How to create ledgers for Excise Duty in Tally ERP9

Creating Ledgers for Excise Duty in Tally ERP 9

The Ledgers for Excise Duty are used to Account the Excise Duty.

Go to Gateway of Tally > Accounts Info > Ledgers > Create

1.      Select Duties & Taxes from the List of Groups

2.      Select Excise for Type of Duty/Tax

3.      Select the appropriate Duty Head from the list

3.      Set Inventory values are affected to Yes

4.      Enter the Percentage of Calculation

6.      Select the Method of Calculation from the Type of Duty list

Similarly, you can create Ledger Masters for different Rates of Excise Duties.

Methods of Excise Accounting      

The user can use any of the following two methods to account Excise Duty in Tally

1.      On the Total Cost Basic Rate

 Assessable Value + Taxes = Cost of the Item

       The sum of the Total Assessable Value and the Excise Duty will form a part of the Cost of the Item

       Eg.  Stock Item A costs                                    Rs. 50/ unit

100 nos of Stock Item A                                 Total Cost Rs. 5000(@ Rs. 50/unit)

Excise Duty@16%                                          Rs. 800/-

Education Cess@2%                                       Rs. 16/-

    Secondary Education Cess @ 1%                     Rs. 8/-

The Total Amount                                        Rs. 5824/-

The Total Purchase Cost/unit                      Rs. 5824/100= 58.24

  Note: The Excise Duty paid by the dealer becomes the cost for the dealer.

2.      Appropriation by Quantity or Value

Eg.     Stock Item A cost                                    Rs. 50/unit

100 nos of Stock Item A                           Total Cost Rs. 5000

Excise Duty@16%                                     Rs. 800/-

Education Cess@2%                                  Rs. 16/-

    Secondary Education Cess @ 1%                Rs. 8/-

The basic Rate of the Stock Item is retained and the details of the Excise Duty are shown using the duty ledgers created under the purchase account. The appropriation is done by Tally and the duty against is added to the cost of the material.