Excise Duty

[Former Member]

Hi,

Can someone explain the excise duty?

Thanks in advance

Reddy

[Former Member]

Hi Reddy,

Excise Duty

Use

SAP R/3 automatically calculates excise duties in Materials Management (MM) and in Sales and Distribution (SD), and posts them in Financial Accounting (FI).

The system covers all types of excise duty, all of which need to be calculated and reported separately:

• Basic excise duty (BED)

• Special excise duty (SED)

• Additional excise duty (AED)

• Cess

Features

The system of excise duties is complex, and differs from the generic functions for taxes on sales and purchases in a number of ways:

• The rate of duty on a single material can vary according to which chapter ID it is listed under.

• You cannot offset all excise duty on inputs against outputs.

Depots cannot offset any input duties at all. Manufacturing plants can only offset input duties if they can show that the input materials are used to produce output materials.

• You have to record all excise duty (inputs and outputs) in excise registers.

• Your company may only be entitled to offset a portion of the duty on inputs against duty on outputs.

• Companies that qualify as small-scale industries can levy excise duty on outputs at reduced rates, so if you purchase materials from these companies, you must calculate a different rate of excise duty.

Excise Determination

In MM, SAP R/3 comes with two ways of determining excise duties (and sales taxes) on input materials: formula-based excise determination and condition-based excise determination. The system calculates excise duties using a tax procedure.

SD also supports formula-based and condition-based excise determination, but in SD, the system calculates the taxes using a pricing procedure, not the tax procedure (see Pricing).

Reporting

You have to remit the excise duty that you have collected to the central excise authorities. The law requires you to remit excise duty twice monthly: for the first half of any given month (1–15 inclusive) and from 16 to month-end. In each case, you are allowed five days to remit the excise duty. Country Version India offers a report to help you do just that (see Remittance of Excise Duty Fortnightly).

A small number of transactions have to be remitted on the same day (see Other Outward Movements).

In addition, the system allows you to prepare printouts of the various excise registers for the tax authorities.

Reward points if useful

Regards

Adarsh Mathur

[Former Member]

Hi, In Indian Taxing procedure, Excise Duty plays a vital role in manufacturing scenario. Excise related configuration is known as CIN configuration. CIN Configuration is a topic in itself.

<b> Refer the link for further details on CIN</b>

For each form of excise duty, there are three separate condition types as follows:

Excise duty Ad valorem Specific Total*

Basic JEXP JEXQ JEXT

Additional JEAP JEAQ JEAT

Special JESP JESQ JEST

Cess JCEP JCEQ JCET

http://help.sap.com/saphelp_470/helpdata/en/95/00bb3cfbe1624be10000000a114084/frameset.htm

Message was edited by:

SHESAGIRI.G

[Lakshmipathi]

Hi Jagadeshwar

<b>1) What is Excise Duty?</b>

Excise Duty is an indirect tax levied and collected on the goods manufactured in India.

<b>2) Who is responsible to pay such duty to the Government? What are the relevant enactments governing levy and collection of central excise duty?</b>

Generally, manufacturer of goods is responsible to pay duty to the Government. This indirect taxation is administered through an enactment of the Central Government viz., The Central Excise Act, 1944 and connected Rules - which provide for levy, collection and connected procedures. The rates at which the excise duty is to be collected are stipulated in the Central Excise Tariff Act, 1985.

<b>3) Is it mandatory to pay duty on all goods manufactured?</b>

Yes, it is mandatory to pay duty on all goods manufactured, unless exempted. For example, duty is not payable on the goods exported out of India. Similarly exemption from payment of duty is available, based on conditions such as kind of raw materials used, value of turnover (clearances) in a financial year, type of process employed etc.

<b>4) Which organ of the Central Government is entrusted with the collection of Central Excise Duty? What are the other responsibilities entrusted with the Central Government Department?</b>

The Central Excise Department spread over the entire country administers and collects the central excise duty. The apex body that is responsible for the policy and formulation of connected rules is the Central Board of Excise and Customs which functions under the control of the Union Finance Ministry. There are about 60,000 staff and officers including 1500 officers in Group A level and 5,000 officers in Group B level in the Department. The Central Excise officers are also entrusted with the administration and collection of Service tax, Additional Excise Duty in lieu of sales tax on goods of special importance and Additional Excise Duty on textiles and articles of textiles, etc. and the Customs duty. The Central Excise officers are also armed with NDPS Act in the suppression of illicit trafficking in narcotic drugs and psychotropic substances. They are also entrusted with the task of enforcing various allied enactments like the Foreign Trade Regulation Act, the Foreign Exchange Regulation (now Management) Act, the COFEPOSA Act,

Thanks

G. Lakshmipathi

[Former Member]

Hi Lakshmipathi ji,

Excellent explanation on excise duty.Gud work.

Murli.