Excise Accounting

Excise Accounting in Tally 9

©Tally (India) Pvt. Ltd. 2007

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

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Contents

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

Basic Excise Duty ....................................................................................................................................................... 2Special Duty of Excise ................................................................................................................................................ 2Additional Duty of Excise (AED)................................................................................................................................ 2Education Cess on Excise Duty .................................................................................................................................. 2Secondary and Higher Education Cess on Excisable Goods ..................................................................................... 2

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

Basic Customs Duty .................................................................................................................................................... 3Additional Customs Duty ............................................................................................................................................ 3Special Additional Duty on Customs Duty ................................................................................................................. 3Education Cess on Customs Duty ............................................................................................................................... 4Secondary and Higher Education Cess on imported goods ....................................................................................... 4Basis of Calculation of Duties .................................................................................................................................... 5

1. Creation of Masters1.1 Company Setup ....................................................................................................................................................... 6

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

1.2.1 Party Ledgers.................................................................................................................................................. 101.2.2 Sales and Purchases Ledger .......................................................................................................................... 111.2.3 VAT Tax Ledgers ............................................................................................................................................ 121.2.4 Excise Duty Ledgers ....................................................................................................................................... 13

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

2. Transactions2.1 Purchases................................................................................................................................................................ 33

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

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 the central 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 are imported into or exported out or manufactured in India:

Excise Duty Customs Duty

Businesses engaged in manufacturing / production of excisable goods or imports of goods into India 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 and customs applicable to manufacturers and importers.

Excise DutyExcise Duty or Duty of Excise is a tax on goods produced or manufactured in India and intended for home consumption i.e., sale in India. The Excise Duty is chargeable at the time of production or 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 ultimate consumer. 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 is commonly 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 and Miscellaneous Cess Acts provide authority for collection of Additional Excise Duty and Cess respectively on several manufactured items over and above Basic Excise Duty.

The Duties levied under Central Excise Act are:

1

Introduction

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 general rate is 16% and there is a partial exemption for a few products. It is also termed as CENVAT.

Special Duty of ExciseSpecial Duty of Excise is leviable on items covered in Schedule II to Central Excise Tariff, like aerated 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 be levied 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 between Central and State Governments. The Additional Duty is in addition to Excise Duty. Rules, procedures, penalties, etc. for collecting these 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 on aggregate of all duties of excise including special Excise Duty or any other duty of excise, but excluding Education Cess on excisable goods). All provisions of Central Excise Act, including those 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 will be 0.32%.

Secondary and Higher Education Cess on Excisable GoodsThe 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 the existing 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 be excluded while calculating both the Cesses.

2

Introduction

Customs DutyCustoms 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 basic Customs 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 DutyBasic 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 at standard 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 under section 3(1) Customs Tariff Act. It is basically imposed when the excisable goods are imported, in order 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 Duty that 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 Customs Duty payable plus any other sum chargeable on that commodity under any law in addition to and in the same manner as duty of customs (i.e., NCCD of Customs), but excluding Anti Dumping Duty, Special Additional Duty and Safeguard Duty. For instance, if the Customs Value of goods is Rs. 20,000, Customs Duty is 30% and Excise Duty on 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/- [Rs 20,000+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 value2. Basic Duty of Customs 3. Surcharge 4. Additional duty of Customs (CVD)

3

Introduction

Consider the example explained in the above paragraph. If the Special Additional Duty (SAD) is payable @ 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 of customs, to be calculated on aggregate of custom duties on imported goods but excluding safeguard duty, Countervailing duty on subsidised Articles, Anti Dumping Duty levied under Customs Tariff Act and the Education Cess on imported goods.All provisions, rules and regulations of Customs Act, including those relating to refund, exemption from 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 - Rs 1,958.40/- and Education Cess Rs. 79.17/-.

Secondary and Higher Education Cess on imported goodsThe Finance Act 2007 has imposed an additional Cess termed Secondary and Higher Education Cess @ 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. The Existing Education Cess (2%) and Secondary & Higher Education Cess (1%) are to be excluded while 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 of Duty

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

4

Introduction

Basis of Calculation of Duties

Excise Duty

Customs Duty

Sl.No. Duties of Excise Basis of Calculation1. Basic Excise Duty BED On Assessable Value2. Special Excise Duty SED On Assessable Value3. Additional Duty of Excise —

Goods of Special ImportanceAED [GSI] On Assessable Value

4. Additional Duty of Excise —T&TW AED [T&TW] On Assessable Value5. 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 Calculation1. Basic Customs Duty BCD On Assessable Value2. Countervailing Duty CVD On Assessable Value + BCD3. Educational Cess On (BCD+CVD) excluding CVD

on subsidised Articles4. Sec. & Higher Educational Cess On (BCD+CVD) excluding CVD

on subsidised Articles & above Education Cess

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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 greater levels 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 SetupConsider the following example which illustrates creation of a new company in Tally 9 for Excise Accounting in Tally.

