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Microsoft Business Solutions Navision 4.

0- Fringe Benefit Tax

Table of Contents
Overview of Functionality..................................................................................... 3 Detailed Setup ................................................................................................... 3 Comprehensive Functionality ............................................................................ 3 Reports .............................................................................................................. 3 Fringe Benefit Tax ................................................................................................ 4 Types of Fringe Benefits which are Liable for Tax: .............................................. 4 Reimbursement of Expenditure from Client ......................................................... 6 Net Expenses to be Considered in case of Recovery from Employees .................. 6 Capital or revenue expenditure ............................................................................ 6 Value of Fringe Benefits ....................................................................................... 6 Value of Deemed Fringe Benefits ......................................................................... 7 Computation of Fringe Benefits Tax Liability ....................................................... 9 Advance Payment of Fringe Benefit Tax............................................................. 10 Return of Fringe Benefits.................................................................................... 10 Setup- Fringe Benefit Tax ................................................................................... 11 Accounting Period ........................................................................................... 12 Groups ............................................................................................................. 13 Rates ............................................................................................................... 14 G/L Account Card ............................................................................................ 16 General Ledger Setup...................................................................................... 17 Dimensions ...................................................................................................... 18 Transactions ........................................................................................................ 20 Booking of the Expenses.................................................................................. 20 Viewing the Ledger Entries .......................................................................... 21 In case of Reimbursement from Client ........................................................... 23 Viewing the Ledger Entries .......................................................................... 24 In case of Capitalizing the Advertisement Expense in Balance Sheet ............ 26 Viewing the Ledger Entries .......................................................................... 27 In case Amount has to be Recovered from Employee ..................................... 28 Viewing the Ledger Entries .......................................................................... 29 Update FBT Entries ............................................................................................. 30 Calculation of FBT .............................................................................................. 34 Any Other Heads.............................................................................................. 39 Any Other Deduction ....................................................................................... 41 Settlement of FBT entries ............................................................................... 47 View the history of Calculate FBT ................................................................... 49 Reports................................................................................................................ 51 Appendix ............................................................................................................. 58

Overview of Functionality
Fringe Benefit Tax functionality comprehensively covers the Indian business scenario. This functionality is a standard solution for the employers who are liable to pay FBT under Income tax Act, 1961.

Detailed Setup
FBT functionality contains a detailed setup, which is used in mapping Sections, General Ledgers, Value %, Tax Rates, and Calculation of FBT.

Setup Area
Accounting Period

Description
Accounting periods for FBT are defined here. Codes, Section and Section description are defined here. Section code, effective date Tax %, surcharge %, eCESS %, and Value % are defined here. Select FBT Group Code here. Provision to mention the FBT Rounding type and Precision are defined here.

Groups

Rates

G/L Account Card General Ledger Setup

Comprehensive Functionality
In case of General Ledgers, FBT setup maintained in the program comprehensively covers the following: Updations of FBT Entries by selecting the type of expenses (Reimbursement from client, Recovered from employee, Accounted in balance sheet). Calculation of FBT with date, Global Dimension 1 code, and Global Dimension 2 code filters Settlement of the calculated FBT amount

Reports
The Fringe Benefit Tax report is the standard solution for the employers to furnish the annual return of FBT and also helps the auditors to furnish annexure II of form 3CD. FBT

entry G/L report is provided to identify that how much FBT is payable or paid for particular General Ledger.

Fringe Benefit Tax


The taxation of perquisites -- or fringe benefits -- provided by an employer to his employees, in addition to the cash salary or wages paid, is fringe benefit tax. Any benefits -- or perks -- that the employee (present or former) get as a result of their employment are to be taxed, but the tax is payable by the employer. The benefits include employee compensation other than wages, tips, health insurance, life insurance, and pension plans. Section 115WB of the finance bill defines fringe benefits as: any privilege, service, facility, and amenity directly or indirectly provided by an employer to the employees (including former employees) during their employment period. These benefits also include reimbursements, made by the employer either directly or indirectly to the employees for any purpose, contributions by the employer to an approved superannuation fund as well as any free or Concessional tickets provided by the employer for private journeys undertaken by the employees or by their family members.

Types of Fringe Benefits which are Liable for Tax:


As per section 115WB (1) of the income tax, fringe benefits mean any consideration for employment provided by the way of: (a) Any privilege, service, facility, and amenity, directly or indirectly provided by an employer, whether by the way of reimbursement or to his employees (including former employee or employees) (b) Any free or Concessional ticket provided by the employer for private journeys of the employee or their family members (c) Any contribution by the employer to an approved superannuation fund for employees

As per the finance bill, fringe benefits shall be deemed to have been provided if the employer has incurred any expense or made any payment for the purposes of: Entertainment Festival celebrations Gifts Use of club facilities

Provision of hospitality of every kind to any person whether by way of food and beverage or in any other manner, excluding food or beverages provided to employees in the office or factory Maintenance of guest house Conference Employee welfare Use of health club, sports and similar facilities Sales promotion, including publicity Conveyance, tour and travel, including foreign travel expenses Hotel boarding and lodging Repair, running and maintenance of motor cars Repair, running and maintenance of aircraft Consumption of fuel other than industrial fuel Use of telephone Scholarship to the children of the employees In case the employer is engaged in the business of carriage of passengers / goods by motor car or by aircraft, a lower percentage of expenses on repair, running, and maintenance of motor cars or aircrafts or fuel has been specified. Similarly for hotels, a lower percentage of the expenses incurred on hospitality has been specified for the purpose of calculating liability under the fringe benefit tax. An employer liable to pay fringe benefit tax is required to furnish a return of fringe benefits before the due date as given in section 115WD. Section 115WE outlines the procedure for the assessment of the return of fringe benefits filed by the employer and the determination of tax or interest payable or refund due and in either case the issue of intimation to that effect. Depreciation of motor car Section 115 WB (2) (H) of the Income Tax Act includes the following for the calculation of FBT: Expenditure on repair of motor car Expenditure on running of motor car including fuel Maintenance of motor car Depreciation of motor car Lease rent of motor car Salary paid to drivers of motor car Rent of garage for motor cars Interest on loan taken to purchase motor cars The depreciation on motor car or on any other asset for the purposes of FBT will be the depreciation, computed under the provision of section 32 of the Income Tax Act .Further; such amount shall be the total amount of depreciation in respect of the relevant block of assets. For example, for the purposes of depreciation on motor car, the amount of

depreciation relating to the block of asset-motor car will be included within the scope of clause (H) of subsection (2) of section 115 WB. Note: For the payment of advance tax on fringe benefits tax, depreciation should be taken on a prorata basis for the payment of advance FBT.

Reimbursement of Expenditure from Client


A company incurs expenditure on traveling, hotel, and on others wholly and exclusively for executing an assignment for its client and the client reimburses the company for such out of pocket expenses. Since the expenditure on traveling, hotel, and on others is incurred by the company and is not by the client, so the company is liable to FBT in respect of such expenditure. However the client will not be liable to FBT in respect of payment of such expenditure (as per circular No 8/2005 dated 29-08-2005). Any reimbursement of expenditure incurred for the purpose of conveyance, tour and travel is an essential component of professional fee paid by the client to the lawyer or auditor. Accordingly, such expenditure is not liable to FBT in the hands of client (as per circular No 8/2005 dated 29-08-2005).

Net Expenses to be Considered in case of Recovery from Employees


Where the employer recovers from its employees, any amount of expenditure incurred for the purposes listed in clause (A) to (Q) of subsection 115 WB, the value of the fringe benefits will be determined with reference to the net expenditure and not with the gross expenditure.

Capital or revenue expenditure


FBT is payable in the year in which expenditure is incurred irrespective of whether expenditure is capitalized or not .However the same expenditure will not be liable to FBT again in the year in which it is amortized and charged to profit and loss account.

Value of Fringe Benefits

Fringe benefits, as per section 115WB(1), means any consideration for employment provided by way of-

Value as per Section 115WC

Fringe benefits, as per section 115WB(1), means any consideration for employment provided by way of-

Value as per Section 115WC

Any privilege, service, facility, amenity directly or indirectly provided by an employer, whether by the way of reimbursement or otherwise, to the employees.

No value given

Any free or concessional ticket provided by the employer for private journeys of his employees or their family members

100% (cost at which the same benefit is provided to the general public) minus any recovery from the employee.

Any contribution by the employer to an approved superannuation fund for employees.

100% (from the assessment year 2007-08, 100% of the amount in excess of Rs. 1,00,000 for each employee).

Value of Deemed Fringe Benefits


. Items of expenditure of deemed fringe benefits as per section 115WB (2). Entertainment Provision of hospitality of every kind by the employer to any person, whether by way of provision of food or beverages or in any other manner whatsoever and whether or not such provision is made by reason of any express or implied contract or custom or usage of trade, but does not includes any expenditure on, or payment for, food or beverages provided by the employer to his employees in office or factory and any expenditure on or payment through paid vouchers which are not transferable and usable only at eating joints or outlets. In the case of an employer engaged in the business of :Value as per section 115WC

20% 20%

5%

Items of expenditure of deemed fringe benefits as per section 115WB (2). Hotel Carriage of passenger or goods by aircraft Carriage of passenger or goods by ship.

Value as per section 115WC

Conference (not being fee for participation by the employees in any conference) Any expenditure on conveyance, tour and travel (including foreign travel), on hotel, or boarding and lodging in connection with any conference shall be deemed to be expenditure incurred for the purpose of conference. Sales promotion including publicity. Employees welfare Conveyance In the case of an employer engaged in the business of :Construction Pharmaceuticals Software

20%

20% 20% 20% 5%

Use of hotel, boarding and lodging facilities

20%

In the case of an employer engaged in the business of :Pharmaceuticals Software Carriage of passenger or goods by aircraft Carriage of passenger or goods by ship.

5%

Items of expenditure of deemed fringe benefits as per section 115WB (2). Repair, running (including fuel), maintenance of aircrafts and the amount of depreciation thereon In the case of an employer engaged in the business of :Carriage of passenger or goods by aircrafts

Value as per section 115WC 20%

0%

Use of Telephone (including mobile phone) other than expenditure on leased telephone lines Maintenance of any accommodation in the nature of guest house Festival celebrations Use of health club and similar facilities Use of any other club facilities Gifts Scholarships Tours, travel, foreign travel (from the assessment year 2007-08)

20%

20%

50% 50% 50% 50% 50% 5%

Computation of Fringe Benefits Tax Liability


Fringe Benefit Tax Rate: Fringe benefit tax is calculated at the rate of 30 per cent of the value of fringe benefits. Surcharge: Fringe benefit tax is calculated at the rate of 30 per cent will be increased by surcharge as follows: Different employers If the employer is an AOP/BOI Nil If fringe benefit does not exceed Surcharge as a % of fringe benefits tax

Rs. 10,00,000 10% If fringe benefit is above Rs. 10,00,000

If the employer is an artificial juridical 10% person If the employer is a firm If the employer is a domestic company If the employer is a non-domestic company If the employer is a local authority 10% 10% 2.5% Nil

Education CESS: Education CESS is 2 per cent of fringe benefit tax and surcharge.

Advance Payment of Fringe Benefit Tax


Every employer shall pay advance tax on his current fringe benefits. The amount of advance tax payable in the financial year shall be 30 percent (+ surcharge + eCESS) of the value of the fringe benefits paid or payable in each quarter. The advance tax shall be payable on or before 15 th day of the month following such quarter. The advance tax payable in relation to the quarter ending on March 31 of the financial year shall be paid by the assesses on or before March 15 of the said financial year. However the last quarter installment of the advance tax may be paid on an estimate basis, as the same has to be paid before the closure of the financial year.

Return of Fringe Benefits


Every employer who has paid (or made provisions for payment) fringe benefits to his employees during the previous year, will have to submit the return of fringe benefits to the Assessing Officer on or before the due dates given below: Different employers If the employer is a company If the employer is a person other than company and books of account are required to be audited. If the employer is a person other than company and books of account are not Due date of the assessment year October 31 October 31

July 31

Different employers required to be audited.

Due date of the assessment year

Setup- Fringe Benefit Tax


NAVIGATION: FINANCIAL MANAGEMENT SETUP FRINGE BENEFIT TAX

Accounting Period
NAVIGATION: FINANCIAL MANAGEMENT SETUP FRINGE BENEFIT TAXACCOUNTING PERIOD

Fill in the fields according to these guidelines: Field


Create Year

Description
Define a new financial year by clicking Create Year button.

Close Year

Close the financial year by clicking Close Year button. Once you closed the financial year then the program will not create any FBT entry, related to that period

If user has not created Accounting period then program will not create FBT entry for those G/L accounts which are mapped with FBT groups.

Fill in the fields according to these guidelines: Field


Start Date

Description
Define the start date of the financial year.

End Date

Define the end date of the financial year.

Groups
NAVIGATION: FINANCIAL MANAGEMENT SETUP FRINGE BENEFIT TAXGROUPS

Fill in the fields according to these guidelines: Field


Code Description

Description
Define the code in this field. Define the description of the sections as defined in the section 115 WB of the Income Tax Act. Define the sections in the field.

Section

For calculation of FBT it is mandatory to create FBT groups and these FBT groups should attach to particular G/L accounts.

Rates
NAVIGATION: FINANCIAL MANAGEMENT SETUP FRINGE BENEFIT TAXRATES

Fill in the fields according to these guidelines:

Field
FBT Group

Description
Choose the FBT Group from the look up list. Define the date from when the FBT tax rates are applicable. Define the FBT tax % in this field Define the FBT eCess% in this field Define the value % as defined in the section 115 WC of the fringe benefits provided by the employer to his employees.

Effective Date

Tax % eCESS % Value %

Rates are mandatory to calculate FBT with effective date. If the rate has been changed during the period user has to create another line for same section with new effective date. Program will calculate FBT according to rates defined with effective date.

G/L Account Card


NAVIGATION: Financial Management General Ledger Chart of Accounts Account Card

Fill in the fields according to these guidelines: Field


FBT Group Code

Description
Select the FBT group Code for the specific GL account from the lookup list. It will map

the GL account with FBT group.

The user can view the GL accounts mapped with different FBT groups by pressing F5 or selecting List menu item in Account menu button on the G/L Account Card.

The user can view different GL accounts which are mapped with different FBT groups.

General Ledger Setup


NAVIGATION: Financial Management Setup General Ledger Setup
FBT rounding precision will be defined in the General ledger setup.

Fill in the fields according to these guidelines: Field


FBT Rounding Type

Description
Define whether FBT amount will be rounded up, down, or nearest. The program uses this information to round the FBT amount to the whole number. The field defines the size of the interval that will be used for rounding FBT amounts. FBT amount, eCess amount, surcharge amount will be rounded off to whole numbers individually.

FBT Rounding Precision

Dimensions
NAVIGATION: Financial Management Setup Dimensions

Create dimensions like Department and Project. Also create dimensions value like ADM, Sales, and others under Department by selecting dimensions value in Dimension menu button.

NAVIGATION: Financial Management Setup General Ledger Setup

Select the value of Global Dimensions 1 Code and Global Dimensions 2 Code from the lookup lists. The code user will select will be available while doing transaction through Journals. The same will display in Calculate FBT form while calculating FBT.

The user can change the Global Dimension code by selecting Change Global Dimensions menu item in Functions menu button on the General Leger Setup Dimensions tab.

Transactions
Booking of the Expenses
NAVIGATION: Financial Management General Ledger General Journal

To make the transactions in G/L Accounts which are under FBT, fill the fields in General Journal as follows:

First Line
Posting Date: Document Type: Document No.: Account Type: Account No.: Description: Amount: Bal. Account Type: Bal. Account No.: 01/04/06 Payment G0037 G/L Account 8420 Entertainment and PR 10000 G/L Account 2910

Second Line
Posting Date: Document Type: Document No.: Account Type: Account No.: Description: Amount: Bal. Account Type: Bal. Account No.: 01/04/06 Payment G0038 G/L Account 8410 Advertisement 15000 G/L Account 2910

Third Line
Posting Date: Document Type: Document No.: Account Type: Account No.: Description: Amount: Bal. Account Type: Bal. Account No.: Post the Journal 01/04/06 Payment G0039 G/L Account 8430 Travel 5000 G/L Account 2910

Viewing the Ledger Entries


NAVIGATION: Financial Management General Ledger History Registers
The user can view the posted transaction- G/L Entry

The program will create the following entries: For the document number: G0037 Particulars Type Amount(Rs) Entertainment and PR DR 10000 To, Cash CR 10000

For the document number: G0038 Particulars Advertisement To, Cash Type Amount(Rs) DR 15000 CR 15000

For the document number: G0039 Particulars Travel To, Cash Type Amount(Rs) DR 5000 CR 5000

Also all the above transactions will reflect in FBT Entry table. The transaction on G/L account can be done in the following ways. General Journal Cash Receipt Journal Payment Journal Purchase Invoice Purchase Order Purchase Journal Sales order Sales Invoice The user can post the above transaction with Global Dimensions. In this case two fields will come automatically like Department code and Project code. Select Department Code as Sales from lookup list.

In case of Reimbursement from Client


To understand this case we will take the example of a Travel account. Initially Rs. 5000 is debited and now Rs. 2000 will be reimbursed from client.

To Credit Travel Expense account, fill the fields in General Journal as follows:

Posting Date: Document Type: Document No.: Account Type: Account No.: Description: Amount: Bal. Account Type: Bal. Account No.: Post the Journal

01/04/06 Blank G0042 Vendor (Client) 10000 Delhi Postmaster 2000 G/L Account 8430 (Travel account)

Viewing the Ledger Entries


NAVIGATION: Financial Management General Ledger History Registers
The user can view the posted transaction- G/L Entry

The program will create the following entry: For the document number: G0042

Particulars Vendor To, Travel

Type Amount(Rs) DR 2000 CR 2000

The above entry will reflect in FBT Entry table.

In case of Capitalizing the Advertisement Expense in Balance Sheet


To understand this case we will take the example of an Advertisement account.

Initially Rs. 15000 is debited and now Rs. 5000 will be capitalized in the balance sheet.

To credit the Advertisement Expense account, fill the fields in General Journal as follows:
Posting Date: Document Type: Document No.: Account Type: Account No.: Description: Amount: Bal. Account Type: Bal. Account No.: Post the Journal 01/04/06 Blank G0043 G/L Account 1210 Operating Equipment 5000 G/L Account 8410 (Advertisement account)

Viewing the Ledger Entries


NAVIGATION: Financial Management General Ledger History Registers
The user can view the posted transaction- G/L Entry

The program will create the following entry: For the document number: G0043 Particulars Type Amount(Rs) Operating Equipment DR 5000 To, Advertisement CR 5000 The above entry will reflect in FBT Entry table.

In case Amount has to be Recovered from Employee


To understand this case we will take the example of an Entertainment and PR account. Initially Rs. 10000 is debited and now Rs. 5000 will be recovered from employee .

To Credit Entertainment and PR account, fill in the fields in General Journal as follows:
Posting Date: Document Type: Document No.: Account Type: Account No.: Description: Amount: Bal. Account Type: Bal. Account No.: Post the Journal 01/04/06 Blank G0051 G/L Account 2350 recovered from Employees A/C 5000 G/L Account 8420 (Entertainment and PR account)

Viewing the Ledger Entries


NAVIGATION: Financial Management General Ledger History Registers
The user can view the posted transaction- G/L Entry

The program will create the following entry: For the document number: G0051 Particulars Type Amount(Rs) Recovered from Employee A/C DR 5000 To, Travel and PR CR 5000 The above entry will reflect in FBT Entry table.

Update FBT Entries


NAVIGATION: Financial Management General Ledger Periodic Activities Fringe Benefit Tax Update FBT Entries

In Update FBT Entries there are three types of Expenses which user can assign with FBT entries. By default blank option will be there against each FBT entry. Following are the Types of Expenses in Update FBT Entries: Option Reimbursement from Client Description If any expense is reimbursed from client then it will be considered for the purposes of FBT and it will be shown in the

Recovered from Employee

Reimbursement from client column of the Calculate FBT form. If any expense is recovered from employees that will not be considered for the purposes of FBT and it will be shown in the amount recovered from Employees column of the Calculation of FBT Form.

Accounted in Balance Sheet

If the entry is related to the Balance Sheet. If that expense is coming under section 115 WB of the Income Tax Act then FBT should be paid. This amount will be shown in Accounted in Balance Sheet of Calculate FBT form.

In this form, the user can select the type of expenses like Reimbursement from Client, Accounted in Balance Sheet, and Recovered from Employee from the drop down button. By default the Type of Expenses field appears blank for all transactions. The program will update the type of expenses based on selection from the drop down button. The user can navigate any GL entry by pressing Navigate menu button. After clicking the Navigate button, the program will show the posted transaction .

User can view the G/L Entry.

User can view the FBT entry.

After selecting the type of expenses close the form. Note 1: The program will show only those FBT entries which are not settled. If the user has assigned type of expense and calculate FBT and also done the settlement process after this those transactions will not come in the form. Note 2: If after crediting the expenses account with some value and assigning the credited entry with some type of expense, the user realizes that the credited entry is wrongly posted and it has to be reversed. For this, after debiting the expenses account with same amount the user has to select the same type of expense which was selected for the negative entry in the Update FBT entries. Note 3: The user can change the type of expenses any time before settlement. Only the user has to suggest lines again in the Calculate FBT form.

Calculation of FBT
NAVIGATION: Financial Management General Ledger Periodic Activities Fringe Benefit Tax Calculate FBT

To calculate FBT, fill in the fields according to these guidelines: Fields


Starting Date Ending Date Department Filter

Information
01/04/06 (enter the starting date) 30/06/06 (enter the ending date) Left Blank (If you want to select Department Filter select it from the lookup list) Left Blank (If you want to select Project filter select it from the lookup list)

Project Filter

Click Suggest Lines in Functions menu button to populate the lines in Calculate FBT form depending upon the filter options. Note 1: If some transactions are posted with dimensions codes and some are posted without dimensions code, then the user has to leave the Dimensions field blank to calculate FBT on all transactions. If the user wants to calculate the FBT only for the transactions posted with dimensions then the user can give the dimensions in the filters. If the user wants to calculate the FBT for only those transactions which are posted without Dimensions, then the user has to enter in the filter options of Global Dimensions 1 and Global Dimension 2 code, then the program will suggest only those transactions which are posted without dimensions.

Note 2: If the user has suggest the lines with some different dimension filters and again he/she wants to change the dimension filters, system will give the message Click Suggest Lines as Dimension has been changed. User has to click suggest lines again to populate the lines according to dimension filters. If user will ignore the message and directly try to settle then system will not allow the user to settle the form and give the error message Click Suggest Lines as Dimension has been changed.

The program will show all the FBT Groups that has been created in Groups setup. After clicking the suggest lines program will populate the lines for each defined sections.

Following are the fields system will automatically fill the values after clicking Suggest Lines: Fields
FBT Group

Description
The program will populate the FBT group which is defined in setup. This field gets the value based on the posted entries in the corresponding G/L accounts. (Here system will show the value by using the formula: All Blank (type of expenses) A/C in Balance Sheet Reimbursement from client assigned in Update FBT Entries). This field will get the corresponding value if Accounted in balance sheet is selected in the Update FBT Entries window. The user can view the entries from the drill down button.

Debited to profit and loss A/C

A/C for in the balance sheet

Fields
Reimbursement from client

Description
This field will get the corresponding value if Reimbursement from Client is selected in the Update FBT Entries window. The user can view the entries from drill down button. This field will get the corresponding value if Recovered from Employee is selected in the Update FBT Entries window. The user can view the entries from the drill down button. The program will automatically fill the values in this field by calculating (Debited to profit and loss A/C + A/C for in the balance sheet + Reimbursement from client + Any other head - Recovered from Employee - Other deduction). This field will get populated as defined in the setup. The program will calculate the value (Amount * Value %). On the calculated value of the fringe benefit is applicable. The program will calculate the tax amount for each line depending upon the Tax % defined in the setup. The program will calculate the surcharge amount for each line depending upon the Surcharge % defined in the setup. The program will calculate the eCESS amount for each line depending upon the eCESS % defined in the setup

Recovered from Employee

Amount

Value %

Value of the fringe benefit

Tax Amount

Surcharge Amount

eCESS Amount

On the footer level of Calculate FBT form following fields will get populated: Fields Total Fringe Benefit Description Total value of fringe benefit calculated for all lines is populated in this field. Total tax amount without rounding for all lines of Calculate FBT form. In this field total tax amount is rounded depending on the precision given in the

Total Tax Amount

Rounded Total Tax Amount

Fields

Description setup. Total surcharge amount without rounding for all lines of Calculate FBT form. In this field total surcharge amount is rounded depending on the precision given in the setup. Total eCESS amount without rounding for all lines of Calculate FBT form. In this field total eCESS amount is rounded depending on the precision given in the setup. The sum of values in Total Tax, Surcharge and eCESS fields will come in this field. The sum of values in Rounded Total tax, Surcharge and eCESS fields will come in this field.

Total Surcharge Amount

Rounded Total Surcharge Amount

Total eCESS Amount

Rounded Total eCESS Amount

Total FBT

Rounded Total FBT

The program will automatically calculate FBT after clicking Suggest Lines.

Any Other Heads


This field is available on Calculate FBT form and this filed is editable.
Click the lookup button available on the field. After clicking the lookup button, a new window will open and here the user can enter the values for FBT calculation.

Fill in the fields according to these guidelines: Fields


FBT Group

Description
CAREXP (This field will automatically populated specific to the line selected on calculate FBT form). Enter the description of the amount you are entering. In this case we are entering depreciation amount for Car expenses.

Description

Amount

Enter the amount which has to be considered for the FBT calculation After entering the amount, the program will automatically display the ending date of the Calculate FBT form. This field is editable, the user can change the date but the date should be in the range of starting and ending date.

Adjustment date

The user can enter as many lines he/she wants. Adjustment date is mandatory, if the user does not mention the date, he/she cannot close the form. After entering the amount, close the form. The program will automatically update the Amount , Fringe Benefit, Tax, Surcharge, and eCESS fields with new values.

The program will also update the fields on the footer level with new values. Any value is entered here will be taken care for calculation of FBT. Any other heads field can be utilized for those values which are not actually stored in the program like Depreciation as per Income Tax Act, etc.

Any Other Deduction


This field is available on Calculate FBT form and this filed is editable.

Click the lookup button available on the field. After clicking the lookup button, a new window will be opened and here the user can enter the values for FBT calculation.

Fill in the fields according to these guidelines: Fields


FBT Group

Description
SUPERFU (This field will automatically populated specific to line selected on Calculate FBT form).

Description

This field includes the the description of the amount. In this case we are entering deduction under superannuation fund.

Amount

Enter the amount which has to be

Fields

Description
considered for FBT calculation. (The amount the user enters will be deducted from the total of Debited to Profit Loss, A/C for in B/S, Any other heads, and Reimbursement from client)

Adjustment date

The program will automatically display the ending date of the calculate FBT form after entering the amount. This field is editable. The user can change the date should be in the range of starting and ending date.

The user can enter as many lines as he/she wants. Adjustment date is mandatory. If the user does not mention the date he/she cannot close the form. After entering the amount close the form. The program will automatically update the values of Amount , Fringe Benefit, Tax, Surcharge, and eCESS fields with new values. The program will also update the fields on the footer level with new values. Any value is entered here will be taken care for calculation of FBT. Other deductions field can be utilized for those values which are not actually stored in the program like Threshold amount for Superannuation funds, etc. Note: The program will update all fields containing values on run time. After suggesting lines in Calculate FBT form the user can enter the values in Any Other Head or Other Deductions fields with adjustment dates. When the user close the form the program will automatically recalculates the figures. There is no need to select Suggests Lines again if the user is doing any adjustments in the form.

In the above image the user can see that the program has recalculated the values, depending on the values entered in Any Other Head form and Other Deductions form and updated the values of FBT.

Note: If the user wants to change the type of expenses in Update FBT entries after calculating FBT, then the user has to go in Update FBT entries form and there the user can change the type of expenses for the selected entry. After changing the type of expenses the user has to open the calculate FBT form and from the list, he/she has to select the FBT form for which the user has changed the type of expenses. After opening the calculate FBT form again, the user has to click Suggest Lines and the program will automatically updates all the fields with new values. Note: If the user wants to post any other entry, whether debiting the G/L account or crediting the G/L account then also the user has to click Suggest Lines in the form which is already opened in Calculate FBT form. The user can view the report on FBT by clicking Print in Functions menu button. The program will generate the report for those FBT entries which are not yet settled.

If the FBT Group field is blank then system will generate report for all FBT groups, if user will give the filter for FBT group then system will generate report for those particular FBT groups.

Click Preview button to view the report or click Print button to take the printout.

The program will display all the details of unsettled entries. The program will also display the details of values entered in the Any Other Heads and in Other Deductions form.

Settlement of FBT entries


After ensuring that the program has calculated correct FBT for all FBT groups, the user can settle the period by selecting Settlement in Functions menu button.

After clicking the Settlement option the program will settle the FBT entries for the given period and give the message FBT entries are successfully settled.

Note 1: If the Total FBT is calculated in negative (-) then system will not allow the user to settle the form as negative (-) FBT is not going to submit to the government authorities. In this case Program will adjust the negative (-) FBT with Positive (+) FBT in the next period. Note 2: If User has settled the Calculate FBT form for the period say 01/04/2006 to 30/06/06 with some FBT amount and after this user has entered some more transactions pertaining to settled period (01/04/06 to 30/06/06) which are applicable for FBT, then in the calculate FBT form user has to give the starting date (01/04/06) and ending date (30/09/06) and click suggest lines. Program will fill the lines with the values posted between April to June (as these transactions are still unsettled) with transactions posted between July to September. User can adjust the FBT amount in the next period as Fringe Benefit Tax has to be deposited to the government authorities as Advance Tax.

View the history of Calculate FBT


Click the List menu option in FBT Calculation menu button to view the history of settled and unsettled Calculate FBT forms.

After clicking the list menu item the program will open the new form.

Fill in the fields according to these guidelines: Fields


Starting Date

Description
Enter the starting date which is entered at the time of calculating FBT. Enter the ending date which is entered at the time of calculating FBT. If Department filter is given at the time of calculating FBT then the program will show otherwise this field will remain blank. If Project filter is given at the time of calculating FBT then the program will show otherwise this field will be blanked. A check mark in this field shows that the period is settled. If this field is blank it means that the period is still open for the settlement.

Ending Date

Department Filter

Project Filter

Settlement

If the user wants to view the settled form then the user has to select the particular line and click OK.

In this settled Calculate FBT form all fields are not editable and also the user can not print the report as this form is already settled. If the user wants to open the unsettled form through the history then he/she has to select the period. If the user wants to create the another form for the same filters and in the history the form is already opened with the same filters then the user has to delete the previous form and then he/she can create the new form in calculate FBT. If the user has entered the values in Any Other Heads and in Other Deductions and then he/she deletes the form then again he/she has to enter the values in Any Other Heads and in Other Deductions in the new form for the same period.

Reports
NAVIGATION: Financial Management General Ledger Reports Fringe Benefit Tax Fringe Benefit Tax

Fill in the fields according to these guidelines to generate the report: Fields
Starting Date

Description
Enter the starting date.( as for example:01/04/06) Enter the ending date.( as for example: 30/06/06) The user can select Department Code from the lookup list.( here it is Left Blank) The user can select Project Code from the lookup list.( here it is Left Blank)

Ending Date

Department Code

Project Code

If the user wants to take a print then he/ she has to click Print menu button. If the user wants to view then he/she has to click the View menu button.

Note: If the user wants to view all the transactions which are posted with dimensions
and without dimensions then the user has to left blank the Department and Project code filters. If the user wants to view the report for only those entries which are posted with some dimensions then the user has to give the dimension code filters. If the user wants to generate report for only those transactions which are posted without dimensions then the user has to enter to view the report. The user can generate the Fringe Benefit tax report for only those transactions which are settled through Calculate FBT form.

System will generate the report for settled entries according to the filter options given by the user.

NAVIGATION: Financial Management General Ledger Reports Fringe Benefit Tax FBT Entry G/L

Fill in the fields according to these guidelines to generate the report:

Field
G/L Account No.

Description
Left Blank. (If want to generate report for particular G/L account, enter the G/L account number). Left Blank. (If want to generate report for Settled then enter Yes) Enter 01/04/06..30/06/06

Settlement Posting Date

If the user wants to take a print then he/ she has to click Print menu button. If the user wants to view then he/she has to click the View menu button

This report will give the details of FBT entries with amount of FBT G/L wise. At the time user will suggest lines in Calculate FBT form this report can be generated. Also user can generate this report after settlement. In this report Any other head and Other Deductions details will not come because user will enter the values in both the

fields for Sections not for particular G/L in calculate FBT form. Also FBT entry contains type of expenses like accounted in Balance Sheet and Reimbursement from client report will not show any FBT amount for these entries. User can give any posting date filter to generate this report. This report will help the user to identify that how much FBT is payable or paid against particular G/L.

