Overview Presented By K V Ramesh Babu 2 India Localization 1. India Legal Requirements Overview 2. Logistics Process Overview ( Procurement & Sales ) 3. Utilization 4. Extended Withholding Tax
Contents 3 India Localization Requirements - Overview
CENVAT (Excise)
VAT / LST / CST
Service Tax
Cenvat Credit
4 India Localization Requirements - Overview
Central Value Added Tax (Excise)
VAT (LST) / Central Sales Tax
Service Tax
Cenvat Credit
5 Central Value Added Tax (Excise) What is Cenvat?
Tax on manufacturing or production of goods in India
Goods having 4M Characteristics are covered under this - Movable (No duty on Immovable Goods) - Marketable (Bought and Sold) - Manufactured (Come up out of a process) - Mentioned (Central Excise Tariff)
Every legal entity that manufactures or produces excisable goods shall pay the duty leviable on such goods
Materials are classified under various tariff headings (Chapter Ids). This will be subject to change in every financial budget.
Goods consumed in-house also liable for payment of duty
6 Central Value Added Tax (Excise) What is the basis of charge? Tax Rates Provided by GOI and are subject to change after each year based on the budget Exemption to pay duty on intermediate products in the following cases - used for manufacturing capital goods - used for manufacturing final goods which are eligible for Cenvat credit Duty shall be paid when the goods are removed from the place of production or place of storage Excise duty not payable on goods manufactured for exports or deemed exports Goods manufactured in factory for use within the factory for repairs of machinery installed within the factory are exempt from excise. 7 Central Value Added Tax (Excise) Types of Excise Duty
Basic Excise Duty (BED)
Additional Excise Duty (AED)
Special Excise Duty (SED)
Education Cess on Excise
Secondary and Higher education Cess
8 Central Value Added Tax (Excise) Duty Calculation
Specific duty It is calculated on the basis of certain unit, length, weight etc. Eg. cigarette
Ad valorem duty It is based on the value of the goods
Duty based on tariff value The Govt. may fix tariff value from time to time. The duty will be calculated as percentage of tariff value fixed by the Govt. and not on assessable value
9 Central Value Added Tax (Excise) Duty Calculation Considerations Transaction value is the price actually paid or payable for the goods and includes any other amount that the buyer is liable to pay in connection with such sale
Any additional consideration flowing directly or indirectly to the seller from the buyer should be added to the transaction value.
Cost of production is not relevant for the purpose of determining assessable value.
Assessable value may be lower than the cost price of the goods.
Goods should be assessed in the form in which they are removed.
10 Excise Payment Overview
Vendor Plant Customer Pays Excise Duty Pays Excise Duty for all outbound goods movement
Claims Cenvat
Pays Excise component to the Vendor 11 Central Value Added Tax (Excise) CENVAT PAYMENT
Duty to be paid by 5 th of the following month
Duty deposited in bank using TR 6 challan and credited to PLA
Duty is paid by debiting PLA
12 Central Value Added Tax (Excise) Excise Registers
Statutory Excise Reporting
Excise Registers (RG23A & C Part I & Part II,RG1, PLA, RG23D)
Excise Monthly Returns
Bond Registers
License Registers
Running Bond Registers
13 India Localization Requirements - Overview
CENVAT (Excise)