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

Step 1: Create/ Alter Company screenIn the Company Creation screen,

Select India in the Statutory compliance for fieldSpecify the State and Pin Code details Select Accounts with Inventory in the Maintain field

6

Creation of Masters

The completed Company Creation screen is displayed as shown.

Figure 1.1 Company Creation screen

Press Enter to accept.

Step 2: F11: Statutory & Taxation featuresGo to Gateway of Tally > press F11: Features > Statutory & Taxation

1. Set Enable Value Added Tax (VAT) and Set/Alter VAT Details to Yes

7

Creation of Masters

The Statutory & Taxation screen is displayed as shown.

Figure 1.2 F11 - Statutory and Taxation screen

2. Press Enter and the VAT Details screen appears3. Select Karnataka in the State field4. Select Regular in the Type of Dealer field 5. Enter the date of applicability in the Regular VAT Applicable From field

The VAT Details screen is displayed as shown.

Figure 1.3 VAT Details screen

6. Specify the VAT TIN numbers, Inter-state Sales Tax Number and PAN/ Income-Tax No. details

8

Creation of Masters

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

Figure 1.4 F11: Statutory & Taxation screen

7. Press Enter to accept

9

Creation of Masters

1.2 Ledger ClassificationsCreate 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 > CreateThe completed Ledger Creation screen of Sterling Steel Industries is displayed as shown.

Figure 1.5 Ledger Creation screen of Sterling Steel Industries

Press Enter to accept

Create M/s. Decora Equipments ledger in the similar manner.

Ledger Under Maintain balances bill-by-bill

Inventory Values are affected

Sterling Steel Industries Sundry Creditors Yes NoDecora Equipments Sundry Debtors Yes No

10

Creation of Masters

1.2.2 Sales and Purchases Ledger

Go to Gateway of Tally > Accounts Info. > Ledgers > CreateThe completed Ledger Creation screen of Sales – Excisable Goods is displayed as shown.

Figure 1.6 Ledger Creation screen of Sales – Excisable Goods

Press Enter to acceptSimilarly, create purchase ledger.

Ledger Under Inventory values are affected

Used in VAT Returns

VAT/Tax Class

Sales–Excisable Goods

Sales Accounts

Yes Yes Sales @ 4%

Purchases–Excisable Goods

Purchase Accounts

Yes Yes Purchases @ 4%

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

11

Creation of Masters

1.2.3 VAT Tax Ledgers

Go to Gateway of Tally > Accounts Info. > Ledgers > Create The completed Input VAT @ 4% ledger screen is displayed as shown.

Figure 1.7 Input VAT Ledger Creation screen

Press Enter to accept.

Similarly, create Output VAT @ 4% ledger.

Ledger Under Type of Duty/Tax

VAT/Tax Class


Percent-age of Calcula-tion

Method of Cal-culation

Input VAT @ 4% Duties & Taxes

VAT Input VAT @ 4%

No 4% On VAT Rate

Output VAT @ 4% Duties & Taxes

VAT Output VAT @ 4%

No 4% On VAT Rate

12

Creation of Masters

1.2.4 Excise Duty Ledgers

Basic Excise Duty Ledger

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

In the Ledger Creation screen,1. Type Basic Excise Duty in the Name field2. Select Duties & Taxes in the Under field3. Select Excise in the Type of Duty/Tax field


Duty Head


Percent-age of Cal-culation

Method of Calcula-tion

Basic Excise Duty Duties & Taxes

Excise Excise Duty

No 16% On Total Sales

Special Excise Duty

Duties & Taxes

Excise Special Duty


Education Cess on Excise Duty

Duties & Taxes

Excise Cess on Duty

No 2% Surcharge on Tax

Secondary and Higher Education Cess on Excise Duty

Duties & Taxes

Excise Cess on Duty


13

Creation of Masters

The Ledger Creation screen for Basic Excise Duty is displayed as shown..

