Defining Duty Rates (Excise for Manufacturer)

Different businesses have different requirements. While some businesses  deal with a single stock item and single type of transaction, whereas some businesses deal with multiple stock items, and different types of transactions and require a more complex statutory functionality.

Based on the demands of the business, you can select the kind of capability that you want.

Defining Duty Rates at the Company Level

Excise duty rates can be defined at company level when you deal in only one type of goods having a single duty rate.

ABC Company is a manufacturing unit for packaged drinking water. They sell 20l water cans. Let us see how excise tariff can be defined and applied in a scenario like this.

1. Press F11 (Features) > set the option Enable Excise to Yes.
   If you do not see this option, press F12 (Configure) and set the options Show more features and Show all features to Yes.
2. Set the option Set/alter Excise tariff details to Yes in the Excise Details screen.
3. Enter the excise details and define the duty rate.
   
4. Press Enter to save.
5. Press Ctrl+A to save the Excise Registration details.

To enter new tariff details or revised excise rate

1. Go to the Excise Tariff Details screen (shown above).
2. Enter the new excise Rate
3. Press Enter. The Tariff Details Applicability screen appears. Enter the Applicable From date.
4. Press Enter to save and return to Excise Registration Details screen.

You can also press Alt+W (Details) from the Excise Tariff Details screen, enter the Applicable From date and provide the tariff details with revised excise duty.

Creating Duty Ledger

Create a duty ledger with the Type of Duty as CENVAT and the Duty Head as Basic Excise Duty.

Using the defined duty rate in a transaction

On selecting the duty ledger created in a transaction, the duty rate is calculated as shown in the screen below.

ABC Company uses one tariff for all the stock items that they manufacture or deal with. Hence, the same duty ledger can be used for all stock items like Dew Drops Water Packet (500ml), Dew Drops Water Can (20l) and Dew Drops mini (500ml).

Defining Tariff Rates at the Group Level

In addition to accounting masters like groups and ledgers, excise duty and tariff details can be defined in inventory masters such as stock group and stock item.

Royal Industries is a food processing company that manufactures waffles, wafers, and biscuits. All the goods that they manufacture and sell attract 6% excise duty, except for stock items that are coated with chocolate, which attract 12% excise duty.

Now let us see how defining stock rate at the group level will simplify the process for Royal Industries.

Defining Tax Rate

1. Gateway of Tally > Create > type or select Stock Group.
   Alternatively, press Alt+G (Go To) > Create Master > type or select Stock Group.
2. Enable the option Set/alter excise details in the Stock Group Creation screen.
3. Enter the excise details and define the duty rate.
   

To enter new tariff details or revised excise rate

1. Go to the Excise Tariff Details screen (shown above).
2. Enter the new excise Rate.
3. Press Enter. The Tariff Details Applicability screen appears. Enter the Applicable From date.
4. Press Enter to save and return to Excise Registration Details screen.

You can also press Alt+W (Details) from the Excise Tariff Details screen, enter the Applicable From date and provide the tariff details with revised excise duty.

Similarly, the group Waffles and Wafers (Chocolate Coated) can be created, and duty details defined appropriately as shown below:

The Excise Tariff Details screen for tax rate 12% appears as shown below:

To enter new tariff details or revised excise rate

1. Go to the Excise Tariff Details screen (shown above).
2. Enter the new excise Rate.
3. Press Enter. The Tariff Details Applicability screen appears. Enter the Applicable From date.
4. Press Enter to save and return to Excise Registration Details screen.

You can also press Alt+W (Details) from the Excise Tariff Details screen, enter the Applicable From date and provide the tariff details with revised excise duty.

Creating Stock item

Create the stock item under the group for which the duty rate has been defined. The stock items will inherit the excise tax details configured at the stock group level.

Similarly create stock item under the group Waffles and Wafers (Chocolate Coated). This item will inherit 12% excise duty configured in the stock group.

To enter new tariff details or revised excise rate, press Alt+W (Details) from the Excise Tariff Details screen. Enter the Applicable From date and provide the tariff details with revised excise duty.

Creating a Duty ledger

Create a duty ledger with the Type of Duty as CENVAT. The Ledger Creation screen of excise duty ledger appears as shown below:

Using the defined duty rate in a transaction

On selecting the duty ledger created in a transaction, the duty rate is calculated as shown in the screen below. 

The tax analysis of  this transaction shows that although only one excise duty ledger was selected in the transaction, duty of each stock item has happened according to the rate defined in the group.

Once defined at the group level, the tax rate can be applied to all the stock items classified under the group.

Defining Duty Rates at the Ledger Level

Duty rates can be defined at the ledger level. Based on the requirement of the business, tax configuration can be made either in the ledger master or in the stock item master.

GoIndia is a company that process and supply fuel to fuel stations. They sell petrol and diesel, both branded and unbranded. The duty rates for each one of their stock item is different. They will define the rates of duty in the stock item master level.

Let us see how they record the sale of diesel and unleaded petrol.

Defining Duty Rates in the ledger

1. Gateway of Tally > Create > type or select Ledger.
   Alternatively, press Alt+G (Go To) > Create Master > type or select Ledger.
2. Enable the option Set/Alter excise details.
3. Press F12 (Configure) and set the option Enable multiple selection of Duty details to Yes.
4. Enter tariff details Tariff name, HSN code, and Reporting unit of measure.
5. Enter the excise details as shown in the image below:
   

To enter new tariff details or revised excise rate

1. Go to the Excise Tariff Details screen (shown above).
2. Enter the new excise Rate.
3. Press Enter. The Tariff Details Applicability screen appears. Enter the Applicable From date.
4. Press Enter to save and return to Excise Registration Details screen.

You can also press Alt+W (Details) from the Excise Tariff Details screen, enter the Applicable From date and provide the tariff details with revised excise duty.

Using the defined duty rate in a transaction

On selecting the duty ledgers created in a transaction, the duty rates are calculated as shown in the screen below.

The tax analysis of  this transaction shows that duty has been calculated for each stock item based on the tax configuration made in the stock items.