VAT / LST / CST
Service Tax
Cenvat Credit
14 VAT / Central Sales Tax How is Sales tax treated in India ?
This is a tax on sale
VAT / LST is charged on sales within the state
Central Sales Tax (CST) is charged on inter-state sales
Any sale would be charged to either VAT or CST but only to one of them
Every person carrying on any business is required to charge VAT / CST, on all sales made by him, and pay it to the Government
VAT / CST shall be charged at the rate in force as on the date of sale
15 VAT / Central Sales Tax Tax Impact under VAT System
Rs. STAGES I Manufacturer II Wholesaler III Retailer Selling price (excl. tax) 100.00 Cost price 100.00 Cost price 120.00 VAT @ 12.5% 12.50 Overheads & profit @ 20% 20.00 Overheads & profit @ 20% 24.00 Sale price 112.50 Sale price (excl. tax) 120.00 Sale price (excl. tax) 144.00 Tax paid 12.50 VAT @ 12.5% 15.00 VAT @ 12.5% 18.00 Sale price (incl. Tax) 135.00 Sale price (incl. Tax) 162.00 Tax paid (15-12.50) 2.50 Tax paid (18-15) 3.00 16 CENVAT vs. VAT Cenvat VAT Central Value Added Tax State Value Added Tax Revenue to Central Government Revenue to State Government Tax on Manufactured Goods Tax on Sale of goods Single point tax - paid at the first point of goods movement Multi Point Tax payable at each stage of value chain Credit can be availed Credit can be availed except in case of LST General CENVAT rate @ 16% with exceptions General VAT rate @ 4% or 12.5% with exceptions Centrally administered Cenvat Chain cannot be broken on interstate boundaries State administered Chain broken on interstate transactions Cenvat credit can be availed on Services Cenvat credit cannot be availed on Services 17 India Localization Requirements - Overview
CENVAT (Excise)
VAT (LST) / Central Sales Tax
Service Tax
Cenvat Credit
18 Service Tax
Tax on services rendered
Applicable only on those services which have been notified by the Government
Tax is payable @ 12 % plus education cess & Higher and Secondary education cess
Exemptions to persons rendering taxable service below 400,000 INR
Tax to be paid by 5 th of the next month
Service tax is payable on advances
19 Service Tax Service Tax Considerations
Service tax is payable on value of services
Value of service is the gross amount charged by the service provider for the taxable service provided
Any discount/rebate given to customer before accepting the payment would be deducted from the gross amount
In most of the cases person providing the taxable service is liable to pay tax
Reimbursement of expenses incurred on behalf of customer is not taxable
No tax on services which are exported or used for providing services which are being exported
20 Service Tax Export of Service
Should be at least partly performed outside India
It is delivered outside India and used outside India
Payment for such services is received in foreign exchange
No tax on services which are exported
21 Service Tax Import of Service
Should be provided from outside India to a person in India
Service provider does not have a place of business in India
Person receiving such service has a place of business in India
Person receiving such services is liable to pay service tax
Cenvat credit can be utilized for tax payment
Tax paid can be used for availing credit
22 Service Tax CENVAT Credit on Input Services
Service provider is entitled to take credit of service tax paid on input services
Credit can be taken only when full payment has been made for the service
Credit may be taken for service tax and also for education Cess , Secondary and Higher Education Cess paid
In case the service provider is engaged in exporting services, he shall be granted refund of CENVAT on input services
In many cases, various input services will be consumed in the headquarters/administrative offices of manufacturers and OSPs. In such cases, the invoices indicating the payment of service tax will be in the name of such headquarters/ administrative offices. Provision can be made for availing credit of such service tax, in the premises where manufacturing activity is undertaken or the premises where the output services are rendered. 23 Service Tax Reporting
Half yearly return in form ST-3 to be filed within 25 days from the end of the half year
Return needs to be accompanied by TR -6 challan evidencing duty payment
24 India Localization Requirements - Overview
CENVAT (Excise)
VAT / LST / CST
Service Tax
Cenvat Credit
25 CENVAT Credit
A manufacturer or producer of the final product or provider of taxable services is entitled to take credit of
Cenvat (Excise)
Education Cess
Secondary and Higher Education Cess
Secondary and Higher Education Cess
Service tax paid on input services
Countervailing Duty 26 CENVAT Credit What items can be considered for taking Credit?
A manufacturer or producer of the final product or provider of taxable services is entitled to take credit of CENVAT paid on the INPUTS used in the manufacturing process
INPUTS include inputs in capital goods manufacture which would be used further in manufacturing process
Inputs need not be contained in the final product. It should have been used in the process
27 CENVAT Credit What items can be considered for taking Credit?
CENVAT paid on the CAPITAL GOODS used in the manufacturing process
Capital goods should be used in manufacturing process and not in any office
Service tax and education cess paid on any input service used in relation to manufacturing process
When capital or inputs are removed as such (i.e. without using), only the credit availed originally needs to be paid
Inputs are eligible for Cenvat credit even if the intermediate products are exempt 28 CENVAT Credit When the Credit may be taken?
