Excise concepts

This functionality is specific for India.

Excise is an event tax levied on goods manufactured or produced in India and it is payable to Central Board of Excise and Customs (CBEC). Each CBEC zone in India is further divided into:

  • Commissionerates
  • Divisions
  • Range

The excise authorities issue a unique registration number to manufacturers for each factory and warehouse.

In ERP, the excise range for each warehouse or purchase office or sales office dealing with excisable goods is defined in the Excise Range By Address (tccom9138m00l) session.

Assessable value for excise

The assessable value for excise is the value on which excise duty is calculated. To calculate excise duty, set the Amount Origin field in the Aggregate Taxes (tctax9141m00l) session to Assessable value for Excise.

For an order line, LN defaults the Assessable value for Excise based on the India localization data defined in the Item Data for Indian Localization (tcibd9137m00l) session:

  1. When MRP is applicable, assessable value for excise is equal to MRP.
  2. When MRP is not applicable, assessable value for excise is equal to assessable value by Item and Business Partner.
  3. When assessable value for business partner is not defined, assessable value for excise is equal to assessable value by item.
  4. When assessable value for an item is not defined, assessable value for excise is equal to the Order line amount.
  5. You can also enter the assessable value manually at the transaction level.
RG 1 register

The RG 1 register is used to maintain the details of the excisable goods manufactured by the company and indicates the actual stock of the finished goods. When the finished goods are received in warehouse the inventory quantity increases and when the goods are sold the inventory quantity decreases. The following transactions are maintained in the RG 1 register:

  • Production receipt
  • Sales delivery

The number series for the RG 1 register is defined in the Excise Details By ECC (tccom9139m00l) session. LN updates the RG 1 register with the following details, when you update a record in the Item - Warehouse - Inventory Transaction (whinr1510s000) session:

  • Order type and transaction type
  • Transaction details such as item, quantity and transaction date
  • Opening balance
  • Assessable value for excise and the total excise duty (sum of BED, SED, AED, Cess and ADC)

Use the Daily Stock Account (RG 1) (whinr9540m00l) session to view the RG 1 register details. Use the Print Daily Stock Account (RG1) (whinr9440m00l) session to print the RG 1 register details.

RG 23A, RG 23C registers

The RG 23A, RG 23C registers are used to maintain the details of the excisable goods which are purchased. The RG 23A register is used for non-capital items and the RG 23C register is used for capital items. Each register comprises of two parts. Part I maintains the quantity of the excisable goods purchased and Part II maintains the CENVAT credit details. The following transactions are maintained in the RG 23A, RG 23C registers:

  • Purchase receipt
  • Production issue
  • Sale of purchased item

When a receipt is confirmed in the Warehouse Receipts (whinh3512m000) session, LN updates the Part I of the RG 23A or RG 23C registers with the following details:

  • ECC number and the serial number
  • Order details
  • Receipt details
  • Quantity received
  • Quantity put away

Use the Print CENVAT Register Part I (whinr9443m00l) session to print the details of the RG 23A or RG 23C register.

Excise Control Code

The Excise Control Code (ECC) is a unique number assigned by the excise authorities to the factory or warehouse or dealer dealing with excisable goods. The number is in the following format:

  • The first ten characters represent the PAN code issued by the Income tax authorities.
  • The next two characters identify the registered entity as following:
    • XM - Manufacturer or warehouse
    • XD - Dealer
  • The last three characters represent a numeric code for each factory or warehouse or dealer with the same PAN.

The ECC code is maintained in the Registration Numbers by Business Partner (tctax4100m000) session for each purchase office, sales office or warehouse. The excise details specific to each ECC code such as the serial number of the RG 23A, RG 23C, RG1 registers and the excise invoice number are maintained in the Excise Details By ECC (tccom9139m00l) session.

HSN code

Harmonized System of Nomenclature (HSN) code is a unique eight digit classification code assigned to an item. The code is defined as following for each item:

  • The first two characters represent the chapter.
  • The 3rd and 4th characters represent the heading.
  • The 5th and 6th characters represent the sub-heading.
  • The last two characters represent the tariff item.
Example

The tariff item with HSN code 51.06.10.10 is classified as follows:

  • 51 - represents the Chapter Wool, fine or coarse animal hair; horsehair yarn and woven fabric.
  • 51.06 - represents the Heading Yarn of carded wool, not put up for retail sale in the above chapter.
  • 51.06.10 - represents the sub-heading Containing 85% or more by weight of wool in the above heading.
  • 51.06.10.10 - represents the tariff item Shoddy woolen yarn with eight per cent duty.

The HSN code is defined in the HSN by Item (tcibd9143m00l) session.

Personal Ledger Account

Personal ledger account (PLA) maintains the advance payments to the excise authorities for each excisable item. The entries in the PLA are as follows:

  • A credit entry is made in PLA with the advance amount deposited with excise authority.
  • A debit entry is made in PLA at the time of removal of goods; with the duty payable on excisable item.

You must define the PLA account for each excise registered warehouse in the PLA account per ECC field in the Excise Details By ECC (tccom9139m00l) session.

CENVAT credit

Manufacturers can take credit of the excise duty paid on raw materials and capital goods and also the service tax paid on input services. The credit can be used to pay excise duty on final products and service tax on output services. For more information, refer to CENVAT credit.

Excise invoice

Excise invoice or Goods Pass out Document (GPD) is a business document provided by the Buy-from business partner or issued to the Sold-to business partner along with the goods shipment and contains the following details:

  • ECC number
  • Name of the consignee
  • Classification and description of excisable goods
  • Date and time of removal of goods
  • Mode of transportation and vehicle number
  • Rate of duty
  • Quantity and value of goods
  • Excise duty payable on goods

The sold-to business partner uses the excise invoice to claim the claimable excise duty and adds the non-claimable duty to the inventory value.

RG 23D

RG 23D dealer is the dealer or consignment agent who is not a manufacturer but deals with the excisable goods and is authorized to issue a dealer invoice to the buyer. RG 23D dealer passes the duty to the buyer and cannot claim the CENVAT credit. For more information, refer to RG 23D dealer.

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