Reversal and Refund of CENVAT Credit

[Excise for Manufacturer] in Tally.ERP 9

In case of exports under bond the Excise Duty will not
be charged. But the Duty already paid on the raw
materials which are used for manufacturing the finished
goods can be utilised for paying any other duty (Excise
or Service Tax). In case if there are no other sales
apart from Export Sales, then the Assessee can apply
for refund of duties paid on inputs from the
Government.
Note : B ef ore appl yi ng for Ref und, its
re qui red to rev erse the CENVAT C redi t.

Refund/Reversal of CENVAT Credit

To reverse the CENVAT Credit,

Go to Gateway of Tally > Accounting Vouchers >
Journal Voucher
Press F7 and select CENVAT Credit
Adjustment Class from the Voucher Class list
Note : A sepa rate Voucher C lass shoul d
have been crea ted bef ore passi ng
the Re fund/Re ve r sal entri es.
Select CENVAT Refund/Reversal against Used
for
[Img-315]
Select the required Excise Unit from the list of
Excise Units
Debit the ledger created for Refund Receivable
and specify the refund amount which is
claimable.
Credit CENVAT Ledgers and select the bill
references for reversing the credit.
Similarly, select the Education Cess and Secondary
Education Cess Ledgers also for the respective
refunds/reversals.
Set Yes to specify the Adjustment Details

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Enter the required period for which
the Refund/Reversal processed
Specify the required remarks in
the Narration field
[Img-317]
Press Enter to accept and save
Note : Re fund Re ce ivable L edger is
creat ed und er Curr e nt Asse ts Grou p.
The above Refund/Reversal entry will affect the
following Excise Reports:
1.In Excise Computation the CENVAT Credit will
be reduced to the extent of Reversal.
2.In ER1 the reversed CENVAT will be shown as
utilisation of CENVAT Credit against row
number 11 (Credit utilised for payment of
Duty on goods).
3.In CENVAT Adjustment
Summary and Availed report, the reversal
amount will be shown as utilisation.
4.In Abstract the reversal of CENVAT Credit will
appear under the column Credit Utilised for
Payment of Duty on Goods.
5.In RG 23A Part II, the CENVAT Credit will be
captured under the Debit columns and balance
will be shown at the end of the report.
CENVAT Reversal (Rule 6) [Excise for
Manufacturer] in Tally.ERP 9
As per Rule 6 of the Cenvat Credit Rules, the Manufacturer shall not be allowed to avail Cenvat Credit attributable
to the Inputs or Input services used in the manufacture of EXEMPTED GOODS.
Manufacturer shall maintain separate accounts for receipt, consumption and inventory of input meant for use in the
manufacture of dutiable final products and separately for use in the manufacture of exempted goods and can avail
CENVAT credit only on that quantity of inputs which is intended for use in the manufacture of dutiable goods.
In other words, the CENVAT credit to be reversed, on the portion of Exempted goods.

To reverse the CENVAT Credit,

Go to Gateway of Tally > Accounting Vouchers >
Journal Voucher
Press F7 and select CENVAT Credit
Adjustment Class from the Voucher Class list
Note : A sepa rate Voucher C lass shoul d
have been crea ted bef ore passi ng
the Re ve r sal entri es.
Select the Excise Adjustment flag CENVAT
Reversal (Rule 6) in the Used for field

[Img-318]
Select the required Excise Unit from the list
of Excise Units
Debit the ledger created for CENVAT Reversal on
Exempt Goods (ideally grouped
under Indirect Expenses) and specify the
amount to be reversed.
Credit CENVAT Ledgers and select the bill
 references for reversing the credit.
Similarly, select the Education Cess and Secondary
Education Cess Ledgers also for reversal.
Set Yes to specify the Provide Details