Cenvat credit in respect of inputs may be taken immediately on receipt of the inputs
Input includes all goods, except diesel and petrol / gasoline, used in relation to the manufacturing whether directly or indirectly and whether contained in the final product or not
Credit in respect of inputs shall be available whether such inputs are lying in stock or used in the manufacturing process 29 CENVAT Credit When the Credit may be taken?
Cenvat credit in respect of capital goods may be taken for an amount not exceeding 50 % of the duty paid on such capital goods in the year in which such goods are received and balance in any subsequent financial year
Cenvat credit in respect of the capital goods shall be allowed even if such goods have been acquired on lease, hire purchase or loan agreement
No Cenvat credit shall be allowed on any input or capital good which is used in the manufacture of exempted goods or in providing exempted services 30 CENVAT Credit When the Credit may be taken?
No time limit for availing CENVAT credit
Unutilized Cenvat credit at the year end should be shown under Loans & Advances in Balance Sheet
Cenvat credit balance should be reviewed at the year end and any non-utilizable portion should be added to purchase cost
SSI units ( turnover below 10 million INR) cannot avail Cenvat credit on inputs but can avail Cenvat credit on Capital goods. But this credit can be utilized only when SSI unit becomes liable to pay excise. 31 CENVAT Credit How the CENVAT credit may be Utilized?
Cenvat credit may be utilized towards payment of
Excise duty on any final product
An amount equal to Cenvat credit taken on inputs if such inputs are removed as such
An amount equal to Cenvat credit taken on capital goods if such capital goods are removed as such
Service tax on any output service
32 CENVAT Credit How the CENVAT credit may be Utilized?
Towards payment of Education cess on excisable goods or on taxable services
Where any input or input service is used in final product which is cleared for export, the Cenvat credit in respect of input or input service so used shall be utilized towards payment of excise duty on domestic consumption or towards payment of service tax on output service
Where the adjustment mentioned above is not possible, the manufacturer shall be allowed a refund of such an amount
33 CENVAT Availment & Utilization Overview
CENVAT on hold for Cap Goods CENVAT Account VENDOR EXCISE INVOICE PROCESS GOODS RECEIPT DESPATCH SALES EXCISE INVOICE PROCESS Excise Duty Payable A/C PLA A/C DEPOSIT FUNDS IN PLA ACCOUNT Debit PLA Account SELECT REGISTER Excise duty Utilization Transaction ON-LINE TRANSACTIONS MONTHLY TRANSACTIONS Debit ED Payable A/c (Consolidated Entry) Credit ED Payable A/c Credit PLA A/c Credit CENVAT A/c Debit CENVAT A/c Debit CENVAT on-hold A/c 34 India Localization 1. India Legal Requirements Overview 2. Logistics Process Overview ( Procurement & Sales ) 3. Utilization 4. Extended Withholding Tax
Contents 35 Logistics Process Overview
Overseas Customer Domestic Vendor Import Vendor Domestic Vendor Domestic Customer Subcontractor Plant X Plant Y Depot A Depot B 36 Excise Procurement Scenarios
Domestic Procurement Process
Subcontracting Process
Stock Transport Process
Imports Purchase
Service Procurement Process
37 Typical Procurement Cycle
Invoice Verification Payment Processing Requirement Determination Goods Receipt Purchase Order Monitoring Order Processing Vendor Selection 38 Excise Procurement Scenarios
Domestic Procurement Process
Subcontracting Process
Stock Transport Process
Imports Purchase
Service Procurement Process
39 Domestic Procurement of Raw Materials
Vendor liable to pay excise to Govt.
