| # Excise & Sales Tax Introduction Excise duty is levied on the items listed in the Central Excise Tariff Act. Each excisable item must have a unique HSN code defined in compliance with the Chapters, Headings, Sub-headings and the tariff code of the Central Excise Tariff Act. You can define the item data specific to India localization. Each manufacturer or dealer must register with the excise authorities and maintain a unique Excise Control Code (ECC) for each warehouse, purchase office or sales office that deals with excisable goods. The details of the excise offices can be maintained. The ECC codes of your organization can of your business partner can also be maintained You can also specify the reason code for goods moved out of a warehouse. An excise registered warehouse can maintain excisable transactions, sequentially, in the following registers: RG 1 register RG 23A/C I & II registers RG 23D Reg 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 a warehouse, the inventory quantity increases and when the goods are sold, the inventory quantity decreases. You can update the RG1 register automatically or manually. The RG 23A, RG 23C registers are used to maintain the details of the excisable goods 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. You can print the CENVAT Register Part I and II. The RG23 A and RG23 C register are clubbed and maintained as a single register. The Personal ledger account (PLA) maintains the advance payments to the excise authorities for each excisable item. You can define the PLA account for each excise registered warehouse. 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 shipment. The document 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. The excise functionality is applicable for incoming and outgoing excisable goods. Excise functionality for incoming goods Goods can be received in a warehouse or directly at a project site. Received goods are always accompanied by a document called excise invoice/Goods Pass out Document (GPD). Note: The Goods Pass out Document or the excise invoice is a legal document printed in the Warehouse Management or in the Central Invoicing. The incoming excise duty functionality supports the following business processes: Normal purchase Sales returns Inventory transfer Excise functionality for outgoing goods The Goods Pass out Document or the excise invoice document must be sent to the customer with the shipped goods. The excise invoice states the amount of the excise duties. The customer can use the excise invoice to claim back the excise amount paid as CENVAT credit. You can also cancel the excise invoices. The outgoing excise duty functionality supports the following business processes: Normal sales AS SUCH SALES of Capital goods AS SUCH SALES of non-capital goods Inventory transfers Purchase returns For Purchase returns, CENVAT credit is reduced for the quantity of goods you return. Similarly, for the Sales returns, CENVAT credit increases for the goods you receive. Cancellation of an excise invoice You can specify the maximum time period allowed for cancelling an excise invoice. The time period is calculated from the Excise Invoice Date to the current date and time. RG 23 D Dealer RG 23D dealer is a dealer or a consignment agent, who is not a manufacturer but deals with the excisable goods. The dealer invoice issued by the RG 23D dealer must contain only the actual excise duty paid by the manufacturer. You can select a warehouse to be an RG23D Warehouse. You can maintain the dealer invoice details, when the Dealer Status is First stage dealer or Second stage dealer. The claimable excise duty is maintained in the CENVAT distribution account. A unique folio number is generated for each receipt in a RG 23D warehouse, against which the item is issued. An item can also be issued from multiple folios. The RG 23 D issues can be maintained by the Folios, when the supplier of the item is a manufacturer or first stage dealer. When an issue is made against a folio, Infor LN updates the Balance Quantity of the folio. You can confirm the shipment only when the Total Issue Quantity is equal to Shipped Quantity. You can print the dealer invoice with original excise details. You can close the Folio when the balance quantity against the folio is zero. You can view the details of the issues made against a folio entry. Excise related taxes in RG 23D Receipts and Issues When an excisable item is received in a RG 23D warehouse, the RG 23D Receipts are Against Folio Lines and it is populated with the corresponding tax details. The RG23D Folio Wise Issue Lines is populated with the tax details of each folio line, when an excisable item is issued in a RG 23D warehouse. Subcontracting The subcontracting functionality addresses excisable goods movement between manufacturer and subcontractor. The subcontracting functionality handles the Total Process subcontracting (Item subcontracting), without raising the production order, and Partial Process subcontracting through production order (operation subcontracting with/without material flow). Based on the subcontracting type, ERP LN displays the required data automatically. The returnable excise challan can be printed and sent to the subcontractor. An intimation document can be sent to excise authorities to provide the required information. ERP LN also provides the