Gateway of Tally >Accounting Vouchers >pressF8: Sales

1. Press F2and change date to 05/04/2007

2. Select Decora Equipments in Partys A/c Name and pressEnter

3. Select Sales Excisable Goods in the Sales Ledger field and the VAT/Tax isdefaulted as Sales @ 4%

4. Select Engine Valve 5 in the Name of the Itemfield and press Enter

5. Type the Quantityas 500, Rateas 250and press Enter twice

6. Select Basic Excise Dutyand press Enterto accept the rate and duty amount

7. Select Educ. Cess on Excise Duty and press Enter to accept the rate and cessamount

8. Select Sec. & Higher Educ. Cess on Excise Duty and press Enterto accept the rateand cess amount

9. Select Output VAT @ 4%ledger and press Enter, the VAT amount i.e., Rs. 5,824 iscalculated automatically

10. In the Bill-wise Details screen, press Enterto accept the default bill allocations




Engine Valve - 5" 500 250 125,000.00






Total Cess Value 600.00

Total Amount 145,600.00

Value Added Tax (VAT) 4% 5,824.00



49/50

Transactions

46

The completed Sales Voucherscreen is displayed as shown.

Figure 2.10 Sales Voucher


Step 2 : Print Sales Invoice

13. Press Pg Up

14. Press Alt + Pand press Enter


50/50

Transactions

The printed Sales Invoicescreen is as shown.

Excise Accounting PDF

Documents

Transcript of Excise Accounting PDF