Vendor Excise Invoice accompanies Goods
GR at Factory Gate
Excise Invoice Capture
Excise Invoice Post (Optional)
Excise Stock Part I Register entry
Excise Invoice Post
CENVAT Part II Register entry
Vendor Delivery Goods Receipt Excise Invoice Liability to Vendor
- Price - Excise - Other Taxes - Other Costs
Vendor Invoice 40 Domestic Procurement of Raw Materials Accounting Entries
GR Posting Inventory Account Dr. GR/IR Clearing Account Cr. Excise Invoice Posting Excise Duty A/C Dr. CENVAT Clearing Account Cr. CENVAT Onhold A/C ( For Capital Goods) Dr. Vendor Invoice Posting CENVAT Clearing A/C Dr. GR/IR Clearing A/C Dr. Accounts Payable Cr. 41 Procurement: Cancellation of CENVAT Credit
It is possible to cancel the CENVAT credit after it has been availed. In the first step, the material document has to be cancelled. This is followed by canceling the CENVAT credit.
42 Procurement: Vendor Returns
Vendor returns possible by creating an excise invoice for Other movements
Avail the credit for the materials/goods that are received.
Create an excise invoice for the materials/goods returned to the vendor and pay excise duty by posting this invoice.
43 Procurement: Additional Adjustments
A supplementary excise invoice for extra excise duty sent by a vendor can be captured and credit availed
CENVAT credit for Materials destroyed, lost, etc. can be written off
Surrender of credit for the excisable materials which are used for non-productive purposes
All these are taken care by Excise JV Transaction 44 Procurement: Adjustments & Reversals Highlights Flexibility for 100% Compliance Management of CENVAT Credit for Capital Goods CENVAT Reversals and Adjustments One-Step Reversal of Excise Invoice Scrap Non-production use Additional Excise Paid by Vendor Deposit into PLA through TR6 Cancel Excise Invoice With Reference to External Document CENVAT Adjustment 45 Excise Procurement Scenarios
Domestic Procurement Process
Subcontracting Process
Stock Transport Process
Imports Purchase
Service Procurement Process
46 Subcontracting Process Input Output Challan FACTORY Sub contractor 47 Subcontracting Process A. With out Payment of Duty: Removal of Materials from Factory Note: Print Immediate Option to be used Subcon Order Transfer Posting Subcon Challan Challan Printing 48 Subcontracting Process A. With out Payment of Duty : Receipt of materials from subcontractor Note: Challans on which quantities are not completely returned have the status assigned Goods Receipt Subcon challan Reconciliation Complete Challan 49 Subcontracting Process A. With out Payment of Duty : Reversals Note: Listing Transaction gives list of Challans due for Reversal Run Listing Transaction Get Material Qty not returned on Challan Reverse Credit availed on Input Material 50 Subcontracting Process A. With out Payment of Duty : Recredit Note: Listing Transaction gives list of Challans due for Recredit Run Listing Transaction Get Material Qty subsequently returned on Challan Recredit Reversed Credit 51 Subcontracting Process B. Under Full Payment of Duty : Transfer Posting of Input Material to Subcon Note: Excise Invoice created and Posted under other Movements Subcon Order Transfer Posting Excise Invoice Creation Excise Invoice Posting 52 Subcontracting Process B. Under Full Payment of Duty : Receipt of Material from Subcon Goods Receipt Excise Invoice Capture Excise Invoice Post Invoice Verification 53 Excise Procurement Scenarios
Domestic Procurement Process
Subcontracting Process
Stock Transport Process
Imports Purchase
Service Procurement Process
54 Stock Transport Process
Plant liable to pay excise to Govt.
Excise Invoice accompanies Goods
GR at Plant Gate
Excise Invoice Capture
Excise Invoice Post (Optional)
Excise Stock Part I Register entry
Excise Invoice Post
CENVAT Part II Register entry
Supplying Plant Delivery Goods Receipt Receiving Plant Excise Invoice 55 Stock Transport Process FEATURES Applicable for Plants in different registration Ids Assessable value in excise master used for duty computation EI capture in receiving plant w.r.t - STO - GR Excise Values copied from supplying plant invoice during EI capture No Inter Plant Billing Delivery through MM Stock Transfer Excise Invoice Other Movements 56 Excise Procurement Scenarios
GR Posting Inventory Account Dr. GR/IR Clearing Account Cr. Excise Invoice Posting Excise Duty A/C Dr. Customs Clearing Account Cr. Vendor Invoice Posting GR/IR Clearing A/C Dr. Accounts Payable (Vendor) Cr. 59 Excise Procurement Scenarios
Domestic Procurement Process
Subcontracting Process
Stock Transport Process
Imports Purchase
Service Procurement Process
60 Service Procurement
Service PO Service Entry & Acceptance Invoice Verification PO for Services
Service Tax, Ecess and SECESS
Service Provider liable to Pay ST to Govt.