Appendix
Case 1:
R Ltd. is a software manufacturing company. The following expenses have been incurred by the company in previous year 2006-07. The Fringe Benefit Tax payable by the company for the assessment year 2007-08 will be computed as under: Expenses on running and maintenance of cars Diwali Expenses Salary of employees Expenses on Boarding and lodging facilities in hotel Expenses on foreign tour Expenses on first aid facility in a dispensary for employees welfare Expenses on exhibition for sale promotion Free club facilities Rent free accommodation to employees Rs. 50,000 Rs. 15,000 Rs. 7,50,000 Rs. 18,000 Rs. 30,000 Rs. 15,000 Rs. 17,000 Rs. 10,000 Rs. 25,000

Computation: Nature of Expenses


Expenses on running and maintenance of cars Diwali Expenses Salary to employees Expenses on boarding and lodging facilities in hotel Expenses on Foreign tour Expenses on first aid facility in a dispensary for employees welfare Expenses on Exhibition for sales Promotion Free club facilities Rent Free accommodation to employees

Quantum of expense
50,000

Value of fringe benefit


20%

Amount of fringe benefit


10,000

15,000 7,50,000 18,000

50% Not a FB 5%

7,500 NIL 900

30,000 15,000

5% Not a FB

1,500 NIL

17,000

Not a FB

NIL

10,000 25,000

50% Not a FB

5,000 NIL

Nature of Expenses
Total value of Fringe Benefit Fringe Benefit Tax payable @ 30% Add : Surcharge @ 10% Add : Education Cess @ 2% Total Fringe Benefit Tax Payable

Quantum of expense

Value of fringe benefit

Amount of fringe benefit


24,900 7,470 747 8,217 164 8,381

Case 2:
Profit and loss account of R Ltd. for the year ending 31-03-2007

Profit and Loss Account For the year ended on 31-03-2007 Particulars
Salaries Bonus Contribution to FPF Postage Telephone Conveyance Traveling Food and beverages to employees in office Conference expenses (Include 11000 towards participation fee of four employees) Entertainment expenses Premium on accident policy of employees Repair and maintenance of motor cars Insurance Premium (includes Rs.10000 for insurance of the motor car)

Amount
300000 36000 30000 18000 52600 24000 30000 40000

Particulars
Gross Profit

Amount
820550

30800

24500 12000 52650

30000

Particulars
Depreciation (includes 21000 towards depreciation of motor car) Net Profit Total

Amount
80000

Particulars

Amount

60000 820550

Total

820550

Computation: Nature of expenditure


Telephone Conveyance Traveling Conference Entertainment Repair & Maintenance of motor car (52650+10,000+21000) Value of Fringe Benefit Fringe Benefit Tax payable @ 30% Add : Surcharge @ 10% Add Education Cess@ 2% Total Fringe Benefit Tax Payable

Amount
52600 24000 30000 19800 24500 83650

Valuation
20% 20% 5% 20% 20% 20%

Amount of Fringe Benefit


10520 4800 1500 3960 4900 16730

42410 12723 1272 13995 280 14275

Microsoft Business Solutions Navision 4.0- Excise on Trading Goods, ER-5 & ER-6 Returns

Table of Contents
Overview of Functionality ...................................................................................... 4 Detailed Setup ................................................................................................... 4 Comprehensive Functionality ............................................................................ 5 Statutory Reports .............................................................................................. 6 Excise on Trading Goods ...................................................................................... 7 ER- 5..................................................................................................................... 9 ER- 6................................................................................................................... 10 RG 23 D .............................................................................................................. 11 Setups for RG 23 D............................................................................................. 11 Company Information ...................................................................................... 11 Location........................................................................................................... 12 Excise Posting Setup ...................................................................................... 13 Sales & Receivable Setup ............................................................................... 14 Purchase & Payable Setup ............................................................................. 16 No. Series........................................................................................................ 17 General Posting Setup .................................................................................... 17 Purchase Order................................................................................................... 18 Viewing the Ledger Entries.............................................................................. 20 Purchase Invoice ................................................................................................ 23 Viewing the Ledger Entries.............................................................................. 24 Sales Order ......................................................................................................... 27 Viewing the Ledger Entries.............................................................................. 28 Sales Invoice....................................................................................................... 31 Viewing the Ledger Entries.............................................................................. 31 Purchase Return ................................................................................................. 36 Viewing the Ledger Entries.............................................................................. 37 Sales Return Order ............................................................................................. 41 Viewing the Ledger Entries.............................................................................. 42 Goods Sent Directly to the Buyer Place by the Manufacturer. ............................ 44 Steps to be Followed by the Manufacturer ...................................................... 45 Steps to be followed by Buyer ......................................................................... 49 Steps to be followed by dealer ........................................................................ 50 Scenario where the manufacturer is also doing the trading activity .................... 50 Goods Purchased for Trading and Further Transferred for Manufacturing ......... 51 Transfer of Goods to Manufacturing Unit from Trading Unit ............................ 51 Viewing Ledger Entries ................................................................................... 53 Capital Goods Purchased for Trading and further Transferred for Manufacturing ............................................................................................................................ 56 Transfer of Capital Goods to Manufacturing Unit from Trading Unit ................ 56 Viewing Ledger Entries ................................................................................... 58 Reports ............................................................................................................... 60 RG 23 D .......................................................................................................... 60 Quarterly Return for Traders ........................................................................... 61 ER- 5 and ER- 6.................................................................................................. 65 Item Card......................................................................................................... 65

Production BOM.................................................................................................. 67 Identify Principal Input......................................................................................... 69 BOM History........................................................................................................ 71 Generation of ER- 5 (Declaration)....................................................................... 73 Filling of ER-5 (Declaration) ................................................................................ 75 BOM History for Filling Status (Declaration) ....................................................... 76 Amendments in Production BOM ........................................................................ 77 BOM History for Amended BOM ......................................................................... 81 Filling of ER-5 (Amendment) ............................................................................... 84 BOM History for Filling Status (Amendment) ...................................................... 85 Generating ER- 6 Return .................................................................................... 87 Appendix ............................................................................................................. 92 Excise on Trading Goods ................................................................................ 92 ER ER - 6 ........................................................................................... 93 5 and

Overview of Functionality
Excise on Trading Goods This feature is developed for the user engaged in manufacturing activity / trading activity. If the user is engaged in manufacturing activity then the system will record the transactions in RG 23 A part1 register. If the user is engaged in trading activity then the system will record the transactions in RG 23 D register. If the user is engaged in both the activities then the system will provide the solution by recording the transactions in RG 23 A part 1 and RG 23 D. When goods are purchased from dealers / depots / consignment agents / importer / first stage dealer / second stage dealer, then the buyer of inputs (manufacturer) can avail CENVAT credit in the following cases:

If dealers / depots / consignment agents / importers, issuing invoice If dealers maintain proper records means RG 23 D registers.
The amount of duty actually paid by dealers / depots / consignment agent should be indicated in invoice on pro rata basis. Excise Returns ER-5 & ER-6 Every manufacturer of final product will annually furnish ER5 form to the Superintendent of Central Excise regarding the description of principal inputs and quantity of such principal inputs required to be used in the manufacture of unit quantity of such final product. for Cenvat is registered with Central excise authorities.

Detailed Setup
Excise on Trading Goods

At Company Information master level, place a check mark in Trading Co. field if the goods are purchased for trading activities. At Location Card master level, place a check mark in Trading Item field if the location is doing trading activities. Separate G/L to be maintained for trading activities through Excise Posting Setup, Sales & Receivables Setup, and Purchase & Payable Setup. Separate number series to be maintained for invoices used for trading activities through No. Series Setup. Excise Returns ER-5 & ER-6 At Item Card level, identify the scrap item for ER-6 return.

Comprehensive Functionality
Excise on Trading Goods Following features are handled by the system: Recording of purchase transactions in RG 23 D register. Recording of sales transactions in RG 23 D register. Generation of quarterly return for traders. Direct dispatch of goods from the manufacturer to the final buyer. Direct dispatch of goods to the second stage dealer. Duty computation in case of trading of goods. Goods transfer from trading location to manufacturing location.

Excise Returns ER-5 & ER-6 Following features are handled by the system: Identification of principal inputs. Generation of ER-5 return (Annual Declaration).

Filling of ER-5 return (Annual Declaration) Amendment in principal inputs. Generation of ER-5 return (Amendment) Filling of ER-5 return (Amendment) Handling of scrap in ER-6 return. Generation of ER-6 return (monthly return).

Statutory Reports
Following reports are handled by the system: RG 23 D register Quarterly return for traders ER- 5 returns (Annual Declaration) ER-5 returns (Amendment) ER-6 returns (Monthly return)

Excise on Trading Goods


Who are eligible to distribute CENVAT credit without doing the manufacturing activity?
1) First Stage Dealer 2) Second Stage Dealer 3) Importer

In which conditions first stage dealer, second stage dealer, and importer are allowed to distribute the CENVAT credit without doing the manufacturing activity?
As per rule 9(4) of CENVAT Credit Rule 2004: 1. First stage dealer, second stage dealer, and importer have to register with the Jurisdictional Central Excise Officer in the Divisional office having jurisdiction over his place of business. 2. Maintenance of record, indicating the fact that input or capital goods are supplied from the stock on which duty was paid by the manufacturer of such input or capital goods.

Is there any prescribed format to maintain the record for dealers /importer?
CENVAT Credit Rule 2004 does not prescribe any statutory record but as per rule 9(4) of CENVAT Credit Rule 2004 requires the maintenance of records indicating the fact that the input or capital goods are supplied from the stock on which duty is paid by the producer of such input or capital goods and only an amount of such duty on pro rata basis has been indicated in the invoice issued by him. What is the basis of distributing duty by first stage dealer, second stage dealer and importer at the time of making sales? Amount of duty received should be distributed on pro rata basis among the customers and that should be indicated in the invoice issued by him (regarding the purchase details). How to handle the scenario when the dealer returns the goods? When the goods has been received by the dealer and the same has been rejected by the dealer then dealer should raise the trade CENVAT invoice in the name of vendor and entries for this return will effect in RG23D in issue column.

Can the goods be dt d l t a cr ct y i h i f h n ts e ee s e e r e u rp t b p d c o mf elo u a c r tm y a u a h r s p i d i h h o o el re ln op i e d m dre s a s fa g gs t a p s c t dt t ee s n of h e m ? a c r es i Yes, the goods can be dispatched directly from the manufacturer to the buyer. This dispatch is permitted only if the whole consignment is dispatched from the manufacturer to the ultimate buyer. In such a case, dealer will not issue CENVAT Invoice to the buyer. Now buyer can take CENVAT credit on the basis of the manufacturer Invoice, if his name is mentioned in the manufacturer invoice as Consignee.

Invoice procedure for dealers: a) For CENVAT goods:


In a normal commercial invoice raised by wholesaler, distributor, and dealer; excise duty will not be charged separately. In fact the dealer can not charge excise duty in his invoice separately as he has not paid the same. Rule 11(7) of Central Excise Rules states that provision of Rule 11 (which is applicable to the manufacturers) as well as goods supplied by the first stage dealer or second stage dealer. In addition ,as per Rule 9(4) of CENVAT credit rules ,Amount of duty actually paid on goods should be indicated in the invoice of dealer on pro rata basis (It should not be charged but merely indicated). A dealer is required to indicate in his invoice, the excise duty paid on goods by the buyer. However, this should not be separately charged to the buyer, Details of excise duty paid by the manufacturer should only be shown separately in the invoice. The amount of excise should not be recovered from buyer separately showing it as Excise Duty.

b) For non CENVAT goods


A dealer is permitted to have another series of invoice for non-excisable goods or goods chargeable to zero rate of duty. RG23D register need not to be maintained in respect of such goods (Mumbai II Commissioner ate Trade Notice No.78/94 dated 02/12/94). It has been clarified that invoice in respect of excisable goods need not to be in prescribed format if the buyer does not want to avail CENVAT credit. The dealer /depot /importer can issue invoice from separate series in such cases. CENVAT will not be available on such private invoices. It is a general permission and no specific permission from department authorities is necessary .However, serial numbers should be separated and these serial numbers should also be informed to Department (Delhi Commissioner ate Trade Notice No.80/94 dated 28/12/94).

Manufacturer is doing manufacturing activity as well as trading activity


If the Manufacturer is doing the manufacturing activity as well as trading of excisable goods then Manufacturer has to follow these steps: 1. Apply the excise registration with Central Excise Authority for manufacturing as well as trading. For example- Where the registrant has one factory and is also a

registered dealer, who has PAN Number as ABCDE1234H,then the new registration number will be ABCDE1234HXM001 for the manufacturing and ABCDE1234HXD001 for the Trading. 2. Maintain the record for CENVAT claim separately for manufacturing and trading. For Manufacturing: RG23A Part I, RG23A Part II, RG23C Part I, RG23C Part II and for Dealer/Importer: RG23D. 3. For every purchase, sales, and return; transaction should be recorded separately for Manufacturing and Trading. 4. Return should be submitted with the Excise Authority monthly for manufacturing activity in ER 1 and quarterly for trading activity in prescribed format.

Purchase of raw material is made for Trading and later used for manufacturing purposes (in case of Manufacturer is doing manufacturing as well as Trading).
The user has to issue the trading CENVAT invoice but the name should be the mfe mo m a rt e V r nb ac e tac c k C A d t s n u n. h n ua e E T i es u r aN e u rn t N c o a ar t s w fe a t h e hi t of Trading CENVAT issued by him.

Purchase of raw material is made for manufacturing and later; is used for trading purposes (in case of Manufacturer is doing manufacturing as well as trading).
Manufacturer has purchased the raw material for manufacturing purpose but no manufacturing activity has been done with the raw material and later it has been sold for trading activity. In this case the user has to issue the manufacture CENVAT invoice and the CENVAT amount should be the same as at the time of purchasing the raw material. Such type of scenario has already been handled in the Navision as Goods Removed as Such. Note:

In the scenario where billing quantity is less than received quantity due to transit loss which is unavoidable:
When the billing quantity is more than the receipt quantity and shortage quantity is due to transit loss which is unavoidable then the dealer has to distribute the duty on the basis of quantity receipt. This is applicable only in the case of Petroleum and Chemical Industries.

ER- 5
What is ER5?
Every manufacturer of final product will annually furnish ER5 form to the Superintendent of Central Excise regarding the description of principal input and quantity of such

principal inputs required to be used in the manufacture of unit quantity of such final product.

What is principal Input?


The principal input has been defined as any input which is used in manufacturing final products, where the cost of such input constitutes not less than 10% of the total cost of the raw materials used in the final product.

Cases where the manufacturer does not need to submit ER5 with Central Excise Authority
1)Manufacturer engaged in manufacturing goods other than those goods, which are falling under chapters -22,28,29,30,32,33,34,38,39,40,48,72,73,76,84,85,87 and heading no.54.02,55.01,55.02,55.03, and 55.04 2) Manufacturer who have paid duty less than Rs 100 lakhs from current account (Personal ledger Account-PLA) during previous year have been exempted from filing of annual declaration ER5 and monthly return of ER6

When will ER5 form be submitted with Central Excise Authority?


Description ER 5 If any amendment made in ER 5( After 30th April and before new financial year begins) Due date for filing the ER5 Form Before 30th April of each financial year Amendment ER 5 form should be filed Before the proposed changes or within 15 days Such changes made in the form

Amendment in ER5
If a manufacturer of final products intends to make any alteration in the information furnished earlier, he can furnish information to the Superintendent of Central Excise together with the reasons for such alteration before the proposed changes or within 15 days of such change in the ER5 Form.

Final product having multiple BOM:


If a final product has multiple BOM then the details of principal input of each BOM will be given in ER5.

ER- 6
What is ER6?
Every manufacturer of final product will monthly furnish ER 6 Form to the Superintend of Central Excise regarding the receipt and consumption of each principal input with reference to quantity of final products manufactured by him.

What is principal Input?


The principal input has been defined as any input used in manufacturing final products where the cost of such input constitutes not less than 10% of the total cost of the raw materials used in the final product.

Cases where the manufacturer does not need to submit monthly ER6 return with Central Excise Authority:
1. Manufacturers engaged in manufacturing goods other than those goods, which are falling under chapters -22,28,29,30,32,33,34,38,39,40,48,72,73,76,84,85,87 and heading number 54.02,55.01,55.02,55.03, and 55.04 2. Manufacturers who have paid duty less than Rs. 100 Lakhs from current account (Personal ledger Account-PLA) during previous year, have been exempted from filing of annual declaration ER5 and monthly return of ER6.

When will the monthly ER6 return be submitted with Central Excise Authority?
Description Due date for filing the ER 6 form ER 6 Within 10 days from the close of each month

If any amendment has made in ER5 regarding principal input then all revised principal input information is to be submitted in ER6.

RG 23 D Setups for RG 23 D
Company Information
NAVIGATION: ADMINISTRATION APPLICATION SETUP GENERAL COMPANY INFORMATION.

Fill in the fields according to these guidelines:

Field
Trading Co

Comment
If the user is doing only trading activity, then the user has to place a check mark in the Trading Co field. A check mark in this field shows that Trading Item field in Purchase Order, Purchase Invoice, Sales Order, and Sales Invoice form will automatically get the checked status. The user can also uncheck the Trading Item field, but the transaction will not be affected in RG 23D. This action will help the trader when he is also trading with non excisable goods.

Location
NAVIGATION: W o S a au e Lo rs t on ee u c h p t i

Fill in the fields according to these guidelines:

Field
Trading Location

Comment
A check mark in this field shows that all transaction related to the location will be displayed in RG 23D register.

Excise Posting Setup


NAVIGATION: Financial Ma mt P g px P g n e S s tE s ane g t u o Se e p t u c o Setup i n i s t e i n
The user can define the G/L account in the posting set up for CENVAT trading account and CENVAT transferred trading account.

Fill in the fields according to these guidelines:

Field
CENVAT Cr. Receivable (Trading)

Comment
Choose the G/L account from the look up list. Choose the G/L account from the look up list.

CENVAT Transferred (Trading)

Sales & Receivable Setup


NAVIGATION: S &k t S & Receivable Set up a M t S l l a ge e r s e i n u a p es

Fill in the fields according to these guidelines:

Field
Posted Invoice No.(Trading)

Comment
Choose the number series from the look up list for sale invoice (trading).

Posted Ret Rcts No.(Trading)

Choose the number series from the look up list for sales return (trading).

Purchase & Payable Setup


NAVIGATION: Pa S c &a e us e Pa P l u r t us a S c h e u r p h ey t b p e

Fill in the fields according to these guidelines:

Field
Posted Invoice No.(Trading)

Comment
Choose the number series from the look up list for purchase invoice (trading). Choose the No. series from the look up list for purchase return (trading).

Posted Ret Rcts No.(Trading)

No. Series
If the user is doing manufacture and trading activity simultaneously then the user has to maintain different series of sales invoice and purchase invoice for manufacturing and trading.

NAVIGATION: Financial Ma mt N n e S . ane gt u o e p Series.


The user can define the number series in the window below, for trading and manufacturing invoices separately.

General Posting Setup


NAVIGATION: Financial Ma mt P g p n P g p n e S s e ga o s ane g t u o s e e p t t el s e i u n r tt i u n

Fill in the fields according to these guidelines:

Field
Sales Account (Trading)

Comment
Choose the G/L account from the look up list for the trading sales. Choose the G/L account from the look up list for the trading sales return. Choose the G/L account from the look up list for the trading purchases. Choose the G/L account from the look up list for the trading purchase return.

Sales Cr. Memo Acc. (Trading)

Purch. Account (Trading)

Purch. Cr Memo Acc.(Trading)

Purchase Order
NAVIGATION: Pa O Ps Os us r r i r/ Invoices r ec g d c h e do n e re r s

To create a purchase order, fill the fields as follows:


Vendor: Location: 10000 Blue (Place a check mark in Trading Location Field in Location Card). Excise 1000 10 1000 10000 (The system will calculate it.)

Structure: Item: Quantity: Direct Unit Cost : Line Amount:

Calculate Structure Values. The system will calculate excise according to the defined setups. On the Invoicing tab, Trading Item field will be by default checked if the Trading Co. field in Company Information window is checked. Post the order with Receive and Invoice.

Viewing the Ledger Entries


NAVIGATION: Pa O Ps Hy s v us r r i i Pd i r e c g s o Ie c h e do n t re o s r to e c ns

The system will create the following entry: Purchase account (Trading) CENVAT Cr. Receivable (Trading) Vendor A/C Dr. Dr. Cr. 10000 1600 11600.

Excise has been calculated by taking the following values: Base amount: BED %: Excise Amount: 10000. 16 1600 (10000*16% = 1600).

The system will create RG 23 D entry: The user can view it by pressing Crlt+F8 (Zoom) keys.

In the above window Excise Amount per Unit field has value as: 160. Note 1: If the Location Code field is blank, then the program will take the ECC number mentioned in the Company Information window, provided that the Trading Location field should be checked in the Location Card. Note 2: If the Trading Item field in the Purchase Order form is checked and Trading Location field is unchecked in the Location Card, then the program will give an error message.

Note 3: The user can calculate the excise amount through Structure and further if the excise amount is not matched with the vendor invoice then the user can enter the excise amount manually.

Purchase Invoice

To create a purchase invoice, fill the fields as follows:


Vendor: Location: 10000 Blue (Place a check mark in Trading Location Field in Location Card). Excise 1000 15 1000 15000 (The system will calculate it.)

Structure: Item: Quantity: Direct Unit Cost : Line Amount:

Calculate Structure Values. The system will calculate excise according to the defined setups. On the Invoicing tab, Trading Item field will be by default checked if the Trading Co. field in Company Information is checked.

Post the Invoice.

Viewing the Ledger Entries


NAVIGATION: Pa O Ps Hy s v . us r r i i Pd i r e c g s o Ie c h e do n t re o s r to e c ns

The system will create the following entry: Purchase account (Trading) CENVAT Cr. Receivable (Trading) Vendor A/C Dr. Dr. Cr. 15000 2400 17400

Excise has been calculated by taking the following values: Base amount: BED %: Excise Amount: 15000 16 2400 (15000*16% =2400)

The system will create RG 23 D Entry. The user can view it by pressing Crlt+F8 (Zoom) keys.

In the above window Excise Amount per Unit field has value as: 160. Note 1: If the Location Code field is blank, then the program will take the ECC number mentioned in the Company Information window, provided that the Trading Location field should be checked in the Location Card. Note 2: If the Trading Item field in the Purchase Order form is checked and Trading Location field is unchecked in Location Card, then the program will give an error message.

Note 3: The user can calculate the excise amount through Structure and further if the excise amount is not matched with the vendor invoice then the user can enter the excise amount manually.

Sales Order
NAVIGATION: Sales & Marketing e c grIe O Ps Osi r r i dn s d o n ev re r c s / o

To create a sales order, fill the fields as follows:


Customer: Location: Structure: Item: Quantity: Unit Price: Line Amount: 10000 Blue Excise 1000 15 4000 60000 (The system will calculate it.)

Calculate Structure Values. The system will calculate excise according to the defined setups. On Invoicing tab, Trading Item field will be by default checked if the Trading Co. field in Company Information window is checked. Post the Order with Ship and Invoice.

Viewing the Ledger Entries


NAVIGATION: Sales & Marketing e c gis v O Ps Hy o Ie r r i s Pd i do n t re o s r to e c ns

The system will create the following Entry: Customer A/C CENVAT Transferred (Trading) A/C Sales A/C Dr. Cr Cr. 62400 2400 60000

Excise has been calculated with following values: Base Amount: BED %: Excise Amount: 60000 16 2400

Steps for the calculation of excise amount on FIFO basis: Step 1: First purchase has been made for 10 quantities and the excise amount is Rs. 1600. Second purchase has been made for 10 quantities and the excise amount is Rs. 1600. Step 2: While creating Sales Order, quantity is 15. Step 3: The system will calculate the excise amount on FIFO basis. Step 4: From first purchase order 1600 excise amount for 10 quantities have been taken and from second purchase order 800 excise amounts for 5 quantities have been taken. Step 5: These values will come after calculating structure values. The system will create RG 23 D entries: The user can view it by pressing Crlt+F8 (Zoom) keys.

The system will create two RG 23 D entries with negative values. First entry will be created against first purchase order, where quantity is 10 and excise amount is 1600. Second entry will be created against second purchase order, where quantity is 5 and excise amount is 800. Note 1: If the Location Code field is blank, then the program will take the ECC no. mentioned in the Company Information window, provided that the Trading Location field will be true in Location card. Note 2: If the Trading Item field in the sales order is checked and Trading Location field is unchecked in Location card then the program will give an error message. Note 3: The excise amount will be calculated through Structures. The program will calculate the excise amount on pro-rata basis where the Trading Item field has a checked mark in Sales Order form and that will be displayed in RG 23 D. Note 4: The excise amount will be calculated on FIFO (First in First Out) basis of the Item purchased through Purchase Order/Invoice. Note 5: In the invoice the details of purchase as for example: Central Excise Purchase Amount, Tariff Heading, Rate of Duty, Amount of Duty per Unit, Name and Address of manufacturer, Quantity, and Assessable value will be printed.

Sales Invoice

To create a sales invoice, fill the fields as follows:


Vendor: Location: Structure: Item: Quantity: Direct Unit Cost : Line Amount: 10000 Blue Excise 1000 15 4000 60000 (The system will calculate

Calculate Structure Values. The system will calculate excise according to the defined setups. On Invoicing tab, Trading Item field will be by default checked if the Trading Co. field in Company Information is checked. Post the Invoice.

Viewing the Ledger Entries


NAVIGATION: S &k e c gi Pd i a M t O Ps Hy s v l a gr r i s o Ie e r s e i do n t n re o s r to e c ns

The system will create the following entry: Customer A/C CENVAT Transferred (Trading) A/C Sales A/C Dr. Cr Cr. 62400 2400 60000.

The excise has been calculated with following values: Base Amount: BED %: Excise Amount: 60000 16 2400

Steps for the calculation of excise amount on FIFO basis: Step 1: First purchase has been made for 10 quantities and the excise amount is Rs. 1600. Second purchase has been made for 10 quantities and the excise amount is Rs. 1600. Third purchase has been made for 10 quantities and the excise amount is Rs. 1600. Step 2: While creating Sales Order, quantity is 15. Step 3: The system will calculate the excise amount on FIFO basis. Step 4: In case, 10 quantities have already been sold from the first purchase and 5 quantities from the second purchase, balance 5 quantities will remain in the second purchase and 10 quantities in the third purchase. Step 5: From second purchase order 800 excise amount has been taken for 5 quantities and from the third purchase order 1600 excise amount has been taken for 10 quantities. Step 6: These values will come after calculating structure values.

The system will create RG 23 D Entries: The user can view it by pressing Crlt+F8 (Zoom) keys.

The system will create two RG 23 D entries with negative values. First entry will be created against second purchase order, where quantity is 5 and excise amount is 800. Second entry will be created against third purchase order, where quantity is 10 and excise amount is 1600. Note 1: If the Location Code field is blank, then the program will take the ECC number mentioned in the Company Information window, provided that the Trading Location field will be checked in Location card. Note 2: If the Trading Item field in the Sales Order is checked and Trading Location field is unchecked in Location card then the program will give an error message. Note 3: The excise amount will be calculated through Structures. The program will calculate the excise amount on pro-rata basis when the Trading Item field has a check mark in Sales Order form and that will be displayed in RG 23 D. Note 4: The excise amount will be calculated on FIFO (First in First Out) basis of the item purchased through Purchase Order/Invoice. Note 5: In the invoice the details of purchase like: Central Excise Purchase Amount, Tariff Heading, Rate of Duty, Amount of Duty per Unit, Name and Address of manufacturer, Quantity, Assessable value will be printed. The user can view the sales invoice in the Posted Sales Invoice.

Click the Print Trading Invoice menu item in Print menu button.

Enter the No. and click Preview.

Purchase Return
NAVIGATION: Pa O Ps R Orders us r r i e r ec g t c h e do n u re r s n

To create a return order, fill the fields as follows:


Vendor: Location: Structure: Applies-to Doc. Type: Applies-to Doc No: Item: Quantity: Direct Unit Price: Line Amount: Calculate Structure Values. The system will calculate excise according to the defined setups. On Invoicing tab, Trading Item field will be by default checked if the Trading Co. field in Company Information window is checked. Post the Return Order. 10000 Blue Excise Invoice PT1000073 1000 10 1000 10000 (The system will calculate it.)

Viewing the Ledger Entries


NAVIGATION: Purchase e c gis O Ps Hy o Credit Memos r r i s Pd do n t re o s r t e

The system will create the following entry: Vendor A/C Dr. To CENVAT Cr. Receivable (Trading) A/C Cr To Purchase A/C Cr. Excise has been calculated with following values: Base Amount: BED %: Excise Amount: 10000 16 1600 11600 1600 10000

The system will create RG 23 D Entries: The user can view it by pressing Crlt+F8 (Zoom) keys.

In the above window Excise Amount per Unit field has the value as: 160. Note 1: In case of Purchase Return Order all value in RG 23 D Table will come in negative. Note 2: It is mandatory to mention Applies-to Doc. No while creating Purchase Return Order. Note 3: If the purchase is made and the user has sold the quantity also, after that the user is doing purchase return with application, then the system will not allowed this process. There should be some minimum quantity to return in RG 23 D.

Sales Return Order


NAVIGATION: Sales & Marketing e c geOs O Ps R r rr i t d do n u e re r r s n

To create a return order, fill the fields as follows:


Customer: Location: Structure: Applies-to Doc. Type: Applies-to Doc No: Item: Quantity: Direct Unit Price: Line Amount: Calculate Structure Values. The system will calculate Excise according to the defined setups. On Invoicing tab, Trading Item field will be by default checked if the Trading Co. field in Company Information window is checked. Post the Return Order. 10000 Blue Excise Invoice ST100046 1000 10 4000 40000 (The system will calculate it.)

Viewing the Ledger Entries


NAVIGATION:
Sales & Marketing e c gi Pd i o O Ps Hy s r e rr i s oC M s do n t re o s r te m ed t

The system will create the following entry: Sales A/C CENVAT Transfer. (Trading) A/C Customer A/C Dr. Dr Cr. 40000 1600 41600

Excise has been calculated with following values: Base Amount: BED %: Excise Amount: 40000 16 1600

The original sales invoice is posted with excise amount 1600. The sales invoice has been applied and the system has taken the same excise amount in Return Order. The system will create RG 23 D entries. The user can view it by pressing Crlt+F8 (Zoom) keys.

In the above window Excise Amount per Unit field has the value as: 160. Note 1: Inc case of Sales Return Order all value in RG 23 D table will come in positive. Note 2: It is mandatory to mention Applies-to Doc. No while creating Sales Return Order.

Goods Sent Directly to the Buyer Place by the Manufacturer.

Procedure to be followed by the manufacturer, dealers, and buyer:

Steps to be Followed by the Manufacturer:

Step 1: Create sales invoice and select The Cannon Group PLC as sell-to customer on General tab. Step 2: Choose The Pope Group as consignee in Ship-to Name field on Shipping tab. In Ship-to Address card place a check mark in Consignee field if you want The Pope Group printed as a consignee in the invoice. to be Step 3: Calculate the excise amount through Structures and post the invoice. Step 4: On the basis of manufacturer invoice, buyer can take the CENVAT credit as his n P as a a eo sh s m ls t o consignee in the invoice. eh t e w D i Mr n This case can also be handled though Sales Order. The user can view the Sales Invoice through Posted Invoice.

The system will display the consignee name and address in the Sales Invoice.

Steps to be followed by Buyer:

Fill in the fields according to these guidelines:

Field
Manufacturer E.C.C No

Comment
This field contains the E.C.C number of the manufacturer.

Manufacturer Name

This field contains the name of the manufacturer. This field contains the address of the manufacturer.

Manufacturer Address

The manufacturer ECC number will be displayed in RG 23 A part II. Following steps should be followed further by the buyer: Step 1: Create Purchase Order/Invoice in the name of vendor (who is a dealer). Step 2: Mention the manufacturer details on Shipping tab that will be displayed in RG 23 A.

Step 3: Calculate excise amount through structures and if the excise amount is not m it mfevt u at e an ag tac i n ret cmt t w e u r o ey n r x o c i h h n u ie b c e n h ar c t n h e n es u s hi e manually in the excise amount field. Step 4: Post the Purchase Order/Invoice. Note 1: If the Buyer is a second stage dealer then he has to place a check mark in Trading Items field in Purchase Order/Invoice and the posted entries will be displayed in RG 23 D.

Steps to be followed by dealer:


Step 1: Create a Purchase Order/Invoice in the name of vendor. Step 2: In the Purchase Order/Invoice form, Trading Item field should be unchecked. This is done so that transactions will not be displayed in RG 23 D as CENVAT invoice is already raised by the manufacturer to the buyer and on that invoice, buyer has taken the CENVAT credit. Step 3: Excise amount will not be calculated either through Structures or manually. Step 4: Post the Invoice/Order. Step 5: Dealer has to create a Sales Order/Invoice in the name of customer. Step 6: Dealer should create Non-CENVAT invoice to the customer where no excise amount will be in the invoice. Step 7: Post the Invoice/Order.

Scenario where the manufacturer is also doing the trading activity:


Steps to be followed:
Step 1: Apply for the registration of Manufacturing as well as Trading. Step 2: Create two Location card; one for Manufacturing and second for Trading. Step 3: Define the G/L account in the Excise Posting Group for: CENVAT Cr .Receivable (Trading Account) CENVAT Transferred (Trading Account) Step 4: Define the G/L account for purchase trading and sales trading. Step 5: Define the No. series separately for trading and manufacturing of sales, purchase, and return order.

Step 6: In Trading Location card, place a check mark in Trading Location filed. Step 7: Trading Co. filed should be unchecked in Company Information window. Step 8: At the time of creation of Purchase Order/Invoice, if the item is used for manufacturing purposes then Trading Items field should be unchecked and all posted entries will be displayed in RG 23 A part I & II. Step 9: If the items are purchased for trading then place a check mark in Trading Item field in Order/Invoice. This will display the posted entries in RG 23 D. Step 10: If the trading items have been sold then place a check mark in Trading Item field in Sales Order/Invoice. The posted entries will be displayed in RG 23 D. Step 11: Create the separate Purchase Order /Invoice and Sales invoice /Order for trading and manufacturing items

Goods Purchased for Trading and Further Transferred for Manufacturing


Create a purchase order/invoice with Trading Item filed true with the following values: Quantity: Unit Cost: Line Amount: Excise Amount: Post the Order/Invoice. The system will create the following entry: Purchase A/C Dr. CENVAT Cr. Rec. (Trading) Dr. Vendor A/C Cr. 10000 1600 11600. 10 1000 10000 1600 (16% of 10000)

The posted entry will store in RG 23 D.

