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Excise India/User Documentation 2.4

Warning.png   This document is still a work in progress. It may contain inaccuracies or errors.

Contents

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 :

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

Orgexcise.jpg

Other fields are:

2. Business Partners configuration


Bpartnerexcise.jpg

Following indicators are provided for consideration under Excise.

3. Products configuration

Productexcise.jpg

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

4. Tax Rates configuration

Taxratexcise.jpg

5. Excise specific setup

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

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.

Excisesetup3.png

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.

Contentsex1.jpg

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

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:

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

Excisead1.png

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.

Excisead2.png

Selected invoices are displayed in 'Selected invoices' tab.

Excisead3.png

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

Excisead4.png

As shown in the image below, Please explain

Excisead5.png

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..

ER Section.png

ER WorkCenter.png

ER ProcessPlan.png

ER Activity.png


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:

Product Excise.png

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.

Workreq11.png

Workreq21.png

Workreq5.png

Workreq31.png

Workreq9.png

Workreq61.png

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.

ER1Report1.png

The details of the report are:

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


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.

RG23APART1 PARAMS.png

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

RG23APART1 REPORT.png

Some fields to note are:

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.

RG23CPART1 PARAMS.png

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

RG23CPART1 REPORT.png

Some fields to note are:

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?

RG23APART11 PARAMS.png

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

RG23APART11 REPORT.png

Some fields to note are:

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

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.

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.

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

RG23CPART11 PARAMS.png

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

RG23CPART11 REPORT.png

Some fields to note are:

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

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.

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.

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

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