Excise India/User Documentation 2.4

Contents 1 Introduction 2 Installation 2.1 Dataset Application 3 Configuration 4 Content of the module 4.1 Excise Credit Adjustment 4.2 ER1 Report 4.2.1 Configuration 4.2.2 Usability 4.3 ER1 Service Tax 4.3.1 Configuration 4.3.2 Usability 4.4 RG23 A PART1 4.5 RG23 C PART 1 4.6 RG23 A PART 11 4.7 RG23 C PART 11

Introduction

Excise Duty refers to an indirect type of taxation imposed on the manufacture, sale or use of certain types of goods and products.

An excise or excise tax (sometimes called a duty of excise special tax) is an inland tax on the sale, or production for sale, of specific goods or a tax on a good produced for sale, or sold, within a country or licenses for specific activities. Excises are distinguished from customs duties which are taxes on importation. Excises are inland taxes, whereas customs duties are border taxes. This tax is now known as the Central Value Added Tax (CENVAT).

An excise is considered an indirect tax meaning that the producer or seller who pays the tax to the government is expected to try to recover or shift the tax by raising the price paid by the buyer. Excises are typically imposed in addition to another indirect tax such as a sales tax or Value added tax (VAT). In common terminology (but not necessarily in law), an excise is distinguished from a sales tax or VAT in three ways: (i) an excise typically applies to a narrower range of products; (ii) an excise is typically heavier, accounting for a higher fraction of the retail price of the targeted products; and (iii) an excise is typically a per unit tax costing a specific amount for a volume or unit of the item purchased, whereas a sales tax or VAT is an ad valorem tax and proportional to the price of the good. Typical examples of excise duties are taxes on gasoline and other fuels, and taxes on tobacco and alcohol (sometimes referred to as sin tax). In India, an excise is described as an indirect tax levied and collected on the goods manufactured in India. In India, almost all manufactured products are included for excise duty. In India, for getting excise tax, Govt. of India has made Automation of Central excise and service tax. with this, manufacturer can easily pay their excise tax online on every 5th of following the month through GAR-7

Therefore every time that a transaction such as Purchase Invoice,Sales Invoice,Payment In and Payment Out is posted in the ledger, an excise duty tax is levied

This tax is an ad value tax (VAT) - credit is provided for tax paid on purchase and is managed by Central Board of Excise and Customs.

Excise Duty functionality requires the following :

• Capture of excise related master information that includes the definition of Excise Categories, capturing of excise specific information for an organization, product and partners.
  All details provided in Master Data User Manual

• Chart of Accounts with excise related accounts for tracking balances - sample structure in the India Localization - Chart of Accounts Module

• Generation of Excise taxes as part of sales and purchase transactions - sample structure provided in the India Localization - Taxes Module

• Making payments for Excise into PLA ( Personal ledger account ) - there is no need of specific Localization functionality. Please explain as this is not explained all along this user manual.

• Adjusting credits against excise due - covered in this module in the "Excise Credit Adjustment" window.

• Generation of excise reports and regulatory filing - covered through the reports of this module.

Functionality exclusive to excise is provided in this module, for more details keep reading this user manual.

Installation

This module is installed once India Professional Localization Pack is installed.

Dataset Application

This module contains a set of "Excise Categories" and their corresponding Subheading which populates the "Excise Category" window.

This reference data can be applied either at Client level or at Organization level as explained here: India Excise.

Configuration

This section describes the configuration required for Organization, Business Partners, Products and Tax rates as well as Excise Duty specific configuration.

1. Configuration required for an Organization

• ECC No : that is the "Excise Control Code (ECC) Number" of the Organization. This is a registration number, issued to all the Central Excise Assessees.
• Excise Range : Excise Range as defined under Commissionarate. Select the following indicators for consideration under Excise. (SEZ/LUT, SEZ/Export, Export/Bond, Home Clearance, Export/LUT, Export/Rebate, Inter Unit Transfer, SEZ/Bond)

Other fields are:

• Excise Registration Date: Date of issue of Registration Certificate.
• Unit Type: It is a measure like number,weight etc

2. Business Partners configuration

• ECC No : that is the "Excise Control Code (ECC) Number" of the Business Partner.
• Excise Range : Excise Range as defined under Commissionarate.

Following indicators are provided for consideration under Excise.

• SEZ/LUT
• SEZ/Export
• Export/Bond
• Home Clearance
• Export/LUT
• Export/Rebate
• Inter Unit Transfer
• SEZ/Bond
• Business Partner Type: Options available are Customer ,Vendor etc

3. Products configuration

• Excise Category : that is the product Excise Category

This functionality helps to capture products heading and sub-heading as per Excise category.