Additional Detailing of Individual Services Performed
Additional Control of acceptance
Vendor Invoicing
Inclusive of Service Tax
61 Service Procurement
Vendor Payment FI - JV Utilization Payment Inclusive of Service Tax
Transfer to Service Tax availed accounts
Credit Taken on availed accounts
Utilization Service Tax availed against Service Tax Payable
62 Service Procurement Accounting Entries Accounting Entry after Vendor Invoice Verification Accounts Payable (Vendor) Cr. GR/IR Clearing Account Dr. Service Tax Receivable Account Dr. Education Cess on Service Tax Receivable Account Dr. Sec.Education Cess on Service Tax Receivable Account Dr. FI-JV after Vendor Payment to avail Service Tax Credit Service Tax Availed Account Dr. Education Cess on Service Tax Availed Account Dr. Sec.Education Cess on Service Tax Availed Account Dr.
Service Tax Receivable Account Cr. Education Cess on Service Tax Receivable Account Cr. Sec.Education Cess on Service Tax Receivable Account Cr
63 Excise Sales Overview Full Compliance across the Distribution Process Removal of Goods From Factory From Depot Sale Transfer to Factory Return to Vendor Transfer to Depot Return to Customer Transfer to Subcontractor Sale Transfer to Factory Return to Vendor Transfer to Depot Return to Customer Transfer to Subcontractor 64 Excise Sales Scenarios
Sale from Factory
Transfers to Depot
Sale from Depot
Export Sale
65 Excise Sales Scenarios
Sale from Factory
Transfers to Depot
Sale from Depot
Export Sale
66 Sale from Factory Supplying Plant Price: 1000 Qty : 10 PC Duty 16% + 160 Excise Invoice Dispatch Fortnightly utilization CENVAT/Part II Register PLA Register Debit: Rs. 160 Excise Duty Payable A/C 67 Sale from Factory Delivery Goods Issue Excise Invoice No CIN related updates Update Registers and batch utilization ED Payable Utilization
68 Sale from Factory Posting to Excise duty payable account Posting to CENVAT accounts for Utilization Separate Commercial and Excise Invoice Sales Order Delivery Proforma Invoice Excise Invoice Printing Excise Invoice Commercia l Invoice 69 Sale from Factory Single Commercial and Excise Invoice Sales Order Delivery Commercia l Invoice Excise Invoice Printing Excise Invoice Posting to Excise duty payable account Posting to CENVAT accounts for Utilization 70 Sale from Factory Excise Document Flow Sales Order Sold to : 2300 Material: 400 Quantity: 5 Delivery Ship to: 2300 Material: 400 Quantity: 5
Billing Bill to: 2300 Material: 400 Quantity: 5
Excise Invoice Sold to : 2300 Material: 400 Quantity: 5
71 Sale from Factory Excise Invoice Features
Excise invoice created automatically in background during creation of billing document
Feature made optional and triggered based on customization settings
Excise group and Series group automatically determined based on customization
Provision to print excise invoice immediately after automatic creation of excise invoice 72 Sale from Factory Utilization Due List
Listing of all billing documents due for utilization provided
Also includes ability to view, - Account balances - Total duty amount needed to utilize the displayed billing documents - Deficit, if any 73 Sale from Factory Batch Utilization
Excise Invoices can be created in Batches
Provision of additional fields in selection screen like, - Billing Date - SD Document Category - Billing Document Category 74 Excise Sales Scenarios
Sale from Factory
Transfers to Depot
Sale from Depot
Export Sale
75 Transfers to Depot Stock Transfer Order Replishme nt Delivery Proforma Invoice Excise Invoice Printing Excise Invoice 76 Transfers to Depot Depot Excise Requirements
Distribution of Excisable goods at depot involves maintenance of RG23D registers.
