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  • 1. Excise Accounting in Tally 9
  • 2. ©Tally (India) Pvt. Ltd. 2007Contents of this document, the design and layout is the intellectual property of Tally (India) Private Limited. Names of companies andpersons used in this publication are hypothetical and have been used for illustrative purposes. No part of this publication can bereproduced or transmitted in any form or by any means without the prior written permission of Tally (India) Private Limited. Breach ofthis 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 partof Tally (India) Private Limited.This publication is being issued and released on the condition and understanding that the information, comments and views it containsare 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 abonafide user, on account of any action taken or not taken on the basis of this publication. Despite all the care taken, errors or omissionsmay have crept inadvertently into this publication. Tally (India) Private Limited shall be obliged if any such error or omission is broughtto their notice for possible correction in a future edition. All disputes are subject to the jurisdiction of the competent courts inBangalore.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. ContentsIntroduction Excise 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 ................................................................................................................. 3 Education Cess on Customs Duty............................................................................................................................... 4 Secondary and Higher Education Cess on imported goods ....................................................................................... 4 Basis of Calculation of Duties .................................................................................................................................... 51. 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 ............................................................................................................................................................ 312. Transactions 2.1 Purchases ................................................................................................................................................................ 33 2.2 Sales ........................................................................................................................................................................ 45 i
  • 4. IntroductionThe 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 DutyBusinesses 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 DutyExcise Duty or Duty of Excise is 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 CentralExcise 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 TextileArticles) 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: 1
  • 5. IntroductionBasic Excise DutyBasic Excise Duty is levied under Sec. 3 of Central Excise Act, 1944 on all excisable goods otherthan 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 ExciseSpecial 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.The Additional Duty is 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 CustomsAct, 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 DutyThe 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 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 theexisting Education Cess of 2% and is calculated in the same manner as Education Cess. TheExisting Education Cess (2%) and Secondary and Higher Education Cess (1%) are to beexcluded while calculating both the Cesses. 2
  • 6. IntroductionCustoms DutyCustoms Duty is a tax on import into India and export out of India. The levy and collection ofCustoms 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 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 atstandard rate or at preferential rate).In order to promote Indian agriculture and Indian automobile sector, duties on some articles arecharged 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 DutyAdditional 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 rateamong 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 DutySpecial Additional Duty is levied to provide a common base to domestic goods which have tosuffer 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) 3
  • 7. IntroductionConsider 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 DutyThe 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: Sl.No. Particulars Rate of Amount Duty (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% 79.17Thus, 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 goodsThe 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 tothe 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) 4
  • 8. IntroductionBasis of Calculation of DutiesExcise 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 — AED [GSI] On Assessable Value Goods of Special Importance 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)Customs Duty Sl.No. Duties of Customs Basis of Calculation 1. Basic Customs Duty BCD On Assessable Value 2. Countervailing Duty CVD On Assessable Value + BCD 3. Educational Cess On (BCD+CVD) excluding CVD on subsidised Articles 4. Sec. & Higher Educational Cess On (BCD+CVD) excluding CVD on subsidised Articles & above Education Cess 5