Figure 1.8 Ledger Creation screen for Basic Excise Duty

4. Select Excise Duty in the Duty Head field

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:

CSTThis tax type is used in tax ledgers for calculating tax on sales/ purchases made in the course of Interstate trade or commerce.

ExciseThis 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.

OthersThis tax type is used in tax ledgers for calculating tax (if any) other than the types mentioned above, which are applicable on the sales.

14

Creation of Masters

The Ledger Creation screen for Basic Excise Duty is displayed as shown.


Duty Head refers to the type of Excise duty or Customs Duty applicable on the goods manufactured and imported respectively.In Tally, there are basically six Duty Head types:

Additional DutyThis 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 DutyThis 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 DutyThis 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.

15

Creation of Masters

5. Set Inventory values are affected to No6. Specify 16% in the Percentage of Calculation field and press Enter7. Select On Total Sales in the Method of Calculation field

The Ledger Creation screen for Basic Excise Duty is displayed as shown.


Customs DutyThis 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 DutyThis duty head is used when the duty amount is to be calcu-lated on the Assessable Value of the manufactured goods.

Special DutyThis 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.

16

Creation of Masters

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

Figure 1.11 Completed Ledger Creation screen for Basic Excise Duty


Type of Duty under 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 Excise Duty.

On Total SalesThis 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 RateThis method is used when the computation of duty/ tax is to be done on the rate of the Stock Item.

17

Creation of Masters

Special Excise Duty LedgerGo to Gateway of Tally > Accounts Info. > Ledgers > Create In the Ledger Creation screen,

1. Type Special Excise Duty in the Name field2. Select Duties & Taxes in the Under field3. Select Excise in the Type of Duty/Tax field4. Select Special Duty in the Duty Head field

The Ledger Creation screen for Special Excise Duty is displayed as shown.

Figure 1.12 Ledger Creation screen for Special Excise Duty


18

Creation of Masters

The completed Ledger Creation screen for Special Excise Duty is displayed as shown.

Figure 1.13 Completed Ledger Creation screen for Special Excise Duty


Education Cess on Excise Duty Ledger

Go to Gateway of Tally > Accounts Info. > Ledgers > Create In the Ledger Creation screen,

1. Type Educ. Cess on Excise Duty in the Name field2. Select Duties & Taxes in the Under field3. Select Excise in the Type of Duty/Tax field4. Select Cess On Duty in the Duty Head field

19

Creation of Masters

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

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

5. Set Inventory values are affected to No6. Specify 2% in the Percentage of Calculation field and press Enter7. Select Surcharge on Tax in the Method of Calculation field

20

Creation of Masters

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


Types of Duty under 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 DutyThis 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 TaxThis 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/ Cus¬toms.

21

Creation of Masters

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



22

Creation of Masters

Secondary & Higher Education Cess on Excise Duty Ledger

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

The completed Sec. & Higher Educ. Cess on Excise Duty ledger screen is displayed as shown.

Figure 1.17 Completed Sec. & Higher Educ. Cess on Excise Duty ledger screen


23

Creation of Masters

Customs Duty Ledgers

Basic Customs Duty Ledger

Go to Gateway of Tally > Accounts Info. > Ledgers > Create In the Ledger Creation screen,

1. Type Basic Customs Duty in the Name field2. Select Duties & Taxes in the Under field3. Select Excise in the Type of Duty/Tax field


Duty Head


Percent-age of Calcula-tion


Basic Customs Duty

Duties & Taxes

Excise Customs Duty


Countervailing Duty (CVD)

Duties & Taxes

Excise Customs Duty


Education Cess on Customs Duty

Duties & Taxes

Excise Cess on Customs Duty


Secondary and Higher Education Cess on Customs Duty

Duties & Taxes

Excise Cess on Customs Duty


24

Creation of Masters

The Ledger Creation screen for Basic Customs Duty is displayed as shown.

Figure 1.18 Ledger Creation screen for Basic Customs Duty

4. Select Customs Duty in the Duty Head field

25

Creation of Masters




26

Creation of Masters



The completed Basic Customs Duty ledger screen is displayed as shown.

Figure 1.21 Completed Basic Customs Duty ledger screen


27

Creation of Masters

Countervailing Duty (CVD) LedgerAs explained in the earlier chapter, Countervailing Duty (CVD) is calculated on the Assessable value of goods plus basic customs duty plus National Calamity Contingent Duty (NCCD of Customs). Hence, to facilitate computation of CVD on current sub-total, define the following con-figuration in F12. Step 1: F12: ConfigureGo to Gateway of Tally > F12: Configure > Invoice / Orders Entry

Set Calculate Tax on current Sub-Total to Yes

Figure 1.22 F12: Configuration - CVD

You can also enable the above settings during voucher entry.

