excise accounting pdf
TRANSCRIPT
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Excise Accounting
in Tally 9
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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
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printers and distributors who do not owe any responsibility whatsoever for any loss, damage or distress to any persons, whether or not a
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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
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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 ....................................................................................................................................................... 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
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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:
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Introduction
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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.
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Introduction
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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)
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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
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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
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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 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
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Creation of Masters
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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
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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
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The completed F11: Statutory & Taxation screen is displayed as shown.
Figure 1.4 F11: Statutory & Taxation screen
7. Press Enterto accept
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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
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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
Press Enterto accept
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.
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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 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
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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 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
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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.
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The Ledger Creation screen for Basic Excise Dutyis displayed as shown.
Figure 1.9 Ledger Creation screen for Basic Excise Duty
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.
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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
The Ledger Creation screen for Basic Excise Dutyis displayed as shown.
Figure 1.10 Ledger Creation screen for Basic Excise Duty
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.
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The completed Ledger Creation screen for Basic Excise Dutyis displayed as shown.
Figure 1.11 Completed Ledger Creation screen for Basic Excise Duty
8. Press Enterto accept
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.
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Special Excise Duty Ledger
Go to Gateway of Tally >Accounts Info. >Ledgers >Create
In the Ledger Creation screen,1. Type Special Excise Dutyin the Namefield
2. Select Duties & Taxesin the Underfield
3. Select Excisein the Type of Duty/Taxfield
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
5. Set Inventory values are affectedto No
6. Specify 4%in the Percentage of Calculationfield and press Enter
7. Select On Total Salesin the Method of Calculationfield
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The completedLedger Creation screen for Special Excise Dutyis displayed as shown.
Figure 1.13 Completed Ledger Creation screen for Special Excise Duty
8. Press Enterto accept
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 Dutyin the Namefield
2. Select Duties & Taxes in the Underfield
3. Select Excisein the Type of Duty/Taxfield
4. Select Cess On Dutyin the Duty Headfield
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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
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The Ledger Creation screen for Educ. Cess on Excise Dutyis displayed as shown.
Figure 1.15 Ledger Creation screen for Educ. Cess on Excise Duty
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.
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The completed Ledger Creation screen for Educ. Cess on Excise Dutyis displayed as shown.
Figure 1.16 Ledger Creation screen for Educ. Cess on Excise Duty
8. Press Enterto accept
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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 Dutyin the Namefield
2. Select Duties & Taxesin the Underfield
3. Select Excisein the Type of Duty/Taxfield
Ledger Under Type ofDuty/Tax
DutyHead
InventoryValuesareaffected
Percent-age ofCalcula-tion
Method 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
No 2% Surchargeon Tax
Secondary andHigher EducationCess on CustomsDuty
Duties& Taxes
Excise Cess onCustomsDuty
No 1% Surchargeon Tax
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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
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The Ledger Creation screen for Basic Customs Dutyis displayed as shown.
Figure 1.19 Ledger Creation screen for Basic Customs Duty
5. Set Inventory values are affectedto No
6. Specify 25%in the Percentage of Calculationfield and press Enter7. Select On Total Salesin the Method of Calculationfield
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The Ledger Creation screen for Basic Customs Dutyis displayed as shown.
Figure 1.20 Ledger Creation screen for Basic Customs Duty
The completed Basic Customs Dutyledger screen is displayed as shown.
Figure 1.21 Completed Basic Customs Duty ledger screen
8. Press Enterto accept
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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.
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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 Namefield
2. Select Duties & Taxes in the Underfield
3. Select Excisein the Type of Duty/Taxfield
4. Select Customs Dutyin the Duty Headfield
5. Set Inventory values are affectedto No
6. Specify 4%in the Percentage of Calculationfield and press Enter
7. Select On Total Salesin the Method of Calculationfield
The completed Ledger Creation screen forCountervailing Duty (CVD)is displayed as shown.
Figure 1.23 Ledger Creation screen for Countervailing Duty (CVD)
8. Press Enterto accept
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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 Dutyin the Namefield
2. Select Duties & Taxesin the Underfield
3. Select Excisein the Type of Duty/Taxfield
4. Select Cess on Customs Dutyin the Duty Headfield
5. Set Inventory values are affectedto No
6. Specify 2%in the Percentage of Calculationfield and press Enter
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
8. Press Enterto accept
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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
4. Press Enterto accept
Similarly, create other Stock Items.
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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
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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
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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
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The completed Purchase Voucherscreen is displayed as shown.
Figure 2.3 Purchase Voucher screen
15. Press Enterto accept
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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.
Particulars Quantity Rate Amount
(in MT) (in Rs.) (in Rs.)
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 whenAdditional duty is chargeable.
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Excise Duty Ledgers
Go to Gateway of Tally >Accounts Info. >Ledgers >Create
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)
Press Enterto accept
Ledger Under Type ofDuty/Tax
Duty Head InventoryValues areaffected
Percent-age of Cal-culation
Method ofCalcula-tion
AdditionalDuty of Excise(GSI)
Duties& Taxes
Excise SpecialDuty
No 8% On TotalSales
NationalCalamity Con-tingent Duty(NCCD)
Duties& Taxes
Excise Cess onDuty
No 1% Surchargeon Tax
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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)
Press Enterto accept
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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
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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
Press Enterto accept
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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
Particulars Quantity Rate Amount
(in MT) (in Rs.) (in Rs.)
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% 45.00Total Cess Value 135.00
Total Invoice Amount 19,635.00
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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
13. Type the details of the transaction in the Narrationfield
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The completedPurchase Voucherscreen is displayed as shown.
Figure 2.9 Purchase Voucher
14. Press Enterto accept
The above invoice can also be entered in multi-currency.
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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
11. Type the details of the transaction in the Narrationfield
Particulars Quantity Rate Amount
(in MT) (in Rs.) (in Rs.)
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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The completed Sales Voucherscreen is displayed as shown.
Figure 2.10 Sales Voucher
12. Press Enterto accept
Step 2 : Print Sales Invoice
13. Press Pg Up
14. Press Alt + Pand press Enter
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The printed Sales Invoicescreen is as shown.