information regarding the excise duties to be paid for the goods that are not returned within the specified period. Subcontracting can be implemented using wither of the flows: The subcontracting excise challan with old flow is selected, you can generate the challans at the header level The subcontracting excise challan with old flow is not selected, the application generates the challan and the bulk subcontracting functionality can be implemented. Note Using the bulk subcontracting functionality, you can send items to the subcontractor anonymously, that is, without a subcontracting purchase order. Sales quotations and contracts The sales quotation lines and sales contract lines of an excisable item must include the excise details, such as assessable value, ECC code and so on. When a quotation line is converted to sales order line, Infor10 ERP Enterprise (LN) defaults the tax details from the sales quotation to the sales order line. Similarly, when a sales order line is linked to a sales contract line, the tax details are defaulted from the sales contract line. The history data of the sales quotations and sales contracts must also include the tax details. Purchase request for quotations and purchase contracts The purchase contract lines and purchase contract price revisions of an excisable item must include the excise details such as assessable value, ECC code and so on. The request for quotation for an excisable item must include the tax details. Import RFQ can be distinguished from a domestic RFQ. The domestic RFQ must be created in the home currency of the financial company. The import RFQ must include the import details such as weight, volume and so on. Excise details in warehouse order lines The inbound order lines contain the excise details such as assessable value, ECC code and so on. When the order origin is Purchase Order, Infor LN defaults the excise details from the purchase order line and the inbound order lines are disabled. When the order origin is Transfer or Transfer (Manual), Infor LN defaults the excise details from the outbound order line. Opening balances and inventory adjustments of Registers To ascertain accurate opening balances, you must update the registers for inventory adjustments. Inventory adjustments can be made in the following two ways: When a company migrates from one version to another version. When you adjust the inventory. Example, the inventory is added or reduced. You can Update RG1, RG 23D and RG23 A/C through the adjustment orders. Updating RG Registers for warehouse transfers This functionality updates the applicable RG register for transactions that are completed through warehouse transfer orders, based on the item type. When excisable goods are transacted from an excisable warehouse that has the excise registration number, (the ECC code), an entry corresponding to each transaction must be made in the applicable excise register. Based on the type of item transacted, entries must be made in the following excise registers: For raw materials, the excise entry must be made in the RG 23 A/C register For finished goods, the excise entry must be made in the RG 1 register. For manufactured items, the excise registers are updated based on the warehouse transfer orders of type Issue or Receipt. The sequence, in which the excise registers are to be updated, can be defined. ER1 report Form ER1 (Excise Return 1) is a document submitted to excise authorities, every month. It is a report of the excisable goods and the utilization of CENVAT credit for the month. The document comprises of the following details: Company, ECC number PLA account Manufactured goods, type of duty, rate of duty and duty payable. Amount of duty paid, challan number, challan date and so on. CENVAT credit availed, utilized, the opening balance and the closing balance of all types of indirect taxes. Sales tax (Domestic Duties) Following are the domestic duties: VAT (Sales Tax for movement of goods within the State) CST (Central Sales Tax for movement of goods between two States) Following functionality is supported: Purchase Transactions with Sales Tax (Claimable and Expensed) for VAT and CST. Purchase Return Transactions with Sales Tax. Sales Transactions with Sales Tax both VAT and CST. Sales Return Transactions with Sales Tax. Material Transfers with Sales tax. Rejection of Received goods with Sales Taxes. Partial Receipts. AS SUCH SALES of goods with Sales taxes. Maintenance of Input Tax Credit. Tax declaration for VAT Registers: VAT Register Sales Register Purchase Register VAT (Sales) Tax) Whenever goods are sold, sales tax is charged by the vendor if the goods are shipped to a location in the same state. These transactions are recorded against a registration number, known as the VAT registration number, which is allotted for every state. A monthly declaration is made to the Sales tax authorities, showing the Input Tax Credit taken for Sales taxes paid on purchases made and Sales duty payable on Sales made. Central Sales Tax Whenever goods are sold, Central Sales tax is charged by the vendor if the goods are shipped to another state. The CST paid on a purchase transaction is usually of the type Expensed. CST charged on Sales is displayed in the same declaration as the sales tax declaration and can be set off against Input Tax Credit available from the purchases made. |