Transfer of Goods to Manufacturing Unit from Trading Unit


NAVIGATION: Warehouse Planning &c Rsu E t I e .n xo t c Ja e ne l ol u i m a r s

Fill the fields as follows:


Item No.: Location: New Location: Quantity: Applies-to Entry (RG 23 D): 1000 Blue (Enter the trading location from where goods has to be transferred) Green (Enter the Manufacturing Location to which goods has to be transferred) 10 8

From lookup list of Apples-to Entry (RG 23 D) choose the entry number which you want to transfer.

After selecting, click Ok. The selected entry number will be displayed in Applies-to Entry (RG 23 D) field in Item Reclass. Journal.

Post the Item Reclass. Journal.

Viewing Ledger Entries


Now the user can view the posted entries from Posted Purchase Invoice.

The system will create the following entry. Purchase A/C Purchase (Trading) A/C Cenvat Cr. Receivable A/C Cenvat Cr. Receivable (Trading) Dr. Cr. Dr. Cr. 10000 10000 1600 1600

The purchase and the excise amount will be transferred to Manufacturing G/L accounts from Trading G/L accounts. The system will create RG 23 D Entry.

The system will reverse the original entry in RG 23 D table with negative values as the item has been transferred to manufacturing unit.

Capital Goods Purchased for Trading and further Transferred for Manufacturing
Create a purchase order/invoice with Trading Item filed checked, with the following values: Quantity: Unit Cost: Line Amount: Excise Amount: Post the Order/Invoice. The system will create the following entry: Purchase A/C Dr. CENVAT Cr. Rec. (Trading) Dr. Vendor A/C Cr. 10000 1600 11600 10 1000 10000 1600 (16% of 10000)

The posted entry will store in RG 23 D.

Transfer of Capital Goods to Manufacturing Unit from Trading Unit


NAVIGATION: W o PiE t I e .n au lg e ne c Ja rs a &c Rsu ee n h n xo t l ol n u i m a r s

Fill the fields as follows:


Item No.: Location: New Location: Quantity: Applies-to Entry (RG 23 D): DJ1 Blue (Enter the trading location from where goods has to be transferred) Green (Enter the manufacturing location to which goods has to be transferred) 10 7

From lookup list of Apples-to Entry (RG 23 D), choose the entry number which you want to transfer.

Click OK. The chosen entry number will be displayed in Applies-to Entry (RG 23 D) field in Item Reclass. Journal.

Post the Item Reclass. Journal.

Viewing Ledger Entries


Now the user can view the posted entries from Posted Purchase Invoice

The system will create the following entry. Purchase A/C Purchase (Trading) A/C Cenvat Cr. Receivable A/C Cenvat Cr. Deffered Account Cenvat Cr. Receivable (Trading) Dr. Cr. Dr. Dr. Cr. 10000 10000 800 800 1600.

The system will divide the excise amount as Capital item field is checked in the Item Card. The purchase and the excise amount will be transferred to Manufacturing G/L accounts from Trading G/L accounts. The system will create RG 23 D Entry.

The system will reverse the original entry in RG 23 D table with negative values as the item has been transferred to manufacturing unit.

Reports
RG 23 D
NAVIGATION: Financial Management nL re i pg G G a g R t xR t R el e p E en ee o rd r c o s s r e i 23D

Fill in the fields according to these guidelines:

Field
E.C.C. No.

Comment
Choose the ECC No for which user wants to generate RG 23 D, form the lookup list. Mention the starting date of RG 23 D to be generated Mention the ending date of RG 23 D to be generated. Choose the Item from lookup list if user wants to generate RG 23 D for the particular item.

Starting Date

Ending Date

Item No.

Quarterly Return for Traders


NAVIGATION: Fia ae G a g R t xR t n l gn el e e i pg a M et nL r p E en n a m ee o c n i rd r c o s s r e i Quarterly Return for Traders

Fill in the fields according to these guidelines:

Field
Return for the Location

Comment
Choose the ECC number from the lookup list for which user wants to generate quarterly return. Mention the starting date of quarterly return to be generated Mention the ending date of quarterly return to be generated.

Starting Date

Ending Date

ER- 5 and ER- 6


Item Card
NAVIGATION: Purcha Pi I s l ge ea s n n t n m Create items considering as raw materials.

Create a new item with cost price RW1 500 . Unit Cost: This field is the standard field of Navision. The user can enter the total of raw miot i f h be useful to identify the principal input of a al t u s . will t c ht i i e s e ce s r a i ntT n s ol d final product.

Create another item with cost price RW2 300 . Unit Cost: This field is the standard field of Navision. The user can enter the total of raw miot i f his will be useful to identify the principal input of a al t u s . t c ht i e s e ce r a i ntT n s ol d final product.

Create item considering as finished goods.

Create another item FG .

Production BOM
NAVIGATION: Mfi Pc i Pc O Pc O ac d e dn dn . nu u r rtg rt M rt M a g o Dn oo t n us uB i oo uB i
The user has to create a production BOM for each final product. If the final product has alternative BOMs then the user has to create separate BOM for each final product. The user can link the BOM to the location so that principal input of each BOM that is related to the location can be identified and ER 5 can be generated according to ECC number.

Create a production BOM with the following Information: No.: Description: Units of Measure Code: FG (Finish Goods Item) Finished Goods PCS.

On the line level


First Line: Type: No: Quantity: Unit of Measures: Second Line Item RW1 (Raw Material 1) 50 PCS

Type: No: Quantity: Unit of Measures: Status:

Item RW2 (Raw Material 2) 50 PCS Certified

We have created a production BOM assuming that RW1 and RW 2 are raw materials and are used for FG (Finished Goods). Attach the Production BOM with FG Item.

Also link the production BOM with ECC number. Clicking Location menu item, BOM wise Location window opens where Production BOM No. field and Description field get the default values. The user can choose the location code from the look up list. E.C.C. No. field get the default values as the user choose the location code. In this way the user can link the production BOM to different locations.

Fill in the fields according to these guidelines:

Field
Location Code

Comment
The user can choose the location from the look up list. This field automatically gets the value after choosing location code. This field automatically gets the value after choosing location code.

Location Name

ECC No

Identify Principal Input


NAVIGATION: Mfi P iv I ycn ac rAy ePp u nu u r e c n r l ag i t d t n o i d i c t ti I in p f i t a

After creating BOM, the user has to run the batch job to identify the principal input. For identifying the principal input, the user has to run the batch job and select the filter option. Fill in the fields according to these guidelines:

Field
Production BOM No

Comment
Choose the BOM No. from the lookup list. If the user will not select any particular BOM then the program will run the batch job for all BOMs.

P.I. Identification Date Click OK.

Enter the date of identifying principal input

After running the batch job the program will identify the principal inputs and automatically places a check mark in Principal Input field in Production BOM window.

Principal input identified by the system: Item RW1 RW2 Quantity 50 50 Cost 500 300 Total Value 25000 15000 40000.

Total cost of raw material

Calculation:
10% of total cost of raw material is identified as principal input. 10% of 40000 (40000*10%) = 4000. The total costs of both items are more than 4000. So both items are principal inputs. Note 1: The program will not identify the principal input for those production BOM for which Status field is either Under Development or New. Note 2: If the Production BOM is not attached with the finished goods item card then system will not identify the principal input.

BOM History
NAVIGATION:

Mfi Pc i Pc O Fi B ac d e dn c M nu u r rtg rt M un O a g o Dn oo t n us uB i ns t o History

The user can view the BOM history after running the batch of identifying principal inputs.

Filter Option:
BOM No.: Select the BOM for which the user wants to view the history. If the user left this field blank then program will show the history of all BOMs.

Generation of ER- 5 (Declaration)


NAVIGATION: Fca mnL re i pg ia ae G a g R t xR t n l gn el e p E en a M et ee o n n i rd r c o s s r e i ER-5.

Fill in the fields according to these guidelines:

Field
BOM No.

Comment
Choose the BOM number from the lookup list

Fill in the fields according to these guidelines:

Field
Return for the location

Comment
Choose the ECC number from the look up list. Enter the starting date from which ER-5 has to be generated. Enter the ending date to which ER-5 has to be generated. A check mark in this field shows that the user is generating ER-5 as declaration.

Start Date

End Date

Declaration

Amendment: Place a check mark if the user is generating amended ER-5. In amended ER-5, only amended principal inputs will be displayed with reasons.

Filling of ER-5 (Declaration)


NAVIGATION: Fca mnL rec i E ia ae G a g P iv i F n l gn el e r Ai x a M et ee i c s c i n n i rd o t di t e s l e e ER-5

Fill in the fields according to these guidelines:

Field
Return for the location

Comment
Choose the ECC number for which return has been submitted. Select the financial year for which return has been submitted. Enter the filing date on which return has been submitted. Enter the amendment filing date on which amended return has been submitted.

Financial Year

Filing Date

Amendment Filing Date

BOM History for Filling Status (Declaration)


NAVIGATION: Mfi Pc i Pc O Fi B ac d e dn c M nu u r rtg rt M un O a g o Dn oo t n us uB i ns t o History.

In the BOM History filed, status and filling date has been updated.

Amendments in Production BOM


Amendment in ER-5:
Before amending the production BOM, the user has to make the Status field in Pc Oi fCe r ln nu a rt Md oe n e m th rt oo ww i U Do t t e o dn u B n r r td v e e s s i om t o e e e h i f d p h change the production BOM as per the requirement. The user can delete the items, add the items, and change the quantity proportionate in BOM. After modification the user has to make the st stidn ww a i Pc Oi. t Ce rt Md u e oo s r nuB n a i f d i o After doing amendments in BOM, the user has to run the batch job of identify principal inputs. Now the programs will automatically places a check mark in Principal Input field in Production BOM as per the amendment made and that can also be viewed in the history of BOM.

Entering the reason code in amendment return: NAVIGATION: Mfi Pc i Pc O Cos ac d e dn me nu u r rtg rt M on a g o Dn oo t n us uB i pt n Comments
If the user is making any amendment in the production BOM then the user has to give the reason for making such changes.

Create a new item with cost price 1000. RW3 Create a new line in Production BOM No. FG . Type: No: Quantity: Unit of Measures: Item RW3 10 PCS

Select the line from the production BOM, click Comments menu item in the Component menu. The user can enter the reason for the selected line in production BOM that will be displayed in the amendment ER 5 declaration.

Enter the comment for newly added raw material (reason to be mentioned).

Close the Comment form. M t te oo M a e s t idn . k s i pc O e t Ce rt h u r nu B a i f d i Again run the batch to identify the principal Input.

After running the batch job, the system will identify RW3 as principal input.

Principal Input Identified by the System:


Item Quantity RW1 50 RW2 50 RW3 10 Total cost of raw material Calculation: 10% of total cost of raw material is identified as principal input. 10% of 50000 (50000*10%) = 5000. As the total costs of all three items are more than 5000, so all are principal inputs. The consumption is also changed due to addition of new item in the BOM. Note 1: The program will not identify the principal input for those production BOM for which Status field is either Under Development or New. Note 2: In case the user wants to delete any item from the production BOM, first the user has to enter comment for the item to be deleted then the user can delete the item. Note 3: Comment menu button is a standard button in Navision. Cost 500 300 1000 Total Value 25000 15000 10000 50000.

BOM History for Amended BOM


NAVIGATION: Mfi Pc i Pc O Fi B ac d e dn c M nu u r rtg rt M un O a g o Dn oo t n us uB i ns t o History.

Now the amended entries will be displayed in the BOM history with reasons.

Generation of ER- 5 (Amended) NAVIGATION: Fca mnL re i pg ia ae G a g R t xR t n l gn el e p E en a M et ee o n n i rd r c o s s r e i ER-5

Fill in the field according to these guidelines:

Field
BOM No.

Comment
Choose the BOM number from the lookup list.

Fill in the fields according to these guidelines:

Field
Return for the location

Comment
Choose the ECC number from the look up list. Select the GL account of the out tax with respect to the state. Select the GL account of the input VAT credit with respect to the state. Select the GL account of the VAT deferred account with respect to the state. Place a check mark if user is generating amended ER-5. In amended ER-5, only amended principal inputs will be displayed with reasons.

Start Date

End Date

Declaration Amendment

Filling of ER-5 (Amendment)


NAVIGATION: Fca mnL rec i E ia ae G a g P iv i F n l gn el e r Ai x a M et ee i c s c i n n i rd o t di t e s l e e ER-5

Fill in the fields according to these guidelines:

Field
Return for the location

Comment
Choose the ECC number for which return has been submitted. Choose the ECC number for which return has been submitted. Enter the filing date on which return has been submitted. Select the GL account of the VAT deferred account with respect to the state. Enter the amendment filing date on which amended return has been submitted.

Financial Year

Filing Date

Declaration

Amendment Filing Date

BOM History for Filling Status (Amendment)


NAVIGATION: Manufac d e dn c M t Pc i Pc O Fi B u r rtg rt M un O i o Dn oo n g us uB i ns t o History.

All amended entries in BOM history gets updated with amendment status (Amendment field value as Yes) and amendment filling date.

Generating ER- 6 Return


NAVIGATION: Financial Mgn el e e i pg a mnL r p E R t n e G a g R t x en a t ee o e rd r c o s s r e i ER-6

Fill in the fields according to these guidelines:

Field
Return for the Month of

Comment
Choose the month from the drop down button for which return has to be generated. Choose the ECC number for which return has to be generated. Define the year for which return has to be generated.

Return for the Location

Year

Detail description of the section 4 and from where data should be captured: Description of principal input: Identify the principal input from the production BOM (input which is used in the manufacture of final products where the cost of such input constitutes not less than 10% of the total cost of raw-materials for the manufacture of unit quantity of a given final products) Qty Code: Quantity code of principal input will be captured from production BOM (quantity code may be K.G, PCS, and Liter) Opening Balance: Opening balance of principal input and the data will be captured from RG 23A part 1. Receipt: Receipt of principal input during the month and the data will be captured from RG 23 A part 1. Taken for use in the manufacture of dutiable and exempted F.G: Total quantity of principal input issued for production during the month and the data will be captured from RG 23A part 1. Removed as such or for export or for home consumption: Total quantity removed as such or for export or for home consumption during the month

Removed as such: If goods which are bought for manufacturing is removed from the warehouse without doing any process, then it is termed as Removed As Such. The removal could either be sale or transfer. Closing Balance: Closing balance of principal input and the data will be captured from RG 23 A part 1 Sl No: Serial no of finished goods description FG manufactured out of inputs (description): List of finished goods manufactured out of principal input will be shown in this column and the data will be captured from Production BOM. Qty code of F.G: Quantity code of finished goods (it may be K.G, PCS, Liter) will be captured from production BOM. Qty of F.G manufactured: Total quantity of finished goods manufactured from principal input will be shown in this column. System will capture the data from Output Journal. For example: from principal input A two finished goods X and Y have been manufactured in quantities of 2000 and 3000 respectively during the month (in which ER6 is to be submitted). In this column the quantity of 2000 and 3000 will be shown. Note: If quantity is removed as such the quantity will get affected in column 5 of section 3 in ER 1 and column 7 of section 4 in ER 6 form. If the duty on quantity removed as such is discharged through CENVAT credit then the amount utilized for removed as such will be shown in section 5 of ER 1 return. Section 5 of ER 6: Details of waste and scrap created during manufacture and cleared /destroyed: 1) S. No.: Serial no of waste and scrap will be shown in this column. 2) Description of waste and scrap: Description of all waste and scrap will be shown in this column. 3) Quantity Code: Quantity code of waste and scrap (available options are: K.G, PCS, and Liter) will be shown in this column. 4A) Quantity Cleared: Total cleared quantity of waste and scrap during the month will be shown in this column. This value will get through the sales invoice /Order. Select the Item with scrap field true in that item card. 4B) Quantity Destroyed: Total destroyed quantity of waste and scrap during the month will be shown in this column. Qty destroyed can be track through the item journal. In Item journal select et sg am aet with scrap field n p td enl e t e Ni j nd c Item r aee s t s h y y a u e v t t true in that item card. Select the location code and fill in the Quantity and post the item journal. N a P a P i I. at u s l gt vo r e a m in c n g :h i n n e s

Field description: Scrap item: A check mark in this field to identify the system that this item is a scrap.

Navigation: Manufacturing Execution Consumption Journals.

Enter the following Information: Date: Document No. : Item No.: Location: Quantity: Post the Consumption Journal. User has to enter the quantity in negative. System will load the quantity on inventory. Quantity Cleared: Total cleared quantity of waste and scrap during the month will be shown in this column. This value will get through the sales invoice /Order. Select the Item with scrap field true in that item card. Quantity Destroyed: Total destroyed quantity of waste and scrap during the month will be shown in this column. Qty destroyed can be track through the item journal. In Item j l t t sg am aet m s f o s e y td enl e wci u e n p Ni j nd c I i al r l t e ee s t s h ne r a a u e tt p a cy v t teh r d e true in that item card. Select the location code and fill in the Quantity and post the item journal. 17/10/06 123 Scrap1 Blue -10

The Scrap Item quantity will be displayed in Daily Stock Account. (DSA).

Appendix
Excise on Trading Goods
Example 1:
Trader X has purchased 100 K.G (kilogram) of plastic dana (an item, taken as example) from trader Y. The details of price are as follows: Basic Price Excise Total Rs 10000 Rs 1600 Rs 11600

Now X sells the plastic dana to the persons whose names are given in the table below. Then the details of CENVAT calculation will be as follows: Excise duty per K.G of plastic dana = 1600/100 = Rs16/Name of customer A B C Quantity in K.G 50 30 20 Basic price(Rs) 7000 4000 3000 Excise (Rs) Total(Rs)

800(Rs16*50K.g) 7800 480(Rs16*30K.g) 4480 320(Rs16*20K.G) 3320

Example 2:
Dealer A is registered as first stage dealer and has purchased 100 K.G of plastic dana from dealer B. 50 K.G of plastic dana has been rejected by the dealer A then the following entries will be passed: Details of invoice at the time of receipt of material are as follows: Basic Price: Rs10000 Excise: Rs 1600 Total: Rs 11600 Accounting entries in the books of dealer will be: Purchase A/C Dr Rs10000 CENVAT receivable A/C Dr Rs1600 To Vendor B Cr Rs11600 Details of invoice at the time of rejecting 50 kg of the material: Excise duty per K.G at the time of receipt of material = 1600/100=Rs16 per K.G Basic Price: Excise duty: Total Rs 5000 Rs 800 Rs 5800

Accounting entries in the books of dealer at the time rejecting the material will be: Vendor B A/C To CENVAT payable To Purchase A/C Dr Cr Cr Rs5800 Rs 800 Rs5800

Example 3:
A is the manufacturer as well as the trader. Let us assume that 100 K.G of plastic dana has been purchased from B for trading. The detail price of plastic dana is as follows: Basic Price Excise Duty Total Rs 10000 Rs 1600 Rs 11600

Trader A has recorded the above transaction in RG 23D and after that if the user wants to use 50 K.G for the manufacturing purpose then user has to issue the CENVAT invoice of trading E.C .C No. The excise duty per K.G=1600/100=Rs 16 per K.G Accounting entries for the above transaction At the time of purchasing plastic dana for trading: Purchase (Trading ) A/C Dr CENVAT receivable (trading) A/C Dr Vendor B Ar / C C Rs10000 Rs1600(Effect in RG23D) Rs11600

Accounting entries when the trading goods are used for manufacturing: Purchase Manufacturing A/C Dr CENVAT receivable (Manufacturing) A/C Dr. Purchase Trading CENVAT receivable (Trading) A/C Cr A/C Cr Rs 10000 Rs 1600(Effect in RG23Apart I and II) Rs 10000 Rs 1600(Effect in RG23D)

ER and ER - 6 5
Example 1:
Description Qty R MAT A RMAT B R MAT C 5 1 2 Unit of measure Pcs Pc Pcs Basic 15000 1000 2000 Excise 2000 100 VAT 1200 50 200 CST Freight 500 50 Total 15500 1100 2000

Per unit of bicycle costs = 18600 Identify the principal input: % of raw material A cost involved in bicycle = 15500*100/18600 = 83.33% % of raw material B cost involved in bicycle = 1100*100/18600 = 5.91% % of raw material C cost involved in bicycle = 2000*100/18600 = 10.75% Out of this three raw materials (A, B, and C), A and C have been consumed more than 10% of the total cost of raw materials in manufacturing bicycle. So A and C are identified as principal inputs.

Example 2:
Suppose a manufacturer has filed the annual declaration regarding principal input of 15 final products. Now the manufacturer has changed the BOM of two final products and principal input has changed. In this case the manufacturer has to file the amendment ER5 regarding the principal input of two final products only.

Example 3:
In original ER5, the manufacturer has given the declaration of principal input as: Name of final product A B C D Name of principal input X, Y, and Z P, Q, and R Y, Z, and M J, K, and F

Nh n ua nt Mi o this case the o m a rc e Bo lu w ac h a h t u rs g e fpc In e fe h d O frt t nd . a A principal input becomes X, Y, and D. The manufacturer has to submit the amendment return of ER5 regarding the declaration of D as principal input. The manufacturer has to give reasons in the amendment return of ER5, why Z has not been identified as principal input? If the quantities of X and Y have changed after introducing D in the BOM of final pc th n ua u t eetf rth e u rs b e nn r R o e mfe t m adtn 5 d tac h st mmr o u, An aro i t h e E u regarding the changes in the principal inputs: X, Y, Z, and D with reasons.

BOM of the bicycle and identifying the principal input Example 4:


Description Qty Unit of BASIC Measure Pcs Pc Pcs 15000 1000 2000 EXCISE VAT CST Freight Total cost 15500 1100 2000 18600

R.MAT A 5 R MAT B 1 R MAT C 2 Per unit of

2000 100

1200 50 200

500 50

Description Qty

Unit of BASIC Measure

EXCISE VAT

CST

Freight

Total cost

bicycle costs Identifying the principal input % of raw material A cost involved in bicycle = 15500*100/18600 = 83.33% % of raw material B cost involved in bicycle = 1100*100/18600 = 5.91% % of raw material C cost involved in bicycle = 2000*100/18600 = 10.75%

Out of these three raw materials (A,B,C), raw materials A and C have consumed more than 10% of cost of raw materials in manufacturing bicycle. So the raw materials A and C have been identified as principal input.

Microsoft Business Solutions Navision 4.0- Depreciation on Block of Assets /Additional Depreciation / Number of Days

Table of Contents
Definitions ............................................................................................................. 3 Fixed Assets ...................................................................................................... 3 Depreciation ...................................................................................................... 3 Depreciation as per Companies Act...................................................................... 3 Depreciable Amount: ......................................................................................... 3 Classification of Assets ..................................................................................... 3 Revaluation of Assets ........................................................................................ 4 Method of Depreciation ..................................................................................... 4 Pro-rata Depreciation ........................................................................................ 4 Depreciation in case of Multi Shift Operations ................................................... 4 Depreciation on Assets value less than Rs 5000 .............................................. 5 Depreciation as per Income Tax Act ..................................................................... 5 Types of Assets on which Depreciation can be claimed .................................... 5 Tangible Assets ............................................................................................. 5 Intangible Assets ........................................................................................... 5 Conditions for Depreciation ............................................................................... 6 Allowed Methods of Depreciation ...................................................................... 6 Block of Assets .................................................................................................. 6 Special Conditions............................................................................................. 7 Additional Depreciation ..................................................................................... 7 Assets not Eligible for Additional Depreciation .................................................. 7 Additional Depreciation Rate ............................................................................. 8 Calculation of Depreciation as per Companies Act ............................................... 8 Depreciation Book Card .................................................................................... 8 Fixed Asset Card ............................................................................................. 11 Calculating Depreciation ................................................................................. 12 Viewing the Ledger Entries.............................................................................. 14 Minor Assets.................................................................................................... 15 Multiple Shifts .................................................................................................. 17 Fixed Asset Card ............................................................................................. 18 Calculating Depreciation ................................................................................. 24 Viewing the Ledger Entries.............................................................................. 25 FA Reports .......................................................................................................... 28 Calculation of Depreciation as per Income Tax Act ............................................ 29 Depreciation Book Card .................................................................................. 30 FA Classes ...................................................................................................... 31 Accounting Period Income Tax........................................................................ 33 Fixed Asset Card ............................................................................................. 34 Viewing the Ledger Entries.............................................................................. 42 Enter an Opening Balance .............................................................................. 45 FA Reports .......................................................................................................... 45 Appendix ............................................................................................................. 48 As per Companies Act ..................................................................................... 48 As per Income Tax Act .................................................................................... 52

Definitions
Fixed Assets
Fixed Assets are used for providing or producing goods or services. In normal course of business Fixed Assets are not used for resale.

Depreciation
Depreciation is a measure of the wearing out, consumption or other loss of value of a depreciable asset arising from use, efflux ion of time or obsolescence through technology and market changes. It is allocated so as to charge a fair proportion in each accounting period during the useful life of the asset. It includes amortization of assets whose useful life is predetermined and depletion of wasting asset.

Depreciation as per Companies Act


Depreciable Amount:
Depreciable amount of a depreciable asset is its historical cost or any amount substituted for historical cost in the financial statements, less the estimated residual value. This amount will be written off over the useful life of the depreciable asset.

Classification of Assets
According to schedule VI of Companies Act, 1956, fixed assets should be presented in balance sheet classifying as far as possible as follows: 1. Goodwill 2. Land 3. Buildings 4. Leaseholds 5. Railway sidings 6. Plant and Machinery 7. Furniture and Fittings 8. Development of property 9. Patents, Trade marks and Trade designs 10. Livestock 11. Vehicles

Revaluation of Assets
When any historical cost of a depreciable asset undergoes change due to increase or decrease in long-term liability because of exchange fluctuations, price adjustments, changes in duties or similar factors, the depreciation on the revised unamortized depreciable amount should be provided prospectively over the residual useful life of the asset. In case the revaluation has material effect on amount of depreciation, the same should be disclosed separately in the year in which revaluation is carried out.

Method of Depreciation
It is permissible for a company to follow different depreciation methods for different types of assets. The same methods should be followed every year. A change in method can be made only if such change is required by statue or for compliance with accounting standard issued by the Institute of Chartered Accountants of India, or if the change would result in more appropriate preparation and presentation of financial statements of enterprise.

Pro-rata Depreciation
In any financial year, if any addition or deletion is made in the asset (means, asset has been sold, discarded, demolished or destroyed) then the depreciation on such asset shall be calculated on a pro rata basis from the date of such addition or up to the date of such deletion based on actual number of days. If the financial year is more or less than 12 months then rates of depreciation of schedule XIV should be taken proportionately.

Depreciation in case of Multi Shift Operations


Calculations of the extra depreciation for double shift and triple shift working shall be made separately in the proportion of the number of days for which the concern worked in double shift or triple shift, as the case may be, bears to the normal number of working days during the year. For this purpose, the normal number of working days during the year shall be deemed to be In case of a seasonal factory or concern, the number of days on which the factory or the concern actually worked during the year or 180 days, whichever is higher. In other case, the number of days on which the factory or the concern actually worked during the year or 240 days, whichever is higher. The extra shift depreciation shall not be charged in respect of any item of machinery or plant, which has been specifically exempted by inscription of the letters N.E.S.D (No Extra Shift Depreciation) against it in sub-items as specified in Appendix II and also in respect of the items of machinery and plant to which the general rate of depreciation of 13.91 per cent applies as given in Appendix II to this document .

Depreciation on Assets value less than Rs 5000


If the value of the individual item of asset whose actual cost is less than Rs 5000 and belongs to any category other than Plant and Machinery, then rate of depreciation is 100% in the year of acquisition. If the item belongs to category of Plant and Machinery and if the actual cost of each item is less than Rs 5000 and less than 10% of the value of total Plant and Machinery the asset can be written off to the extent of 100% in the year of acquisition. Else, depreciation rates as specified in schedule XIV of the Companies Act.

Depreciation as per Income Tax Act


Depreciation claim is not optional. From the assessment year 2002-03 depreciation is available for assessee whether the assessee has claimed, the deduction for depreciation in computing his or her total income, or not.

Types of Assets on which Depreciation can be claimed


Depreciation is allowed on tangible and intangible assets.

Tangible Assets
Types on tangible assets on which depreciation is allowed: 1. 2. 3. 4. Building Machinery Plant Furniture

Intangible Assets
Types of Intangible assets on which depreciation is allowed: 1. 2. 3. 4. 5. 6. Know-how Patents Copy Rights Trade marks Licenses Franchises or any other business or commercial rights of similar nature

Conditions for Depreciation


Followings are the conditions to claim Depreciation: 1. Person claiming depreciation must own the asset 2. Asset must be used either for the business purpose or for the profession purpose 3. Asset must be used during the relevant previous year for which depreciation is sought. 4. In case of intangible asset, asset should have been acquired after 31/03/1998.

Allowed Methods of Depreciation


Written down value method is used as the method of depreciation. In case of enterprises involved in generation or generation and distribution of power, one-time option of straight line method or written down value method is allowed.

Block of Assets
Depreciation is allowed on block of assets. Block of assets represents different type of assets as specified above, grouped together based on same percentage of depreciation. For example: All Buildings with 5% depreciation. There are 19 Block of Assets as given below:

Class of Assets
Tangible Assets Tangible Assets Tangible Assets Tangible Assets Tangible Assets Tangible Assets Tangible Assets Tangible Assets Tangible Assets Tangible Assets Tangible Assets Tangible Assets Intangible Assets Intangible Assets Intangible Assets Intangible Assets Intangible Assets Intangible Assets Intangible Assets

Type
Buildings Buildings Buildings Furniture Plant & Machinery Plant & Machinery Plant & Machinery Plant & Machinery Plant & Machinery Plant & Machinery Plant & Machinery Plant & Machinery Know-how Patents Copyrights Trade Marks Licenses Franchises Other Rights

Block No
Block 1 Block 2 Block 3 Block 4 Block 5 Block 6 Block 7 Block 8 Block 9 Block 10 Block 11 Block 12 Block 13 Block 14 Block 15 Block 16 Block 17 Block 18 Block 19

Depreciation Rate
5% 10% 100% 10% 15% 20% 30% 40% 50% 60% 80% 100% 25% 25% 25% 25% 25% 25% 25%

Special Conditions
1. Block exists but WDV of block becomes zero: in this case no depreciation is allowed. The value of block reduced below zero is termed as Short Term Capital Gain. 2. Block ceases to exist but WDV exists: in this case no depreciation is allowed. The value of block is Short Term Capital Loss. 3. In case of succession, amalgamation, business reorganization, and de-merger in the year in which this occurs, depreciation is calculated as: a. Calculate depreciation for previous year in which such change occurs as if such change did not take place. b. Amount of depreciation as calculated above is apportioned between the: i. Predecessor and successor ii. Amalgamating and amalgamated company iii. Demerged and resulting company As the case may be, in the ratio of number of days for which the assets are used by predecessor and successor/amalgamating and amalgamated company/ demerged and resulting company during the previous year in which ownership changes. 4. If the asset is put to use for less than 180 days in the year in which it is acquired then depreciation on such asset will be 50% of normally calculated depreciation. But in case the asset has been used even for one day in the subsequent year then the depreciation would be calculated on the normal rate.

Additional Depreciation
If the assessee is engaged in manufacture or production of any article or thing, and has acquired and installed a new eligible plant and machinery after 31/03/2005, then assessee is eligible for additional depreciation.

Assets not Eligible for Additional Depreciation


1. 2. 3. 4. 5. 6. Intangible Assets Buildings Furniture Ships and Aircrafts Used Plant or Machinery Plant or Machinery installed in any office premises or residential accommodation or guest house 7. Any office appliances or road transport vehicles 8. Any plant or machinery, the whole of the actual cost of which are allowed as a deduction in computing income chargeable under the head Profits and Gains of Business or Profession for any previous year

Additional Depreciation Rate


Additional depreciation rate is 20%. If the asset is put to use for less than 180 days in the acquired year then the additional depreciation rate will be 10%. Additional depreciation is available only in the year in which the new plant or machinery is first put to use.

Calculation of Depreciation as per Companies Act


Depreciation Book Card
Navigation: Financial Management Fixed Assets Set up Depreciation Book

Field Description:
Use Fiscal Year Days: Place a check mark in this field and the program will automatically take the denominator as 365 days for the depreciations calculation. Denominators value will be 366 days for the leap year. Click General Ledger, Setups, Accounting Periods

Create accounting period for calculating depreciation.

Use Fiscal Year Days field in Depreciation Book card has the number of days as defined in Accounting Periods. The program will automatically take the denominator as 365 days for the depreciations calculation. Denominators value will be 366 days for the leap year.

Fixed Asset Card


For each fixed asset, you must set up a card containing information about the asset.

Navigation: Financial Management Fixed Assets Fixed Assets

To create a Fixed Asset, fill the fields in FA card as follows:


No. : Description: Serial No. : FA Class Code: FA Sub class code: FA location code: Depreciation Book Code: FA posting Group: Depreciation method: Depreciation starting date: Straight-line %: FA000130 Plant & Machinery FAPM01 Tangible Machinery Prod. Company Machinery Straight-line 01/04/06 20.00

Book value:

2, 00,000

Book value will be affected after making Acquisition of Fixed Asset through FA G/L Journal or Purchase order/Invoice.