Incoming Excise Invoice reference is required to be mentioned on depot Sales Invoice
At the Factory gate, Excise is paid on the declared value of the goods to be sold at depot.
Depot should charge from the customer the same Excise duty from that was paid at factory/source.
In case of price escalations at depot the difference needs to be paid at the factory. 77 Transfers to Depot Depot Receipts for Stock Transfer
GR made against the delivery note / stock transfer Excise invoice details directly copied from factory invoice Loss in transit taken care of Ship-from can be captured at Excise Invoice for depot. Multiple P.O.s can be combined in one receipt Folio number generation can be switched on through customization Item details are proposed for stock returns 78 Transfers to Depot Depot Receipts for Direct Purchases
GR made against the PO Individual excise invoice details copied from PO item or can be entered at item level For imports CVD can be marked Ship-from can be captured at Excise Invoice for depot. Multiple P.O.s can be combined in one receipt Folio number generated based on customization 79 Excise Sales Scenarios
Sale from Factory
Transfers to Depot
Sale from Depot
Export Sale
80 Sale from Depot Sales Order Delivery & PGI Excise Invoice Capture Commercia l Invoice Selling Price 1000 , Quantity 10, ED @ 16% = 160 RG23D Reduce quantity by 10, Debit 160 81 Sale from Depot Depot Sales
Separate steps for Excise Invoice create and verification
Option for Single step creation and verification through customization
Option to cancel excise invoice before verification
Provision to create depot invoice before post goods issue based on delivery document
Option to restrict incoming excise invoice selection from the same source of supply
User-exits for unit conversion and Excise / Series group determination 82 Sale from Depot Depot Sales: A-Certificate Selection
Pick up the A-certificates relevant for the current removal
A-certificate can be selected along with the corresponding excise invoice
Multiple A-certificates can be picked up
Splitting of the A-certificate amount across removals not allowed
Separate RG23D entries in the same folio for better tracking
Value gets added up and cumulative excise proposed during Billing 83 RG23D Register Material Receipt in Depot Movement / sale from depot Text Text Text Receipt update the quantity and the value in RG23D The reference / mother invoice details in terms of batches etc captured Reference to the mother invoice is made Update goods issue quantity Excise amount cannot differ from that paid at the first point of goods movement 84 Depot Operations
Comprehensive solution for Depot functionality
RG23D Maintenance and Printing functionality is available
Provision to receive Internal as well as External Excise Invoice at Depot.
Close integration with MM and SD processes 85 Excise Sales Scenarios
Sale from Factory
Transfers to Depot
Sale from Depot
Export Sale
86 Export Sale Supplying Plant Excise Invoice If Exported under bond If not exported under bond Price 1000, Quantity 10, Duty@ 16% = 160 Update Registers Debit ED payable a/c 160 Update Cenvat Part II register and PLA register Fortnightly utilization
87 Export Sale Excise Bonding Document Flow Sales Order Sold to : 2300 Material: 400 Quantity: 5 Delivery Ship to: 2300 Material: 400 Quantity: 5
Billing Bill to: 2300 Material: 400 Quantity: 5
Excise Invoice Sold to : 2300 Material: 400 Quantity: 5
Bond Register Sold to : 2300 Material: 400 Quantity: 5
Capture Licence Sold to : 2300 Material: 400 Quantity: 5
Bonds / LOUT / Licence as applicable in the Business process 88 Export Sale Deemed Export Sales
Sale is marked as Deemed Excise status of customer gives complete concession No amount utilization Use of local excise invoice range based on series group 89 India Localization 1. India Legal Requirements Overview 2. Logistics Process Overview ( Procurement & Sales ) 3. Utilization 4. Extended Withholding Tax
Contents 90 Utilization Monthly Utilization
Facilitates payment of duty accumulated for each month
Features include Display of pending invoices Option for Posting date Posting to a Business area Selection based on a range of dates Optionally, Selection based on a range of invoices Utilization strategy based on customization settings
