excise for manufacturer

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Page 1: Excise For Manufacturer

© Tally Solutions Pvt. Ltd. All Rights Reserved

Excise for Manufacturer

Select the required Option

Introduction to Central Excise Excise for Manufacturer in Tally.ERP

Page 2: Excise For Manufacturer

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Introduction to Central Excise

Page 3: Excise For Manufacturer

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Central Excise• Central Excise is an Indirect Tax• Levied by Central Government As per Central Excise

Act, 1944

Page 4: Excise For Manufacturer

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Excise duty is Applicable on?

Page 5: Excise For Manufacturer

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Goods• What is GOODS ??• The article which is movable and marketable is called

as GOODS

Page 6: Excise For Manufacturer

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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

Page 7: Excise For Manufacturer

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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

Page 8: Excise For Manufacturer

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What is Manufacturing? ….Deemed Manufacturing Packing, Labeling, drawing, Mixing, Diluting etc

Page 9: Excise For Manufacturer

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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

Page 10: Excise For Manufacturer

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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

Page 11: Excise For Manufacturer

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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

Page 12: Excise For Manufacturer

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“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).

Page 13: Excise For Manufacturer

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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)

Page 14: Excise For Manufacturer

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When we have to pay Excise duty?

Page 15: Excise For Manufacturer

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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

Page 16: Excise For Manufacturer

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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

Page 17: Excise For Manufacturer

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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

Page 18: Excise For Manufacturer

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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

Page 19: Excise For Manufacturer

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Q & A

Page 20: Excise For Manufacturer

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Excise for Manufacturer in Tally.ERP

Page 21: Excise For Manufacturer

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Steps to be followed for Excise for Manufacturer in Tally.ERP1. Register Excise Unit / Factory2. Create Tariff / HSN3. Create Raw Material & Finished Goods4. Create Voucher Types for Excise purpose5. Create Supplier / Customer Ledgers6. Create Additional Expense Ledgers7. Create Excise Duty Ledgers8. 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)

Page 22: Excise For Manufacturer

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Register Excise Unit / FactoryGo 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

Page 23: Excise For Manufacturer

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Create Tariff / HSNGo 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

Page 24: Excise For Manufacturer

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Create Raw Material & Finished GoodsGo 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 itemReporting UOM : Reporting UOM (Unit of Measure) is prescribed unit by Central Excise. Which will be used in all Excise ReportsValuation Type : Select valuation type applicable for the itemList of Excise Duty Classifications : Is the exhaustive list of all duties prescribed by Central ExciseStock Item Type : Select the appropriate item type or else select Others

Step 3

Page 25: Excise For Manufacturer

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Create Voucher Types for Excise purposeGo 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 VoucherSet YES for Excise and select Excise Unit Note : For each Excise Unit you have to create separate set for voucher types

Step 4

Page 26: Excise For Manufacturer

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Create Supplier / Customer LedgersGo 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

Page 27: Excise For Manufacturer

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Create Additional Expense LedgersGo 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 expensesUse 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

Page 28: Excise For Manufacturer

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Create Excise Duty LedgersGo 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 ExciseExcise Accounting Code : Give the Duty Accounting code. This will be used in GAR 7 challanDuty Head : Select appropriate Duty Head as applicablePercentage of Calculation : Give applicable percentage for the DutyMethod of Calculation : Appropriate method will be shown depend upon Duty Head

Step 7

Page 29: Excise For Manufacturer

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Purchase Raw MaterialsGo 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 CreditFull Credit Availed : If Excise Duty selected in Purchase voucher is of CENVAT typeNO Credit Availed : If Excise Duty selected in Purchase voucher is of Excise type

Step 8

Page 30: Excise For Manufacturer

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Manufacture Finished GoodsGo 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….

Page 31: Excise For Manufacturer

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Removal of Finished GoodsGo 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 invoiceNature of Removal : (Default) General removal type (Exempt) For Exempt Removal (Export) For the purpose of Export removalShow Statutory Details : This is to check the Duty / Tax calculation of the invoiceNote : Selecting Exempt or Export Nature of Removal will not calculate Excise duties

Step 8….

Page 32: Excise For Manufacturer

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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….

Page 33: Excise For Manufacturer

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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….

Page 34: Excise For Manufacturer

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Q & A

Page 35: Excise For Manufacturer

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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

Page 36: Excise For Manufacturer

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Thank You