  • 9. 1. Creation of MastersTally 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 Tallyfor Excise Accounting to be activated.1.1 Company SetupConsider 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 screenIn the Company Creation screen, Select India in the Statutory compliance for field Specify the State and Pin Code details Select Accounts with Inventory in the Maintain field 6
  • 10. Creation of MastersThe 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
  • 11. Creation of MastersThe Statutory & Taxation screen is displayed as shown. Figure 1.2 F11 - Statutory and Taxation screen 2. Press Enter and the VAT Details screen appears 3. Select Karnataka in the State field 4. 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
  • 12. Creation of MastersThe completed F11: Statutory & Taxation screen is displayed as shown. Figure 1.4 F11: Statutory & Taxation screen 7. Press Enter to accept 9
  • 13. Creation of Masters1.2 Ledger ClassificationsCreate necessary Purchases, Sales, Party ledgers & Excise Duty, Customs Duty ledgers andStock Items as explained below:1.2.1 Party Ledgers Ledger Under Maintain balances Inventory Values bill-by-bill are affected Sterling Steel Industries Sundry Creditors Yes No Decora Equipments Sundry Debtors Yes NoGo 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 acceptCreate M/s. Decora Equipments ledger in the similar manner. 10
  • 14. Creation of Masters1.2.2 Sales and Purchases Ledger Ledger Under Inventory values Used in VAT VAT/Tax Class are affected Returns Sales–Excisable Sales Yes Yes Sales @ 4% Goods Accounts Purchases– Purchase Yes Yes Purchases @ Excisable Goods Accounts 4% If VAT is not applicable, then set Used in the VAT Returns to No.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. 11
  • 15. Creation of Masters1.2.3 VAT Tax Ledgers Ledger Under Type of VAT/Tax Inventory Percent- Method Duty/Tax Class Values are age of of Cal- affected Calcula- culation tion Input VAT @ 4% Duties & VAT Input VAT No 4% On VAT Taxes @ 4% Rate Output VAT @ 4% Duties & VAT Output VAT No 4% On VAT Taxes @ 4% RateGo to Gateway of Tally > Accounts Info. > Ledgers > CreateThe 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. 12
  • 16. Creation of Masters1.2.4 Excise Duty Ledgers Ledger Under Type of Duty Inventory Percent- Method of Duty/Tax Head Values are age of Cal- Calcula- affected culation tion Basic Excise Duty Duties Excise Excise No 16% On Total & Taxes Duty Sales Special Excise Duties Excise Special No 4% On Total Duty & Taxes Duty Sales Education Cess Duties Excise Cess on No 2% Surcharge on Excise Duty & Taxes Duty on Tax Secondary and Duties Excise Cess on No 1% Surcharge Higher Education & Taxes Duty on Tax Cess on Excise DutyBasic Excise Duty LedgerGo to Gateway of Tally > Accounts Info. > Ledgers > CreateIn the Ledger Creation screen, 1. Type Basic Excise Duty in the Name field 2. Select Duties & Taxes in the Under field 3. Select Excise in the Type of Duty/Tax field 13
  • 17. Creation of MastersThe Ledger Creation screen for Basic Excise Duty is displayed as shown.. Figure 1.8 Ledger Creation screen for Basic Excise Duty 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. VAT This 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. 4. Select Excise Duty in the Duty Head field 14
  • 18. Creation of MastersThe Ledger Creation screen for Basic Excise Duty is 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 on the 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. 15
  • 19. Creation of Masters 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. 5. Set Inventory values are affected to No 6. Specify 16% in the Percentage of Calculation field and press Enter 7. Select On Total Sales in the Method of Calculation fieldThe Ledger Creation screen for Basic Excise Duty is displayed as shown. Figure 1.10 Ledger Creation screen for Basic Excise Duty 16
  • 20. Creation of Masters 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 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.The completed Ledger Creation screen for Basic Excise Duty is displayed as shown. Figure 1.11 Completed Ledger Creation screen for Basic Excise Duty 8. Press Enter to accept 17
  • 21. Creation of MastersSpecial Excise Duty LedgerGo to Gateway of Tally > Accounts Info. > Ledgers > CreateIn the Ledger Creation screen, 1. Type Special Excise Duty in the Name field 2. Select Duties & Taxes in the Under field 3. Select Excise in the Type of Duty/Tax field 4. Select Special Duty in the Duty Head fieldThe Ledger Creation screen for Special Excise Duty is displayed as shown. Figure 1.12 Ledger Creation screen for Special Excise Duty 5. Set Inventory values are affected to No 6. Specify 4% in the Percentage of Calculation field and press Enter 7. Select On Total Sales in the Method of Calculation field 18
  • 22. Creation of MastersThe completed Ledger Creation screen for Special Excise Duty is displayed as shown. Figure 1.13 Completed Ledger Creation screen for Special Excise Duty 8. Press Enter to acceptEducation Cess on Excise Duty LedgerGo to Gateway of Tally > Accounts Info. > Ledgers > CreateIn the Ledger Creation screen, 1. Type Educ. Cess on Excise Duty in the Name field 2. Select Duties & Taxes in the Under field 3. Select Excise in the Type of Duty/Tax field 4. Select Cess On Duty in the Duty Head field 19