Posting of TR6 Challan entry to PLA account 91 Utilization Utilization Due List
Feature to view list of all billing documents due for utilization
Other features include ability to view - Account balances - Total duty amount needed to utilize the displayed billing documents - Deficit, if any
92 TR6 Challan Posting with PLA Register Updation House Bank Own Create Excise JV - PLA updation TR6 Challan (J1IH ) PLA Register for Value Post Accounting document in FI to post the payment Excise PLA hold A/c Dr House Bank A/c Cr Prepare Cheque & TR 6 Chllan Enter the Accounting Doct. or TR6 Challan No., FY, Plant, Excise Group, etc.,
Allocate the TR6 Challan Amount as per TR6C i.e. BED / AED / SED
Banker Transfer the funds toExcise Authorities and Acknowledge the TR 6 Chllan
Update the PLA Register & Accounting Document Posted EXCISE PLA A/c Dr Excise PLA hold A/c Cr 93 Utilization of CENVAT Total Available Balances RG23A Input Debit Balance Credit Balance Is the Balance Sufficient NO Yes Output RG23A & C Part II PLA Register TR6 Challan Payment Input Credit from Vendor Material Purchase Input Credit from Vendor Capital Purchase (50%) RG23C PLA Balance Perform the Excise Utilization Total Excise duty payable Excise duty payable on Customer Invoice Apportion the payable amount between the Registers RG23A, RG23C & PLA Post the Utilization Accounting document generated & Registers updated based on Amount apportionment 94 CENVAT Availment & Utilization Overview
CENVAT on hold for Cap Goods CENVAT Account VENDOR EXCISE INVOICE PROCESS GOODS RECEIPT DESPATCH SALES EXCISE INVOICE PROCESS Excise Duty Payable A/C PLA A/C DEPOSIT FUNDS IN PLA ACCOUNT Debit PLA Account SELECT REGISTER Excise duty Utilization Transaction ON-LINE TRANSACTIONS MONTHLY TRANSACTIONS Debit ED Payable A/c (Consolidated Entry) Credit ED Payable A/c Credit PLA A/c Credit CENVAT A/c Debit CENVAT A/c Debit CENVAT on-hold A/c 95 India Localization 1. India Legal Requirements Overview 2. Logistics Process Overview ( Procurement & Sales ) 3. Utilization 4. Extended Withholding Tax
Contents 96 EWT: TDS Overview Pay Tax to Government Issue Certificates
Deduct Tax from Vendor Vendor Vendor Income tax office Bank 97 EWT: TDS (Tax Deducted at Source) Tax is deducted at source from all payments/provisions which are hit by the TDS provisions of the Act
Some of the above payments/provisions pertain to services that come within the scope of Tax Deducted at Source (TDS) under the Indian Income-tax Act, 1961 (Act).
Tax is not deducted from payment for goods
TDS is required to be deducted at the time of payment or invoice posting whichever is earlier.
The taxes which are so deducted, will then have to be deposited to the credit of the Indian Government on or before 7 th of next every month.
The company will have to issue TDS certificates to the vendors for the tax deducted and also file with the tax office, Quarterly & Annual Return of the total taxes deducted during the year under the various sections of the Act. 98 EWT: Vendor TDS ABC Ltd
Mumbai plant BANK Income Tax Office Certificate Advance Interest Payment Payment/Challan Customer Quarterly Returns 101 EWT: Provisions and Adjustments
TDS computed on entries in provisional liability accounts (GR/IR and SR/IR Accounts)
TDS is computed at each period end on uncleared entries remaining in the GR/IR and SR/IR accounts
GR/IR and SR/IR accounts relevant for computing TDS on provisions identified separately
GL accounts to which the provisional TDS is posted identified and document Type used for provisional TDS postings is separately identified
JV facility available for carrying out changes to TDS relevant postings
Accounts to which losses (non-recoverable TDS) is to be posted and the document type to be used for TDS adjustment postings is identified separately 102 EWT Activities Posting Invoice, Credit Memo, Down Payment, etc Challan Update On payment due date TDS Certificate Printing, Reprinting and Cancellation on appropriate due dates
Quarterly Return
Tax Adjustment JV Where required Periodic Activities Daily Activities TDS on Provisions Posting Where required 103 Thank you! Questions??