28

Creation of Masters

Step 2: Create CVD Ledger Go to Gateway of Tally > Accounts Info. > Ledgers > Create In the Ledger Creation screen,

1. Type Countervailing Duty (CVD) in the Name field2. Select Duties & Taxes in the Under field3. Select Excise in the Type of Duty/Tax field4. Select Customs Duty in the Duty Head field5. Set Inventory values are affected to No6. Specify 4% in the Percentage of Calculation field and press Enter7. Select On Total Sales in the Method of Calculation field

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

Figure 1.23 Ledger Creation screen for Countervailing Duty (CVD)


29

Creation of Masters

Education Cess on Customs Duty Go to Gateway of Tally > Accounts Info. > Ledgers > Create In the Ledger Creation screen,

1. Type Educ. Cess on Customs Duty in the Name field2. Select Duties & Taxes in the Under field3. Select Excise in the Type of Duty/Tax field4. Select Cess on Customs Duty in the Duty Head field5. Set Inventory values are affected to No6. Specify 2% in the Percentage of Calculation field and press Enter7. Select Surcharge on Tax in the Method of Calculation field

The completed Ledger Creation screen for Education Cess on Customs Duty is displayed as shown.

Figure 1.24 Ledger Creation screen for Education Cess on Customs Duty


30

Creation of Masters

Secondary & Higher Education Cess on Customs Duty Go to Gateway of Tally > Accounts Info > Ledgers > Create

The completed Ledger Creation screen for Sec. & Higher Educ. Cess on Customs Duty is displayed as shown.

Figure 1.25 Ledger Creation screen for Secondary & Higher Education Cess on Customs Duty


1.3 Stock Items For entering the transactions of purchase and sales, create the Stock items with the unit of measure. By this you will be able to raise the Item Invoice and get the Stock Summary with all Stock Item details.Create the following Stock Items

Stock Item Under UnitsHot Rolled Coils – 100mm Primary MTIron Bars Primary KgsCopper Alloy Strips Primary KgsEngine Valve – 5” Primary Nos

31

Creation of Masters

Go to Gateway of Tally > Inventory Info. > Stock Items > CreateIn the Stock Item creation screen,

1. Type Hot Rolled Coils – 100mm in the Name field2. Select Primary from the List of Groups in the Under field3. Select MT (Metric Tonnes) in the Units field

The completed Stock Item Creation screen is displayed as shown.

Figure 1.26 Stock Item Creation


Similarly, create other Stock Items.

32

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. Sterling Steel 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

33

Transactions

Create Purchase InvoiceGo to Gateway of Tally > Accounting Vouchers > press F9: Purchase

1. Press F2 and change the date to 02/04/20072. Specify 483 as the Supplier Invoice No. and the Date as 02/04/20073. Select Sterling Steel Industries in Party’s A/c Name field and press Enter4. Select Purchases – Excisable Goods in the Purchase Ledger field and the VAT/

Tax Class field is automatically prefilled as Purchases @ 4% 5. Select Hot Rolled Coils – 100mm in the Name of the Item field6. Type the Quantity as 400, Rate as 500 and press Enter to accept the Amount7. Select Basic Excise Duty from List of Ledger Accounts and press Enter to accept

the rate and duty amount

Figure 2.1 Purchase Voucher screen with Basic Excise Duty entry

8. Select Special Excise Duty and press Enter to accept the rate and duty amount9. Select Educ. Cess on Excise Duty and press Enter to accept the rate and cess

amount

34

Transactions

The Purchase Voucher screen with Educ. Cess on Excise Duty is displayed as shown.

Figure 2.2 Purchase Voucher screen with Educ. Cess on Excise Duty

10. Select Sec. & Higher Educ. Cess on Excise Duty and press Enter to accept the rate and cess amount

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

12. In the Bill-wise Details screen, specify the Type of Ref as New Ref and type 483 in the Name field

13. Press Enter to accept the screen14. Type the details of the transaction in the Narration field

35

Transactions

The completed Purchase Voucher screen is displayed as shown.

Figure 2.3 Purchase Voucher screen


36

Transactions

Illustration 2

On 3rd April 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 above transaction.