[Img-319]
Enter the required period for which the reversal
is being processed
Specify the required remarks in
the Narration field
[Img-320]
Press Enter to accept and save
This Reversal entry will affect the following Excise
Reports:
Excise Computation
Forms E.R.-1 (Table No. 8, Row 13), and
E.R.-3 (Table No. 6, Row 11)
RG23 Part II
Credit Summary
Credit Availed
Abstract
Creating a
Journal Voucher CENVAT Credit Adjustment
[Excise for Manufacturer] in Tally.ERP 9
Under Central Excise Act Excise duty is payable
monthly or quarterly depending on the Type of
manufacturer.
If youre a Regular Manufacturer, Excise Duty is payable
Monthly and if you are SSI Excise Duty is payable
Monthly. Hence the CENVAT Credit Adjustment entry is
recorded at the end of Every month or Quarter
depending on the type of Manufacturer.
For the payment of Excise Duty, CENVAT
Credit available to a Unit will be adjusted towards
the Duty Payable to arrive at the Net Duty
Payable to the Government.
In Tally.ERP 9 to record the adjustment, CENVAT
Duty and Excise Duty accounts
are Credited and Debited, respectively to nullify their
balances and the net balance in the Excise Duty ledgers
will be paid to the Government.

Create Voucher Class in Journal Voucher

Go to Gateway of Tally > Accounts info. > Voucher

Types > Alter > Journal
Tab down to Name of Class field
Enter the Name of Class as CENVAT Credit
Adjustment and press Enter
In Voucher Type Class Screen
 o Set Use Class for Excise /CENVAT Adjustment to Yes

[Img-321]

[Img-322]

Press Enter to accept and save.

Record the transaction in Journal Voucher

To record the Journal voucher

Go to Gateway of Tally > Accounting Vouchers >
F7: Journal
1.In Voucher Type sub form select CENVAT
Credit Adjustment in Class field.

[Img-323]

2.Enter the Date as 30-4-2009

2.In Used For field select CENVAT Adjustment

[Img-324]

4.Press Alt + L or click on L: Excise

Helper button to view CENVAT
Adjustments screen
[Img-325]

5.In CENVAT Adjustments screen

In Excise Unit field select ABC Company from
the List of Excise Units. On selecting Excise
Unit the CENVAT credit available details will
be displayed in CENVATAvailable column
In Payable From and To field mention the
period for which the payment is done.
o Payable From: 1-4-2009

o To: 30-4-2009

On specifying the Payable

From and To date the duty payable for
the period specified will be displayed
in Duty Payable column.
[Img-326]

Note : Rs. 6 9 ,0 0 0 is the C ENV AT

C re dit (B asi c Exci se Duty amount)
avai labl e f or adj ustment towards ex ci se
du ty p ayabl e

Rs. 1 ,38 0 is the C ENV AT Cr e dit

( Educat ion C ess am ount) avail abl e f or
adj ustment towards ex ci se du ty payabl e.
C redi t of Educati on C ess on Exci sabl e
goo ds and i mported goo ds can be
utili sed only for p ayment of educati on
ces s on final pro ducts.

Rs. 6 90 i s the C ENV A T C re dit

( Se condary Education Ce ss
am ount) avail abl e f or adj ustment
towar ds exci se du ty p ayabl e. Cre di t of
S HE C ess on Exci sabl e good s and
i mported goo ds can be utili sed only f or
p ayment of secondary e ducati on ces s on
f inal product s.
 User can adjust full / partial amount of
Credit available towards duty payable for
the period. The amount of CENVAT credit
adjusted towards duty payable needs to be
specified in Adjustment Amount column.
In Adjustment Amount column specify the
adjustable amount as
o Basic Excise Duty Rs. 69,000

o Education Cess Rs. 1,380

o Secondary Education Cess Rs. 690

We are adjusting full credit towards duty

payable.
Press Enter to save the adjustment. Tally.ERP 9
displays Proceed to Adjust Excise
Duties screen for confirmation to adjust excise
duties
[Img-327]

Press Enter to save the CENVAT Adjustments.