Calculating Depreciation
Navigation: Financial Management Fixed Assets Periodic Activities Calculate Depreciation.

On the Fixed Asset tab, you can set a filter to select the assets he/she wants to depreciate. For example: enter FA000130 in the Filter field. On the Options tab, enter the information shown in the following picture:

Click OK to calculate the depreciation on 31/03/07 The batch job has calculated depreciation for fixed asset number FA000130 and created lines in the Fixed Asset G/L Journal window. Click Fixed Assets, FA G/L Journals. The Fixed Asset G/L Journal window appears .

The batch job has calculated depreciation for fixed asset number FA 000130 and created lines in the Fixed Asset G/L Journal window.

The No. of Depreciation Days field has been filled in. When you run the batch job, the program calculates depreciation only over the number of days entered in this field. The program normally would calculate the depreciation days The balancing line is created because the Insert Bal. Account field on the Options tab for the Calculate Depreciation batch job is selected. Click Posting, Post to post the journal.

Viewing the Ledger Entries


To see the posted entries for fixed asset number FA000130, follow these steps: Click Fixed Assets, Fixed Assets. Browse to the card for FA000130.

On the line, in the Book Value field, click the Assist Button to open the FA Ledger Entries window.

Depreciation has been calculated by taking the values as follows: Book value: FA posting date of depreciation: Depreciation period (12 months): Rs. 2,00,000 31/03/07 (depreciation ending date) 365 days.

Calculated depreciation amount = 200000*20/100*365/365 = 40000 .

Minor Assets
There are two significant settings in the FA depreciation book for minor assets: The depreciation method is normally straight-line. The depreciation starting date and the depreciation ending date are the same. Due to this reason the program always calculate 100% depreciation; even other acquisitions and depreciation have already been posted to this asset. Example Create a fixed asset called Minor Assets 5000 The fixed asset should have the following depreciation book information Depreciation Book Code: FA posting Group: Depreciation Starting Date: Depreciation ending Date: Company Machinery 01/04/06 01/04/06

You can set up a separate G/L account and FA posting Group for minor asset depreciation. However, for this example we will simply use the existing machinery posting group.

Using the FA G/L journal, add the following acquisition costs for the year. The balancing account number for each acquisition is G/L account 2910.

Date
01/04/06 01/07/06 01/10/06

Acquisition
1000 1000 1000

Once you have posted the journals, the Minor Assets 5000 Fixed Asset card should look like this:

You set up one Minor Asset per year in Fixed Asset Card because the legislation for minor assets may change from one fiscal year to the next. Each time you purchase an asset that is classed as a minor asset, you post the acquisition cost and depreciation to the same Minor Asset Card you have set up. The acquisition costs of all minor assets will be collected on this asset and depreciated by 100% when the next periodic depreciation is calculated. Click Fixed Asset, Periodic Activities, Calculate Depreciation. On the Fixed Asset Tab, enter the No. from the minor asset fixed asset card in the No. Filter field. Fill in the Options Tab as follows: Depreciation Book: FA Posting Date: Posting Date: Description: Company 31/03/07 31/03/07 Depreciation Minor Asset 5000.

Click OK to run the batch job and then click Fixed Assets, FA G/L journals to look at the journal created by the batch job. Click Functions, Insert FA Bal. Account to insert a balancing account and then post the journal. If you open the Fixed Asset card for the minor assets you will see that the book value is 0. You can see the journal entries by clicking the Assist Button in the Book Value field.

The above example shows several postings of acquisition costs during a fiscal year and one yearly calculation of depreciation. However, you can also depreciate minor assets every month if you want. The asset will always depreciate 100% of the current book value at the time the depreciation is calculated. If you had run the Calculate Depreciation batch job on 30/09/06 (before you entered the 01/10/06 acquisition), and then run it again on 31/03/07, you would get the following result:

Date
01/04/06 01/07/06 30/09/06 01/10/06 31/03/07

Acquisition Cost
1000 1000

Depreciation
-2000

1000 -1000

Multiple Shifts
If the particular asset is used in single shift for 3 months, in double shifts for 3 months, and in triple shift for 6 months in a particular financial year you need to go through the information given below.

Navigation:

Financial Management Fixed Assets Set up Depreciation Book

Fill in the fields according to these guidelines: Field No of Days Non Seasonal Comments Define 180 days or actual working days of the concern whichever is higher. Define 240 days or actual working days of the concern whichever is higher.

No of Days Seasonal

Fixed Asset Card


For each fixed asset, user must set up a card containing information about the asset. Navigation:

Financial Management Fixed Assets Fixed Assets

To create a Fixed Asset, fill the fields in FA card as follows:


No. : Description: Serial No. : FA Class Code: FA Sub Class Code: FA Location Code: Depreciation Book Code: FA posting Group: Book Value: FA000130 Plant & Machinery 01 PM01 Tangible Machinery Prod. Company Machinery 1, 00,000

Book value will be affected after making Acquisition of Fixed Asset through FA G/L Journal or Purchase order/Invoice . Click Depr. Book, Shifts

When the asset is used in multi shifts then you have to fill the FA shift form in the FA card.

Fill in the fields according to these guidelines:

Field Depreciation Book Code

Comment The Depreciation Book Code is set to default value automatically from the Fixed Asset card. The FA Posting Group is set to default value automatically from the Fixed Asset card. Define the starting date of asset used in shift. Define the ending date of the asset used in shift Define the depreciation method applicable for the asset. Define rate of depreciation in this field. Define the shift type for which the asset has been used. The available options are single, double, and triple. Define the industry type. The available options are Normal, seasonal, and nonseasonal. Normal type of industry is used for single-shift. Define the actual no of days, the asset has been used during the period, when the actual no of days are different from starting date and ending date of depreciation.

FA Posting Group

Depreciation Starting Date

Depreciation Ending Date

Depr. Method

Straight Line % Shift Type

Industry Type

Used no of days

Create FA Shifts card First Line Depreciation Book code: The program automatically inserts a book code (For example Company). FA Posting Group: The program automatically inserts a posting group (For example Machinery). Depreciation Starting Date: 01/04/06 Depreciation Ending Date: 30/06/06 Depreciation Method: Straight-line Straight-line %: 10.00 Shift type: Single

Industry Type: Used No. of Ddays: Second Line Depreciation Book code: FA Posting Group:

Normal 50.

The program automatically inserts a book code (For example Company). The program automatically inserts a posting group (For example Machinery).

Depreciation Starting Date: 01/07/06 Depreciation Ending Date: 30/09/06 Depreciation Method: Straight-line Straight-line %: 20.00 Shift type: Double Industry Type: Seasonal Used No. of days: 40 Third Line Depreciation Book code: FA Posting Group: The program automatically inserts a book code (For example Company). The program automatically inserts a posting group (For example Machinery).

Depreciation Starting Date: 01/10/06 Depreciation Ending Date: 31/03/07 Depreciation Method: Straight-line Straight-line %: 30.00 Shift type: Triple Industry Type: Seasonal Used No. of Days: 100. Close the form. Note 1: You have to create the FA Shifts form for each asset that has been used for multiple shifts in FA Card. Note 2: If the concern is working for only single shift: When the concern is working in single shift the depreciation calculation will be done from FA Card line level; you only need to place a check mark in the use fiscal year days field in the Depreciation book card, after which the program will calculate the depreciation by taking the denominator either as 365 days or 366 days (in case of leap year). Also, there is no need to fill any FA Shifts form in the FA card. For every financial year you have to create new lines in shifts form if the asset is used in multi shifts.

Note 3: If you have defined some or all fields in the line level of the Fixed Asset card and have also defined in the FA shift form in FA card then application will give priority to the shift form. Note 4: If you have placed a check mark in the use fiscal year days field in the depreciation book and also defined the FA shift form in FA card then the program will give priority to the shift selected from the drop down box and the denominator for calculating the depreciation will be as follows. For Single shift - denominator will be the 365/366 days if you have placed a check mark in the depreciation book card. For double shift: - denominator will be the days defined in the No days Seasonal /Non Seasonal field in the Depreciation book card. For triple shift- denominator will be the days defined in the No days Seasonal /Non Seasonal field in the Depreciation book card.

Note 5: As per the law shift type single will always known for Normal Industries and Shifts type Double/Triple will always known for seasonal/ non-seasonal industries. Note 6: While entering Depreciation Start date and Depreciation End date in shifts form (for particular FA card) program will not allowed any overlapping of these dates. Example if in first line you have mention 01/04/06 (start date) and 30/06/06 (End Date), on second line you are not permitted to any date lying between 01/04/06 to 30/06/06. This validation is valid for the same financial year.

Calculating Depreciation
Navigation:

Financial Management Fixed Assets Periodic Activities Calculate Depreciation.

On the Fixed Asset tab, you can set a filter to select the assets you want to depreciate. For example: enter FA000130. On the Options tab, enter the information shown in the following picture:

Click OK to calculate the depreciation on 31/03/07 The batch job has calculated depreciation for fixed asset number FA000130and created lines in the Fixed Asset G/L Journal window. Click Fixed Assets, FA G/L Journals. The Fixed Asset G/L Journal window appears.

The batch job has calculated depreciation for fixed asset number FA 000130 and created lines in the Fixed Asset G/L Journal window. The No. of Depreciation Days field has been filled in. When you run the batch job, the program calculates depreciation only over the number of days entered in this field. The program will calculate the depreciation days. The balancing line is created because the Insert Bal. Account field on the Options tab for the Calculate Depreciation batch job was selected. To post the journal click Posting, Post.

Viewing the Ledger Entries


To see the posted entries for FA000130, follow these steps: To browse the card for asset number FA000130, click Fixed Assets, Fixed Assets.

On the line, in the Book Value field, click the Assist Button to open the FA Ledger Entries window

Depreciation has been calculated by taking the values as follows: Book value: FA posting date of Depreciation: Rs. 100000 31/03/07 (Depreciation Ending Date)

Different conditions for depreciations calculation:

For single shift, the program calculates depreciation for 50days, and the denominator will be 365. Calculated depreciation amount = 100000*10/100*50/365 = 1370 For double shift, the program calculates depreciation for 40 days, and the denominator will be as defined in the No. of Days Seasonal field in the Depreciation Book card. Calculated depreciation amount = 100000*20/100*40/180 = 4444 For triple shift, the program calculates depreciation for 100 days, and the denominator will be as defined in the No. of Days Season field in the Depreciation Book card. Calculated depreciation amount = 100000*30/100*100/180 = 16667 Force No of Days field in the calculated depreciation window has no relevance if the user has defined no of days in the Used No Of Days field in the FA Shifts form in the FA card. Note 1: Depreciation will be calculated only if the FA posting date is greater than or equal to the depreciation ending date in FA Shifts form. If the FA posting date is less than the depreciation ending date, then you have to modify the depreciation ending date to calculate the depreciation. Note 2: In case of manual posting of depreciation amount through FA Journal or FA G/L Journal the user has to select the FA Shift Line No. for the corresponding FA Shift Entry for which the Journal line has been made. In Calculate Depreciation Process the FA Shift Line No. field is program generated and should not be changed.

MONTHLY CALCULATION OF DEPRECIATION IN CASE OF SEASONAL / NON SEASONAL INDUSTRIES For calculating the monthly depreciation in case of seasonal or non seasonal industries, the user has to define 12 lines for 12 months in the FA Shift form, because program will not calculate depreciation on pro-rata basis in terms of Used No. of days. Example 1 First Month - April If the starting date of depreciation is 01/04/2006 and the depreciation ending date is 30/04/2006 in Shifts form and 180 days has been defined as concern working days in No. of Days Seasonal field in Depreciation Book Card. While calculating Depreciation you have to define FA posting date as 30/04/06 in calculate Depreciation window. The program will take the denominator as 180 days and numerator as 30 days. Book value is Rs. 50000 and Rate of Depreciation is 20%

Calculation of Depreciation as per WDV. 50000*20/100 *30/180 = 1667. (Depreciation for April).

Second Month - May If the starting date of depreciation is 01/05/2006 and the depreciation ending date is 31/05/2006 in shifts form and 180 days has been defined as concern working days in No. of Days Seasonal field in Depreciation Book Card. While calculating Depreciation user has to define FA posting date as 31/05/06 in calculate Depreciation window. The program will take denominator as 180 days and numerator as 31 days. Book value is now Rs. 48333. Calculation of Depreciation as per WDV. 48333*20/100 *31/180 = 1665. (Depreciation for May).

FA Reports
Navigation: Financial Management Fixed Assets Reports Fixed Assets Depr. Schedule for Comp. Act

Fill in the fields according to these guidelines:

Field

Comments
Specify the Start Date with which you want

Start Date

the report to be generated (01/04/067) Specify the End Date with which you want the report to be generated (31/03/07)

End Date

Click the Preview Button.

Calculation of Depreciation as per Income Tax Act


Navigation:

Financial Management Fixed Assets Setup Depreciation Books

Depreciation Book Card

Fill in the fields according to these guidelines:

Fields
Book Type

Comments
Select the book type as Income Tax. In this case all applicable rules for Income Tax will be calculated for the depreciation book.

Depr. Threshold Days Define the threshold no of days where 50% of the normal rate is applicable. If the asset has been acquired during the year and asset has been put to use less than 180 days then depreciation rate is 50% of the normal rate. Depr. Reduction % Define the reduction rate

Note:
The program checks the acquisition date and the starting date of depreciation in the Fixed Asset card. If acquisition date and starting date fall in the same accounting period then the depreciation rate is 50% of the normal rate. If the acquisition date and starting date of depreciation fall in different accounting periods then the system calculates the depreciation rate as per normal rate

FA Classes
Navigation: Financial Management Fixed Assets Setup FA Classes

Select the FA class code and click the block menu button to open the new window as follows:

Fill in the fields according to these guidelines:

Fields
FA Class

Comments
The program automatically inserts the value in FA Class field. Define the code for the Block, for example: Block1, Block2, and so on. Define the description of the code fields

Code Description Book Value

Displays the book value of the block. The opening balance of the block can be entered through FA journal. Subsequently, at the time of addition or deletion of asset, the value automatically gets updated in the book value field. There are two different conditions when no depreciation is charged for the block: The value in the Book Value field becomes short term capital gain if the amount in Book Value field is less than zero and the number of assets existing in the block is one or more than one. The value in the Book Value field becomes short term capital loss if the amount in Book Value field is more than zero and the number of assets existing in the block is zero. Depreciation % Define the rate of depreciation for the block. Add Dep % Define the additional depreciation rate for the block. At present additional depreciation is applicable to only selected plant and machinery block. No. of Assets The program automatically calculates the No. of Asset existing in the block.

Accounting Period Income Tax


As per the Income Tax Act, accounting period is always April to Mach but it may be different in the Companies Act. A user needs to create the accounting period ever year .

Navigation: Financial Management Fixed Assets Setup FA Accounting Periods Inc.Tax

Click the Create Year button to create a new fiscal year.

Fill in the fields according to these guidelines:

Fields
Starting Date

Comments
Define the starting date of the accounting period.

No Of Periods

Define the no. of periods for the accounting period. Define the period of length, for example month, quarter and so on.

Period Length

Fixed Asset Card


For each fixed asset, user must set up a card containing information about the asset.

Navigation: Financial Management Fixed Assets Fixed Assets

To create a Fixed Asset, fill the fields in FA Card as follows: No. : Description: Serial No.: Add. Depr. Applicable: FA000140 Machinery 1 M01 Place a check if you want to calculate Additional Depreciation for the particular Asset. FA Class Code: Tangible FA Sub class code: Machinery FA Location code: Prod. FA Block Code: Select the Block from look up button that has been created in Block card. After selecting the Block it means that particular has been attached with the Block. (Block 1) Depreciation Book Code: Income Tax FA posting Group: Machinery Depreciation Method: Straight-line Depreciation Starting Date: 01/04/06 Straight-Line %: 10.00 (The program will automatically insert the % from Block card). Book value: 1, 00,000 Book value will be affected after making Acquisition of Fixed Asset through FA Journal.

To create a Fixed Asset, fill the fields in the FA Card as follows: No. : Description: Serial No. : Add. Depr. Applicable: FA000150 Machinery 2 M02 Place a check if you want to calculate Additional Depreciation for the particular Asset. FA Class Code: Tangible FA Sub Class Code: Machinery FA Location Code: Prod. FA Block Code: Select the Block from look up button that has been created in Block card. After selecting the Block it means that particular has been attached with the Block. (Block 2) Depreciation book code: Income Tax FA Posting Group: Machinery Depreciation Method: Straight-line Depreciation Starting Date: 01/11/06 Straight-Line %: 20.00 (The program will automatically insert the % from the Block card) Book Value: 2, 00,000 Book value will be affected after making Acquisition of Fixed Asset through FA Journal. Click Fixed Asset, Setup, FA Classes, and Blocks:

Now, see that the fields Book Value and No. of Assets have been populated after creating FA card for Block 1 and Block 2. Click the Assist button in the Book Value field to view the FA Ledger entries for the Particular Block (Block 1).

Click the Assist button in the No. of Assets field to view the Fixed Asset list. You can view various types of assets attached with the particular Block (Block 1).

Calculating Depreciation Navigation: Financial Management Fixed Assets Periodic Activities Calculate Depreciation

On the Fixed Asset tab, set a filter to FA Class code as Tangible and FA Block Code as Block 1. You can also depreciate asset wise by mentioning the FA No. On the Options tab, enter the information shown as follows:

Click the OK button to calculate the depreciation on 31/03/07. The batch job has calculated depreciation for the block code Block 1 and created lines in the Fixed Asset Journal window. Click Fixed Assets, FA Journals. The Fixed Asset Journal window Is displayed as shown below:

The batch job has calculated depreciation for block number Block 1 and created lines in the Fixed Asset Journal window. Click Posting, Post to post the journal. Now calculate Depreciation for Block 2

Navigation: Financial Management Fixed Assets Periodic Activities Calculate Depreciation

On the Fixed Asset tab, you can set a filter for FA Class Code as Tangible and FA Block Code as Block 2.

You can also depreciate asset-wise by mentioning the FA No. On the Options tab, enter the information as follows:

Click OK to calculate depreciation on 31/03/07.The batch job has calculated depreciation for the block code Block 2 and created lines in the Fixed Asset Journal window. Click Fixed Assets, FA Journals. The Fixed Asset Journal window is displayed as follows:

The batch job has calculated depreciation for block number Block 2 and created lines in the Fixed Asset Journal window.

Click Posting, Post to post the journal.

Viewing the Ledger Entries


To see the posted entries for Block 1 and Block 2, follow the procedure mentioned below: Click Fixed Assets, Set Up, FA Classes, Blocks: Block 1

See that the amount in Book Value field has been changed. Click the Assist button in the Book Value field to view the FA Ledger entries for the particular block (Block 1).

Depreciation has been calculated as follows: Book value was Rs. 100000

Depreciation Starting Date was 01/04/06 and FA Posting Date (Depreciation Ending Date) was 31/03/07 Asset has been put to use for more than 180 days Depreciation calculated is 100000*30/100 = 30000 (10% normal depreciation rate and 20% additional depreciation rate) Block 2

Depreciation has been calculated as follows: Book value was Rs. 200000 Depreciation Starting Date was 01/11/06 and FA Posting Date (Depreciation Ending Date) was 31/03/07 Asset has been put to use for less than 180 days Depreciation calculated is 200000*20/100 = 40000 (10% normal depreciation rate and 10% additional depreciation rate) You can view the posted entries from Fixed Asset card for the particular Asset. Note 1: In Block 2 you have mentioned 20% normal depreciation rate and 20% additional depreciation rate, but the program calculates depreciation with 50% of rate of normal and additional depreciation rate. This is because the asset has been put to use for less than 180 days. Note 2: If the particular asset has been put to use on any day of the subsequent year, then full rate of normal and additional depreciation will be applicable. Note 3: Additional depreciation is allowed only once and that too in the previous year in which the eligible asset is put to use and the asset has been acquired and installed after 31.03.05. Note 4: Additional depreciation allowed shall be deductible while computing the WDV for the next year.

Note 5: If the Book Value of the block becomes negative and no. of assets decrease to zero, then the program will not calculate any depreciation for the particular block. Note 6: The program will not restrict the calculation of depreciation on a monthly (or other periodicity) basis as per Income Tax Act because periodic depreciation may help in computation of the advance tax of the assessee. If any asset of a block has been sold on which monthly depreciation has already been posted; then the system will give an appropriate error message and will not allow posting of that asset until all depreciation entries for that year have been cancelled for that block. However, it is advisable not to calculate the depreciation on a monthly basis as per Income Tax Act. Note 7: If the asset has been acquired and put to use in the same year and appreciation has been made to the asset after 180 days of a financial year, then an appreciation amount of 50% of the normal rate is applicable .If the appreciation has been made before 180 days of a financial year, then on an appreciation amount 100 % of the normal rate is applicable. If the appreciation has been made before 180 days of a financial year when asset has been acquired and put to use, then the user has to follow the standard procedure by posting the FA Journal by giving the FA Posting Type as Appreciation. If the appreciation has been made after 180 days of a financial year when asset has acquired and put to use for more than 180 days, then the you have to follow the steps. Step-1: Open a new FA Card; Book value will be affected after making Acquisition of Fixed Asset through FA Journal. FA No: 01 Acquisition cost Rs.100000 Acquisition date: 01/04/06 Starting date of depreciation: 01/04/06 Step-2: Open another FA Card; Book value will be affected after making Acquisition of Fixed Asset through FA Journal. FA No: 02 Acquisition cost Rs.50000 Acquisition date: 01/04/06 Starting date of depreciation: 30/11/06 Take Appreciation as Acquisition, and define start date of depreciation as appreciation date. Step-3: Attach both the assets FA 01 & FA 02, with Block 01. Step-4: Run the batch job for calculating depreciation for Block 01. Step-5: The program will calculate depreciation with 100% rate of depreciation for FA 01, and with 50% rate of depreciation for FA 02. The FA posting date is now 31/03/07 (last day of a financial year).

Step-6: On 01/04/07 (starting day of new Financial year), you will reclassify FA 02 to FA 01 through FA reclassification journal. After reclassification, the program will transfer all the book values including acquisition cost and depreciation amount from FA 02 to FA 01. Step-7: Notice that FA 02 now has a zero book value. Step 8: On 01/04/07, you will dispose FA 02 with zero amount through FA journal. Note 8: In case of Income tax Act, if user has selected User-Defined as Depreciation method the system will not calculate Depreciation. By selection User-Defined system will give error message Depreciation Method must not be User-Defined in FA Depreciation Book FA No. ='', Depreciation Book Code='INCOMETAX'.

Enter an Opening Balance:

If you are entering the opening balance of the fixed asset as per Income Tax Act for the first time, then you have to follow some steps which (steps) can be understood through an example. Example: You want to enter an opening balance on 01-04-2007 then you have to: Open accounting period for the years 2006-07 and 2007-2008 in the Accounting Periods Inc Tax Acquire the asset through FA Journal as on 31-03-2007 in the accounting period 2006-07 Enter 31/03/2007 in FA Posting Date field Select FA number and depreciation book code from the look up list Select FA posting type as Acquisition Cost from the drop down box Enter the amount of opening balance in the Amount field Post the FA Journal Enter 01/04/2007 in the Depreciation Starting Date field of FA card

FA Reports
Navigation: Financial Management Fixed Assets Reports Fixed Assets Depr. Schedule for IT Act

Fill in the fields according to these guidelines:

Fields
Start Date

Comments
Specify Start Date that should be used to generate the report (01/04/06)

End Date Specify End Date that should be used to generate the report (31/03/07)

Click the Preview button.

Appendix
As per Companies Act
Example 1: Annual depreciation: Straight Line Method: If a machine cost Rs. 1, 20, 000 on 1/1/2006 assuming the accounting year ends on 31 December and the rate of depreciation is prescribed for SLM as 4.75%. Year Computation Annual Depreciation Accumulated Depreciation Book Written Down Value 114300 108600 102900 97200

1 2 3 4

120000x4.75% 120000x4.75% 120000x4.75% 120000x4.75%

5700 5700 5700 5700

5700 11400 16100 21800

Written Down Value Method: Assume rate of depreciation prescribed for WDV as 15%. Year 1 2 3 4 Example 2: Monthly Depreciation: Straight Line Method: The machine cost Rs. 1, 20,000 on 1/1/2006 assuming the accounting year ends on 31 December and rate of depreciation is prescribed for SLM as 4.75%. Year Computation Annual depreciation Monthly Depreciation Book Written Down Value 120000x4.75%x31/365=484* 119516 120000x4.75%x28/365=437* 119097 120000x4.75%x31/365=484* 118595 120000x4.75%x30/365=469* 118126 120000x4.75%x31/365=484* 117642 120000x4.75%x30/365=469* 117173 Computation 120000x15% 102000x 15% 86700x15% 73695x15% Annual Depreciation 18000 15300 13005 11054 Accumulated Depreciation 18000 33300 46305 57359 Book Written Down Value 102000 86700 73695 62641

January February March April May June

120000x4.75% 120000x4.75% 120000x4.75% 120000x4.75% 120000x4.75% 120000x4.75%

5700

Written Down Value Method: Assume rate of depreciation prescribed for WDV as 5%. Year Computation Annual Depreciation Monthly Depreciation Book Written down value 118471 117090 115561 114082 112553 111074

January February March April May June

120000x15%

18000

120000x15%x31/365=1529 120000x15%x28/365=1381 120000x15%x31/365=1529 120000x15%x30/365=1479 120000x15%x31/365=1529 120000x15%x30/365=1479

Pro-rata depreciation on purchase and sales of Purchase of Asset: Pro-rata depreciation should be calculated for the number of calendar days in a year and taking year duration for 365 days /366 days in case of leap year. Example 3: Purchase Scenario: XYZ limited purchase a machinery of Rs. 2, 50,000 on 1 November 2005. The rate of depreciation is 10%. The XYZ limited closes their account on 31 March every year. As per companies act, the depreciation should be computed as under: Asset Acquired Original Cost 2,50,000 Depreciation for Number of Days 151 Depreciation Rate 10% Depreciatio n Amount =2,50,000x 10%x151/3 65 = 10342

Machinery

1.11.2005

Sales Scenario: XYZ Limited sold machinery Rs. 2, 50,000 on 15 August 2005. This machinery was purchased on 1/4/2005. The rate of depreciation is 10%. XYZ limited close their account on 31 March every year. Asset Acquired Original cost Date of Sales Depreciati on for number of Days 137 Depre ciation rate 10% Depreciati on amount

Machinery

1.04.2005

2,50,000

15.08.2005

=2,50,000 x10%x137 /365 = 9384

Combined scenario of Purchase and Sales: Larsen Ltd. closes their accounts on 31 March 2006 every year. They purchased the machineries as follows: 1. Purchased the machineries (R) costing Rs.1,20,000 on 1/07/2003 2. On 1/01/2004 some machineries (s) were purchased costing 1,20,000 3. On 1/10/2004 again purchased some machinery (T) costing Rs. 20000 4. On 1/01/2005 purchased a new machinery (U) for Rs. 60,000 5. One machinery (Q) costing Rs. 40,000, which was purchased on 1/7/2003 was sold for Rs. 12000 on 1/10/2005. 6. They charged depreciation @ 33.33% on the Written Down Value Method. Machinery Machinery(R) Machinery (S) Total Acquired 1-07-2003 Original cost 1,20,000 2003 (depreciation) 1,20,000x33.33 %x275/365=30 133 1,20,000x33.33 %x91/365 = 9972 40105 2004 (Depreciation) 2005

1-01-2004

1,20,000

2,40,000

Machinery (T) Machinery (u)

1-10-2004

20,000

1-1-2005

60,000

(2,40,00040105=19989 5x33.33%)= 66625 20,000x33.33 %x182/365=3 324 60,000x33.33 %x91/365= 4986

Machinery (Q)

1-7-2003

40,000

40,000X33.33% X275/365=1004 4

(29956X33.33 %)=6696

23260 x 33.33%x183 /365 =3887

Total

80,000

40105

74935

(3,20,0004010535048)=244 847-23260 x33.33%=7 3855

Example 4: Depreciation computation for Seasonal Industries: A sugar industry started crushing on 1/10/2005. The mill was running on three-shift basis. The new milling machinery worth of Rs. 5, 00,000 was installed on 1/11/2005. The company closed the plant on 15 March 2006 due to scarcity of cane. The depreciation rate for triple shift is prescribed @15% p.a on Written Down Value Method. Mill closes their books on 31 March every year. Asset Acquired Original cost Duration of year (Seasonal industry 180 or actual whichever is higher) 180 Depreci ation for number of Days Depr Depreciation eciati amount on rate

Milling Machine

1-11-2005

5,00,000

151

15%

=500,000x15% x135/180= 56250

Depreciation computation for other industries: M/S Suba Pharmaceuticals were running their plant on double shift basis. They have to stop there production on 15/10/2005 due to scarcity of raw material. They cold not operate the plant till 31 March 2006. The opening balance of machinery on 1/04/2005 was 4, 00,000. The rate of double shift depreciation is 7.55% p.a. on Written Down Value Method. Asset Acquired Original Duration of Depreci Depre Depreciati cost year (Other ation ciation on amount industry for rate 240 or number actual of Days whichever is higher)

Milling Machine

01-04-2005

4,00,000

240

198

7.55%

=400,000x 7.55%x19 8/240= 24915

As per Income Tax Act


Example 1: Computation of Written down value & Depreciation: X owns the following assets as on 1/4/2006: Asset Building A Building B Building C Building D Building E Machinery A Machinery B Machinery C Machinery D Machinery E Furniture A Furniture B Rate of Depreciation (%) 10 10 10 5 5 15 15 30 30 30 10 10 Written down value as on 1.04.2006 10,20,000 5,40,000 6,35,000 2,60,000 3,10,000 60,000 1,82,000 1,65,000 4,000 50,000 1,10,000 8,000

The following assets are acquired during the previous year 2006-07 Asset Building F Machinery F Machinery G Machinery H Machinery I Patents Technical Know-how Rate of Depreciation (%) 10 15 15 15 30 25 25 Actual cost 5,40,000 1,12,000 4,000 62,000 16,000 40,000 60,000 Date of acquisition 14-5-2006 15-5-2006 16-7-2006 21-9-2006 21-9-2006 15-4-2006 17-5-2006

The following assets have been sold during the previous year 2006-07 Asset Machinery C Building D Machinery E Sale Consideration 1,10,000 4,00,000 80,000 Date of sale 2-9-2006 21-10-2006 28-03-2007

Determine the depreciation for the assessment year 2007-08 Computation of Depreciation:

Particulars

WDV as on 1-04-2006 21,95,000

Block 1 Building 10% Block 2 Building 5% Block 3 Machinery 15% Block 4 Machinery 30% Block 5 Furniture & Fixtures Block 6 Intangible Assets Total

Additions during the year 5,40,000

Assets sold during the year 0

WDV as on 31-3-2007 27,35,000

Depreciation

2,73,500

5,70,000 2,42,000

0 1,78,000

4,00,000 0

1,70,000 4,20,000

8,500 63,000

2,19,000

16,000

1,90,000

45,000

13,500

1,18,000

1,18,000

11,800

NIL

1,00,000

1,00,000

25,000

3,95,300

Example 2: Written down value of four machines at the beginning of the previous year 2006-07, forming part of a block of assets carrying 15% rate of depreciation was Rs. 5,50,000,which includes Rs. 50,000 of machine which is acquired on 5.1.2006 but put to use on 14-1-2007. The following four machines of the same block were bought as follows: Machinery Q R S T Date of Purchase 5-4-2006 15-5-2006 15-11-2006 15-5-2006 Date when put to use 15-5-2006 31-1-2007 27-3-2007 03-04-2007 Cost (Rs.) 1,00,000 2,00,000 1,50,000 2,00,000

Four machines of this block (other than those that were acquired and put to use for less than 180 days) were sold for Rs. 4, 00,000. Computation of Depreciation on 31/3/2007: (a) WDV at the beginning of the year Additions during the year in the same block (i)Machinery Q acquired and put to use for 180 days or more 1, 00,000 (ii) Machinery S acquired and put to use for less than 180 days and machinery R although acquired in the previous Year for a period exceeding 180 days but put to use for less than 180 days.(2,00,000+1,50,000) 3,50,000

5, 50,000

4,50,000

Total Less: Assets sold during the year WDV on which depreciation is to be charged Depreciation: On Rs. 2, 50,000 @ 15% On Rs, 3, 50,000 @ 7.5% Written Down value at the end of the year

10, 00,000 4, 00,000 6, 00,000 37,500 26,250

63,750 5, 36,250

Example 3: R Ltd. has started a new business of manufacturing paints on 1/04/2006. The company has purchased the following assets during the financial year 2006-07: Asset Actual cost of acquisition Date of Purchase Rate of Depreciation Date on which the asset is put to use 10-4-2006 18-6-2006

Furniture Air-Conditioner installed in office Car Plant-X Plant-Y Plant Z Computer for office Computer for factory

2,00,000 1,00,000

10-04-2006 16-06-2006

10 15

8,00,000 50,00,000 20,00,000 80,000 1,00,000 1,50,000

12-7-2006 11-4-2006 15-9-2006 1-08-2006 1-07-2006 2-7-2006

15 15 15 100 60 60

12-7-2006 28-04-2006 16-11-2006 15-09-2006 1-07-2006 4-07-2006

Computation of Depreciation and Additional Depreciation: Furniture (10%) Plant (60%) Opening WDV as on 1-4-2006 Add: Actual cost of assets acquired during the year WDV as on 313-2007 Less : Normal Depreciation Less: Additional depreciation** WDV as on 104-2007 NIL 2,00,000 NIL 2,50,000 Plant & Car (15%) NIL 79,00,000 Plant (100%) NIL 80,000

2,00,000 20,000 NIL 1,80,000

2,50,000 1,50,000 30,000 70,000

79,00,000 10,35,000* 12,00,000 56,65,000

80,000 80,000 NIL NIL

Normal Depreciation on Plant (15%) has been calculated as under : (1) Depreciation @ 15% on 59,00,000 8,85,000 (2) Depreciation @ 7.5% on Rs. 20,00,000 1,50,000 10, 35,000 ** Additional depreciation has been calculated as under: Plant X Actual Cost Rate of Additional Depreciation Additional Depreciation 50,00,000 20% Plant Y 20,00,000 10% Plant Z Computer for factory 1,50,000 20% Other Assets NIL

NIL

10,00,000

2,00,000

NIL

30,000

NIL

Microsoft DynamicsNav 4.0 IN SP1Direct Debit to PLA.

