Companies having more than one excise units may require to transfer raw materials or finished goods from one unit to another. A manufacturing unit has to be registered as a Large Taxpayer unit (LTU) to allow inter unit transfer of goods without the duty liability.
If a company is not registered as an LTU, then inter unit transfer of goods will attract excise duty. However, this transfer of goods should affect only the inventory books, and not impact the financial reports of the company by reflecting as purchases or sales. The manufacturer should still be able to book the duty liability as applicable.
ABC Company is not a registered as an LTU. ABC Company transfers 100 nos. of Oval Eyegalsses - T1234 to their inventory unit ABC Company II. The transfer of goods from ABC Company will be considered a regular clearance of stock with 12.5% of excise duty applicable on the stock transfer.
To enable Material In and Out Transactions
Go to Gateway of Tally > F11: Features > F2: Inventory Features.
Enable the option Use Material in/out.
Press Ctrl+A.
Recording Material Out Transaction
Go to Gateway of Tally > Inventory Vouchers.
Click F12: Configure.
Enable the option Allow Modification of Nature of Removal to Yes.
Select ABC Company as the Tax Unit.
Select the Excise Book Name from the List of Excise Books.
Select the Branch Ledger as the Party's A/c Name.
Select Inter Unit Transfer as the Nature of Removal.
Select the required Destination Godown.
Select the Stock Item to be transferred.
Enter the Godown, Quantity and Rate in the Stock Item Allocations screen.
Press Enter.
Select the Excise Duty ledger.
Select F Form as the Form to Receive.
Enter the Form Series No., Form No., and Date.
Press Enter.
The completed Material Out voucher is as shown below:
Press Enter.
On saving the material out transaction, a prompt to create a liability voucher will be displayed as shown below:
Press Enter.
A journal voucher with the flag Excise Duty on Movement of Stocks will be automatically created to raise the tax liability as shown below:
Press Enter.
ABC Company received 500 sets of light filtering lens from their branch unit. Basic Excise Duty of 12.5% applicable on the stock transfer of goods.
Recording Material In Transaction
Go to Gateway of Tally > Inventory Vouchers > Ctrl+W
Click F12: Configure.
Select ABC Company as the Tax Unit.
Select the Excise Book Name from the List of Excise Books.
Select the Branch Ledger as the Party's A/c Name.
Select the required Destination Godown.
Select the Stock Item to be transferred.
Enter the Godown, Quantity and Rate in the Stock Item Allocations screen.
Press Enter.
Select the Excise Duty ledger.
The completed Material In voucher transaction appears as shown below:
Press Enter.
On saving the material in transaction, a prompt to avail CENVAT credit appear as shown below:
Press Enter.
A journal voucher with the flag Excise Duty on Movement of Stocks will be automatically created to avail CENVAT credit as shown below:
Press Enter.
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