  • 23. Creation of MastersThe 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 No 6. Specify 2% in the Percentage of Calculation field and press Enter 7. Select Surcharge on Tax in the Method of Calculation field 20
  • 24. Creation of MastersThe Ledger Creation screen for Educ. Cess on Excise Duty is displayed as shown. Figure 1.15 Ledger Creation screen for Educ. Cess on Excise Duty 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 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/ Cus¬toms. 21
  • 25. Creation of MastersThe completed Ledger Creation screen for Educ. Cess on Excise Duty is displayed as shown. Figure 1.16 Ledger Creation screen for Educ. Cess on Excise Duty 8. Press Enter to accept 22
  • 26. Creation of MastersSecondary & Higher Education Cess on Excise Duty LedgerGo to Gateway of Tally > Accounts Info. > Ledgers > CreateThe 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 Press Enter to accept 23
  • 27. Creation of MastersCustoms Duty Ledgers Ledger Under Type of Duty Inventory Percent- Method of Duty/Tax Head Values age of Calcula- are Calcula- tion affected tion Basic Customs Duties Excise Customs No 25% On Total Duty & Taxes Duty Sales Countervailing Duties Excise Customs No 4% On Total Duty (CVD) & Taxes Duty Sales Education Cess Duties Excise Cess on No 2% Surcharge on Customs Duty & Taxes Customs on Tax Duty Secondary and Duties Excise Cess on No 1% Surcharge Higher Education & Taxes Customs on Tax Cess on Customs Duty DutyBasic Customs Duty LedgerGo to Gateway of Tally > Accounts Info. > Ledgers > CreateIn the Ledger Creation screen, 1. Type Basic Customs Duty in the Name field 2. Select Duties & Taxes in the Under field 3. Select Excise in the Type of Duty/Tax field 24
  • 28. Creation of MastersThe 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
  • 29. Creation of MastersThe Ledger Creation screen for Basic Customs Duty is displayed as shown. Figure 1.19 Ledger Creation screen for Basic Customs Duty 5. Set Inventory values are affected to No 6. Specify 25% in the Percentage of Calculation field and press Enter 7. Select On Total Sales in the Method of Calculation field 26
  • 30. Creation of MastersThe Ledger Creation screen for Basic Customs Duty is displayed as shown. Figure 1.20 Ledger Creation screen for Basic Customs DutyThe completed Basic Customs Duty ledger screen is displayed as shown. Figure 1.21 Completed Basic Customs Duty ledger screen 8. Press Enter to accept 27
  • 31. Creation of MastersCountervailing Duty (CVD) LedgerAs 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: 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
  • 32. Creation of MastersStep 2: Create CVD LedgerGo to Gateway of Tally > Accounts Info. > Ledgers > CreateIn the Ledger Creation screen, 1. Type Countervailing Duty (CVD) in the Name field 2. Select Duties & Taxes in the Under field 3. Select Excise in the Type of Duty/Tax field 4. Select Customs Duty in the Duty Head field 5. Set Inventory values are affected to No 6. Specify 4% in the Percentage of Calculation field and press Enter 7. Select On Total Sales in the Method of Calculation fieldThe completed Ledger Creation screen for Countervailing Duty (CVD) is displayed as shown. Figure 1.23 Ledger Creation screen for Countervailing Duty (CVD) 8. Press Enter to accept 29
  • 33. Creation of MastersEducation Cess on Customs DutyGo to Gateway of Tally > Accounts Info. > Ledgers > CreateIn the Ledger Creation screen, 1. Type Educ. Cess on Customs Duty in the Name field 2. Select Duties & Taxes in the Under field 3. Select Excise in the Type of Duty/Tax field 4. Select Cess on Customs Duty in the Duty Head field 5. Set Inventory values are affected to No 6. Specify 2% in the Percentage of Calculation field and press Enter 7. Select Surcharge on Tax in the Method of Calculation fieldThe completed Ledger Creation screen for Education Cess on Customs Duty is displayed asshown. Figure 1.24 Ledger Creation screen for Education Cess on Customs Duty 8. Press Enter to accept 30
  • 34. Creation of MastersSecondary & Higher Education Cess on Customs DutyGo to Gateway of Tally > Accounts Info > Ledgers > CreateThe completed Ledger Creation screen for Sec. & Higher Educ. Cess on Customs Duty isdisplayed as shown. Figure 1.25 Ledger Creation screen for Secondary & Higher Education Cess on Customs Duty Press Enter to accept1.3 Stock ItemsFor entering the transactions of purchase and sales, create the Stock items with the unit ofmeasure. By this you will be able to raise the Item Invoice and get the Stock Summary with allStock Item details.Create the following Stock Items Stock Item Under Units Hot Rolled Coils – 100mm Primary MT Iron Bars Primary Kgs Copper Alloy Strips Primary Kgs Engine Valve – 5” Primary Nos 31
  • 35. Creation of MastersGo to Gateway of Tally > Inventory Info. > Stock Items > CreateIn the Stock Item creation screen, 1. Type Hot Rolled Coils – 100mm in the Name field 2. Select Primary from the List of Groups in the Under field 3. Select MT (Metric Tonnes) in the Units fieldThe completed Stock Item Creation screen is displayed as shown. Figure 1.26 Stock Item Creation 4. Press Enter to acceptSimilarly, create other Stock Items. 32
