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.
To define the tariff rate at the stock group level
1. Go to Gateway of Tally > Inventory Info. > Stock Group > Create .
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 click L : 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 click L : Details from the Excise Tariff Details screen, enter the Applicable From date and provide the tariff details with revised excise duty.
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.
Create a duty ledger with the Type of Duty as CENVAT. The Ledger Creation screen of excise duty ledger appears as shown below:
On selecting the duty ledger created in a transaction, the duty rate is calculated as shown in the screen below. Click the image below to go to the step-by-step procedure for recording an excise sales transaction.
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.