TABLE OF CONTENTS

Personal Ledger Account (PLA) ...................................................................................... 3 Direct Debit to PLA: ....................................................................................................... 3 Setup ............................................................................................................................... 4 Transactions: ................................................................................................................... 5 Sales Orders : .............................................................................................................. 5 Sales Invoices ............................................................................................................ 15 General Journals ........................................................................................................ 16 Reports:......................................................................................................................... 19 PLA Excise No. Series .............................................................................................. 19 Sales Invoice ............................................................................................................. 20 E.R.-1 ........................................................................................................................ 21

Personal Ledger Account (PLA)


PLA is the record of amount deposited by the manufacturer with the excise authorities in advance for payment of excise as and when, the manufacturer clears goods; he will debit the PLA by the amount of duty payable on those goods. Each debit and credit entry must be made on separate line and assigned a running serial number for each financial year. Only one entry, either debit or credit, can be made against one serial number. When the assessee deposits any amount with the Central Excise authorities for payment towards excise duty, he must make a credit entry in the PLA. At the time of removal of excisable goods assessee pays the duty determined by him by making a debit entry in the PLA. The balance remaining at a given point of time is the amount available for future payment of excise duty. If any goods are removed from the factory without such debit entry or without adequate credit balance in the PLA, they will be treated as goods removed without payment of duty. Generally, corrections are not allowed in PLA. If any corrections become necessary, the original entry must be neatly scored and attested by the assessee or his authorized agent.

Direct Debit to PLA:


When inputs or capital goods on which Cenvat Credit is taken are removed as such from the factory, the manufacturer of final product has to pay an amount equal to Cenvat Credit availed on inputs/capital goods at the time of receipts . If they are removed after processing from the factory the manufacturer has to pay an amount of Excise Duty as computed at the time of removal. Both can be done by debiting the Personal ledger Account (PLA).

Setup
Financial Management Setup Excise Excise No. Series List Define a separate Number Series for each E.C.C. No. such that PLA entry no. for each PLA gets generated based on the defined series

Transactions:
Sales Orders :
1. Sales and Marketing Order Processing Orders a) Create a new Sales Order for a customer. Select excisable item on the line level and fill in all the line details. Select the excise structure and calculate structure values for the line items. b) Checkmark the field Direct Debit to PLA if the Excise amount of the selected line has to be Directly Debited to PLA. c) Direct Debit to PLA field is available through Show Column on sales document sub form. d) Direct Debit to PLA is applicable for sales of items and Fixed Assets.

Goods removed as such

If goods are removed as such ( i.e. without any further processing/manufacturing after being purchased) then the following excise amount fields can be selected from Show Column on Sales Document sub form and can be edited: BED Amount, AED (GSI) Amount, AED (TTA) Amount, SED Amount, SAED Amount, Cess amount, NCCD Amount, eCess Amount, ADET Amount, ADE Amount. Enter the Excise amounts paid at the time of purchase of the same if the excise amount is different. Normally the values in these fields should not be changed.

e) Click on Function-> Direct Debit to PLA

f) Following form will be opened. Enter the fields under column PLA with the Excise Amounts allocation duty wise. (All other Fields are not editable). The total of the Excise amount entered in these fields should be equal to the total of Excise Duty Payable amount .Close the form after allocations.

g) Post the sales Order: Posting -> Post

The errors/warnings will be displayed in the test report of the sales order/invoice. This will help the user to identify any missing steps.

h) Ship and Invoice: Do the Ship and Invoice for the Order.

i) Go to Sales and Marketing History Posted Invoices

h) Click on Navigate Button . Following screen will be displayed

i) Please note that PLA entries are created. Debiting the Excise Payable and crediting the PLA. j) The GL Entry table will show following entries

Thus the Excise amount will be Directly Debited to PLA and an entry will be generated in PLA Entry Table. The PLA Entry No. field will be populated with the number generated from the E.C.C. No. & Type combination of Excise No. Series table: PLA entry No is a new field in the PLA Entry Table. The PLA Entry No. would also be populated on Posted Sales Invoice Header. In the sales invoice report the PLA Entry No is displayed. Screen shot is shown in the last page.

During the process of Pay Excise from General Journal and while payment of Excise duty through PLA then also the PLA entry No. is populated in the PLA Entry Table based on the No series as defined in the Excise No Series table..

Sales Invoices
a) Do the standard steps for creation of sales invoice. b) Check the field Direct Debit to PLA if the Excise amount of the selected line has to be directly debited to PLA

c) Follow the steps of Sales Order except for Ship and Invoice.

General Journals
a) Periodic Settlement of Excise Duty Payable: Financial Management General Ledger General Journal. For Periodic Settlement of the line transactions for which Direct Debit to PLA is unchecked in Sales Order/ Invoices along with other Sales Orders /Invoices.

b) Click on Functions -> Payments Excise The Invoices which have Excise Amount Payable will appear for the purpose of periodic settlement.

c) Click on button Apply Entries. The following screen will appear.

d) Enter the Excise Payable amount in the relevant fields viz RG 23 A, RG 23 C, PLA. Note : The amount of excise payable will not include the Direct Debit to PLA transactions.

Reports:
PLA Excise No. Series
Financial Management Reports Excise Reporting PLA Excise No. series This Report will be generated ECC No. wise and Month wise and will show the PLA Entry No. of various entries.

Sales Invoice
Sales Invoice with PLA Entry No. and Direct Debit to PLA.

E.R.-1
The following new features have been added in the E.R.-1 Report: 1) Excise Prod. Posting Group, Unit wise grouping so that the system shows different unit of measures under same chapter heading. 2) Another section added for Removed As Such goods (The goods which are removed without any Manufacturing/Processing). In case of Removed As Such for a given Unit & Excise Prod. Posting Group this section is displayed

Microsoft Business Solutions Navision 4.0- Indian Value Added Tax

Table of Contents
Overview of Functionality ...................................................................................... 4 Detailed Setup ................................................................................................... 4 Comprehensive Functionality ............................................................................ 5 Reports.............................................................................................................. 5 Definitions ............................................................................................................. 6 Value Added Tax (VAT) .................................................................................... 6 Input VAT .......................................................................................................... 7 Output VAT........................................................................................................ 7 Input VAT Credit ................................................................................................ 8 Input VAT Credit on Capital Goods ................................................................... 8 Input VAT and Input VAT Credit ........................................................................ 8 VAT Rounding Off ............................................................................................. 9 VAT Setoff and Carry Forward .......................................................................... 9 Inter State Purchases, Sales, and Branch Transfers......................................... 9 Exports, Deemed Exports, and Supply to EOU Units ........................................ 9 Composition Scheme ........................................................................................ 9 Lease Transactions ......................................................................................... 10 Debit Notes/ Credit Notes ................................................................................ 10 Adjustments in TAX Credit Due to Changes in Usage .................................... 10 Adjustments in TAX Credit Due to Goods Lost / Destroyed or Consumed ...... 10 Setup- Sales Tax (Value Added Tax).................................................................. 11 Schedules........................................................................................................ 11 States .............................................................................................................. 13 Deferment Period ............................................................................................ 14 Schedule ......................................................................................................... 16 Forms .............................................................................................................. 17 TAX Jurisdictions............................................................................................. 18 Tax Details ...................................................................................................... 19 Company Information ...................................................................................... 20 Location Card .................................................................................................. 22 Customer Card ................................................................................................ 23 Vendor Card .................................................................................................... 24 Item Card......................................................................................................... 25 Calculation of Input VAT on Item ........................................................................ 25 Viewing the Ledger Entries.............................................................................. 27 Calculation of VAT on Capital Goods.................................................................. 30 Viewing the Ledger Entries.............................................................................. 33 Calculation of VAT if the Vendor has opted Composition Scheme ..................... 36 Viewing the Ledger Entries.............................................................................. 37 Calculation of Retention Limit on VAT. ............................................................... 40 Viewing the Ledger Entries.............................................................................. 41 Calculation of Vat able Purchase Tax on CST .................................................... 45 Viewing the Ledger Entries.............................................................................. 46 Calculation of VAT if Purchases are meant for Export or Deemed Export .......... 49 Purchase Credit Memo. ...................................................................................... 49

Viewing the Ledger Entries.............................................................................. 50 Calculation of Output VAT .................................................................................. 54 Viewing the Ledger Entries.............................................................................. 54 Calculation of Output VAT in case of Standard Deduction .................................. 57 Viewing the Ledger Entries.............................................................................. 58 Sales of Goods in case of Export or Deemed Export / VAT Exempted ............... 60 Sales Credit Memo ............................................................................................. 61 Viewing the Ledger Entries.............................................................................. 62 VAT Adjustment .................................................................................................. 65 VAT Settlement ................................................................................................... 76 View the posted Ledger Entries....................................................................... 81 VAT Reporting .................................................................................................... 87 Interstate Sales and Purchases....................................................................... 88 Intrastate Sales and Purchases....................................................................... 90 Purchase Book VAT ........................................................................................ 92 Sales Book VAT .............................................................................................. 94 VAT Settlement ............................................................................................... 95 VAT Deferment................................................................................................ 97 VAT Credit Carried Forward ............................................................................ 99 Viewing and Printing the Tax Invoice ............................................................ 100 Appendix ........................................................................................................... 103

Overview of Functionality
VAT functionality comprehensively covers the Indian VAT scenario. This functionality is a standard solution for the States / Union Territories (UT) that have implemented or are implementing VAT in India. This functionality provides a common solution for the requirements under all Indian States / UTs VAT Acts.

Detailed Setup
VAT functionality contains a detailed setup, which will used in mapping the Tax rate, calculation of Input VAT Credit, Output VAT, VAT Adjustments, and the VAT Settlement process.

Setup Area
T.I.N. Nos.

Description
Various TIN Nos. of the firm are defined. State/UT, first two-digits of the TIN of the State, Deferments for the Capital Goods, Schedules of the State, Specified Period for Refund, Tax Period, Retention Limit incase of Branch Transfer, GL account for Input VAT credit, GL account for Output Tax, GL account for VAT Deferred Account, GL account for VAT payable Account, GL account for VAT Refund, and GL account for Excess Input VAT Credit Carried forward are defined. Item Categories and the Item category, which is a Works contract, are defined. Tax Jurisdiction, the State under which it falls, Tax Type, Retention Limit for Non Taxable Sales and whether this retention limit is loaded on the item are defined. Tax Jurisdiction and the Item Category, the Schedule, Tax Rate, Capital Good, Creditable Good, Standard Deduction, VAT able Purchase Tax, VAT retention limit are defined. All Schedules for States are defined. Tax jurisdiction applicable for Customer/ Vendor State with the Location is defined. If the item is fixed asset, and the Tax Group code for the item are defined. TIN No of the Vendor and whether opted for Composition is defined. TIN No of the Customer and whether the Sale to customer is Export/ Deemed Export Sale or VAT Exempted Sale are

States

Tax Groups

Tax Jurisdictions

Tax details

Schedules Tax Area Locations Item Card Vendor Card Customer Card

Location Card GL Account Card

defined. TIN No of the Location, Location under composition and Export/ Deemed Export Location are defined. Tax Group Code is defined

Comprehensive Functionality
VAT setup maintained into the system comprehensively covers the following, in cases of Normal items, Capital Goods and GL (Leases): Computation of Input VAT/ CST Computation Input VAT-able Purchase Tax Computation of Input VAT Credit taking care of retentions for items and non-taxable sales and retentions for items purchased for execution for works contacts Computation of Output VAT/CST VAT Reversals/ Adjustments in the cases of Changes in Usage, Lost/Destroyed, Branch Transfers, Non-Business Consumption (with the applicable retention) and Credit Notes VAT Setoff / Settlement process VAT Refund in case of Excess Input Vat Credits carried forward, Current Input VAT credit, and Input VAT credit for the goods exported Refund claimed (if any) with respect to the Excess Input VAT Credits carried forward and Current Input VAT Credit are checked/ monitored with regard to the specified period for refunds applicable in state VAT Act. Financial and VAT entries Above mentioned cases are specific to States and handled accordingly.

Reports
The fundamental VAT reports like Sales Register, Purchase Register, Tax Invoice, IntraState Purchases and Sales, Inter-State Purchases and Sales, Deferment Schedule, VAT Payable Carried Forward A/C, VAT Deferment Account, and VAT Settlement have been covered and VAT rounding off has been taken care of. The information required for the VAT returns for the states has also been provided.

Definitions
Value Added Tax (VAT)
Value Added Tax (VAT) is the tax on the value addition. Invoice method is followed in India for the Value Addition Tax, where in the input tax paid on all the inputs and capital goods used in production, manufacture or process of taxable output is allowed as input VAT credit. .

Base Price
Base price is the base value of the item on which the VAT rate is applied to get input VAT or output VAT.

Input VAT
VAT paid or payable by a purchasing dealer to the selling dealer or the VAT able entry tax / purchase tax paid or payable is defined as input VAT.

Input VAT Credit


Credit available on the input VAT paid / payable on purchases.

Composition Scheme
Presumptive Compounded Tax

VAT Dealer
Dealer, registered under the VAT Act is defined as VAT dealer.

Input VAT Credit Reversal


Reversal of input VAT credit due to change in usage, destruction, loss, sale of capital goods, transfer, and so on is defined as input VAT credit reversal

Output VAT (Capital Goods)


VAT payable on sale of capital goods is defined as output VAT.

Vat Credit Receivable (Capital Goods)


Input tax credit (capital goods) available for set off in current period is defined as VAT credit receivable.

Vat Credit Deferred (Capital Goods)

Input tax credit (capital goods) available and deferred for set off in next periods has been defined as VAT credit deferred.

VAT able Purchase Tax


Taxes other than VAT which are VAT able known as VAT able purchase tax.

Capital Goods
Fixed assets which are capital goods and not in the negative list as defined under respective State VAT Law where purchase of asset was made.

Taxable Turnover
The turnover which is considered for calculating input VAT credit is defined as taxable turnover.

Total Turnover
Total Turnover is defined as aggregate of sale prices of all goods including the transactions if any.

CST Sale
Inter state sale covered under CST act is defined as CST sale.

Out VAT
Tax payable by a registered dealer on the sale of goods effected

Tax Period
Tax period is either a calendar month or any other period as may be prescribed under the State VAT Act for filing the returns to the tax authority

Input VAT
VAT paid on local purchases, means within the same state, is defined as input VAT. A percentage of the input VAT will be available as credit.

Output VAT
VAT payable on sales/ transactions to the customers in the same state is defined as output VAT.

Input VAT Credit


The part of input VAT and VAT able purchase tax that can be used in the settlement process is called input VAT credit. Input VAT credit is available on the input VAT and on the VAT able Purchase tax paid / payable on the purchase of goods to the state. These purchases are from the registered dealer under the respective State VAT Act, who has not opted for the composition scheme and items intended for the purpose of: Sale or resale inside the state Use as raw material or as capital goods in manufacturing and processing of taxable goods Sale in course of export out of territory of India. Inter state trade or commerce.

Input VAT Credit on Capital Goods


Input tax credit on capital goods will be available for traders and manufacturers. Input VAT paid on capital goods will be eligible for tax credit; the same will be adjusted over a period depending on the State (a maximum of 36 equal monthly installments).

Input VAT and Input VAT Credit


The available input VAT credit will be based on the usage of Inputs/ Capital Goods in the taxable and non taxable turnover: USAGE Taxable Turnover Non Taxable Turnover Common Usage INPUT VAT CREDIT Full Input VAT Credit No Input VAT Credit Input VAT Credit = Input VAT x (Taxable Turnover/ Total Turnover)

For VAT in Maharashtra: 1. Partial Input VAT Credit for non taxable turnover 2. Partial Input VAT Credit on fuels In both of the above cases, retention would be 4% of the purchase price. 1. Partial Input VAT Credit for non taxable turnover can be arrived as under Input VAT Credit = (Input VAT Retention amount) + (Retention Amount x (Taxable Turnover/ Total Turnover)) 2. Partial Input VAT Credit on fuels can be arrived as under Input VAT Credit = (Input VAT Retention amount) x (Taxable Turnover/ Total Turnover)

VAT Rounding Off


Any sum payable by the dealer under the VAT Act shall be rounded off to the nearest rupee value. Therefore, if any amount of tax containing a part of rupee consisting of paise for example: 50 paise or more, then it will be increased to the nearest rupee that is to Rs. 1, and if such part is less than 50 paise, it will be ignored.

VAT Setoff and Carry Forward


Input VAT credit amount in relation to any Tax period will be set off against the amount of the Output VAT of the Tax Period. If the input VAT credit exceeds the output VAT in a tax period, then the excess credit will be carried over to the next period. Input VAT credit would be carried up till the end of the specified period and excess unadjusted input VAT credit at the end of specified period, if any, would be used for refund. The specified period and the tax period depend on a particular State.

Inter State Purchases, Sales, and Branch Transfers


Inter State transactions do not come under the purview of State VAT Act. They fall under the purview of CST Act. Purchases: Tax paid on inputs procured (purchases) from other states through interstate sale will not be used for credit. Sales: The output tax payable will be CST and input VAT credit can be used to set off against the CST payable Branch Transfers: Transfer will get input tax credit to the extent of input VAT paid in excess of 4% if supported by m F. Transferee will not get any input VAT credit. f o r

Exports, Deemed Exports, and Supply to EOU Units


Export Sales, Deemed Exports, and supply to EOU units will not come under the purview of State VAT Act. They are considered as zero-rated sales and the input VAT credit is available on the inputs used in these sales. Input VAT credit can be adjusted against output VAT (if any) or refunded in full.

Composition Scheme

Small dealers with annual gross turnover not exceeding the limit, fixed up by the respective State, who are otherwise liable to VAT, shall have an option for a composition scheme where the tax is paid as a small percentage of the gross turnover. No input VAT credit is available to such dealer and the purchases from them will not be considered for input VAT credit.

Lease Transactions
Lease does not involve transfer of title in goods at the time of transaction and involves only right to use an asset for defined period of time. Some State VATs have included lease rentals in sales and output VAT as payable. The output VAT will be on the lease rentals.

Debit Notes/ Credit Notes


When VAT dealer has been issued a credit note or debit note on goods purchased, the tax credit account and the goods cost would be adjusted for the amount. Adjustment will be based on the time of receipt of Debit Notes or Credit Notes; the time here is specified by the State VAT Act.

Adjustments in TAX Credit Due to Changes in Usage


In cases of changes in the expected usage and actual usage of goods for taxable and non taxable turnover, input VAT credit claimed in respect of such purchases will be reduced or increased (as the case may be) in the tax period during which the change in usage takes place.

Adjustments in TAX Credit Due to Goods Lost / Destroyed or Consumed


In case where any goods or goods manufactured on which the input VAT credit have been claimed, are lost or destroyed; the input VAT credit would be reversed on such goods in the tax period in which goods are claimed to have been lost or destroyed. The amount of reversal shall be state specific.

Setup- Sales Tax (Value Added Tax)


Schedules
NAVIGATION: FINANCIAL MANAGEMENT TAX SETUP SALES

NAVIGATION: FINANCIAL MANAGEMENT TAX SETUP SALES SCHEDULE

Define the schedules under the State VAT Act. This form acts as a list form for selecting the schedule in the tax details.

States
NAVIGATION: Fca mu a a t ia aeS s S n l gn e S T a a M et t l x t n n i p ee s

Fill in the fields according to these guidelines:

Field
State Code for TIN

Comment
Define the state code used in the TIN No of the state. Select the GL account of the out tax with respect to the state. Select the GL account of the input VAT credit with respect to the state. Select the GL account of the VAT deferred account with respect to the state. Select the GL account of the VAT or CST payable account with respect to the state. Select the GL account of the VAT refund account with respect to the state. Select the GL account of the Carried Forward Excess Vat Credit with respect to the state.

Tax Account (Sales)

Tax Account (Purchases)

VAT Deferred Account No.

VAT Payable Account No.

VAT Refund Account No.

Excess Credit C/F Account No

Branch Transfer Retention

Define the percentage of the retention on the base value above which the input VAT credit is available when branch transfer occurs from the state of the location. Define the tax period of the respective state. Define the specified period according to the state VAT act after which the refund of the Excess Vat Credit Carried Forward can be applied for refund.

Tax Period

Specified Period for Refund

Deferment Period
NAVIGATION: Fca mu a a t D e r ia aeS s S fni n l gn e S T a e t d a M et t l x t n n i p ee e P s r e m o

Fill in the fields according to these guidelines:

Field
State

Comments
The state, for which the deferment is defined, gets automatically populated with the reference to the cursor placed in the State form at the time of selecting the deferment period from the state button. Define the date from when the threshold and the deferments are applicable. Define the threshold range for which a

Effective Date

Starting Threshold Amount & Closing

Field
Threshold Amount

Comments
separate deferment is applicable and the effective date. Define number of deferments for the threshold and the effective date.

No of Deferments

Schedule
NAVIGATION: Fca mu a a t S u ia aeS s S e n l gn e S T a c l a M et t l x t h n n i p ee s d e

Fill in the fields according to these guidelines:

Field
Schedule

Comments
Select the schedules for the state

Forms
NAVIGATION: Fca mu a a t F ia aeS s S m n l gn e S T a o a M et t l x t r n n i p ee s s

Fill in the field according to these guidelines:

Field
Forms

Comments
Select the form applicable for the state

TAX Jurisdictions
NAVIGATION: Fca mu a a a io ia aeS s T ri n l gn e S T x d s a M et t l x Ji n n i p e ut sn c

Fill in the fields according to these guidelines:

Field
Tax Type

Comments
Define the type of tax whether it is VAT or CST with respect to tax jurisdiction. Define the state of the tax jurisdiction. Define the VAT retention limit percentage on the Non taxable sales for the jurisdiction. VAT retention is calculated on base price of the Item.

State VAT Retn Limit % of ITC NTS

VAT Retn Limit loaded on Item

A check mark in this field shows that VAT retention is loaded on Item. The VAT retention is calculated on the input VAT amount.

Field

Comments
If VAT retention limit percentage on the non taxable sales is defined for the tax jurisdiction with the VAT Retn Limit loaded on Item field unchecked, the difference of Input VAT and the retention will be available for input VAT credit and the retention amount is available for Input VAT credit based on the usage in Non Taxable Sales. If VAT retention limit percentage on the Non Taxable Sales is defined for the Tax Jurisdiction VAT Retn Limit loaded on Item field checked, the difference of input VAT and the retention will be available for input VAT credit based on the usage in Non Taxable Sales and the retention amount is loaded on the Item.

Tax Details
NAVIGATION: Fca mu a a at ia aeS s Te n l gn e S T x i a M et t l x Ds n n i p e a l

Fill in the fields according to these guidelines:

Field

Comments

Field
Schedule

Comments
Select the schedule of item category in the tax jurisdiction A check mark in this field shows that item categories are considered as capital goods and input VAT credit is available with respect to the tax jurisdiction A check mark in this field shows that item categories on which input VAT credit is available with respect to the tax jurisdiction Define the standard deduction available from the base price to calculate the VAT for the item category in the tax jurisdiction.

Capital Goods

Creditable

Standard Deduction

VAT able Purchase Tax

Define the purchase tax which is VAT able on the item category over and above the CST. The VAT able purchase tax is calculated on the base price and CST. Define the VAT retention on the purchase of item categories with respect to the jurisdiction. VAT retention is calculated on base price of the Item. If the VAT Retn Lt % of ITC on Purch difference of Input VAT and the retention will be available for Input VAT credit based on the usage in Non Taxable Sales and the retention amount is loaded on the Item

VAT Retn Lt % of ITC on Purch

Company Information
NAVIGATION: ADMINISTRATION APPLICATION SETUP GENERAL COMPANY INFORMATION

Fill in the fields according to these guidelines:

Field
VAT Composition

Comments
A check mark in this field shows that Company is under composition scheme. Select the type of composition from drop down menu. The options available are: Retailer, Works Contract, Bakery, Restaurant /Club, and Second hand Motor Vehicle. A check mark in this field shows that the Company is into export or deemed export sales.

Types Of Composition

Export or Deemed Export

Location Card
NAVIGATION: W o S a I a au e Lo T ft rs t on a r n e e u cs x m hp t i n i oo

Fill in the fields according to these guidelines:

Field
VAT Composition

Comments
A check mark in this field shows that location is under composition scheme. Select the type of composition from drop down menu. The options available are: Retailer, Works Contract, Bakery, Restaurant /Club, and Second hand Motor Vehicle. A check mark in this field shows that the location is into export or deemed export sales.

Types Of Composition

Export or Deemed Export

Customer Card
NAVIGATION: Sales & Marketing su eT ft S ts x m a Cm a r n l sr I a e o n i oo

Fill in the fields according to these guidelines:

Field
T.I.N No

Comments
Enter the TIN number of the customer. The systems checks the state code for TIN

Field

Comments
defined in States form taking the reference from the state of the location and displays a message: TIN No should stt ah r tX wY i (If the state code for TIN has been defined as XY).

Export or Deemed Export

A check mark in this field shows that sale to the customer is either Export or Deemed Export.

VAT Exempted

A check mark in this field shows that customer lies in the VAT Exempted category.

Vendor Card
NAVIGATION: Purchase n V r a r n Pi es x m lg n I a a d T ft n n o n i oo

Fill in the fields according to these guidelines:

Field
T.I.N No

Comments
Enter the TIN number of the customer. The

Field

Comments
systems checks the state code for TIN defined in States form taking the reference from the state of the location and displays a message: TIN No should stt ah r tX wY i (If the state code for TIN has been defined as XY).

Composition

A check mark in this field shows that vendor is under composition scheme

Item Card
NAVIGATION: Purc n I T ft h Pi t a r n a lg m x m s a s Ia e n ne n i oo

Fill in the fields according to these guidelines:

Field
Fixed Asset

Comments
A check mark in this field shows that the item is a fixed asset.

Calculation of Input VAT on Item

NAVIGATION: Purc Processing h Order a s e Orders.

To create a purchase order, fill the fields in Purchase Order as follows:


Vendor: Location: Structure: Item: Quantity: Direct Unit cost Excluding VAT: Line Amount Excluding VAT: Non ITC Claimable Usage %: Calculate Structure Value. The system will calculate the VAT and distribute the VAT amount in Amount Loaded on Inventory and Input Credit/Output Tax Amount fields. Post the Purchase Order as Receive and Invoice. 10000 (Delhi Postmaster) Blue VAT 1000 (Bicycle) 10 1000 10000 (The system will calculate it.) 50

Viewing the Ledger Entries


NAVIGATION: Pa History us r c h e Posted Invoice.
The user can view the posted transaction- G/L Entry and Details Tax Entry.

The system will create the following entry: Purchase A/C Purchase Tax A/C To Vendor A/C Dr. Dr. Cr. 10500 500 11000.

VAT has been calculated by taking the values as follows: Base Value: VAT %: Non ITC Claimable Usage %: Tax Amount: Amount Loaded on Item: ITC: 10000 10 50 1000 500 500.

We have given 50% usage, and the system has allocated the tax amount (50%) each in Loaded on Item and ITC. If the Non ITC Claimable Usage % is 0, then the whole tax amount will be available for ITC. The system will also create a Detail Tax Entry. The user can view it by pressing Crlt+F8 (Zoom).

In the above window Input Credit/Output Tax Amount field has value as: 500 and Amount Loaded on Item field has value as: 500. Note 1: VAT can be calculated only if the vendor is matching with the location s state state. In the above case vendor state is Andhra Pradesh and the location state is also Andhra Pradesh. Note 2: For calculation of ITC, the Creditable Goods field in Tax Details Setup should be true.

Note 3: If the user is not using location card and kept the location code blank in purchase order/invoice then also system will calculate VAT on the basis of Company Information. Calculation of VAT for Item can also be done by Purchase Invoice.

Calculation of VAT on Capital Goods.


NAVIGATION: Pa Order Processing us r c h e Orders.

To create a purchase order, fill the fields in Purchase Order as follows:


Vendor: Location: Structure: Item: Quantity: Direct Unit cost Excluding VAT: Line Amount Excluding VAT: Non ITC Claimable Usage %: 10000 (Delhi Postmaster) Blue VAT 1000 (Bicycle) 10 50000 500000 (The system will calculate it.) 50

Place a check mark in Fixed Asset field in Item Card. Calculate Structure Value. The system will calculate the VAT and distribute the VAT amount in Amount Loaded on Inventory and Input Credit/Output Tax Amount fields.

The user can view the deferment schedule before posting the Purchase Order. Click the Order button and select Deferment Schedule.

The system will create the deferment entries according to the define deferment periods in the State setup. In the above window the user can check if the system is making the correct deferment schedules and the ITC will distributed in the future deferment periods equally. The user can print deferment schedule before posting.

Enter the value in Document No. field: Click Preview.

106627

This report will give the clear picture of the deferment schedules. Post the Purchase Order as Receive and Invoice.

Viewing the Ledger Entries


NAVIGATION: Pa History us r c h e Posted Invoice.
The user can view the posted transaction- G/L Entry and Details Tax Entry.

The system will create the following entry: Fixed Asset A/C Dr. 525000

VAT Deferred A/C To Vendor A/C

Dr. Cr.
500000 10 50 50000 25000 25000.

25000 550000.

VAT has been calculated by taking the values as follows: Base Value: VAT %: Non ITC Claimable Usage %: Tax Amount: Amount Loaded on Item: ITC:

We have given 50% usage, the system has allocated the tax amount 50% each in Loaded on Item and ITC. If the Non ITC Claimable Usage % is 0, then the whole Tax Amount will available for ITC. The system will also create Detailed Tax Entries.

The system will create 11 detail tax entries, because in the setup we have defined 10 deferment periods. First entry will be identified as ITC available for settlement in the same tax period and the rest ten entries are transferred to VAT deferred account.

Note 1: Fixed Asset Deferments will be created only if the per unit cost price of fixed asset is lying between the starting and ending threshold amount. Note 2: It is mandatory to place a check mark in Capital Goods fields in Tax Details setup if the user wants to calculate Deferments Schedules for a fixed assets. Note 3: The same can be done if the user is using Fixed Asset module. In this case the user has to create a FA card and has to mention the tax group code in FA card. Note 4: If the user is not using FA Module and still want to make deferments for Fixed Asset then the user should place a check mark in Fixed Asset field in Item card. Note 5: It always advisable to create separate Purchase order/invoice for item,GL and Fixed Asset.

Calculation of VAT for fixed Asset can also be done through Purchase Invoice.

Calculation of VAT if the Vendor has opted Composition Scheme


Place a check mark in Composition Scheme field in Vendor card.

NAVIGATION: Pa Order Processing us r c h e Orders

To create a purchase order, fill the fields in Purchase Order as follows:


Vendor: Location: Structure: Item: Quantity: Direct Unit cost Excluding VAT: Line Amount Excluding VAT: Non ITC Claimable Usage %: 10000 (Delhi Postmaster) Blue VAT 1000 (Bicycle) 10 1000 10000 (The system will calculate it.) 50

Place a check mark in the Composition field. Calculate Structure Value.

The system will calculate the VAT and the tax amount will be loaded on item because the Vendor has opted Composition scheme. Post the Order with Receive and Invoice.

Viewing the Ledger Entries


NAVIGATION: Purchase History Posted Invoice.
The user can view the posted transaction- G/L Entry and Details Tax Entry.

The system will create the following entry: Purchase A/C To Vendor A/C Dr. Cr. 11000 11000.

The system will calculate the VAT amount and the whole tax amount will be loaded on Item. The system will also create Detail Tax Entries.

In the above window Input Credit/Output Tax Amount field has the value as: 0 and Amount Loaded on Item field has the value as: 1000.

Note 1: If the user has opted a Composition scheme then the user has to place a check mark in Location card and also mention the type of Composition. The user has to follow the same process that has been followed in case when the vendor has opted for Composition scheme. Note 2: The system will calculate the VAT amount and tax amount will be loaded on Item.

Note 3: If the user is not using location card then he/she has to place a check mark in composition scheme field in Company Information master setup and also select the type of composition. These cases can also be handled through Purchase Invoice.

Calculation of Retention Limit on VAT.


Mention the VAT Retention limit % of ITC NTS as 4% in Tax Jurisdiction. NAVIGATION: Pa Order Processing us r c h e Orders

To create a purchase order, fill the fields in Purchase Order as follows:


Vendor: Location: Structure: Item: Quantity: Direct Unit cost Excluding VAT: Line Amount Excluding VAT: Non ITC Claimable Usage %: 10000 (Delhi Postmaster) Blue VAT 1000 (Bicycle) 10 1000 10000 (The system will calculate it.) 50

Calculate Structure Value. The system will calculate the VAT and distribute the VAT amount in Amount Loaded on Inventory and Input Credit/Output Tax Amount fields.

Post the Purchase Order as Receive and Invoice.

Viewing the Ledger Entries


NAVIGATION: Pa History us r c h e Posted Invoice.