Note : C urrentl y Tall y.ERP 9 all ow s the
adj ustment of cre di t and li abil i ty of
same nature of du ty e xam ple : BED
cre di t can be adj usted towar ds B ED.

* C ENVAT A dj ustment betw e en the

duti es i. e. B ED C redi t adj ustment
towar ds NC CD etc. and
* A dj ustment of servi ce i nput cre di t
towar ds exci se du ty and v ice v ersa are
not suppor ted.
6.On saving the CENVAT Adjustments, Journal
Voucher displays the adjusted ledgers with
the amount adjusted automatically
[Img-328]

Completed Journal Voucher is displayed as shown

[Img-329]

7.Press Enter to save.

Journal Voucher Rounding Adjustments
[Excise for Manufacturer] in Tally.ERP 9
While recording Excise Purchase and Sales
transactions, at times the assessable value and the
resultant Duty values appear in decimals when the
option Rounding Method is set
asNot Applicable in the ledger masters. Due to this,
while making the CENVAT Credit Adjustment entry,
even the Adjustment Amount is in decimals.
However, the Central Board of Excise and Customs
requires assessees to round off this Amount to the
nearest rupee.
That is, if the Adjustment amount is `3762.62, it has to
be rounded off to `3763.
For this, a new flag Rounding Adjustments has been
provided in Journal Voucher in Tally.ERP 9 from
Release 3.7 onwards. The decimal amount of each
Duty/CENVAT ledger can be rounded off using this flag.
To understand this feature let us execute the following
steps.
1.Record an Excise Purchase Invoice
Go to, Gateway of Tally > Accounting Vouchers >
Purchase > Excise Purchase
Record an Excise Purchase invoice with the
assessable value in Decimals. While recording, ensure
that in the CENVAT Ledger Masters,
the Rounding Method is set as Not Applicable.
The Excise Purchase Invoice is recorded as shown
below:
[Img-330]
Press Y to accept the entry.

2.Record an Excise Sales Invoice

Go to, Gateway of Tally > Accounting Vouchers >
Sales > Excise Sales
Record an Excise Sales Invoice with the assessable
value in Decimals. While recording, ensure that in the
Duty Ledger Masters, the Rounding Method is set
as Not Applicable.
The Excise Sales Invoice is recorded as shown below:
[Img-331]
Press Y to accept the entry.

3.Create Duty Rounding Ledger under

Indirect Expenses
Go to, Gateway of Tally > Accounts Info.> Ledgers
> Create
Enter Duty Rounding in the Name field
Select the Group
as Indirect Expenses in Under field
[Img-332]
Press Ctrl+A to accept

4.Record a Journal Entry with flag Rounding

Adjustments
Go to, Gateway of Tally > Accounting Vouchers >
Journal > select Voucher Class CENVAT
Adjustment
Enter the voucher date
Select the flag Rounding Adjustments
Select the Excise Unit
Let us take the example of Basic Excise Duty
16% ledger, used in the Excise Sales transaction, the
amount being `1732.12. After round off the value
should be `1732.
Select the ledger Basic Excise Duty CENVAT in
Debit field
In the Excise Duty Allocation screen, select
the required bill reference from the List of
Pending Tax Bills
Enter the amount as `0.12 and press Enter
Credit the ledger Duty Rounding with amount
as `0.12

[Img-333]
Press Ctrl+A to accept
Similarly record Journal entries for other Duty/CENVAT
ledgers. The ledger amounts appear rounded. Let us
check the amounts in Accounts Books > Ledgers.
Go to Gateway of Tally > Display > Accounts
Books > Ledgers > Basic Excise Duty 16%