Iron Bars 500 30 15,000.00 Assessable Value 15,000.00

Basic Excise Duty 16% 2,400.00 AED [GSI] 8% 1,200.00

Total Duty Value 3,600.00 NCCD 1% 36.00 Education Cess 2% 72.00 Sec. & Higher Education Cess 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 when Additional duty is chargeable.

37

Transactions

Excise Duty Ledgers

Go to Gateway of Tally > Accounts Info. > Ledgers > CreateThe completed Ledger Creation screen for Additional Duty of Excise (GSI) is displayed as shown.

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



Duty Head Inventory Values are affected

Percent-age of Cal-culation


Additional Duty of Excise (GSI)

Duties & Taxes

Excise Special Duty


National Calamity Con-tingent Duty (NCCD)

Duties & Taxes

Excise Cess on Duty


38

Transactions

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

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


39

Transactions

Create Purchase InvoiceSetup:Press F12, set Allow selection of VAT/Tax Class during entry to Yes.The F12: Configure screen is displayed as shown.

Figure 2.6 F12: Configure for Selecting of VAT Class

40

Transactions

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

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

Figure 2.7 Purchase Voucher screen with AED, NCCD entry


41

Transactions

Illustration 3

On 4th April 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 F2 and change date to 04/04/20072. Specify 24/2007 as the Supplier Invoice No. and the Date as 04/04/20073. Select Spring Steels Pte Ltd., in Party’s A/c Name and press Enter4. Select Purchases – Excisable Goods in the Purchase Ledger field and the VAT/

Tax Class as Imports 5. Select Copper Alloy Strips in the Name of Item field6. Type the Quantity as 100, Rate as 150 and press Enter to accept the Amount7. Select Basic Customs Duty and press Enter to accept the rate and duty amount8. Select Countervailing Duty (CVD) and press Enter to accept the rate and duty

amount


Copper Alloy Strips 100 150 15,000.00 Assessable Value 15,000.00

Basic Customs Duty 25% 3,750.00 Countervailing Duty 4% 750.00

Total Duty Value 4,500.00 Education Cess 2% 90.00 Sec. & Higher Education Cess 1% 45.00

Total Cess Value 135.00 Total Invoice Amount 19,635.00

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Transactions

The Purchase Voucher screen 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 Enter to accept the rate and cess amount

10. Select Sec. & Higher Educ. Cess on Customs Duty and press Enter to accept the rate and cess amount

11. In the billwise details screen, specify the Type of Ref as New Ref and press Enter to accept 24/2007 in the Name field

12. Press Enter to accept the screen13. Type the details of the transaction in the Narration field

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Transactions

The completed Purchase Voucher screen is displayed as shown.

Figure 2.9 Purchase Voucher


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

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Transactions

2.2 SalesConsider the following example to illustrate Excise Sales transactions. Illustration 4

On 5th April 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 InvoiceGo to Gateway of Tally > Accounting Vouchers > press F8: Sales

1. Press F2 and change date to 05/04/20072. Select Decora Equipments in Party’s A/c Name and press Enter3. Select Sales – Excisable Goods in the Sales Ledger field and the VAT/Tax is

defaulted as Sales @ 4%4. Select Engine Valve – 5” in the Name of the Item field and press Enter5. Type the Quantity as 500, Rate as 250 and press Enter twice6. Select Basic Excise Duty and press Enter to accept the rate and duty amount7. Select Educ. Cess on Excise Duty and press Enter to accept the rate and cess

amount8. Select Sec. & Higher Educ. Cess on Excise Duty and press Enter to accept the rate

and cess amount9. Select Output VAT @ 4% ledger and press Enter, the VAT amount i.e., Rs. 5,824 is

calculated automatically 10. In the Bill-wise Details screen, press Enter to accept the default bill allocations11. Type the details of the transaction in the Narration field


Engine Valve - 5" 500 250 125,000.00 Assessable Value 125,000.00

Basic Excise Duty 16% 20,000.00 Total Duty Value 20,000.00

Education Cess 2% 400.00 Sec. & Higher Education Cess 1% 200.00

Total Cess Value 600.00 Total Amount 145,600.00 Value Added Tax (VAT) 4% 5,824.00

Total Invoice Amount 151,424.00

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Transactions

The completed Sales Voucher screen is displayed as shown.

Figure 2.10 Sales Voucher


Step 2 : Print Sales Invoice13. Press Pg Up14. Press Alt + P and press Enter

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Transactions

The printed Sales Invoice screen is as shown.

Figure 2.11 Printed Sales Invoice

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Excise Accounting

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Transcript of Excise Accounting