4. Tax Rates configuration

• Indian Tax Category: please explain
• Excise Tax Subcategory: please explain

5. Excise specific setup

Excise setup window allows to configure excise related input tax accounts as well as output tax accounts:

• Excise input tax accounts are required because please explain.
• Excise ouput tax accounts are required because please explain.

Only one excise setup can be configured for each Excise Credit Type and Organization.

(What Excise Credit Type is?? Please explain.

Go to Financial Management -> India Localization -> Excise -> Excise Setup or just type "Excise Setup" in the Quick Launch window.

• Excise credit type : There are four types of excise credits. Those are: please explain
• General Ledger : Appropriate general ledger should be chosen.
• Input Tax : It is an account where the basic excise duty credit is maintained.
• Input Cess : It is an account where the education cess credit is maintained.
• Input HES : It is an account where the HES cess credit is maintained.
• Output Tax : It is an account where the basic excise duty debit is maintained.
• Output Cess : It is an account where the education cess debit is maintained.
• Output HES : It is an account where the HES cess debit is maintained.

Content of the module

Once installed this module creates a new folder named "Excise" under India Localization menu.

To check the content of the Excise sub-menu go to Financial Management -> India Localization ->Excise.

In India, Excise and Service Tax are filled under the same tax department. For additional information, please visit this url: http://www.cbec.gov.in/.

This module provides the "ER1 Report" required by the Government of India.
Same way, the user also needs to fill in the "Annexure 10" along with the ER1 Report, therefore "ER1 Central Excise Credits" and "ER1 Service Tax" reports are also provide to allow "Annexure 10" to be filled in.

More in detail:

• Excise Credit Adjustment window allow the user to....please explain
• Excise Setup window allow the user to...please explain
• ER1 Central Excise Credits report once launched shows ...please explain
• ER1 Service Tax report once launched shows...please explain
• RG23 A PART 1 report once launched shows...please explain
• RG23 C PART 1 report once launched shows...please explain
• RG23 A PART 11 report once launched shows...please explain
• RG23 C PART 11 report once launched shows...please explain
• PLA Register Report once launched shows...please explain

Excise Credit Adjustment

Go to Financial Management -> India Localization -> Excise -> Excise Credit Adjustment or just type "Excise Credit Adjustment" in the Quick Launch window.

Excise Credit Adjustment" window allows to....please explain (images below does not help to fully understand what the purpose of this window is)

Once in the Excise Credit Adjustment window, create a new record and enter below data:

• Organization : this is the organization for which credit available will be calculated.
• Period : once selected the sales ??? invoices for that period will be listed.
• Excise Credit Type : One Excise Credit Type must be chosen.
  For that excise type invoice's basic tax, education cess and HE cess available balance will be calculated and it will be shown in the status bar. If the user changes the Excise Credit Type, available balances of basic tax, education cess and HE cess will be recalculated.

Once all the above is entered, press the process button "Select Invoices".

After clicking on 'Select Invoices’ button the sales invoices which are completed and whose invoice date lies in that selected period appear in the pop-up window.
The sum of basic tax of all the selected invoices should be less than the basic tax balance available..please explain.

Selected invoices are displayed in 'Selected invoices' tab.

On click of the ‘Process’ button the record will be processed and G/L journal will be created for that record. Please explain.

As shown in the image below, Please explain

ER1 Report

Configuration

Production Setup

Go to Application -> Production Management -> Setup and create a Section, a Work Center, a Process Plan and an Activity.

The purpose of doing this is...please explain..

• Section
  

• Work Center
  

• Process Plan and
  

• Activity

Product:

Go to Master Data Management-> Product or just type "Product" in the Quick Launch window and create a Product.

Product should be created with the following features as shown below:

• Tax Rate should be related to an Excise Duty Tax Category.
• An Excise Category needs to be entered, as well as the corresponding Chapter Subheading.
• Production check-box needs to be checked.
• And finally, a Process Plan for the product needs to be selected.

Production Transactions

It is also required to setup a Work Requirement and a Work Effort for the Requirement.

The purpose of doing this is...please explain..images below does not help to fully understand the purpose of this.

of what?????? please explain...

Usability

ER1 Report includes....., therefore the source of information is ........which do include..... (please explain).

This report can be launched by following below detailed steps:

1. Login as the Administrator of your client.
2. Go to Financial Management -> India Localization -> Excise -> ER1 Report or just type "ER1 Report" in the Quick Launch window.
3. The report is displayed as below.

The details of the report are:

• CETSH No: Chapter Sub-Heading Number
• Description of Goods:Chapter Heading
• Unit of Measure : Unit
• Opening Balance: Opening Balance for the Excise
• Quantity Manufactured: Quantity Manufactured in the Work Requirement
• Quantity Cleared: Quantity Sold
• Closing Balance: Closing Balance for the Excise
• Assessable Value: Value of the manufactured goods.
• Type of Clearance: As of now all the Clearance are Home Clearance.