[Img-334]
Observe, the closing balance is now rounded off
to `1732.00
Now, while recording a Journal with CENVAT
Adjustments flag, and using
the Excise Helper option, the values of the CENVAT
and Duty ledgers appear rounded.
[Img-335]
Note : To i ncrea se the amount of the
du ty p ayabl e l edge r, Cr edi t the l edger
w hi le recor di ng the ab ove j ournal entry.
Si mil arly, to i ncreas e the C ENVAT
amount, De bit the C ENVAT l edger w ith
the re qui r ed amount. To reduc e the
amount, revers e the ste p. That
i s, D ebit the Du ty p ayabl e led ger
and Cr edi t the C ENVAT l edger.
G.A.R. - 7 Payment (Without using Auto Fill of
Statutory Payment) [Excise for Manufacturer]
in Tally.ERP 9
In Tally.ERP 9, from Release 2.0 Tax/Duty
payments can be recorded using S: Stat
Payment Button.
To record G.A R. -7 Payment without using the auto fill of statutory payment

Go to Gateway of Tally > Accounting Vouchers >

F5: Payment
In F12: Configure (Payment Configuration)
Ensure Use Single Entry mode for
Pymt/Rcpt/Contra is set to Yes
1.Enter the Date as 3-5-2008.
2.Press Alt + S or click on S: Stat Payment to
view Statutory Payment screen

[Img-336]
 3.In Statutory Payment screen
Type of Duty/Tax: In this field select the
Tax/Duty Type towards which tax payment entry
is being recorded. Here we are recording excise
duty payment entry, hence select Excise from
the Type of Duty/Tax

[Img-337]
Note : The Ty pe s of D uty / Tax will be
di spl ay ed bas ed on the statutory
f eatures enabl ed i n F11: Features for
the compa ny.
Auto Fill Statutory Payment: Set this option
to YES to auto calculate and fill the duty payable
to the Government. Set this option to NO, if the
user wants to manually select the duty ledger
and duty bills. ABC Company does not want the
 duty details to be auto filled to the payment
voucher, hence the option Auto Fill Statutory
Payments is set to No.

[Img-338]
4.Press Enter to accept the Statutory Payments
details.
5.In Account field select the Bank account through
which the duty payment is made. Select SBI
Bank from the List of Ledger Accounts.
5.Under Particulars select Excise Duty ledger - Basic
Excise Duty @ 16% and press enter to
view Excise Duty Allocation screen.
5.In Excise Duty Allocation screen select all the
pending bills for the Payment of tax.
[Img-339]
8.Amount will be updated based on the pending
bills selected in the Excise Duty
Allocation screen.
8.Under Particulars select Excise Duty ledger
- Education Cess @ 2%. In Excise Duty
Allocation screen select all the pending bills for
the Payment of tax.
8.Under Particulars select Excise Duty ledger
Secondary Education Cess @ 1%. In Excise
Duty Allocation screen select all the pending bills
 for the Payment of tax.
8.Set the option Provide Details to Yes to
view Payment Details screen.

[Img-340]
12. In Payment Details (for Excise) screen:
In Period From and To field enter the period
as 1-4-2008 to 30-4-2008
In Excise Unit Name field select ABC
Company from the List of Excise Units
In Challan No. field enter the Bank Challan no.
- 456423 used to pay the duty amount
In Challan Date field enter the date 3-5-
2008 on which the duty is paid
In Bank Name field enter the Name of the Bank
 SBI Bank through which the payment is
made.
In BSR Code field enter the BSR Code of the
branch - 0078548
In Cheque/Draft/Pay Order No. field enter
the Cheque Number 552423
In Cheque Date field enter the cheque date
as 3-5-2008

[Img-341]
13. In the Narration field enter the Cheque No.
-552423.
[Img-342]
14. Press Enter to accept and save.

Printing G.A.R.7 Challan

Press Page Up from the payment voucher to view

the payment voucher entered on 3-5-2008.
Press Alt +P or click on P: Print button to view the
Voucher Printing Screen.
[Img-343]
The option Print G.A.R.7 Challan is by default set
to Yes.
Ensure that Alt+I with Print Preview is selected and
press enter to view print preview of G.A.R. 7
Challan.
[Img-344]