Excise Duty issue

[Former Member]

Dear Sir,

I configure Excisable depot.

STO Process

we created purchase order in which price is mentioned 1000 for a material, and we did delivery ,proforma invoice and excise invoice ( Price of material 1000, Excise Duty is BED 100 Ecs 2 H Ecss 1) through J1IIN and we have done Goods receipt through MIGO while doing MIGO we have given Base Value 1000 ,BED 100, ECS 2, H Ecs 1 and J1IG document also created.

the issue is that while selling goods, our sales price will be 2000 so naturally BED will be 200, ECS 4 and Hecss 2 in our sales invoice. but when we create Depot Excise Invoice through J1IJ . excise duties BED 100, Ecs 2 and Hecss 1 are appearing which means the amount of excise duties are picking up from J1IG document OR MIGO Document.

question is that we need to do Price escalation in depot , how can we treat excise duties in Depot?

Do we need to do JV in Depot for excise?

Please give me an insight in this regard as early as possible

Thanks

Shibu Chandran

[Lakshmipathi]

The standard depot process is that whatever duty is levied at delivering plant on Depot, the same amount will flow in depot billing irrespective of your depot selling price.

G. Lakshmipathi

[Former Member]

Dear Sir,

so you are saying that even though there is price escalation, excise duties would be the same which we have paid to excise dept during the stock transfer.

my question is that will excise dept question us regarding the price escalation? because we escalated the price of goods but we are charging the STO Excise duty from Customer. customer and company will be benefited.

Excise dept will let us do this practice?

Please clarify my doubts

Thanks

Shibu Chandran

[Former Member]

HI,

Please give me some insights for my querry

Thanks

Shibu

[Lakshmipathi]

even though there is price escalation, excise duties would be the same

No you have misunderstood my statement. As per excise rule, depot are suppose to sell only at the rate they receive from their plant. However, as you said, in case of price increase, they have to do the exercise what I had listed in the link

[Re: Capturing of excise duty depots for the factory supplementery invoices|;

G. Lakshmipathi

[Former Member]

Excise duty remains the same even if the price changes at the depot.

That's why we have the concept of mother invoice.

Price change can be due to several reasons and excise dept has nothing to do with it.

What they are concerned about is that the duty you charge the customer should remain the same as there is no value addition happening at the depot.

When you dispatch products from the plant, you declare the amount the to be paid to excise separately on the invoice. You take that amount from the customer and pay it to the excise on his behalf. Now this amount should remain the same when you dispatch from the depot to the customer irrespective of the price.

[Former Member]

As per excise law in India, whenever there is a price escalation happens in a depot we have to create a document called "A Certificate" by paying additional excise duty on the differencial amount between STO price and Depot sales price. Because when you post incoming excise duty in J1IG after MIGO at depot, system captures BED, CESS & E.CESS as per the chapter ID of the material being transported from the factory and based on this Excise duty value for STO is calculated.

If the selling price of the material is higher than the STO price, we have to pay excise duty on the defference. Because law requires excise duty to be calculated on the selling price or assesible value if one exists.

perform the following activities

J1ILN >Indirect taxes>Procurement->Excise invoice->For Depot--> J1IGA Acertificate entry at Depot

Here enter the internal excise invice already captured at J1IG. System will show you the excise duty values to corresponding Folio nos. Here you can enter excess amount to be paid for each line item in the excise invoice. Save.

Now you create OR, delivery and PGI from Depot for customer. Go to J1IJ to create Depot Excise invoice. After entering the delivery document no. you will see a list internal of excise invoices choose the excise invoice to which your delivery material belongs. In the bottom you will see other table containing a list of "A Certifivates" created for all your internal excise invoices. You have to choose the "A Cerificate" of the internal invoice which you have selected already. Capture and post the document. Now RG23D will be updated.

Now you create the commercial invoice for the customer in VF01. In item condition tab you can see the effect of "A Certificate".

Please reward if you find this as useful

Regards

Ramesh

[Former Member]

As per excise law in India, whenever there is a price escalation happens in a depot we have to create a document called "A Certificate" by paying additional excise duty on the differencial amount between STO price and Depot sales price. Because when you post incoming excise duty in J1IG after MIGO at depot, system captures BED, CESS & E.CESS as per the chapter ID of the material being transported from the factory and based on this Excise duty value for STO is calculated.

If the selling price of the material is higher than the STO price, we have to pay excise duty on the defference. Because law requires excise duty to be calculated on the selling price or assesible value if one exists.

perform the following activities

J1ILN >Indirect taxes>Procurement->Excise invoice->For Depot--> J1IGA Acertificate entry at Depot

Here enter the internal excise invice already captured at J1IG. System will show you the excise duty values to corresponding Folio nos. Here you can enter excess amount to be paid for each line item in the excise invoice. Save.

Now you create OR, delivery and PGI from Depot for customer. Go to J1IJ to create Depot Excise invoice. After entering the delivery document no. you will see a list internal of excise invoices choose the excise invoice to which your delivery material belongs. In the bottom you will see other table containing a list of "A Certifivates" created for all your internal excise invoices. You have to choose the "A Cerificate" of the internal invoice which you have selected already. Capture and post the document. Now RG23D will be updated.

Now you create the commercial invoice for the customer in VF01. In item condition tab you can see the effect of "A Certificate".

Please reward if you find this as useful

Regards

Ramesh