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Excise For Manufacturer

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  • 1. Excise for Manufacturer Select the required Option Introduction to Central Excise Excise for Manufacturer in Tally.ERP
  • 2. Introduction to Central Excise
  • 3. Central Excise
    • Central Excise is an Indirect Tax
    • Levied by Central Government As per Central Excise Act, 1944
  • 4. Excise duty is Applicable on?
  • 5. Goods
    • What is GOODS ??
    • The article which is movable and marketable is called as GOODS
  • 6. The Goods which are Excisable
    • What is Excisable Goods ??
    • Articles which are included in Central Excise Tariff Act, 1985 (CETA) are called as ‘Excisable Goods’
    CETA 1985 Must be mentioned in Central Excise Tariff Act
  • 7. Manufactured / Produced in India*
    • Article which are Produced Or must be Manufactured – New & identifiable product known in the market must emerge
    Not Amounts to Manufacture Amounts to Manufacture
  • 8. What is Manufacturing? ….
    • Deemed Manufacturing
    • Packing, Labeling, drawing, Mixing, Diluting etc
  • 9. So… Excise duty is Applicable on?
    • GOODS which are movable and marketable
    • Goods which are mentioned in “ Central Excise Tariff Act”
    • Goods which are Manufactured in India
  • 10. How Excise Duty is calculated ?
    • Excise Rate : Excise Rate is a Percentage / Value to be charged as Duty on Assessable Value / Quantity
    • Assessable Value / Quantity : Assessable Value / Quantity is determined based on Valuation Methods provided by Central Excise Department
  • 11. Rates specified as per “Classification”
    • Why Classification ??
    • All goods cannot carry the same rate of duty
    • It is also not possible to identify all goods individually
    • It is necessary to create Group & Sub-Group to decide a rate of duty on each group & sub-group this is called “Classification”
    CETA 1985 Central Excise Tariff
  • 12. “ Classification / Tariff….”
    • World Customs organisation (WCO) felt the need to have universal standard system of classification of Goods.
    • HSN (Harmonised System of Nomenclature) was introduced
    • Indian Central Excise Tariff (CETA) is based on HSN (w.e.f 1986).
  • 13. Valuation of Goods (Assessable Value)
    • Based on Transaction Value (Valorem) (Section 4)
    • Based on Quantity (Quantum)
    • Based on MRP ( Maximum Retail Price) (Section 4A)
    • Tariff Value (Section 3(2))
    • Compounded Levy Schemes (Currently not supported in Tally.ERP 9)
  • 14. When we have to pay Excise duty?
  • 15. On removal
    • The taxable event under the Central Excise law is ‘Manufacture ’
    • The liability of Central Excise duty arises as soon as the goods are manufactured However collected on removal under Rule 11 invoice
  • 16. Removal under Rule 11 Invoice
    • Excisable goods shall be removed from a factory or a warehouse with an invoice signed by Proprietor or authorized person.
    • Name and Address of Dealer
    • Division name and address
    • Registration number of Dealer
    • Name of Consignee
    • Description of goods
    • Classification of Goods
    • Time and date of removal
    • Rate of Duty
    • Quantity of Goods
    • Value of goods
    • Duty payable
    • Mode of transport
    • Vehicle Number
    • Few requirements of Rule 11
    • Serial Number of Invoice – Could be pre printed or Computer generated at the time of issue of the invoice. CBEC Circular no. 482/48/99-CX dt. 25.8.99
  • 17. CENVAT Credit (ModVAT)
    • Objective was to avoid the cascading effect of multi point levy which skews the price of a product
    • Duty paid is allowed as credit on Inputs and Capital goods purchased from Manufacturers , Registered dealers
    • This credit is allowed to be used for Discharge of Duty Payable
  • 18. Type of Assessee
    • SSI – Small Scale Industry
      • Total Value of Clearance is less than 4 Crores in previous financial year.
    • Regular
      • Total Value of Clearance is more than 4 Crores in previous financial year.
