Excise Duty is an indirect tax levied and collected on the goods manufactured in India. Generally, manufacturer of goods is responsible to pay duty to the Government. This indirect taxation is administered through an enactment of the Central Government viz., The Central Excise Act, 1944 and connected Rules – which provide for levy, collection and connected procedures. The rates at which the excise duty is to be collected are stipulated in the Central Excise Tariff Act, 1985.
It is mandatory to pay duty on all goods manufactured, unless exempted. For example, duty is not payable on the goods exported out of India. Similarly exemption from payment of duty is available, based on conditions such as kind of raw materials used, value of turnover (clearances) in a financial year, type of process employed etc.
So, for manufacturer it is necessary to keep the track of excise how much they paid on purchase of material and what they collect on sales at the end of the month they have to pay the difference to the Govt. or may get Credit too.
To compute and manage the excise on the reception of the goods notes we need one some document that takes care for the excise where we can define what we get as an Excise and what we are going to take under exception.
Big manufacturing companies should increase stock once the excise receipt confirm and other cost computes perfectly to keep the stock valuation based on the WAR or Moving WAR method and also issue material on the basic of the WAR to get the correct cost of material consumed.
Once excise receive we get the supplier invoice and based on that we have to prepare the supplier invoice so our invoice policy should be “Invoice based on the Reception” to have all the cost and correct excise what we receive in customer invoice.
Go through video below to see how OpenERP is powerful to manage that complex process through Excise Receipt.