The system will create the following entry: Purchase A/C Purchase Tax A/C To Vendor A/C Dr. Dr. Cr. 10200 800 11000

VAT has been calculated by taking the values as follows: Base Value: 10000 VAT %: 10 Retention limit %: 4 Non ITC Claimable Usage %: 50 Tax Amount: 1000 Amount Loaded on Item: 200 ITC: 800 Steps for calculation of retention limit: Step 1: Retention has been calculated on the base amount (10000*4%) = 400. Step 2: Retention amount 400 has been deducted from the tax amount which is 1000. 1000-400= 600. In this case 600 is ITC. Step 3: Non ITC Claimable Usage % is 50. It means 50% of 400. 400*50% = 200, it will be loaded on Item and the rest 200 will be available for ITC. We have given 50% usage, the system has allocated the tax amount 50% each in Loaded on Item and ITC. If the Non ITC Claimable Usage % is 0, then the whole tax amount will available for ITC. The system will also create Detail Tax Entries.

The user can view it by pressing Crlt+F8 (Zoom) keys.

In the above window Input Credit/Output Tax Amount field has the value as: 800 and Amount Loaded on Item field has the value as: 200. Following are the permutations and combinations for the calculation of Retention Limit in NAVISION. 1. Retention Limit are defined at Tax Jurisdiction or Tax Details Individually a) The Retention Limit is defined at Tax Details level. Input VAT credit based on the Non ITC Claimable Usage % is calculated on the Input VAT/ Vat able Purchase Tax Retention Amount and the balance of the Input VAT/ Vat able Purchase Tax is loaded on Item/Capital Goods

b) The Retention Limit is defined at Tax Jurisdiction level. VAT Retn Lt loaded on Item field will be unchecked. Input VAT Credit will be calculated as: (Input VAT / Vat able Purchase Tax Retention Amount) + Balance of the Input VAT/ Vat able Purchase Tax x Non ITC Claimable Usage % c) The Retention Limit is defined at the Jurisdiction level and VAT Retn Lt loaded on Item field will be checked. Retention amount will be loaded on Item/Capital Goods and the remaining amount ( Input VAT/ Vat able Purchase Tax Retention amount) is available for input VAT credit based on the usage. 2. Retention Limit are defined at Tax Jurisdiction and Tax Details a) Retention Limit at Tax Jurisdiction with VAT Retn Lt loaded on Item field is unchecked. The Input VAT credit and the amount loaded on item/ Fixed Asset are used as: V = Input VAT/ Vat able Purchase Tax X = Retention Amount as defined at Jurisdiction Y = Retention Amount at Tax Details i. If V>Y Input VAT Credit will be (V-Y) x ( (100- Non ITC Claimable Usage %)/100) ii. If (V-X-Y) <= 0 and V< Y Input VAT Credit will be 0

The balance of Input VAT/CST (Input VAT/CST - Input VAT Credit) is loaded on the item. b) Retention Limit at Tax Jurisdiction with VAT Retn Lt loaded on Item field is checked. The Input VAT credit and The Amount loaded on item/ Fixed Asset are arrived as under V = Input VAT/ Vat able Purchase Tax X = Retention Amount as defined at Jurisdiction Y = Retention Amount at Tax Details i. If (V- Y) <= 0 Input VAT Credit will be 0 If (V- Y) > 0 Input VAT Credit will be

ii.

(V-Y) x ( (100- Non ITC Claimable Usage %)/100) The balance of Input VAT/CST (Input VAT/CST - Input VAT Credit) is loaded on the Item.

Note 1: All retentions limit calculations can be done for Fixed Asset and GL. Note 2: Retention limit calculation can be done for VAT as well as Vat able purchase tax if applicable. These types of calculations can also be handled through Purchase Invoice .

Calculation of Vat able Purchase Tax on CST


NAVIGATION: Pa Order Processing us r c h e Orders

To create a purchase order, fill the fields in Purchase Order as follows:


Vendor: Location: Structure: Item: 40000 (L i o Fnr,a N Delhi) es m ui t : w w H e r e St e ts e u Blue (State is Andhra Pradesh) VAT 1000 (Bicycle)

Quantity: Direct Unit cost Excluding VAT: Line Amount Excluding VAT: Non ITC Claimable Usage %:

10 1000 10000 (The system will calculate it.) 50

Calculate Structure Value. The system will first calculate CST and then the system will calculate the Vat table purchase tax based on base amount and tax amount. Post the Purchase Order as Receive and Invoice.

Viewing the Ledger Entries


NAVIGATION: Pa History us r c h e Posted Invoice.

The system will create the following entry: Purchase A/C Purchase Tax A/C To Vendor A/C To Sales Tax A/C Dr. Dr. Cr. Cr. 12100 1100 11000. 2200

VAT has been calculated by taking the values as follows: Base Value: 10000 CST/VAT %: 10 Vat table Purchase Tax %: 20 (defined in Tax Details setup). Non ITC Claimable Usage %:50 Tax Amount: 1000 Amount Loaded on Item: 2100 ITC: 1100 Steps for the calculation of Vat table purchase tax: Step 1: Base amount is 10000 and the CST % is 10. The system has calculated 10% on 10000 (10000*10%= 1000). Step 2: Now base amount for Vat table purchase tax is 11000 (10000+1000), which is the total of base amount and CST amount. Step 3: Vat able purchase tax% is 20. The system has calculated 20% on 11000. So Vat table purchase tax = 11000*20% = 2200. We have given 50% usage, the system has allocated the Tax amount 50% each in Loaded on Item and ITC. Now the ITC amount is 1100 and amount loaded on item is 2100 (1000 which is CST + 1100 which is 50% is Vat table purchase tax).

If the non ITC claimable usage % is 0, then the whole Vat table purchase tax amount will be available for ITC. The system will also create Detailed Tax Entry.

The user can view it by pressing Crlt+F8 (Zoom) keys.

In the above window Input Credit/Output Tax Amount field has the value as: 1100 and Amount Loaded on Item field has the value as: 2100. Note 1: Vat able purchase tax can be calculated only if the CST is applicable.

Note 2: CST can be calculated if the vendor state is different from the location state. Note 3: Vat able purchase tax can also be calculated for fixed assets. Note 4: If Vat table purchase tax is applicable there may be the case of calculating retention limit on Vat table purchase tax. In this case, the user can calculate the retention limit from Purchase Order/Invoice. Note 5: Vat able purchase tax can also be calculated through Purchase Invoice.

Calculation of VAT if Purchases are meant for Export or Deemed Export


Following are the steps to be followed: Step 1: If the purchases are meant for Export Sales then the user has to place a check mark in Export or Deemed Export field in Location card. Step 2: Create a Purchase Order/Invoice and select the vendor and location (location card in which you have placed a check mark in Export or Deemed Export field). Step 3: Select the structure as: VAT. Step 4: Mention item and quantity with direct unit cost. Step 5: Calculate Structure Value. Step 6: The system will calculate the VAT amount according to the defined percentage. Step 7: Post the Purchase Order. Step 8: Navigate the posted invoice. Step 9: The system will create the normal VAT G/L entry. Step 10: In Detail Tax Entry the Export or Deemed Export field will automatically get checked. It means the system will itself identify that the purchase has been meant for Export Sales and in VAT Settlement it will populate the ITC amount in Input VAT Credit (Exports Sales) field. Note 1: If the purchase is meant for Export Sales then the ITC is available for settlement in the same tax period. Note 2: If the user is not using location card then he/she has to place a check mark in Export or Deemed Export field in company information master card.

Purchase Credit Memo.


NAVIGATION:

Pa Order Processing Memos. us r c h e Credit

To create a purchase credit memo, fill the fields in Purchase Credit Memo as follows:
Vendor: Location: Structure: Item: Quantity: Direct Unit Cost: Line Amount: Non ITC Claimable Usage %: 10000 Blue VAT 1000 (Bicycle) 10 1000 10000 (The system will calculate it.) 50

Calculate Structure Values. The system will calculate the VAT amount and will distribute 50% each in Amount loaded on Item and in ITC. Post the Purchase Credit Memo.

Viewing the Ledger Entries


NAVIGATION: Pa History us r c h e Posted Credit Memos.

The system will create the following entry: Purchase A/C Purchase Tax A/C To Vendor A/C Cr. Cr. Dr. 10500 500 11000

VAT has been calculated by taking the values as follows: Base Value: VAT %: Non ITC Claimable Usage %: Tax Amount: Amount Loaded on Item: ITC: 10000 10 50 1000 500 500

We have given 50% usage, the system has allocated the Tax amount 50% each in Loaded on Item and ITC. If the non ITC claimable usage % is 0, then the whole Vat table purchase tax amount will be available for ITC. The system will create Detail Tax Entry. The user can view it by pressing Crlt+F8 (Zoom) keys.

In the above window Input Credit/Output Tax Amount field has the value as: 500 and Amount Loaded on Item field has the value as: 500. Note 1: The user can use purchase credit memo for fixed assets also. In this case deferment schedules will be reversed with negative values (Only the unsettled Deferment schedules will be reversed). Note 2: The user can also calculate retention limit through Purchase Credit Memo. Note 3: Calculation of VAT and retention limit can also be done with Applies to Doc and Copy document functions.

Note 4: All tax calculations from Purchase Credit Memo will be shown in negative in Detail Tax Entry.

Calculation of Output VAT


NAVIGATION: Sales & Marketing processing Order Orders

To create a sales order, fill the fields in Sales Order as follows:


Customer: Location: Structure: Item: Quantity: Unit Price: Line Amount: Calculate Structure Values. 10000 Blue VAT 1000 10 4000 40000 (The system will calculate it.)

The system will calculate the VAT amount according to the given VAT %. Post the Order as Ship and Invoice.

Viewing the Ledger Entries


NAVIGATION: Sales & Marketing History Posted Invoices.

The system will create the following entry: Customer Sales Tax Sales A/C A/C A/C Dr. Cr. Cr. 44000 4000 40000.

VAT has been calculated by taking the values as follows: Base Value: VAT %: Tax Amount: Input Credit/Output Tax Amount: 40000 10 4000 4000.

The system will also create Detail Tax Entry. The user can view it by pressing Crlt+F8 (Zoom) keys.

In the above window Input Credit/Output Tax Amount field has the value as: 4000.

Note 1: Output VAT can be calculated for fixed assets also. Note 2: All ITC values in Details Tax Entry will be shown in negative. Output VAT can also be calculated through Sales Invoice. Note 3: The user can also calculate CST from sales Order/Invoice. In that case the customer state should be different from location state. The tax amount (CST) will also go in sales tax account.

Calculation of Output VAT in case of Standard Deduction

To create a sales order, fill the fields in Sales Order as follows:


Customer: Location: Structure: Item: Quantity: Unit Price: Line Amount: Standard Deduction: Calculate Structure Values. Post the order as Ship and Invoice. 10000 Blue VAT 1000 10 4000 40000 (The system will calculate it.) 20 (The system will populate the percentage as defined in the Tax Details Setup).

Viewing the Ledger Entries


NAVIGATION: Sales & Marketing History Posted Invoices.

The system will create the following entry: Customer A/C Sales Tax A/C Sales A/C Dr. Cr. Cr. 43200 3200 40000.

VAT has been calculated by taking the values as follows: Base Value: VAT %: Standard Deduction: Tax Amount: Input Credit/Output Tax Amount: 40000 10 20. 3200 3200

Steps for the calculation of output tax in case of standard deduction: Step 1: Base amount: 40000, VAT%: 10%, and Standard Deduction%: 20. Step 2: First the system will calculate 20% on 40000 (40000*20%) = 8000 as standard deduction. Step 3: Standard deduction will be deducted from the base amount and will be (40000-8000) 32000. Step 4: The system will then calculate VAT 10% on 32000. Means final Tax amount =32000*10% = 3200. The system will also create Detail Tax Entry. The user can view it by pressing Crlt+F8 (Zoom) keys.

In the above window Input Credit/Output Tax Amount field has the value as: 3200. Note 1: Standard deduction can also be calculated for fixed assets. Note 2: The Values in detail tax entry will show in negative. Note 3: Standard Deduction tax amount calculation will be displayed on the sales line. This transaction can also be done through Sales Invoice.

Sales of Goods in case of Export or Deemed Export / VAT Exempted

Steps to be followed: Step 1: Place a check mark in Export or Deemed Export / VAT Exempted field in Customer card. Step 2: Create Sales Order/Invoice, select the customer and location. Step 3: Fill in the quantity with unit cost price. Step 4: Calculate Structure Values. Step 5: The system will not calculate any VAT because the Export or Deemed Export/VAT Exempted fields are checked in Customer Card. Step 6: The Posted entry will not reflect in any tax account. Step 7: The system will create normal entry: Customer A/C Dr. Sales A/C Cr. Note 1: VAT exempt and export or deemed export field will also be displayed in the sales header. This will come from the customer card.

Sales Credit Memo


NAVIGATION: Sales & Marketing Processing Order Credit Memos

To create a sales credit memo, fill the fields in Sales Credit Memo as follows:
Customer: Location: Structure: Item: Quantity: Unit Price: Line Amount: Standard Deduction: Calculate Structure Values. Post the Sales Credit Memo. 10000 Blue VAT 1000 10 4000 40000 (The system will calculate it.) 20 (The system will populate the percentage as defined in the Tax Details Setup).

Viewing the Ledger Entries


NAVIGATION: Sales & Marketing History Posted Credit memos

The system will create the following entry: Customer A/C Sales Tax A/C Sales A/C Cr. Dr. Dr. 43200 3200 40000

VAT has been calculated by taking the values as follows: Base Value: 40000 VAT %: 10 Standard Deduction: 20 Tax Amount: 3200 Input Credit/Output Tax Amount: 3200 Steps for the calculation of output tax in case of standard deduction: Step 1: Base amount: 40000, VAT%: 10%, and Standard Deduction%: 20. Step 2: First the system will calculate 20% on 40000 (40000*20%) = 8000 as standard deduction. Step 3: Standard deduction will be deducted from the base amount and will be (40000-8000) 32000. Step 4: The system will then calculate VAT 10% on 32000. Means final Tax amount =32000*10% = 3200. The system will also create Detail Tax Entry. The user can view it by pressing Crlt+F8 (Zoom) keys.

In the above window Input Credit/Output Tax Amount field has the value as: 3200. Note 1: Sales Credit memo can be handled for fixed assets also. Note 2: All values in Details Tax Entry will show in positive.

VAT Adjustment
NAVIGATION:

Financial Managem G a g V A T V e el e a d a A n nL r l d x T t ee u e rd e d Adjustment

Fill in the field according to these guidelines:

Field
VAT Entry No

Comments
Choose the VAT entry number from the lookup list for which adjustment is made

Following fields are populated with the VAT entry and are not editable:

Field
Posting Date

Comments
The posting date of the VAT entry being adjusted The document of the VAT entry being adjusted The document number of the VAT entry being adjusted The VAT amount of the VAT entry being adjusted

Document Type

Document No

VAT Amount IN

VAT Percentage IN

The VAT percentage of the VAT entry being adjusted The location of the VAT entry being adjusted The quantity of the VAT entry being

Original Location

Original Quantity

Field
Original Non ITC Claim Usage %

Comments
adjusted The non ITC claim usage percentage of the VAT entry being adjusted The input VAT credit of the VAT entry being adjusted The amount loaded on Item of the VAT entry being adjusted

Input Credit/Output Tax Amount

Amount Loaded on Item

VAT Adjustment Type: The Following adjustment options are displayed 1. Change in Usage: The user has to select the Change in Usage option if there is change in the usage and fill in the fields according to these guidelines:

Field
Quantity to be Adjusted

Comment
Enter the quantity to be adjusted for change in Non ITC Claimable usage %. Enter the actual usage %.

Non ITC Claimable Usage %

The Revised Input Credit/Output Tax Amount, Amount Loaded on Item and amount of adjustment are calculated and displayed in the respective fields

VAT Entry No. VAT Adjustment Type: Quantity: Non ITC Claimable Usage %

Choose the VAT entry number as 4224 from lookup list. Select the VAT adjustment type as Change in Usage Enter the quantity as10 75

The original entry has the following values: Quantity: 10 Base amount: 10000 VAT %: 10 Non ITC Claimable Usage %: 50 ITC: 500 Amount loaded on Item: 500 After entering Non-ITC claimable usage % as 75 in Adjustment journal the system will show 250 as amount of adjustment in Item field. 250 has been loaded on Item after Adjustments and previously it was available in ITC. Post the Adjustment Journal.

Viewing the Ledger entry from Posted Invoices

The system has created the following entry. Purchase A/C Dr. Purchase Tax A/C Cr. 250 250.

Detail Tax Entry:

In Detail Tax Entries, the system has reversed the original entry with original values and created a new entry with new values according to the done adjustments. Note 1: Change in usage can also be handled for fixed assets. The system will adjust only those deferments which are not settled. Note 2: The user can do partial quantity adjustments in adju n g st C e tt h i m y an een p U s. a g e Note 3: No need to enter the location code in case of change in usage in adjustment journal.

2. Branch Transfer: The user has to select the Branch Transfer option if there is branch transfer and fill in the fields according to these guidelines:

Field
Quantity to be Adjusted Location Code

Comment
Enter the transferred quantity. Enter the transferee location.

The Revised Input Credit/Output Tax Amount, Amount Loaded on Item and amount of adjustment are calculated, displayed in the respective fields Note : I. Use this adjustment type in both inter state and intra state branch transfer. II. Use this adjustment type when ever there is transfer from normal sales location to export sales.

Fill the fields as follows:


VAT Entry No VAT Adjustment Type Quantity: Location Code: 4227 Branch Transfer 10 Green (We are handling Interstate Branch Transfer)

The original entry has the following values: Quantity: Base amount: VAT %: ITC: Location: 10 10000 10 1000 Blue

In State Setup, Branch Transfer Retention % is 5 %. We have entered the Location as Green in Adjustment Journal and branch t/f Retention as 5%. The system will calculate 5% on 10000. It means 500 will be loaded on Item. Post the Adjustment Journal.

Viewing the Ledger Entry from Posted Invoices

The system has created the following entry: Purchase A/C Purchase Tax A/C Dr. Cr. 500 500

Detail Tax Entry:

In Detail Tax Entry: The system will reverse the original entry with original values for the same location (Blue). Another entry will be done for the Adjustment in the Input Tax Credit for the same location (Blue) Last entry will be done for the new location (Green) without ITC and Amount Loaded on Inventory.

Note 1: Branch Transfer can also be handled for fixed assets. The system will adjust only those deferments which are not settled. Note 2: In case of Intra state branch transfer, the system will reverse the original values for old location and the new entry will be created for new location with ITC and Amount loaded on Item values. These types of transfers will be useful in transfers of items purchase for normal sales to export sales. Note 3: The user can do partial quantity adjustments in adju n h st B tt r my a e en p c Tf rr a n. s e

3. Lost or Destroyed: The user has to select the Lost or Destroyed option if there is loss or destruction and fill in the fields according to these guidelines:

Field
Quantity to be Adjusted

Comment
Enter the Lost or Destroyed quantity.

The Revised Input Credit/Output Tax Amount, Amount Loaded on Item and amount of adjustment are calculated, displayed in the respective fields

VAT Entry No.: VAT Adjustment Type: Quantity:

4231 Lost / Destroy 10

The original entry has the following values: Quantity: Base amount: VAT %: ITC: Location: 10 10000 10 1000 Blue

We have entered the quantity as 10 in Quantity field in Adjustment Journal. It means 10 quantities has been lost or destroyed. 1000 has been loaded on Item after Adjustments and previously it was available in ITC. Post the Adjustment Journal.

Viewing the Ledger Entry from Posted Invoices.

The system has created the following entry: Purchase A/C Purchase Tax A/C Dr. Cr. 1000 1000

Detail Tax Entry:

The system will reverse the original entries with values.

Note 1: Lost/Destroy can also be handled for fixed assets. The system will reverse only those deferments which are not settled. Note 2: The user can dr aam i s t h oi nd e amtB pl tj n d e e n au t iu t j n a t s s u yr q y t n t pa c Tf rr a n. s e 4. Non business consumption: The user has to select the Non business consumption option if there is Consumption and fill in the fields according to these guidelines:

Field
Quantity to be Adjusted

Comment
Enter the consumed quantity.

The Revised Input Credit/Output Tax Amount, Amount Loaded on Item and amount of adjustment are calculated, displayed in the respective fields Note: Enter the description of the adjustment in all the above cases of adjustment

VAT Entry No.: VAT Adjustment Type: Quantity:

4233 Non business consumption. 10

The original entry has the following values: Quantity: Base amount: VAT %: ITC: Location: 10 10000 10 1000 Blue

We have entered the quantity as 10 in Quantity field in Adjustment Journal. It means 10 quantities has been consumed. 1000 has been loaded on Item after Adjustments and previously it was available in ITC. .

Post the Adjustment Journal.

Viewing the Ledger Entry from Posted Invoices

System has created the following entry: Purchase A/C Purchase Tax A/C Dr. Cr. 1000 1000

Detail Tax Entry:

Note 1: Non business consumption can also be handled for fixed assets. The system will reverse only those deferments which are not settled. Note 2: The user can do partial quantity adjustments in adjustment type Non business consumption.

VAT Settlement
NAVIGATION: Financial Management General Ledger Added Tax Value VAT Settlement

Fill in the fields according to these guidelines:

Field
State Code

Comments
Select the state for which VAT settlement is to be done.

Starting Date

Enter the tax period starting date in this field. If the starting date is not equal to one day after the previous settlement ending date then an error message pops up which will define the starting date.

Ending Date

The systems displays the ending date taking the starting date and the tax period into consideration . The system will show in this field. Original

Type

Revision No

The system will generate the number at the time of revision. The user has to enter the document number before posting the Settlement form.

Document No.

Following fields are present at the line level:

Field Name
Total Out Put VAT

Description
Populated with the output VAT payable for the tax period

Remarks
This field is non editable and contains a drill down button which displays the entries This field is non editable and contains a drill down button which displays the entries This field is non editable and contains a drill down button which displays the entries This field is non editable and contains a drill down button

VAT Adjustment Amount

Populated with the adjustment amount for the tax period

Input Vat Credit ( Normal Sales)

Populated with the input VAT credit amount for sales which are not export sales Populated with the input VAT credit of capital goods which

VAT Receivable (Capital Goods)

Field Name

Description
can be claimed in the current tax period

Remarks
which displays the entries

Balance

Displays the balance of VAT payable after setting off the input VAT credit on normal sales, VAT adjustment VAT Receivable

This field is non editable

Carry Forward from Previous Period

Displays the balance amount of the excess Input VAT credit carried forward up to Last Tax Period The user can enter the Amount of Refund wished to Claimed

This field is non editable and contains a drill down button which displays the entries

Refund

This field is editable and contains validations for Amounts, which is more than the minimum amount of the carried forward amount of no of Specified period for refund from the starting date. Amount, which is more than the carried forward from previous period Displays Error Messages in Above Cases

Setoff against current VAT

The user can enter the Amount of wished to setoff against VAT payable

This field is editable and contains validations for: Amount, which is more than the VAT payable Amount, which is more than the Carry Forward from Previous Period less Refund Displays Error Messages in Above Cases This field is non editable

Carried Forward

Displays the balance amount of the excess Input VAT credit carried forward after reducing the Refund and Setoff against Current VAT

Field Name
VAT Payable

Description
Displays the balance VAT payable which is balance setoff against current VAT Displays the VAT payable amount if it is Negative

Remarks
This field is non editable

Excess VAT for adjustment (Applicable if VAT Payable is Negative)

This field is non editable

Refund

The user can enter the amount of refund wished to claimed

This field is editable and contains validations for Amount, which is more than the minimum amounts of the carried forward amount of no of Specified period for refund from the ending date. Amount, which is more than the Excess VAT for adjustment Displays Error Messages in Above Cases This field is editable and contains validations for: Amount, which is more than the CST payable Amount, which is more than the Excess VAT for adjustment less Refund Displays Error Messages in Above Cases This field is non editable

Setoff against CST Payable

The user can enter the Amount of wished to Setoff against CST payable

Carry forward

Displays the balance amount of the excess Input VAT credit carried forward less the Refund and Setoff against Current CST payable Populated with the CST Payable for the Tax Period

CST Payable

This field is non editable and contains a drill down button which displays the entries This field is non editable and

Input VAT Credit

Populated with the Input VAT

Field Name
(Exports Sales)

Description
Credit Amount for sales which not Export Sales The user can enter the Amount of Refund wished to Claimed

Remarks
contains a drill down button which displays the entries This field is editable and contains validation for Amount, which is more than the Input VAT Credit (Exports Sales) Displays Error Message in Above Cases This field is editable and contains validation for Amount, which is more than Input VAT Credit (Exports Sales) less Refund Displays Error Message in Above Cases This field is editable and contains validation for Amount, which is more than Input VAT Credit (Exports Sales) after reducing Refund and Setoff against VAT payable Displays Error Message in Above Cases This field is non editable

Refund

Setoff against VAT payable

The user can enter the Amount of wished to setoff against VAT payable

Setoff against CST payable

The user can enter the Amount of wished to setoff against VAT payable

Carry forward

Displays the balance amount of the excess Input VAT (Exports Sales) credit carried forward less the Refund , Set off Against VAT Payable Setoff against Current CST payable Displays the balance amount of the excess of VAT payable after Set off Against VAT Payable Setoff from Input VAT Credit (Exports Sales)

Net VAT Payable

This field is non editable

Net CST Payable

Displays the balance amount of This field is non editable the excess of CST payable after Set off Against VAT Payable Setoff from Input VAT Credit (Exports Sales)

After making the adjustments in the Settlement form the user can post the Settlement form.

View the posted Ledger Entries


NAVIGATION: Financial Management General Ledger History Registers

The system will transfer the purchase tax amount, sales tax amount, and Vat deferred amount to VAT Payable account. The system will create the G/L entries on the ending date of tax period.

If the user wants to do any alterations in the posted settlement form?


Open the same Tax Period Settlement form and click Undo post menu item in posting menu button. By clicking Undo post the system will create the copy of the Original Settlement form with revision number. This revised settlement is not editable. The user can do any alterations in the original one. Clicking Undo post, the system will reverse the original G/L entries with the same document number.

Alteration in Settlement form

Now we have adjusted the input VAT credit (export sales) amount 2000 with setoff against CST payable. In the previous settlement form it was equally setoff against VAT payable and CST payable. Post the Settlement form with new document number. Again view the posted ledger entries.

The system will create the new G/L entries according to the adjustment done in the Settlement form.

View the history of Settlement

Click the Settlement menu button and select the list menu item to view the history of settlement.

Fields Description: State code: Starting Date: Type: Revision No.: Net VAT payable Amount: Net CST payable Amount: Carried forward amount: Settlement: State will be displayed Starting date of the settlement It will show if settlement is Original or Revised. It shows the revision number. Net VAT payable after setoff. Net CST payable after setoff. Excess credit carried forward. True or false

Note 1: System will display the message for any new entries for period which has been already settled.

VAT Reporting
NAVIGATION: Financial Management General Ledgerp Reporting R tVAT es o r

Following reports are available in VAT:

Interstate Sales and Purchases


NAVIGATION: Financial Management General Ledgerp Reporting R tVAT es o r Interstate Sales and purchases

All Inter state purchase and sales can be viewed from this report.

Fill in the fields according to these guidelines:

Field
State Posting Date

Comment
Select the State. Period

The report can be previewed as following and printed using the respective buttons.

Intrastate Sales and Purchases


NAVIGATION: Financial Management General Ledger Reports Reporting VAT Intrastate Sales and Purchases
All intra state purchase and sales can be viewed from this report.

Fill in the fields according to these guidelines:

Field
State Posting Date

Comment
Select the state. Period

The report can be previewed as following and printed using the respective buttons.

Purchase Book VAT


NAVIGATION: Financial Management General Ledger Reports Reporting VAT Purchase Book VAT

Fill in the fields according to these guidelines:

Field
State Posting Date

Comment
Select the state. Period

All inter-state and intra-state purchases can be viewed from this report. The report can be previewed as following and printed using the respective buttons.

Sales Book VAT


NAVIGATION: Financial Management General Ledger Reports Reporting VAT Sales Book VAT

Fill in the fields according to these guidelines:

Field
State Posting Date

Comment
Select the state. Period

All inter-state and intra-state purchases can be viewed from this report. The report can be previewed as following and printed using the respective buttons

VAT Settlement
NAVIGATION: Financial Management General Ledger Reports Reporting VAT VAT Settlement

Fill in the fields according to these guidelines:

Field
State Starting Date

Comment
Select the state. Enter the starting date

The report can be previewed as following and printed using the respective buttons.

VAT Deferment
NAVIGATION: Financial Management General Ledger Reports Reporting VAT VAT Deferment

Fill in the fields according to these guidelines:

Field
State Starting Date Ending Date

Comment
Select the state. Enter the starting date Enter the ending date

The report can be previewed as following and printed using the respective buttons.

VAT Credit Carried Forward


NAVIGATION: Financial Management General Ledger Reports Reporting VAT VAT Credit Carried Forward

Fill in the fields according to these guidelines:

Field
State

Comment
Select the state.

The report can be previewed as following and printed using the respective buttons.

Viewing and Printing the Tax Invoice


NAVIGATION: Sales & Marketing t Pd i Hy s v i s o Ie o r to e c ns

Select the Print Tax Invoice on the print button following Tax Invoice is previewed and printed.

Appendix
ILLUSTRATIONS 1. VAT dealers with full Taxable Turnover (INTRA STATE SALES) and Purchases in the state

VAT dealer dealing in commodities which are taxable at 4% and 12.5% respectively under the provisions of the Act. The dealer is not dealing in non taxable goods, also buys goods which are taxed at 4% and 12.5% required for business. Sale and purchases are in the same state. The input VAT credit available and VAT payable for a tax period is illustrated below: PURCHASES ( INPUT) TURNOVER VAT PAID 1,00,000 2,00,000 4,000 25,000 29,000 SALES ( OUTPUT) TURNOVER 60,000 2,20,000 TOTAL VAT OUTPUT

RATE OF VAT 4% Goods 12.5% Goods

VAT PAYABLE 2,400 27,500 29,900

TOTAL INPUT VAT

INPUT VAT CREDIT

29,000

= Output VAT VAT Credit Input = Rs.29,900 Rs.29,000 = Rs.900 The Input Tax Credit of the total period will be setoff against the Output VAT of the period VAT PAYABLE

Following are the entries: For purchases of 4% goods in the above example Debit Credit Purchases A/c 100000 Purchase Tax 4% 4000 Vendor A/c 104000

For purchases of 12.5% goods in the above example Debit Credit Purchases A/c 200000 Purchase Tax 12.5% 25000 Vendor A/c For sales of 4% goods in the above example Debit Customer A/c 62400 Output VAT 4% Sales A/c 225000

Credit 2400 60000

For sales of 12.5% goods in the above example Debit Credit Customer A/c 247500 Output VAT 12.5% 27500 Sales A/c 220000

VAT Settlement at the end of tax period for the above transactions VAT Value Excluding VAT Output VAT Output VAT 4% 60000 2400 Output VAT 12.5% 220000 27500 Total Output VAT INPUT VAT CREDIT Purchase Tax 4% 100000 4000 Purchase Tax 12.5% 200000 25000 Total Input VAT Credit VAT Payable

29900

29000 900

2.

VAT dealers making both Taxable Turnover and Non Taxable Turnover (INTRA STATE SALES) and Purchases in the state

VAT dealer makes taxable turnover and non taxable turnover. The dealer buys and sells goods, which are taxable and non taxable in the same State. The input VAT credit available and VAT payable for a tax period is illustrated below: PURCHASES ( INPUT) RATE OF VAT 4% Goods 12.5% Goods Non Taxable Goods 4% goods used as common inputs for both taxable & non taxable goods 12.5% goods used in business common for both taxable and non taxable goods TOTAL INPUT VAT TURNOVER 1,00,000 1,00,000 50,000 10,000 VAT PAID 4,000 12,500 NIL 400 SALES ( OUTPUT) TURNOVER 1,20,000 1,80,000 1,00,000 NIL VAT PAYABLE 4,800 22,500 NIL NIL

20,000

2,500

NIL

NIL

19,400

TOTAL OUTPUT TAX Rs.3, 00,000 Rs.1, 00,000 Rs.4, 00,000

27,300

1. 2. 3.

Total taxable turnover for the period: Total non taxable turnover for the period: Total turnover for the period:

Calculation of Input VAT Credit 4% rate of goods 1. Input VAT Credit for Specific inputs 2. Input VAT Credit for Common Inputs 2500x300000/400000 12.5% rate goods Rs 4,000 400x300000/400000 RS 18,675 = Rs 12,500 Rs 1875 Output VAT

Rs 300 TOTAL INPUT VAT CREDIT VAT PAYABLE VAT Credit Input = =

Rs.27, 300 675 Rs.18, Rs.8, 625

The Input VAT Credit on the common inputs used in Taxable and non Taxable Turnover will be equal to the result of: input VAT x Taxable Turnover / Total Turnover

4. VAT dealers having Inter State Purchases


VAT dealer makes taxable turnover and non taxable turnover. The dealer buys and sell goods, which are taxable and non taxable. Purchases are both intra state and inter state but the sales are intra state only. The input Vat credit available and Vat payable for a tax period are illustrated below: PURCHASES ( INPUT) RATE OF VAT TURNOVE VAT/CST R PAID 1,00,000 1,00,000 50,000 10,000 4,000 12,500 NIL 400 SALES ( OUTPUT) TURNOVER VAT PAYAB LE 4,800 22,500 NIL NIL

4% Goods 12.5% Goods Non Taxable Goods 4% goods used as common inputs for both taxable & non Taxable goods Inter State TOTAL INPUT VAT

1,20,000 1,80,000 1,00,000 NIL

20,000

800 ( CST) 16900

NIL TOTAL VAT T

NIL OUTPUT 27,300

1. 2. 3.