    • LTU
      • Excise duty or Service tax paid more than 5 Crores in a financial year
  • 19. Q & A
  • 20. Excise for Manufacturer in Tally.ERP
  • 21. Steps to be followed for Excise for Manufacturer in Tally.ERP
    • Register Excise Unit / Factory
    • Create Tariff / HSN
    • Create Raw Material & Finished Goods
    • Create Voucher Types for Excise purpose
    • Create Supplier / Customer Ledgers
    • Create Additional Expense Ledgers
    • Create Excise Duty Ledgers
    • Transactions
      • Purchase Raw Materials
      • Manufacture Finished Goods
      • Removal of Finished Goods
      • Removal of Finished Goods
      • Utilising CENVAT Credit against Payable Excise Duty
      • Payment of Excise Duty (G.A.R. 7)
  • 22. Register Excise Unit / Factory
    • Go to F11 (Features)  Statutory & Taxation (F3)
    • Enable Excise and provide Excise Unit Details
    • Here you will be entering the Registration details of the Unit / Factory
    • Excise Invoice Book : It’s a Numbering Series to be used in Rule 11
    • There should be at least one Excise Invoice Book for each Excise Unit
    Step 1
  • 23. Create Tariff / HSN
    • Go to Inventory Info.  Tariff Classification  Create
    • Create Tariff Classification required
    • Here you will be creating Tariff / HSN which are applicable for the organization
    • Note : You can create Tariff / HSN only for Excise only for VAT or for Both
    Step 2
  • 24. Create Raw Material & Finished Goods
    • Go to Inventory Info.  Stock Item  Create
    • Create Stock Items (Raw Material / Finished Goods) as required
    • Here you will be creating Raw Materials & Finished Goods and define the Duty details for each of the stock item
    • Select Tariff Classification applicable for the item
    • Reporting UOM : Reporting UOM (Unit of Measure) is prescribed unit by Central Excise. Which will be used in all Excise Reports
    • Valuation Type : Select valuation type applicable for the item
    • List of Excise Duty Classifications : Is the exhaustive list of all duties prescribed by Central Excise
    • Stock Item Type : Select the appropriate item type or else select Others
    Step 3
  • 25. Create Voucher Types for Excise purpose
    • Go to Accounts Info.  Voucher Type  Create
    • Create Voucher Types (Purchase, Purchase Returns (Debit Note), Manufacturing Journal, Sales, Journal (voucher class creation) ) for Excise purpose
    • Here you will be creating Voucher Types required for Excise process
    • Create voucher types under the appropriate Type of Voucher
    • Set YES for Excise and select Excise Unit
    • Note : For each Excise Unit you have to create separate set for voucher types
    Step 4
  • 26. Create Supplier / Customer Ledgers
    • Go to Accounts Info.  Ledger  Create
    • Create Suppliers / Customer ledger and specify their Excise details
    • Here you will be creating Supplier / Customer Ledger and specify their Excise Details which will be used on invoices
    • Under Set / Alter Excise Details provide Excise Details of the Supplier / Customer.
    • Nature of Removal : This is to define the transaction type whether its Default, Exempt or Export transaction.
    • Note : Selecting Exempt or Export type signifies that there will be no Excise Duty calculation in the transaction
    Step 5
  • 27. Create Additional Expense Ledgers
    • Go to Accounts Info.  Ledger  Create
    • Create Additional Expense Ledgers (Packing Charges, Loading Unloading Charges, Insurance etc.) and specify method of apportioning for calculation of Assessable value
    • Here you will be creating Additional Expense Ledger and specify their Excise Details which get printed on invoices
    • Create additional expenses under indirect / direct expenses
    • Use for Assessable Value Calculation : Setting this option will apportion the expense value for Assessable value calculation. Based on option selected it will apportion (Based on Quantity or Value)
    Step 6
  • 28. Create Excise Duty Ledgers
    • Go to Accounts Info.  Ledger  Create
    • Create Excise Duty Ledgers such as Basic Excise Duty, Education Cess, Secondary & Higher Education Cess etc.
    • Here you will be creating Excise Duty Ledgers and give Accounting Code and select appropriate Type of Duty and Duty Head
    • Type of Duty / Tax : Select Excise
    • Excise Accounting Code : Give the Duty Accounting code. This will be used in GAR 7 challan
    • Duty Head : Select appropriate Duty Head as applicable
    • Percentage of Calculation : Give applicable percentage for the Duty
    • Method of Calculation : Appropriate method will be shown depend upon Duty Head
    Step 7
  • 29. Purchase Raw Materials
    • Go to Accounting vouchers  F9  Select Excise Purchase
    • Here you will be passing voucher for Purchasing Raw Materials
    • In Purchase there are TWO ways you can avail CENVAT Credit
    • Full Credit Availed : If Excise Duty selected in Purchase voucher is of CENVAT type
    • NO Credit Availed : If Excise Duty selected in Purchase voucher is of Excise type
    Step 8
  • 30. Manufacture Finished Goods
    • Go to Inventory Vouchers  Alt + F7  Select Manufacturing Journal
    • Here you will be passing voucher for Manufacturing Finished Goods
    • With this entry you will be consuming Raw Material to produce Finished Goods
    Step 8….
  • 31. Removal of Finished Goods
    • Go to Accounting Vouchers  F8  Select Excise Sales
    • Here you will be passing voucher for Removal of Finished Goods
    • Excise Book Name & No. : This is Excise Invoice Book and No. to be printed on Rule 11 invoice
    • Nature of Removal : (Default) General removal type (Exempt) For Exempt Removal (Export) For the purpose of Export removal
    • Show Statutory Details : This is to check the Duty / Tax calculation of the invoice
    • Note : Selecting Exempt or Export Nature of Removal will not calculate Excise duties
    Step 8….
  • 32. Utilising CENVAT Credit against Payable Excise Duty
    • Go to Accounting Vouchers  F7  Select Journal and Voucher Class created for Excise adjustment
    • Here you will be passing voucher for adjusting CENVAT Credit with Excise Duty payable
    • Excise Adjustment Method : We have to select the appropriate Excise Adjustments type (Adjustment of CENVAT Credit) used for adjusting CENVAT Credit with Payable Excise Duty
    Step 8….
  • 33. Payment of Excise Duty (G.A.R. 7)
    • Go to Accounting Vouchers  F5  Select Payment
    • Here you will be passing voucher for Payment of Excise Duty
    • Provide Details : We have to provide (Period details) for which period we are paying duty (Challan and other details) which will get printed in GAR 7 challan
    Step 8….
  • 34. Q & A
  • 35. Coming in next Release 1.x …
    • Job work in & out
    • Captive consumption
    • Removal as such
    • Repairs and renewals
    • Export CT2 & CT3
    • Custom duty handling
    • Bonded warehouse and branch transfer
  • 36. Thank You