ER1 Service Tax

This report provides information to fill in the details in Annexure 10.

Annexure 10 includes information related to...please explain.

Government of India needs to know the Total Service Tax to be split into Service Tax, Education Cess and Secondary and Higher Education Cess.

Configuration

• Apply Service Tax data set, as explained here: India Excise.

• Create a "Service" product(s) (Product type = Service) with a Service Tax Code as...please explain.

Usability

Please explain.

RG23 A PART1

This report is a Stock Register for Raw materials, therefore the products to be listed in this report needs to be configured as...please explain..

Go to Financial Management -> India Localization -> Excise -> RG23 A PART1 or just type "RG23 A PART1" in the Quick Launch window.

• Select the Organization for which the report has to be generated.
• Select the product for which the report has to be generated or it will generate the report for all the products.
• Select the time frame (From Date & To Date).
• Select the output type.There are two options available ie., Excel and PDF.

A sample of the output of this report is shown below.

Some fields to note are:

• Date : Movement Date
• Opening Stock : It is the stock available at the beginning of the period.
• Description of the input received : Name of the product received from vendor.
• Qty Received : Quantity received from vendor on that particular transaction.
• Supplier Inv. No & Date : Vendor Invoice number and invoice date.
• Name and add of the Manufacturer / importer : Vendor name and details.
• Assessee code : Assessee code.
• Range/ division : Range/ division.
• Issued for manufacturing the final product  : It is the Quantity sent from the stock for manufacturing the final product.
• Issued for clearance as such :
  • on payment of duty (please explain)
    • Inv.no/date : It is the document (invoice) number.
    • Qty : It is the Quantity returned to the vendor or the Quantity of goods shipped to the customer.
  • Otherwise:
    • Document no.: It is the document (other than invoice) number.
    • Qty: It is the Quantity displayed when the product has one of four transactions such as Internal Consumption -, Inventory Out, Movement From, Work Order -.
• Balance Qty in Stock : Stock available after each transaction.
• Signature of Central Excise Officer: Please explain
• Remarks: Please explain

RG23 C PART 1

This report is a Stock Register for Capital Goods, therefore the products to be listed in this report needs to be configured as...please explain..

Go to Financial Management -> India Localization -> Excise -> RG23 C PART1 or just type "RG23 C PART1" in the Quick Launch window.

• Select the Organization for which the report has to be generated.
• Select the product for which the report has to be generated or it will generate the report for all the products.
• Select the time frame (From Date & To Date).
• Select the output type.There are two options available ie., Excel and PDF.

A sample of the output of this report is shown below.

Some fields to note are:

• Date : Movement Date
• Opening Stock : It is the stock available at the beginning of the period.
• Description of the input received : Name of the product received from vendor.
• Qty Received : Quantity received from vendor on that particular transaction.
• Supplier Inv. No & Date : Vendor Invoice number and invoice date.
• Name and add of the Manufacturer / importer : Vendor name and details.
• Assessee code : Assessee code.
• Range/ division : Range/ division.
• Issued for manufacturing the final product  : It is the Quantity sent from the stock for manufacturing the final product.
• Issued for clearance as such : (please explain)
  • on payment of duty
    • Inv.no/date : It is the document (invoice) number.
    • Qty : It is the Quantity returned to the vendor or the Quantity of goods shipped to the customer.
  • otherwise (please explain)
    • Document.no : It is the document (other than invoice) number.
    • Qty : It is the Quantity returned to the vendor or the Quantity of goods shipped to the customer.
• Balance Qty in Stock : Stock available after each transaction.
• Signature of Central Excise Officer: (please explain)
• Remarks: (please explain)

RG23 A PART 11

RG23 A Part II is the register for Cenvat Credit. Please explain briefly what the content of this report is. Is there any configuration required? Which are the Openbravo data taken and from where for getting the opening balance, fresh credit allowed, total credit available, etc?

• Select the Organization for which the report has to be generated.
• Select the time frame (From Date & To Date).
• Select the output type.There are two options available ie., Excel and PDF.

A sample of the output of this report is shown below.

Some fields to note are:

• Date : Movement Date

OPENING BALANCE OF DUTY IN CREDIT : Credit Amount available at the beginning of the period.