Total taxable turnover for the Period Total non taxable turnover for the Period Total turnover for the period

: : :

Rs.3, 00,000 Rs.1, 00,000 Rs.4, 00,000

Calculation of Input Vat Credit 4% rate of goods rate goods 1. Input Vat Credit for Specific inputs Rs 4,000 Rs 12,500 2. Input Vat Credit for Common Inputs 400x300000/400000 Rs 300 TOTAL INPUT VAT CREDIT RS 16,800 VAT PAYABLE = Output Vat Vat Credit Input = Rs.27, 300 800 Rs.16, = Rs.10, 500 12.5%

1. The Input Vat Credit on the common inputs purchased in same state, used in Taxable and Non Taxable Turnover will be equal to the result of: Input Vat x Taxable Turnover / Total Turnover 2. There is no input Vat credit on the goods purchased from other state.

VAT dealers having Inter state Purchases and Sales


VAT dealer makes taxable turnover and non taxable turnover. The dealer buys and sells goods, which are taxable and non taxable. The purchases and sales both are Intra-state and inter-state. The input VAT credit available and VAT payable for a tax period can be illustrated below: PURCHASES ( INPUT) RATE OF VAT TURNOVER VAT/CST PAID 4% Goods 12.5% Goods Non Taxable Goods 4% goods used as common inputs for both taxable & non Taxable goods Inter State 1,00,000 1,00,000 50,000 10,000 4,000 12,500 NIL 400 1,20,000 1,80,000 1,00,000 NIL SALES ( OUTPUT) TURNOVER VAT/CST PAYABLE 4,800 22,500 NIL NIL

20,000

800 (CST)

1,00,000

4,000(CST)

TOTAL INPUT VAT

16900

TOTAL OUTPUT 27,300 VAT

1. 2. 3.

Total taxable turnover for the Period Total non taxable turnover for the Period Total turnover for the period

: : :

Rs.4, 00,000 Rs.1, 00,000 Rs.5, 00,000

Calculation of Input VAT Credit 4% rate of goods 12.5% rate goods

1. Input VAT Credit for specific inputs Rs 4,000 Rs 12,500 2. Input VAT Credit for common Inputs 400x400000/500000 Rs 320
TOTAL INPUT VAT CREDIT VAT PAYABLE = = = RS 16,820 Output VAT VAT Credit Input Rs.27300 820 Rs.16, Rs.10480

1.

2. 3. 4.

CST PAYABLE = Rs. 4000 The Input VAT Credit on the common inputs purchased in same state, used in taxable and non taxable turnover will be equal to the result of Input VAT x Taxable Turnover / Total Turnover There is no Input VAT Credit on the goods purchased from other state. The Input VAT Credit can be setoff against CST payable The CST sale are treated as zero rated sale with respect to State VAT Act and included in the Taxable turnover

6.

Capital Goods and Input VAT Credit


1. VAT dealer purchases machinery 1 that is used in the production / process of the Taxable Turnover. The State has determined that the input VAT credit on capital goods can be claimed over 20 tax periods. The Input VAT Credit available for setoff in same period and input VAT credit deferred is illustrated below. Purchase Price of Machinery VAT @ 4% Input VAT Credit Rs 40,000 Input VAT Credit claimable in Current Tax Period Input VAT Credit Deferred The entry will be: Debit 1000000 40000 Rs 10, 00,000 Rs 40,000 Rs 2000 Rs 38000

Credit

Machin Machinery A/c VAT Deferred A/c Vendor A/c Entry at end of the tax period:

1040000

VAT Settlement A/c VAT Deferred A/c 2.

Debit 2000

Credit 2000

VAT dealer purchases machinery 2 used in the production / process of the Taxable Turnover and Non Taxable Turnover. The State has determined that the input VAT credit on capital goods can be claimed over 20 tax periods. VAT dealer estimated that the machinery will be used to produce 75% taxable and 25% non taxable turnover. The input VAT credit available for setoff in same period and input VAT credit deferred is illustrated below.

Purchase Price of Machinery VAT @ 4% Input VAT Credit is 40000 x = 30000 Input VAT Credit claimable in Current Tax Period Input VAT Credit Deferred

Rs 10,00,0000 Rs 40,000 Rs 1500 Rs 28000

VAT deferment schedule of capital goods considering above two transactions Capital Good Machinery 1 Machinery 2 Total Tax Period 1 2000 1500 3500 Tax Period 2 2000 1500 3500 Tax Period 3 2000 1500 3500 Tax Period 3 2000 1500 3500

7.

Branch Transfer Out Of The State

VAT dealer transfers the goods purchased in the state to the branch situated in other state. Purchase price of goods: Rs 10,000 Vat @ 10%: Rs 1,000 The Excess of Input Vat in excess of 4% that is 10-4 = 6% Input Vat Credit available on branch transfer is Rs 600

8.

VAT Dealer in Exports

VAT dealer making the export sales using the purchases in the state Purchases VAT Paid/ Payable Export Sales Input VAT Credit Rs 5, 00,000 Rs 40,000 Rs 8, 00,000 Rs 40,000

1. The export sales are treated as zero rated sale with respect to State VAT Act and included in the Taxable turnover 2. The Input VAT Credit Can be Used to Setoff of any Output VAT Payable, the balance of input credit not claimed will refunded. 3. The same Illustration can be used for Deemed Sales and supply to EOU.

9. Dealers in Composition Scheme


VAT dealer opted for the composition scheme Purchases during the Tax Period VAT Paid Sales Input VAT Credit Out VAT Payable (Composition Rate @ 1%) Rs 5,00,0000 Rs 40,000 Rs 10, 00,000 0 Rs 10,000

1. 2.

The Input VAT credit is not available as the dealer opted for the composition Scheme Output VAT payable will be calculated on the total sales of the period using the composition rate.

10.

Dealers Executing The Composite Works Contracts


1. VAT Dealer engaged in executing the composite works contract maintains proper records of labour & services The Turnover of the works contract of the tax Period Rs 5, 00,000 Charges towards labour, services and other charges Rs 2, 00,000 Taxable Turnover of Works Contracts Rs 3, 00,000 Purchases during the tax period Rs 8, 00,000 Input VAT Paid/ Payable Rs 32,000 Input Tax Credit (Prescribed 90 % for claiming input VAT) Rs 28,800 Out VAT Rs 37,500 Output VAT Payable RS 8,700 I. There is a prescribed percentage in some states, the percentage of the input VAT which is allowed as input VAT credit VAT dealer engaged in executing the composite works contract not maintaining proper records of labour & services

II.

2. VAT Dealer engaged in executing the composite works contract does not maintain proper records of labour and services The turnover of the works contract of the tax period Purchases during the tax period Input VAT Paid/ Payable Calculation of taxable turnove Gross Turnover Standard Deduction (@ 25%) Taxable Turnover Input Tax Credit (Prescribed 90% of Input VAT ) Out VAT Output VAT Payable Rs 5, 00,000 Rs 8, 00,000 Rs 32,000

Rs 5, 00,000 Rs 1, 25,000 Rs 3, 75,000 Rs 28,800 Rs 46,875 RS 18,075

There is a prescribed percentage in some states, the percentage of the Input VAT which is allowed as input VAT credit. The standard deduction in this case of composite works contract is 25%, the Standard Deduction depends on the type of work and it differs from state to state.

11

Dealer engaged Lease Transactions

VAT dealer engaged in lease transactions. Machinery worth is given on lease with monthly lease of Rs 10000. VAT dealer received three lease rentals during the tax period. Taxable Turnover for the period lease transactions Rs 30000 Output VAT Payable (Tax Rate 12.5%) Rs 3750

12

Debit notes/Credit notes


VAT dealer has purchased goods worth RS 1, 00,000 and the Input VAT @ 10% was Rs 10000 The Dealer has been issued a debit note of Rs 11,000 (Including the Input VAT of Rs 1,000) The good should be increased with Rs 10,000 and input Tax credit with Rs s cost 1,000 with following entry

Debit Purchases/Fixed Asset 10000 Purchase Tax/ VAT Receivable / 1000 VAT Deferred Vendor Account

Credit

11000

Incase of Credit notes the above Entry will be reversed 1. The Time limit for Claiming the Input Tax Credit on Debit notes is fixed by the State.

13.

Adjustments in case of Changes in the usage


VAT dealer has purchased goods worth RS 1, 00,000 and the Input VAT @ 10% was Rs 10000 The dealer expected the usage of the goods in taxable turnover and non taxable turnover as 50% and 50%, thereon claimed Rs 5000 ( 50% of 1000) as tax credit At the end of tax period the actual usage was 60% to taxable turnover and 40% for non taxable turnover The eligible amount of input tax credit is Rs 6000, amount of input tax credit should be increased with Rs 1000 and decrease the cost of goods with Rs 1000

Debit Purchase Tax/ VAT Receivable/ 1000 VAT Deferred Purchases/Fixed Asset

Credit

1000

Incase of decrease in tax credit the above entry is reversed assuming the eligible Input Tax Credit is Rs 4000

Note: In case there is no balance respective in the Purchase Tax/ VAT Receivable/ VAT Deferred the amount will be transferred to VAT Payable Account

14

Adjustments in Tax Credit incase of Loss or Destructions


VAT dealer has purchased goods worth RS 1, 00,000 and the Input VAT @ 10% was Rs 10000 The VAT dealer claimed the total input tax Rs 10000 as input tax credit and subsequently the goods were destroyed/ lost. Dealer has to reverse the input tax credit claimed.

Debit Loss due to goods Loss/ 10000 Destroyed Purchase Tax/ VAT Receivable/VAT Deferred

Credit

10000

Note: In case there is no balance respective in the Purchase Tax/ VAT Receivable/ VAT Deferred the amount will be transferred to VAT Payable Account.

Microsoft Business Solutions Navision 4.0- Statement of TDS.

Table of Contents

Tax Deduction at Source ................................................................................................. 3 Statement of TDS ............................................................................................................ 3 Creation of new account in Chart of Accounts ................................................................. 5 Number Series setup ........................................................................................................ 5 Setup for Tax Deduction at Source .................................................................................. 6 Accounting Period ....................................................................................................... 7 T.A.N. Nos. ............................................................................................................... 10 Field Description: ...................................................................................................... 11 TDS groups ............................................................................................................... 11 TDS Nature of Deductions (NOD) ............................................................................. 12 TDS Assesse Codes ................................................................................................... 13 TDS details ................................................................................................................ 14 TDS party master (Parties)......................................................................................... 15 Concessional codes .................................................................................................... 16 TDS NOD lines ......................................................................................................... 16 Correction Type setup ............................................................................................... 18 Company level setup ..................................................................................................... 19 General ledger setup ...................................................................................................... 20 Vendor card................................................................................................................... 21 Transactions .................................................................................................................. 23 Vendor transactions ................................................................................................... 24 Direct invoices using general journal ......................................................................... 24 Direct invoices using invoices ................................................................................... 26 PO based invoices using orders.................................................................................. 27 Advance payment using payment journal................................................................... 29 Payment of TDS amount to government .................................................................... 30 TDS adjustment Journal ............................................................................................ 32 TDS Update Register ................................................................................................. 33 Challan Register: ....................................................................................................... 34 Generate Certificates Numbers. ............................................................................. 36 Generate Form 26Q ................................................................................................... 39 Generate Form 27Q ................................................................................................... 42 Generate eTDS .......................................................................................................... 45 Correction in Statement of TDS: ................................................................................... 50 Generate Revised 26Q / 27Q ..................................................................................... 56 Generate Revised eTDS................................................................................................. 59 Example 1: .................................................................................................................... 63

Tax Deduction at Source


Tax deduction at source (TDS) is one of the methods of collecting income tax from the Assessee. Such collection of tax is effected at the source when any specified type of income arises or accrues to any one. The Income-Tax Act enjoins on the payer of such income to deduct a stipulated percentage by way of income tax and pay only the balance amount to the recipient. The tax, so deducted at source by the payer has to be deposited to the credit of Central Government within the specified time. Such deduction is deemed to be payment of income tax by the recipient at the time of his assessment. Incomes, which are subjected to T.D.S: Salary Interest Dividend Interest on securities Winnings from lottery Horse races Commission and brokerage Rent Fees for professional and technical services Payments to non-residents When will Tax be deducted? The Income Tax Act specifies that tax deduction will occur on crediting a persons account or, on payment, whichever is earlier.

Statement of TDS
The person, deducting tax at source will submit a quarterly statement to the income tax authority (or the person authorized by such authority) in respect of tax deducted at source on or after April 1, 2005. Following Forms (Quarterly statements) are used for this purpose. Form 26Q: This Form is used for TDS other than salary transaction to residents. Form 27Q: This Form is used for TDS other than salary transaction to nonresidents. Quarterly returns should be submitted within 15 days from the end of each quarter. The Income Tax Authority will in turn furnish an annual statement of tax deducted to the assessee in Form No. 27 AS.

As per the Income Tax laws, entities (both corporate and non-corporate deductors) making payments to third parties (deductees) are required to deduct tax at source (Tax deducted at Source TDS) from these payments and deposit the same at any of the designated branches of authorized banks. They should also furnish TDS returns containing details of deductees and bank where TDS amount is deposited with the income tax department (ITD). With effect from 01.04.2005 every deductor must file Quarterly Statement of TDS under Form 26Q and Form 27Q (for Non-Residents). Deductor furnishing returns in electronic form (e-TDS return) have to furnish a control chart Form 27 A in physical form along with the e-TDS return.

Payment Form No. 26Q 26Q 26Q 26Q

other than salary to a resident: Description For the quarter ending ,June 30 For the quarter ending, September,30 For the Quarter ending ,December,31 For the quarter ending ,March 31

Due Date July, 15 October,15 January,15 June, 15

Payment Form No. 27Q 27Q 27Q 27Q

other than salary to a Non-resident: Description For the quarter ending ,June 30 For the quarter ending, September,30 For the Quarter ending ,December,31 For the quarter ending ,March 31

Due Date July, 14, October, 14 January, 14 June, 14

A user needs to define certain basic setups to manage the TDS transactions in Navision 4.0. Define setups at following levels. Creation of new account in Chart of Accounts Number Series setup Setup for Tax Deduction at Source. Setup on Vendor card. Company Information setup General Ledger setup

Creation of new account in Chart of Accounts


The user needs to create balance sheet liability accounts for TDS transactions. The user has to create one account for each TDS group under which company deducts tax. NAVIGATION: FINANCIAL MANAGEMENT GENERAL LEDGER CHART OF ACCOUNTS. Create the necessary GL accounts for all the TDS Payables accounts.

For example, TDS Payable Account for Rent is 5930. TDS Payable Account for Professional Services is 5940. TDS Payable for Contractors is 5941

Number Series setup


TDS certificates are reports generated in Navision and issued to vendors. The user needs to create separate number series for TDS Certificates. NAVIGATION: ADMINISTRATION APPLICATION SETUP GENERAL NO. SERIES. The Number Series you create will be then linked to each TDS group.

Setup for Tax Deduction at Source


The user has to define the setups for TDS in Financial Management Module. Various setups for TDS are: Accounting Period T.A.N Nos. Groups Nature of Deductions Assessee Code Details Parties Concessional Codes NOD Lines Correction Codes

Accounting Period
TDS Accounting Periods are required to generate TDS transactions. The user needs to specify TDS Accounting Periods while filing Form 26Q / 27Q. The system will show an error, if the TDS Accounting Period is not setup for the transaction date.

Navigation: Financial Management Setup Tax deducted at source Accounting Period.

Field-Description Number: This field shows the serial number of account period, and is generated by the system. Starting Date & Ending Date: To create the Accounting periods for TDS, click Create Year button. Closed: Once the annual report is filed with the government, the user can close the accounting period of TDS. To close the accounting periods of TDS, click Close Year button. Once the year is closed, the Closed field gets marked true.

To create the Accounting Periods for TDS as shown in the window, click Create Year button.

Field Description: Starting Date: Define the starting date for the TDS Accounting year. Ending Date: Define the ending date for the TDS Accounting year.

Create Quarter The user can create the Quarters for the selected Financial Year by clicking, Create Quarter.

On clicking Create Quarter, TDS Period setup window will be opened as shown below.

The user can define the Quarters for selected financial year in this window.

Field Description Quarter: Define the code for the Quarter. Starting Date: Define the Starting Date of the Quarter. Ending Date: Define the Ending Date of the Quarter The system will use this setup, at the time of filing of eTDS and revised eTDS for a specific Quarter.

T.A.N. Nos.
Tax Deduction Account numbers allotted to a company may be more than one depending on the number of branch locations from which the company files its resources. You need to capture all the account numbers, allotted to a company.

Navigation: Financial Management Setup Tax Deducted At source T.A.N. Nos.

Field Description: Code: Define the T.A.N. Numbers in this field. Description: Type the description of the Code.

TDS groups
Navigation: Financial Management SetupTax Deducted at Source GROUPS.

Field Description: TDS Group: TDS Group defines the nature of transaction for which TDS is applicable. Select the TDS Groups from the drop down list. Effective Date: Specify the effective date from which the TDS threshold will be applicable. TDS Section: Select the TDS section applicable as per the Income Tax Act, 1961 from the drop down list. TDS Threshold Amount: Define the threshold limit for each TDS Group. Deduct TDS only if, the total transaction with the assessee, exceeds the threshold limit in the financial year. Surcharge Threshold Amount: Define the surcharge threshold limit for each TDS Group. Deduct Surcharge only if, the total transaction with the assessee exceeds the threshold limit in the financial year. Per Contract Value: Define the Per Contract Value for each TDS Group, where it is applicable. TDS will be deducted only if, the total transaction with the assessee exceeds the per contract value in a single transaction of threshold amount in a financial year. Non-Resident Payments: Place a check mark here if, the relevant group deals with nonresidents. TDS Account: Select the TDS Payable account from the Chart of Accounts. No. Series: Attach a Number Series to the TDS Group for the auto generation of TDS Certificate Number for a particular TDS Group. Define the TDS Group and Number Series along with the effective date separately for each Financial Year. The number generated, will be useful in keeping a control over Form 16A Certificate.

TDS Nature of Deductions (NOD)


TDS Nature of Deductions are more specific to the TDS groups defined above. Nature of Deduction (NOD)s are different services on which TDS is applicable. Specify the rates of tax deduction against each TDS NOD in TDS details form.

Navigation: Financial Management Setup Tax Deducted at source Nature of Deductions

Field Description: Code: Define the NOD code in this field. Description: Enter the description of the Nature of Deduction (Service). TDS Group: Select the TDS Group from the drop down list to which the particular nature of deduction belongs. For example, NOD Advertisement, Contractors & SubContractors fall under the TDS Group Contractor. Category: Classify NOD Advertisement, Contractors, and Sub-Contractors by category A, C, S respectively when filing of return under Section 26C.

TDS Assesse Codes


Income Tax Act 1961 defines 'Assesse' as a person by whom any tax or any other sum of money is payable under this Act. The rates of TDS are different for different types of Assesse, hence you need to classify them here.

Navigation: Financial Management SetupTax Deducted at Source Assesse Codes Define the various assesses coming under the TDS purview.

Code: Define the Assesses Code here. For example IND, COM. Description: Type the Description of the Assesses Type here. For example Individual, Company Type: Select the Assesse Type as Company or Others from the drop down list.

TDS details
Define the TDS rates for each NOD and assessee type in the TDS details forms. The rates of tax deduction may vary for each financial year Navigation: Financial Management SetupTax Deducted at Source Details

Field Description: TDS Nature of Deductions: Select the Nature of Deduction from the look up button. TDS Assessee Code: Select the Assessee Code. TDS Group: TDS Group will be defaulted automatically depending on the NOD setup. Effective Date: Specify the effective date from which the TDS rate becomes applicable. Concessional Code: Select the code if the rate is concessional. TDS %: Define the base TDS rate here. Surcharge %: Specify the surcharge rate, if applicable, which is computed on the TDS Amount eCess %: Specify the eCess, if applicable. As per the rules, eCess computation is on the aggregate of TDS inclusive of surcharge.

TDS party master (Parties)


TDS parties are one time parties or vendors, which are not part of our regular vendor master. Navigation: Financial Management SetupTax Deducted at Source Parties

Field Description: Code: Define the Party Code.

Description: Enter the name of the Party. Address, Address2: Enter the Partys Address. State: Enter the name of the state. Postal Code: Enter the relevant Postal code here PAN No: Enter the Permanent Account Number of the Party. PAN Reference No.: If the PAN Number is not available, enter the PAN Reference Number in this field.

Concessional codes
Define concessional codes for cases authorized for concessional rates exclusively by the government. You may give concessional rates for these codes in TDS details. Navigation: Financial Management SetupTax Deducted at Source Concessional Codes .

Field Description: Code: Define the Concessional code here. Description: Enter the description of the Concessional Code here.

TDS NOD lines

Define NOD lines for each Vendor / Customer and Party that is liable to Tax deduction at Source. Navigation: Financial Management SetupTax Deducted at Source NOD Lines This is master to link the Vendor / Customer / Party with various NODs so that NOD linked to the Vendor / Customer / Party is available for TDS transactions. Attach one or more NODs to a Vendor / Customer / Party.

Field Description: Type: Select the Type from Vendor / Customer / Party from the drop down list. No: Select the Vendor / Customer / Party number. Assessee Code: Select the Assesse Code from the lookup list. Nature of Deduction: Select the NOD, depending on the kind of services provided by Vendor / Customer. Concessional Code: Specify a concessional code if a concessional rate is applicable. Concessional Form No.: Enter the Concessional Form Number of Vendor / Customer / Party.

Monthly Certificate: Check this field to generate a certificate every month. Leave this field blank to generate an annual certificate. Threshold overlook: If user wants to deduct TDS even though the threshold limit is not crossed for the customer then he has to check mark the threshold overlook field. Surcharge overlook: If user wants to deduct surcharge even though the surcharge threshold limit is not crossed for the customer then he has to check mark Surcharge overlook field.

Correction Type setup


Under Financial Management Setup TDS Correction Codes

Code: - Define Codes of different types of corrections that can be done at the time of revised returns. Description: - Type the details of Correction Codes. Sorting Order: - Define the sorting order of the correction codes. The system will use the sorting order for corrections defined in the setup to file the revised e-TDS returns. Correction statements (batches) in a multiple batch correction statement have to necessarily be in the sequence given below: C1, C5, C2, C3, C9

Company level setup


Administration Application Setup General Company Information.

Enter basic information about the company, such as the name, addresses, post code, state, country, std code/phone number etc.

The user has to define PAN, TAN, Circle, Ward, Assessing Officer details in Company Information Setup. TAN No: TAN number will be selected from the TAN master. Assessing officer number

This field will accept alphanumeric characters. Circle number This field will accept alphanumeric characters. Ward number This field will accept alphanumeric characters. Note: It is mandatory to enter the TAN Number, since all TDS entries are generated based on this number.

Company Status: Define the status of the company as Public Limited/Private Limited/Government or Others.

General ledger setup


Administration Application Setup Financial Management General Ledger Setup

TDS Rounding Precision: The field defines the size of the interval that will be used for rounding TDS amounts. The field has a default value of 1.00, which means all the components of TDS (viz. TDS amount, eCess amount, Surcharge Amount etc) will be rounded off to whole numbers individually. TDS Rounding Type: Here you can specify whether TDS amount will be rounded up or down or nearest. The program uses this information together with the interval for rounding.

Vendor card
Financial Management Payables VendorTax Information

P.A.N. No: For deduction of TDS from Vendor, PAN numbers for each vendor is captured in the Vendor Card. Vendors PAN Number has to be quoted in Annexure of Statement of TDS and Quarterly return. PAN Status: Select PANAPPLIED/ PANINVALID/ PANNOTAVBL to define the status of P.A.N. Number. P.A.N. Reference No: The user can enter PAN Reference Number, if PAN is applied by the Vendor.

State:
Financial ManagementSetupSales TaxStates

Code: Define the Code for each state. Description: Type the description for each state code. State code for eTDS: Define the state code, to be used for e-TDS filing with the tax authority.

Transactions
TDS functionality is available on the following: 1. General Journal. 2. Purchase Invoice. 3. Purchase Order. 4. Payment Journal. 5. Purchase Journal The following fields are available on the Purchase Order, Purchase Invoice, General Journal, Payment Journal for TDS calculations. TDS Party Type: Select the party type from the drop down list. TDS Party: Select the Vendor / Customer / Party Number from the list. TDS Assessee Code: The assessee code is defaulted automatically from the NOD Party master. TDS Nature of Deduction: Select the Nature of Deduction on which TDS is to be computed. TDS%: The TDS rate is defaulted automatically from TDS Details Master based on the combination of Nature of Deduction and Assessee Code.

TDS Amount: The TDS Amount is computed automatically by the system. Surcharge %: The Surcharge rate is defaulted automatically from TDS Details Master, based on the combination of nature of deduction and assessee code. Surcharge Amount: The Surcharge Amount is computed automatically by the system. TDS Amount including Surcharge: This field displays the total of TDS and Surcharge. eCess %: The eCess rate is defaulted automatically from TDS Details Master based on the combination of nature of deduction and assessee code. eCess on TDS Amount: The eCess Amount is computed automatically by the system. Total TDS Including eCess: This field displays the total amount of TDS to be deducted for the transaction. When you select the TDS Nature of Deduction from the look up button TDS Rate is defaulted automatically from TDS Details Master, based on the combination of nature of deduction and Assesses Code. The other automated fields on a transaction are TDS Amount Surcharge % Surcharge Amount: TDS Amount including Surcharge Education Cess eCess %. eCess on TDS Amount: Total TDS Including eCess

Vendor transactions Direct invoices using general journal


Tax is deducted on Vendor Invoices against which no advance payment has been received. When you make invoice transactions you will make a few additional entries, apart from those you enter regularly, while making an Invoice. Navigation: Financial Management General Ledger General Journals

Enter the Posting Date Select Document Type as Invoice Enter the External Document No as Ven Select TDS Party Type as Vendor Select the TDS Party Do not Select Account Type and Account No as these are automatically populated Select TDS Nature of Deduction as CONT Select the T.A.N No Enter Amount Enter Balancing Account The following fields are automated from the setups predefined TDS Assesse Code TDS % TDS Amount: Surcharge %: Surcharge Amount: TDS Amount including Surcharge:. eCess % eCess on TDS Amount: Total TDS Including eCess Post the Journal

While making Invoices using General Journal / Purchase Journal, make sure that the Document Type is selected as Invoice and the Invoice Amount is denoted with a negative (-) sign, as the vendor has to be credited with the amount.

Direct invoices using invoices


Tax is deducted on Vendor Invoices against which no advance payment has been received. While making invoice transactions you will make a few additional entries apart from the regular entries. Navigation: Financial Management Payables Invoices

Select Buy from Vendor No Enter Posting Date Enter the Vendor Invoice No On the shipping tab select Location Code On the Lines Select account Type G/L account. Select No. Enter Quantity Select TDS Nature of Deduction Enter Direct Unit Cost Excl. VAT To compute the TDS value, on Functions menu button, click Calculate TDS.

The following fields are automated from the setups predefined TDS Assesse Code TDS % TDS Amount: Surcharge %: Surcharge Amount: TDS Amount including Surcharge:. eCess % on TDS: eCess on TDS Amount: Total TDS Including eCess: Post the Invoice.

PO based invoices using orders


Tax is deducted on Vendor Purchase Orders against which, no advance payment has been received. When you make a PO, you will make a few additional entries apart from the regular entries. Navigation: Purchase Planning Orders

Select Buy from Vendor No. Enter Posting Date Enter the Vendor Invoice No On the Shipping tab select Location Code On the Lines Select account Type G/L account. Select Account No. Enter Quantity Select TDS Nature of Deduction Enter Direct Unit Cost Excl. VAT To compute the TDS value, on Functions menu button, click Calculate TDS. The following fields are automated from the setups predefined: TDS Assesse Code: TDS %: TDS Amount: Surcharge %: Surcharge Amount: TDS Amount including Surcharge. eCess % on TDS Amount: eCess on TDS Amount: Total TDS Including eCess: Release and Post the PO.

Advance payment using payment journal


Tax is deducted on Vendor Advance Payment. When you make an advance payment you will make a few additional entries apart from the regular entries Navigation: Financial Management Payables Payment Journal

Select Document Type as Payment Enter Document no Select TDS Party Type as Vendor Select the TDS Party Do not Select Account Type and Account No as these are automatically populated. Enter the External Document No Select TDS Nature of deduction Select the T.A.N No from the look up button Enter Amount The following fields are automated from the setups predefined TDS Assesse Code: TDS %: TDS Amount: Surcharge %: Surcharge Amount:

TDS Amount including Surcharge:. eCess %: eCess on TDS Amount: Total TDS Including eCess: Now Post the Journal.

Payment of TDS amount to government


The TDS that you have deducted on various transactions described above has to be finally deposited with the government. Payment of TDS deducted can be done through General Journal in General Ledger Module Navigation: Financial Management General Ledger General Journal Functions Pay TDS

On Functions menu button, click Pay and then select TDS. A form opens that will show all the TDS entries.

Select the field or fields on which the filters need to be put. The form will show the TDS entries for the selected filters only Select the entries for which TDS amount needs to be paid. Click Pay button of the screen, so that the total of the selected entries is transferred to the General Journal. Post the journal.

Navigation: Financial Management General Ledger Periodic Activity Tax Deduction at Source.

TDS adjustment Journal


Adjustment Journals are used for correcting the TDS amount that is already deducted but not yet paid to the government

Navigation: Financial Management General Ledger Periodic Activities Tax deducted at source TDS Adjustment Journal

Click look up button of the Transaction No field on the header. Select the Transaction you have generated for TDS Parties or any other vendor. Change the details to correct the transaction. That is you can increase or decrease the TDS rate, deducted and the adjustments would be made accordingly. Post the Journal. The revised TDS Amount is now updated in the relevant GL accounts for TDS Payable and Vendor Account.

TDS Update Register


TDS Update Register is maintained to keep track of all the TDS payments made to the government with relevant Challan Details. The Challan Number, Challan Date, and Bank Name are updated using this functionality for each transaction to be printed on TDS certificate. Navigation: Financial Management General Ledger Periodic Activities Tax Deduction at source Update TDS Register

On Functions menu button, click Update Challan Details. The user can give the Challan Details in the window, given below.

Challan Register:
A form is created under Financial Management / Periodic Activities / TDS / Challan Register

The user can update Challan Register for the selected Challan Detail. On Register menu button, click Update Challan Register. System will open a new form and allow to enter Interest Amount, Others, and Paid by book entry fields for the selected Challan Number.

If the user other than govt. organization tries to checkmark Paid by Book Entry field the system will give following error.

Generate Certificates Numbers.


TDS Certificate Number is used to generate the Certificate Number for the Certificates to be issued to the Vendors for the TDS deducted and paid on transaction of various TDS Groups. Navigation: Financial Management General Ledger Periodic Activities Tax Deduction at Source Generate Certificate Nos.

On Functions menu button, click Generate Certificate Nos. This will open a form on which the filters have to be entered to generate certificate numbers for Vendors / Customer / Parties

Party Type: The type of the Party is to be selected here. The various Party Types are Vendor, Customer, and Party. Party: Select the individual Vendor / Customer / Party. TDS Group: Specify the TDS Group. Start Date: Specify the effective date from which the TDS certificates are to be generated. If monthly certificates are to be generated, specify the first day of the month as Start Date. In case of yearly certificate specify 1st April (01/04/year) as Start Date. End Date: Specify the end date to which the TDS certificates are to be generated. If monthly certificates are to be generated, specify the last day of the month as End Date. In case of yearly certificate specify 31st March (31/03/year) as End Date. Monthly Certificate: Place a check mark in this field, if generating Monthly Certificate. The certificate will be generated based on the above specified filters. The corresponding TDS entries are also updated with the Certificate No. and Certificate Dates respectively. To generate Form 16A, click on Functions menu button TDS 16A.

Generate Form 26Q

Navigation: Financial Management General Ledger Periodic Activities Tax Deduction at Source Generate form 26Q.

Use this option to generate form 26Q in print format.

Fields Required: 1. T.A.N Location: An existing TAN Location is selected here for which the Report 26Q will be generated. 2. Report Frequency: Choose Quarter (Quarter 1 or Quarter 2, or Quarter 3 or Quarter 4) from the drop down option. 3. Choose Financial Year: Define Starting Year and End Year. Example: For Financial Year 2005 -2006, starting year is 2005 and ending year is 2006. 4. Full Name: The name of the person, whose name will be printed on the Report 26Q needs to be entered here. 5. Designation: The designation of the person, whose name will be printed on the Report 26Q needs to be entered here. 6. Printing date: The date on which the Report 26Q will be printed is entered here. After mentioning all the above fields, click Preview button. System will show the Print Preview of form 26Q as shown below.

Generate Form 27Q


Navigation: Financial Management General Ledger Periodic Activities Tax Deduction at Source Generate form 27Q. Use the above option to generate form 27Q in print format.

Report frequency quarterly: 1. T.A.N Location: An existing TAN Location is selected here for which the Report 27Q will be generated. 2. Report Frequency: Choose Quarter (Quarter 1 or Quarter 2, or Quarter 3 or Quarter 4) from the drop down option 3. Choose Financial Year: Define Starting year and End year. Example: For Financial Year 2005 -2006, starting year is 2005 and ending year is 2006. 4. Full Name: The name of the person, whose name will be printed on the Report 27Q needs to be entered here. 5. Designation: The designation of the person, whose name will be printed on the Report 27Q needs to be entered here. 6. Printing date: The date on which the Report 27Q will be printed is entered here. After mentioning all the above fields click to Preview button. System will show the Print Preview of form 27Q as shown below.

