Excise Duty in Tally.ERP 9

To study the accounting treatment of excise duty in Tally.ERP 9 is useful for manufacturers and dealers. All they have to pay net excise duty to Govt. account. They have to calculate excise duty on purchase and sale. On purchase, they have to pay the excise duty and on sale, they get excise duty. Difference will be paid into Govt. account.

When any company or manufacturer buys his good from supplier, supplier  has to get his money and excise duty on these goods. After its production, when manufacturer sells these goods to his customers and distributors, he will get his money and excise duty. On this received excised duty, he will get the power of 
excise credit on his purchased goods under Cenvat Act. It means, he will deduct his total paid or payable excise duty from total received or receivable excise duty and balance, he will deposit in Govt. account. It is just same like VAT rules. Following are the main journal entries which are relating to excise or excise duty. 

In the Books of Manufacturer

1. When we purchase goods with Excise duty on Purchase 

Purchase Account Debit 1000 Excise Duty on Purchase Account Debit  200 Creditor  Account Credit 1200

2. When we sell goods with Excise duty on Sale  

Debtor  Account  Debit  1750  Sale Account Credit 1500 Excise Duty on Sale  Credit 250

3. When Excise Duty Paid in Advance 

Excise Duty in Advance  Debit  20

 Bank Account of Govt. Credit  20

4. Excess of Excise duty on sale over excise duty on purchase and excise duty in advance will be payable to Govt. 

Excise Duty on Sale  Account  Debit  250

Excise Duty on Purchase Account Credit 200

Excise Duty in Advance Credit Rs. 20

* PLA  Credit 30

5. When Excise duty is paid in Govt. Account 

* PLA  Debit  30

 Bank Account of Govt. Credit 30

*Personal Ledger Account (PLA) is an account current through which Assessee pays the Duty to the Government. The PLA register is credited when the duty is liable to pay and when the Duty is discharged (by CENVAT Credit /Payment) the PLA register will be debited. The Duty Payable if any will be displayed as Balance. PLA and CENVAT Credit should be used only for payment of excise duty and not for any other payments like rent, fines, penalties etc.

Following are the accounting treatment of Excise Duty in Tally.ERP 9 :-

1st : Change the Statutory Features of Tally.ERP 9 

First of all, you have to go to the gateway of tally.erp 9. In right side below, you see feature button. In this, you have to enable excise duty yes. 

2nd : Create the Ledger Accounts

In ledger creation of Tally.ERP 9, you need to create following ledger accounts

1. Purchase Account - Excise

It will keep under purchase account. 

2. Sales Account - Excise

It will keep under sales account.

3. Creditor Account - Excise

It will keep under sundry creditor account.

3. Debtor Account Excise 

It will keep under sundry debtor account. 

4. Excise Duty Account

It will keep under duties and taxes

5. Education Cess Account 

It will keep under duties and taxes

6. Secondary Education Cess Account 

It will keep under duties and taxes


3rd : Pass the Voucher Entries in Journal Vouchers

Now, start pass the voucher entries in journal vouchers.

For buying  Goods for production

Purchase (excise)  Account Debit

Excise Duty Account Debit
Education Cess Account Debit
Secondary Education Cess Account Debit

Creditor (excise) Account Credit

For Selling Goods to Second or First Dealer or Manufacture 

Debtor (excise ) Account Debit

Sales (excise) Account Credit
Excise Duty Account Credit
Education Cess Account Credit
Secondary Education Cess Account Credit

4th : Check Balance of Excise Duties in Duties and Taxes

We can check the balance in balance sheet's liabilities side by opening it in Tally.ERP 9.