• B.E.D : Excise Duty credit available at the beginning of the period.
• Edu. Cess : Education Cess credit available at the beginning of the period.
• HSC : Secondary education and higher education cess credit available at the beginning of the period.
• A.R.1/Invoice/other approved document/ bill of :
• ECC No of the supplier : The ECC number is a registration number, issued to all the Central Excise Assessees.
• Name & Address of the supplier : Name and address of the vendor
• Folio / Entry no. in Part I :

FRESH CREDIT ALLOWED (4 to 6): This column displays the document (transaction) details against which credit is allowed.

FRESH CREDIT ALLOWED (7) AMOUNT OF DUTY CREDITED: This column displays the fresh credit amount allowed for a particular transaction. This section gives the bifurcated duty values like - BED, Education Cess and Secondary education cess.

• B.E.D : Excise Duty credited on each transaction.
• Additional Duty of Customs/Customs equivalent to BED :
• Edu. Cess : Education Cess credited on each transaction.
• HSC : Secondary education and higher education cess credited on each transaction

TOTAL CREDIT AVAILABLE (5 + 7) : Displays the total of Credit availed. This section gives the bifurcated credit availed values like - B.E.D, Education Cess and Secondary Education Cess

DEBIT ( 9 To 11 ): This section displays the details of Credit adjusted.

• A.R.1/Invoice/ other approved document/Bill of Entry :
• Central Excise Tariff head & Subheading :
• ECC No.of the Buyer : The ECC number is a registration number, issued to all the Central Excise Assessees.
• B.E.D : Excise Duty debited on each transaction
• Addl duty equivalent to to BED :
• Edu. Cess : Education Cess debited on each transaction.
• HSC : Secondary education and higher education cess debited on each transaction

BALANCE OF CREDIT - This section gives the bifurcated duty values like - B.E.D, Education Cess and Secondary education cess after each transaction.

• B.E.D : Excise Duty Credit available after each transaction.
• Additonal Duty of Customs/Customs equivalent to BED :
• Edu. Cess : Education Cess available after each transaction.
• HSC : HSC available after each transaction.

RG23 C PART 11

RG23 C Part-II is register of cenvat credit on capital goods. Please explain briefly what the content of this report is. Please explain briefly what the content of this report is. Is there any configuration required? Which are the Openbravo data taken and from where for getting the opening balance, fresh credit allowed, total credit available, etc?

Go to Financial Management -> India Localization -> Excise -> RG23 C PART 11 or just type "RG23 C PART 11" in the Quick Launch window.

• Select the Organization for which the report has to be generated.
• Select the time frame (From Date & To Date).
• Select the output type.There are two options available ie., Excel and PDF.

A sample of the output of this report is shown below:

Some fields to note are:

• Date : Movement Date

OPENING BALANCE OF DUTY IN CREDIT : Credit Amount available at the beginning of the period.

• B.E.D : Excise Duty credit available at the beginning of the period.
• Edu. Cess : Education Cess credit available at the beginning of the period.
• HSC : Secondary education and higher education cess credit available at the beginning of the period.
• A.R.1/Invoice/other approved document/ bill of :
• ECC No of the supplier : The ECC number is a registration number, issued to all the Central Excise Assessees.
• Name & Address of the supplier : Name and address of the vendor
• Folio / Entry no. in Part I :

FRESH CREDIT ALLOWED (4 TO 6): This column displays the document (transaction) details against which credit is allowed.

FRESH CREDIT ALLOWED (7) AMOUNT OF DUTY CREDITED : This column displays the fresh credit amount allowed for a particular transaction. This section gives the bifurcated duty values like - B.E.D, Education Cess and Secondary education cess.

• B.E.D : Excise Duty credited on each transaction.
• Additional Duty of Customs/Customs equivalent to BED :
• Edu. Cess : Education Cess credited on each transaction.
• HSC : Secondary education and higher education cess credited on each transaction

TOTAL CREDIT AVAILABLE (5 + 7) : Displays the total of Credit availed. This section gives the bifurcated credit availed values like - B.E.D, Education Cess and Secondary Education Cess.

DEBIT ( 9 To 11 ) : This section displays the details of Credit adjusted.

• A.R.1/Invoice/ other approved document/Bill of Entry :
• Central Excise Tariff head & Subheading :
• ECC No.of the Buyer : The ECC number is a registration number, issued to all the Central Excise Assessees.
• B.E.D : Excise Duty debited on each transaction
• Addl duty equivalent to to BED :
• Edu. Cess : Education Cess debited on each transaction.
• HSC : Secondary education and higher education cess debited on each transaction

BALANCE OF CREDIT : This section gives the bifurcated duty values like - B.E.D, Education Cess and Secondary education cess.

• B.E.D : Excise Duty Credit available after each transaction.
• Additonal Duty of Customs/Customs equivalent to BED :
• Edu. Cess : Education Cess available after each transaction.
• HSC : HSC available after each transaction.