Example: Excise duty

This functionality is specific for India.

Example

The following example shows the various taxes levied, when excise duty is applicable on the transaction.

The sales price of an item is INR 23,000. The assessable value for excise is INR 20,000. The assessable value for VAT is INR 21,000. The taxes applicable on the transaction are as follows:

Basic Excise Duty (BED) is 16% on Assessable value for excise.
Additional Excise Duty (AED) is 4% calculated on assessable value for excise and BED.
Special Excise Duty (SED) is 4% calculated on assessable value for excise and BED.
Cess on BED, AED, SED is 2%.
Education cess (Ecess) on BED, AED, SED is 2%.
Secondary and Higher Education cess (SHEcess) on BED, AED, SED is 2%.
National Calamity and Contingency Duty (NCCD) on BED, AED, SED is 2%.
Central sales tax (CST) is 8% on Assessable value for VAT +BED+AED+SED+Cess+ Ecess+SHEcess+NCCD.

The above tax structure is represented in the Aggregate Taxes (tctax9141m00l) session as follows:

The calculation of total tax for the above aggregate tax structure is as follows:

Layer	The amount or tax represented by the layer	Tax
1	100 per cent of 23000 = 23000
2	100 per cent of 20000 = 20000
3	100 per cent of 21000 = 21000
4	0
5	16 per cent of 20,000	3200.00
6	4 per cent of (20000 + 3200)	928.00
7	4 per cent of (20000 + 3200)	928.00
8	2 % of (3200 + 928 + 928) = 101.12 2 % of (3200 + 928 + 928) = 101.12 2 % of (3200 + 928 + 928) = 101.12 2 % of (3200 + 928 + 928) = 101.12	404.48
9	8 % of (21000 + 3200 + 928 + 928 + 404.48)	2116.84
	Total tax	7577.32

The total tax is INR 7577.32.