  • 36. 2. Transactions2.1 PurchasesConsider the following example to illustrate Excise Purchases transactions.Illustration 1On 2nd April 2007, M/s. Steelage Industries purchased the following goods from M/s. SterlingSteel Industries vide Bill No. 483. 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 250,848.00The same is accounted as shown. 33
  • 37. TransactionsCreate Purchase InvoiceGo to Gateway of Tally > Accounting Vouchers > press F9: Purchase 1. Press F2 and change the date to 02/04/2007 2. Specify 483 as the Supplier Invoice No. and the Date as 02/04/2007 3. Select Sterling Steel Industries in Party’s A/c Name field and press Enter 4. 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 field 6. Type the Quantity as 400, Rate as 500 and press Enter to accept the Amount 7. 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 amount 9. Select Educ. Cess on Excise Duty and press Enter to accept the rate and cess amount 34
  • 38. TransactionsThe 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 screen 14. Type the details of the transaction in the Narration field 35
  • 39. TransactionsThe completed Purchase Voucher screen is displayed as shown. Figure 2.3 Purchase Voucher screen 15. Press Enter to accept 36
  • 40. TransactionsIllustration 2On 3rd April 2007, M/s. Steelage Industries purchased the following goods from M/s. SouthernMetalloys Pvt. Ltd., Bangalore (vide Bill No.12). 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 when Additional duty is chargeable.The same is accounted as shown:Create necessary Purchases, Party ledgers and the following Duty ledgers to execute the abovetransaction. 37
  • 41. TransactionsExcise Duty Ledgers Ledger Under Type of Duty Head Inventory Percent- Method of Duty/Tax Values are age of Cal- Calcula- affected culation tion Additional Duties Excise Special No 8% On Total Duty of Excise & Taxes Duty Sales (GSI) National Duties Excise Cess on No 1% Surcharge Calamity Con- & Taxes Duty on Tax tingent Duty (NCCD)Go to Gateway of Tally > Accounts Info. > Ledgers > CreateThe 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 Enter to accept 38
  • 42. TransactionsThe 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 Enter to accept 39
  • 43. TransactionsCreate 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
  • 44. TransactionsGo to Gateway of Tally > Accounting Vouchers > press F9: PurchaseThe completed Purchase Voucher screen with AED, NCCD entry is displayed as shown. Figure 2.7 Purchase Voucher screen with AED, NCCD entry Press Enter to accept 41
  • 45. TransactionsIllustration 3On 4th April 2007, M/s. Steelage Industries imported the following goods from M/s. Spring SteelsPte Ltd., Germany (vide Bill No.24/2007). 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% 45.00 Total Cess Value 135.00 Total Invoice Amount 19,635.00The 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 04/04/2007 2. Specify 24/2007 as the Supplier Invoice No. and the Date as 04/04/2007 3. Select Spring Steels Pte Ltd., in Party’s A/c Name and press Enter 4. 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 field 6. Type the Quantity as 100, Rate as 150 and press Enter to accept the Amount 7. Select Basic Customs Duty and press Enter to accept the rate and duty amount 8. Select Countervailing Duty (CVD) and press Enter to accept the rate and duty amount 42
  • 46. TransactionsThe Purchase Voucher screen with CVD entry is displayed as shown. Figure 2.8 Purchase Voucher screen with CVD entryYou 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 screen 13. Type the details of the transaction in the Narration field 43
  • 47. TransactionsThe completed Purchase Voucher screen is displayed as shown. Figure 2.9 Purchase Voucher 14. Press Enter to accept The above invoice can also be entered in multi-currency. 44
  • 48. Transactions2.2 SalesConsider the following example to illustrate Excise Sales transactions.Illustration 4On 5th April 2007, M/s. Steelage Industries sells the following goods to M/s. Decora Equipments,Bangalore. 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 151,424.00The 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 05/04/2007 2. Select Decora Equipments in Party’s A/c Name and press Enter 3. 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 Enter 5. Type the Quantity as 500, Rate as 250 and press Enter twice 6. Select Basic Excise Duty and press Enter to accept the rate and duty amount 7. Select Educ. Cess on Excise Duty and press Enter to accept the rate and cess amount 8. Select Sec. & Higher Educ. Cess on Excise Duty and press Enter to accept the rate and cess amount 9. 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 allocations 11. Type the details of the transaction in the Narration field 45
  • 49. TransactionsThe completed Sales Voucher screen is displayed as shown. Figure 2.10 Sales Voucher 12. Press Enter to acceptStep 2 : Print Sales Invoice 13. Press Pg Up 14. Press Alt + P and press Enter 46
  • 50. TransactionsThe printed Sales Invoice screen is as shown. Figure 2.11 Printed Sales Invoice 47