Generate eTDS

Navigation: Financial Management General Ledger Periodic Activities Tax Deduction at Source Generate eTDS. After generating form 26Q / 27Q, user will generate e-TDS along with form 27A. The user can Print / Preview Form 26Q and Form 27Q from the Generate Form 26 Q and Generate Form 27 Q menu respectively. These reports will be generated along with the annexure (Deductee Details, Challan Details). Report 27A will be generated along with e-TDS. This report will populate records in 26Q / 27Q table for the given quarter and generate a report for 26Q / 27Q as per specified format.

Here the user needs to select e-TDS (26Q or, 27Q) from the dropdown return that needs to be generated. On selecting Generate eTDS a new form will open:

Field Description:

1.File Name: Select the location of the e-TDS file to be generated and stored. 2. TAN Location: An existing TAN Location is selected here for which the Report 26Q will be generated. 3. Report Frequency: Choose Quarter (Quarter1 or Quarter 2, or Quarter 3 or Quarter 4)

4. Financial Year: Define Starting year and End year. Example: For Financial Year 2005 -2006, starting year is 2005 and ending year is 2006. 5.Full Name: The name of the person, whose name will be printed on the Report 26Q needs to be entered here. 6.Designation: The designation of the person, whose name will be printed on the Report 26Q will be entered here. 7.Printing date: The date on which the Report 26Q will be printed is entered here. This process will create e-TDS return in txt file on the selected path for a period and also generate 27A report as per the specified format. Format of form 27A.

To run this process, generation for 26Q report should be run, at least once. However, the user has the option to run only the 26Q / 27Q report without e-TDS. The file should be validated through the File Validation Utility (FVU) before furnishing it with the government. After filing the return with the government the user will click File eTDS to update the file status to mark the entries as Filed.

This option requires following information to be entered by the user: Quarter Financial year Date of filing Provisional Receipt No. File eTDS will run only under the following conditions: The Report selected is either Report 26Q or Report 27Q The quarter selected in the field Period is in open status i.e., the eTDS Filed for the Report selected for the relevant period is not marked. System will capture the following: If filed ( Yes or No) Date of filing

Return Status will show the user, which e-TDS returns and Revised Returns have been filed. The data will be displayed according to Financial Year and Quarters.

User can view all the Previous RRR No.s defined for the quarter through the lookup provided.

Correction in Statement of TDS:


There are six different types of Correction Statements that can be furnished by the deductor for various types of correction. These are listed below. C1: Correction in Deductor / Collector Details (excluding TAN) C2: Correction in Deductor/Collector (excluding TAN) and / or Challan Details C3: Correction in Deductor/Collector (excluding TAN) and / or Challan Details and / or Deductee Details C5: Correction of PAN of Deductee. C9: Addition of Challan(s) Y: Cancellation of statement to be made for rectification of Deductor/Collector TAN In a C1 correction statement a deductor can update its PAN, name, demographic details, responsible persons details, type of deductor. Details mentioned in the regular statement or last correction statement furnished will be updated with the details provided in the current correction statement. Hence fields where no corrections are required should contain values as mentioned in the regular or last correction statement. A C2 correction statement can be furnished when: There are corrections only in challan detail (CD) records OR

There are corrections in challan detail (CD) records and in deductor details (except TAN) (BH), like PAN, name, demographic details, responsible persons details, type of deductor, etc.

A C3 correction statement can be furnished when: There are corrections only in deductee detail (DD) records or, There are corrections in deductee detail (DD) records and challan detail (CD) records and/or deductor details (except TAN) like PAN, name, demographic details, responsible persons details, type of deductor, and so on. Details mentioned in the regular or last correction statement furnished will be updated with the details provided in the current correction statement. A C5 correction statement can be furnished when: There are updations in deductee PAN i.e. a valid 10-digit PAN to be replaced in place of PANINVALID, PANNOTAVBL and PANAPPLIED or A valid 10-digit deductee PAN stated in the regular or last corresponding statement to be replaced with another valid 10-digit PAN. Details mentioned in the regular or last correction statement furnished will be updated with the details provided in the current correction statement. A C9 Correction Statement can be furnished if; A new challan along with underlying deductee records (if any) is to be added to the regular statement. A Y Correction Statement can be furnished if; there is a change in the TAN number of the deductor/collector. Various types of Corrections Statements are C1, C2 , C3 , C5 and C9 . They can be furnished as a single statement. Statements with multiple corrections are called Multiple Batch Correction Statement. Each type of correction in a Multiple Batch Correction Statement is termed as Batch. Multiple Batch Correction Statement can contain various types of corrections (Batches) pertaining to corrections in the same regular statement furnished (same TAN, Form no., Period, F.Y., A.Y.) only. Example, if there are different types of corrections in different Forms (Form 2 4 Q / 2 6 Q / 2 7 EQ ) for the same TAN and Periodicity, separate files with respective batches will be furnished for each kind of form. A Multiple Batch Correction Statement will always contain a File Header (FH) record. There will be multiple Batch Header (BH) records, depending on the number of batches (C1 , C2 , C3 , C5 , C9 ). There are various combinations in which a Multiple Batch Correction Statement can be prepared and furnished.

A Multiple Batch Correction Statement can be furnished only for C1, C2, C3, C5 and C9 type of Correction Statements. Y type of Correction Statement should be furnished separately. It cannot be part of Multiple Batch Correction Statement. In case of a Multiple Batch Correction Statement, separate provisional receipts will be generated for each batch within the statement. For example if there are three batches like C5, C3, and C9 then, three separate provisional receipts will be generated.

General LedgerPeriodic ActivitiesTax Deducted at SourceCorrect 26Q/27Q Entries

A new Form Correct 26Q / 27Q Entries is created for the corrections in the Quarterly Statement. The user will enter the Financial Year and the Quarter for which he wants to post the corrections. The corrections in a return will be allowed only when the original return has been filed.

Field Description: Quarter: Select the quarter for which corrections are to be made (Q1, Q2, Q3 or Q4). Financial Year: Select the Financial year for which the corrections are to be made. Correction Type: Select whether the corrections are, for Deductor / Challan / Deductee / Deductor TAN 26Q/27Q: Select the Correction Type as 26Q or 27Q.

Clicking OK button after entering in Quarter, Fiscal Year, and Correction Type fields, different forms are opened depending upon selection of Correction Type. If Correction is to be made on Deductee Record, following form will be opened.

The user can make changes in Editable fields of this form and then click Update Entries in Function menu button. This will update the 26Q / 27Q entries with new values.

If Correction is required in Deductor Record, following form will be opened.

The user can make changes in Editable fields of this form and then click Update Entries in Function menu button. This will update the 26Q/27Q entries with new values. If correction is required in Challan Details, following form will be opened.

The user can make changes in Editable fields of this form and then click Update Entries in Function menu button. This will update the 26Q/27Q entries with new values. If correction is required in Deductors TAN Number, following form will be opened.

User can make changes in Editable field i.e. only in TAN number of this form and click Update Entries in Function menu button. This will update the 26Q/27Q entries with new values. The system will automatically identify the corrections as C1, C2, C3, C5, C9 or Y type. However, user can also modify the correction type field in individual windows.

Generate Revised 26Q / 27Q


Once the corrections are done, a form will be provided for the generation of Revised 26Q / 27Q, as:

.
Field Description:

File Name: Location of the e-TDS file TAN Location: An existing TAN Location is selected here, for which the Report Revised 26 Q will be generated.

Report Frequency: Choose Quarter (Quarter 1 or Quarter 2, or Quarter 3 or Quarter 4) from the drop down option. Financial Year: Define Starting Year and End Year. Example: For Financial Year 2005 -2006, starting year is 2005 and ending year is 2006. Full Name: The name of the person, whose name will be printed on the Report Revised 26Q needs to be entered here. Designation: The designation of the person, whose name will be printed on the Report Revised 26Q will be entered here. Printing date: The date on which the Report Revised 26Q will be printed, is entered here.

Revised Form 26Q will be generated in the following format:

Generate Revised eTDS


Navigation: Financial Management General Ledger Periodic Activities Tax Deduction at Source Generate Revised eTDS. After doing specific corrections the user can generate e-TDS through Generate revised e-TDS for 26Q / 27Q.

A form will be opened where the user will define various filter conditions for the generation of Revised 26Q.

A Multiple Batch Correction Statement can be furnished only for C1, C2, C3, C5 and C9 type of Correction Statements. Y type of Correction Statement should be furnished separately. It cannot be part of Multiple Batch Correction Statement. Hence for a correction entry involving C1, C2, C3, C5, C9 and Y type of corrections, three different eTDS files will be created. 1. eTDS for C1, C2, C3, C5 or C9 corrections 2. eTDS for Y type corrections 3. eTDS for regular Y. Revised 27A will be generated with the generation of Revised e-TDS.

After preparation of the Correction Statement the same is to be validated through the File Validation Utility (FVU). The procedure for validation is the same as that for regular statements. Thereafter, furnish the validated (.FVU) Correction Statement with a TIN-FC or directly through the NSDL web-site (www.tin- nsdl.com). The Revised e-TDS can be filed for a specific quarter.

This option requires following information to be entered by the user. Quarter Financial year Date of filing Provisional Receipt No. In case of a Multiple Batch Correction Statement separate provisional receipts will be generated for each batch within the statement. For example if there are three batches like C5, C3, and C9 three separate provisional receipts will be generated. The User can enter multiple Provisional Receipt No.s in the field above. The last Provisional Receipt No. will be used for generation of Batch Header. System will capture the following field: If filed ( Yes or No) Date of filing

Return Status will show the user, which Revised Returns have been filed. The data will be displayed according to Financial Year and Quarters.

User can view all the Previous RRR No.s defined for the quarter through the lookup provided.

Example 1:
Company ABC has received Professional Services from Vendor XYZ . XYZ raised a bill for Rs.1, 00,000/- on ABC. ABC will deduct TDS on 100000 @ 5.61% including surcharge and eCess. ABC will post the following entries:

Professional Charges A/C To TDS Payable Services A/C To XYZ A/C

Dr. Cr. Cr.

Rs.1,00,000 Rs. 5,610 Rs. 94,390

ABC will deposit TDS to Government Authority by passing the following entry. TDS Payable - Services A/C To Bank/Cash A/C Dr. Cr. Rs.5,610 Rs.5,610

ABC will make final payment to XYZ. Entry will be.

XYZ A/C To Bank A/C

Dr. Cr.

Rs.94,390 Rs.94,390.

ABC will issue a TDS certificate (form 16A) for Rs. 5,610 to XYZ.

Example 2:
A regular statement containing four challans / transfer voucher details where: Challan 1 has 10 Deductee records Challan 2 has 5 Deductee records Challan 3 has 15 Deductee records Challan 4 has 20 Deductee records is furnished. Subsequently, there are corrections in the following records in the regular statement; Corrections in Deductor Details In challan 1, update CIN Details

In challan 3, CIN Details to be rectified and for underlying Deductee 4 incorporate 10digit PAN instead of PANINVALID in the Deductee PAN field, for Deductee 10 replace valid PAN with another valid PAN In Challan 4, add a Deductee record. An additional challan with 2 underlying Deductees to be added. There are no changes in challan 2 or its underlying Deductee records. The sequence of these batches (correction statements in a file) will be as follows: File header record (FH) Batch Header record 1 (BH) C5 (updation of Deductee PAN) Challan detail record 3 (CD) Deductee detail record 10 (DD) update valid to valid PAN Batch Header record 2 (BH) C2 (updation of Challan) with batch updation indicator 1 for corrections in Deductor Details. Challan / Transfer Voucher Detail record 1 (CD) updation of CIN Batch Header record 3 (BH) C3 Challan / Transfer Voucher Detail record 3 (CD) Deductee Detail record 4 (DD) update PANINVALID with valid PAN Challan / Transfer Voucher Detail record 4 (CD) Deductee Detail record 21 (DD) addition of a Deductee Batch Header record 4 (BH) C9 addition of a Challan Challan / Transfer Voucher Detail record 5 (CD) Deductee Detail record 1 (DD) Deductee Detail record 2 (DD) If there are no corrections in Challan or Deductee Details except for updation of Deductee PAN and corrections in Deductor Details along with addition of Challan, the sequence will be: C1, C5, C9. A Multiple Batch Correction Statement can be furnished only for C1, C2, C3, C5 and C9 type of Correction Statements. Y type of Correction Statement should be furnished separately. It cannot be part of Multiple Batch Correction Statement. In case of a Multiple Batch Correction Statement separate provisional receipts will be generated for each batch within the statement. For example if there are three batches like C5, C3, and C9 three separate provisional receipts will be generated.

Microsoft Business Solutions Navision 4.0- Tax Collection at Source

Table of Contents
Tax Collection at Source .............................................................................................. 3 Creation of a New Account in Chart of Accounts ...................................................... 5 Number Series Setup ................................................................................................... 6 Setup for Tax Collection at Source ............................................................................. 7 Customer Master ........................................................................................................ 25 Company Information Setup ...................................................................................... 26 General Ledger Setup ................................................................................................ 27 State ............................................................................................................................. 28 Customer Transactions .............................................................................................. 29 Direct Invoices using General Journal .................................................................. 31 Direct Invoices using Invoices ............................................................................... 32 Sales Order based Invoices using Orders............................................................ 33 Advance Payment using Cash Receipt Journal................................................... 35 Adjustment of Advance Payment against Invoice / Order .................................. 36 Credit Memo through Return Order ...................................................................... 37 Payment of TCS amount to government .............................................................. 39 TCS Adjustment Journal ............................................................................................ 41 Update TCS Register ................................................................................................. 43 TCS Challan Register................................................................................................. 45 Generation of TCS Certificate ................................................................................... 46 Form 27EQ .................................................................................................................. 50 Generate eTCS ........................................................................................................... 51 Correct 27EQ Entries ................................................................................................. 54 Revised Form 27EQ ................................................................................................... 59 Generate Revised eTCS ............................................................................................ 61 Reports ........................................................................................................................ 64 Appendix...................................................................................................................... 68

Tax Collection at Source


Tax Collection at Source (TCS) is one of the methods for tax collection by the government. It follows the principle You pay while you earn. While Tax Deducted at Source (TDS) requires the payer to deduct tax at source and remit the tax to the government, TCS requires the receiver/seller to collect tax at source and remit it to the government. The purpose of this provision is to eliminate tax evasion in certain trades. Section 206C (1) says, Every person, being a seller shall, at the time of debiting of the amount payable by the buyer to the account of the buyer or at the time of receipt of such amount from the said buyer in cash or by the issue of a check or draft or by any other mode, whichever is earlier, collect from the buyer of any goods of the nature specified, a sum equal to the percentage specified of such amount as income tax. Section 206C (1C) says Every person, who grants a lease or a license or enters into a contract or otherwise transfers any right or interest either in whole or in part in any parking lot or toll plaza or mine or quarry, to another person, other than a public sector company for the use of such parking lot or toll plaza or mine or quarry for the purpose of business shall, at the time of debiting of the amount payable by the licensee or lessee to the account of the licensee or lessee or at the time of receipt of such amount from the licensee or lessee in cash or by the issue of check or draft or by any other mode, whichever is earlier, collect from the licensee or lessee of any such license, contract or lease of the nature specified, a sum equal to the percentage specified, of such amount as income tax.

Specified Goods for which TCS is Applicable


The Seller of the following products has to collect the tax at source: 1 2 3 4 5 6 Alcoholic liquor for human consumption Tendu leaves Timber obtained under forest lease Timber obtained by any mode other than a forest lease Any other forest produce not being timber or tendu leaves Indian Made Foreign Liquor 7 Scrap

Specified Leases, Licenses or Contracts for which TCS is Applicable


The grantor of the following leases, licenses or contracts has to collect the TCS: 1 2 Parking Lot Toll Plaza 3 Mining and Quarrying

Collection of Tax
TCS has to be collected by the seller, at the time of debiting of the amount payable by the buyer to the account of the buyer or at the time of receipt of such amount, from the buyer in cash or by issue of check/draft or by any other mode, whichever is earlier.

Deposition of Tax
TCS must be deposited within one week from the last day of the month in which the tax was collected at source through ITNS 281.

Issuance of Certificate
The certificate for TCS is to be issued in Form No. 27D. The certificate should be issued within a period of one month from the end of the month in which tax is calculated, where more than one certificate is required to be furnished to a buyer for tax collected at source in respect of the period ending on the September 30 and March 31 in each financial year, the person collecting the tax, may (on request from such buyer), issue within one month from the end of such period. A consolidated certificate is required in form No 27D for the tax collected during the period. However, there is no requirement of furnishing such certificate in respect of tax collected on or after April 1, 2008.

Quarterly Statement of TCS


TCS return should be submitted quarterly (with effect from April 1, 2005) after the end of each quarter in Form No 27 EQ within 15 days from the end of each quarter or 76 days in the case of last quarter. Quarterly TCS return cannot be submitted unless interest for late deposit of TCS is paid. Due dates for filing of quarterly return of TCS:

Form No.
27 EQ 27 EQ 27 EQ 27 EQ

Description
For the quarter ending, June 30 For the quarter ending, September,30 For the Quarter ending, December,31 For the quarter ending, March 31

Due Date
July, 15, October,15 January,15 June,15

You need to define certain setups to manage the TCS transactions in Navision 4.0.at the following levels: Creation of new account in chart of accounts Number series setup Setup for Tax Collection at Source Setup on Customer card Company Information setup General ledger setup State set up

Creation of a New Account in Chart of Accounts


You need to create balance sheet liability accounts for TCS transactions. You also need to create one account for each TCS Type under which company collects the tax.

NAVIGATION: Financial Management General Ledger Chart Of Accounts

Create the necessary GL accounts for all the TCS Payables accounts. For example, TCS Payable Account -A TCS Payable Account -B TCS Payable Account -C

Number Series Setup


TCS certificates are reports generated in Navision and issued to Customers. You need to create separate number series for TCS Certificates. The Number Series you create will be linked to each TCS group.

NAVIGATION: Administration Application Setup General No. Series

Setup for Tax Collection at Source


You need to define certain setups for TCS in the Financial Management module. These setups are as follows: Accounting Period T.C.A.N Nos. Groups Nature of Collection Assessee Code Setups Parties Concessional Codes NOC Lines Correction Codes

TCS Setup
A new menu is available created under Financial Management Setup Tax Collected at Source, as follows:

Accounting Period
TCS accounting period is required for generation of TCS transactions. You need to specify TCS accounting periods while filing Form 27 EQ. TCS accounting period will be the same as the TDS accounting period. The program will show an error if the TCS accounting period is not defined for the transaction date. You need to create the required accounting period to be followed for TDS and TCS. The financial year to be followed as per the Income Tax Act, 1961 is April to March.

NAVIGATION: Financial Management Setup Tax Collection at Source Accounting Period

Fill in the fields according to these guidelines:

Field
Number

Comments
Is the serial number of accounting period and is generated automatically by the program.

Starting Date & Ending Date

The field displays the starting and ending dates of the TCS accounting period.

Closed

A checkmark in this field indicates that the TCS accounting period has been closed.

Create Year To create a new accounting period for TCS, click the Function menu, and choose Create Year.

Fill in the fields according to these guidelines:

Field
Starting Date

Comments
Define the starting date for the TCS accounting year

Ending Date

Define the ending date for the TCS accounting year

Close Year Click FunctionsClose Year, to close the accounting periods of TCS. Once the year is closed, the Closed field gets marked true. After the TCS accounting period has been closed, no TCS transaction can be done during that accounting period. Create Quarter Click Lines Create Quarter, to define the quarters within a specific TCS Accounting year.

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Fill in the fields according to these guidelines:

Field
Quarter

Comments
Define the code for the quarter (Q1, Q2, Q3, and Q4) from the dropdown list.

Starting Date

Define the Starting Date of the Quarter

Ending Date

Define the Ending Date of the Quarter

The program will use this setup while filing of eTCS and revised eTCS for a specific quarter.

T.C.A.N. No.
A T.C.A.N. (Tax Collection Account Number) master is available where all the T.C.A.N. numbers will be defined for different locations of a company where TCS has been collected. T.C.A.N number is a unique code made up of 10 alphanumeric characters. T.C.A.N number is allotted by Income Tax Department to the collector. Collector is the person who collects the tax from customers for selling of specified goods or providing of specified services.

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Section 203 A of Income Tax Act, 1961, says With effect from October 1,2004, every person , deducting tax or collecting tax , who has not been allotted a tax deduction account number or, as the case may be, a Tax Collection Account Number, shall within one month from the end of the month in which tax was deducted or collected or January 31, 2005, whichever is later, apply to the Assessing Officer in Form No. 49B for the allotment of a Tax Deduction and Collection Account Number. Where a Tax Deduction Account Number or Tax Collection Account Number or Tax Deduction and Collection Account Number has been allotted to a person, such person shall quote such number in all challan, certificates, returns and other documents pertaining to such transactions as may be prescribed. The above section suggests that for all applications made after 31st January 2005 either for Tax Deduction Account Number or Tax Collection Account Number only one number is allotted, that is Tax Deduction and Collection Account Number. If the person is having Tax Collection Account Number the same should be used for TCS purposes.

NAVIGATION: Financial Management Setup Tax Collected at Source TCAN Master

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Nature of Collection
Nature of Collection defines the various categories of goods on which TCS is liable to be collected.

NAVIGATION: Financial Management SetupTax Collected at Source Nature of Collection

Fill in the fields according to these guidelines:

Field
Type

Comments
Define nature of collection as a code.

Description

The description is defined against the respective values of TCS type.

TCS Type

Select the relevant TCS Type, namely, A to I respectively.

TCS Assessee Code


In this window, you define whether a buyer is a company or others. In TCS return company buyer is to be shown as 01 and other as 02.

NAVIGATION: Financial Management SetupTax Collected at Source Assessee Code

13

Fill in the fields according to these guidelines:

Field
Code

Comments
Define a code for the Assessee

Description

Enter the Description

Type

Select Company or Others from the dropdown list

You can click TCS Setup to view the TCS details associated with the Assessee Code. Click Details to view the TDS details associated with the Assessee Code.

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TCS Setup
In TCS Setup you can define rates, threshold amounts, per contract amount, and so on, for all sub-elements of TCS applicable for different combination of the TCS type.

NAVIGATION: Financial Management SetupTax Collected at Source Setup

Fill in the fields according to these guidelines:

Field
TCS Nature of Collection

Comments
Select the TCS Nature of Collection in this field from the lookup list as defined in the Nature of collection master.

Assessee Code

Select code from the Lookup list as predefined in the assessee code master.

Effective date

Enter the effective date, from which the TCS rate would be applicable.

Concessional Code

Select the values from the lookup list as defined in Concessional Code master. This field is required when the rate defined is concessional or Zero as per the certificate issued under section 206C (9). The values in this field are i) A, if the lower deduction is as per

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Field

Comments
206C (9). ii) B, for any other reason. The value selected here will be shown in quarterly return. On the basis of the option values selected here, the values of A or B will flow in Quarterly return (27EQ).

TCS %

Define the base TCS rate. It is the applicable rate for the TCS type. Rate can be zero. The field should be in percentage. The field is mandatory.

Surcharge %

Specify the surcharge rate, if applicable, which is computed on the TCS amount. Rate can be zero. The field should be in percentage. The field is mandatory

eCess %

Specify the education eCess rate if applicable, which is computed on the TCS plus Surcharge amount. Rate can be zero. The field should be in percentage. The field is mandatory

TCS Type

TCS Type will display default values automatically when TCS Nature of Collection is selected.

TCS Threshold Amount

Define the threshold limit, that is the amount up to which no tax will be collected.(Presently there is no Threshold limit applicable in case of TCS however in view of flexibility the functionality has been provided)

Surcharge Threshold Amount

Define the surcharge threshold limit, that

16

Field

Comments
is, the amount up to which no surcharge will be collected.

Contract Amount

Define the Per Contract Value for each TCS Group where it is applicable. TCS will be collected only if the total transaction exceeds the per contract value in a single transaction of Threshold amount in a financial year.(Presently there is no per contract value is applicable in case of TCS however in view of flexibility the functionality has been provided)

TCS Account No

Select the TCS Payable account from the Chart of Account.

No. Series

Select the number series that will be used for generation of certificate nos for each TCS Group.

You need to navigate to Setup Card, to setup the above values for TCS Nature of Collection.

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You can also use the Copy functionality to create different combinations for the same nature of collection

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Fill in the fields according to these guidelines:

Field
TCS Nature of Collection

Comments
Define the TCS Nature of Collection for which a new combination is to be created in the setup.

Assessee Code

Define the Assessee code

Effective Date

Date from which the rates will be applicable

TCS Concessional Code

Define if any Concessional code is applicable

Copy

Define if all the fields from previous TCS Nature of Collection should be copied or only a selected set of fields will be copied

You can then modify the fields according to your requirement on the setup card created.

19

Party Master (Parties)


TCS parties are one time parties which are not part of regular Customer Master.

NAVIGATION: Financial Management Setup Tax Collection at Source Parties .

Fill in the fields according to these guidelines:

Field
Code

Comments
Define the party code.

Description

Specify the Name of the party. Specify the partys address.

Address, Address 2

State

Specify the state of the party.

Postal Code

Specify the relevant Postal code.

PAN No

Specify the Permanent Account Number (PAN) of the party. If the PAN No. is not available and PAN is applied for, then PAN Reference No. will be filled. This PAN Reference No. will be quoted in the TCS returns filed with the tax authority

PAN Reference No

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Concessional Code NAVIGATION: Financial Management SetupTax Collected at Source Concessional Code

Fill in the fields according to these guidelines:

Field
Concessional Code

Comments
Define various concessional codes.

Description

Provide the description of the concessional codes.

Nature of Collection (NOC) Lines


This is the master to link the customer with different Nature of collection. One or more nature of collection can be attached to a customer.

NAVIGATION: Financial Management SetupTax Collected at Source NOC Lines

21

Fill in the fields according to these guidelines:

Field
Type

Comments
Choose type of party from the drop down list, The available option are: customer, party, vendor.

No

Select the number of the customer /party/vendor from the look up list.

Assessee Code

Select the Assessee code for the customer/ party/vendor from the look up list.

Nature of Collection

Select the Nature of collection from the lookup list as defined in the TCS Nature of Collection master.

Concessional code

Select the concessional code from the lookup list defined in the Concessional Code master.

Concessional Form Number

If concessional code is applicable for

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Field

Comments
selected TCS type, Concessional form No. field will be filled with the concessional form number of the customer/party.

Threshold Overlook

Threshold limit is the maximum amount defined in the TCS Setup master for the particular TCS type up to which no TCS will be collected. If you want to collect TCS even though the threshold limit is not crossed for the customer then you have to check mark threshold overlook field.

Surcharge Overlook

If you want to collect surcharge even though the surcharge threshold limit is not crossed for the customer then you have to check mark Surcharge overlook field.

Correction Type Setup


You use the Correction Type Setup window where you can define the Correction codes and their sorting order.

NAVIGATION: Financial ManagementSetupTCSCorrectionType

23

Fill in the fields according to these guidelines:

Field
Code

Comments
Define Code for the Correction type

Correction Type

Select Corrections Type (C1, C2, C3, C5, and C9) from the dropdown list provided, that can be done at the time of revised returns.

Description

Specify the details of correction codes.

Sorting Order

Define the sorting order of the correction type.

The program will use the sorting order for corrections defined in the setup to file the revised eTCS returns. Correction statements (batches) in a multiple batch correction statement have to necessarily be in the following sequence:

C1, C5, C2, C3, C9, Y

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Customer Master

Fill in the fields according to these guidelines:

Field
P.A.N. No

Comments
Define the PAN No (Permanent Account number) of the customer. PAN No should be 10 alphanumeric characters.

PAN Status

Select the status of the PAN from the dropdown list where PAN No is not available, or PAN No is available with invalid No. The available options are PANAPPLIED / PANINVALID / PANNOTAVBL

PAN Reference No

Define the PAN Reference no. PAN reference No is available with customer where PAN is applied to the Income tax Authority.

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Company Information Setup


A person selling any goods specified in the Section 206C of the Income Tax Act is required to apply and obtain a new number called T.C.A.N. under Section 206CA.

Fill in the fields according to these guidelines:

Field
T.C.A.N No

Comments
Select the T.C.A.N. No. from the look up list. It is mandatory to enter the T.C.A.N. Number because all TCS entries are generated based on this number.

Assessing Officer

Specify the Assessing officer. This field will accept alphanumeric characters.

Circle Number

Specify the circle number of the Income Tax Department to which the Assessee belongs .This field will accept alphanumeric characters.

Ward Number

Specify the Ward number of the Income Tax department to which the Assessee belongs .This field will accept alphanumeric characters.

26

General Ledger Setup


TCS rounding precision will be defined in the General ledger setup.

. Fill in the fields according to these guidelines: Field


TCS Rounding Type

Comments
Define whether TCS amount will be rounded up or down or nearest. The program uses this information to round the TCS amount to the whole number.

27

State
NAVIGATION: Financial ManagementSetupSales TaxStates

Fill in the fields according to these guidelines:

Field
Code

Comments
Define the Code for each state.

Description

Define the description for each state code.

State Code for eTDS/eTCS

Define the state code for eTDS / eTCS that is to be used for eTCS filing with the tax.

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Customer Transactions
TCS functionality is available in the following windows: General Journal Sales Journal Sales Order Sales Invoice Cash Receipt Journal Credit Memo Return Order In Sales Order, Sales Invoice, General Journal, Cash Receipt Journal, Sales Journal, Credit Memo and Return Order for TCS calculations, the following fields are mandatory: Fill in the fields according to these guidelines:

Field
TDS/TCS Party Type

Comments
Select the party type from the drop down list.

TDS/TCS Party

Select the Customer / Party Number from the list.

TDS/TCS Assessee Code

The assessee code is set to a default value automatically from the NOC Party master.

TCS Nature of Collection

Select the Nature of collection from the look up list on which TCS is to be computed. After selecting the above field, the program automatically picks up the following fields value from the respective table.

TDS/TCS%

The TCS rate is set to default automatically from TCS Setup Master based on the combination of Nature of Collection and Assessee Code.

TDS/TCS Amount:

The TCS Amount is computed

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Field

Comments
automatically by the program.

Surcharge %

The Surcharge rate is set to default automatically from TCS Details Master, based on the combination of nature of collection and assessee code.

Surcharge Amount

The Surcharge Amount is computed automatically by the program.

TDS/TCS Amount including Surcharge

This field displays the total of TCS and Surcharge.

eCess %

The eCess rate is set to default automatically from TCS Setup Master based on the combination of nature of collection and assessee code.

eCess on TDS/TCS Amount:

The eCess Amount is computed automatically by the program.

Total TDS/TCS Including eCess

This field displays the total amount of TCS to be deducted for the transaction.

When you select the TCS Nature of Collection from the lookup button, the TCS rate is set to a default value automatically from TCS Setup Master, based on the combination of nature of collection and Assessee Code. Other automated fields of a transaction, are as follows: TDS/TCS Amount Surcharge % Surcharge Amount: TDS/TCS Amount including Surcharge Education Cess eCess % eCess on TDS/TCS Amount Total TDS/TCS Including eCess

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Direct Invoices using General Journal


Tax is collected on Customer Invoices against which no advance payment has been received. When you make invoice transactions program will make a few additional entries, apart from the regular entries.

NAVIGATION: Financial Management General Ledger General Journals

Following are the steps for creation of an invoice through general journal Enter the Posting Date Select Document Type as Invoice Select TDS/TCS Party Type as Customer Select the TDS/TCS Party from the look up list Do not Select Account Type and Account No as these are automatically populated Select TCS Nature of Collection from the look up list For example - A Select the T.C.A.N No Enter Amount Enter Balancing Account The following fields are automated from the predefined setups: TDS/TCS Assessee Code TDS/TCS % TDS/TCS Amount: Surcharge % Surcharge Amount: TDS/TCS Amount including Surcharge

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eCess % eCess on TDS/TCS Amount: Total TDS/TCS Including eCess Post the Journal When making Invoices using General Journal / Sales Journal, make sure that the Document Type is selected as Invoice and the Invoice Amount is denoted with a positive (+) sign, as the customer has to be debited with the amount.

Direct Invoices using Invoices


Tax is collected on Customer Invoices against which no advance payment has been received. While making invoice transactions program will make a few additional entries apart from the regular entries.

NAVIGATION: Financial Management Receivables Invoices

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Following are the steps for creation of an invoice through Sales Invoice window Select Sell to Customer No Enter Posting Date Enter the External Document No On the shipping tab select Location Code On the Lines Select account Type item. Select No. Enter Quantity Select TCS Nature of Collection Enter Unit Price Excl. VAT To compute the TCS value, on Functions menu button, click Calculate TCS. The following fields are automated from the setups predefined: TDS/TCS Assessee Code TDS/TCS % TDS/TCS Amount Surcharge % Surcharge Amount: TDS/TCS Amount including Surcharge eCess % on TDS/TCS eCess on TDS/TCS Amount Total TDS/TCS Including eCess Post the Invoice

Sales Order based Invoices using Orders


Tax is collected on Customer Sales Orders against which, no advance payment has been received. When you make a Sales order, program will make a few additional entries apart from the regular entries.

NAVIGATION: Sales & Marketing Order Processing Orders

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Following are the steps for creation of an invoice through Sales Order window Select Sell-to Customer No. Enter Posting Date Enter the External Document No On the Shipping tab select Location Code On the Lines Select account Type Item. Select Item No. Enter Quantity Select TCS Nature of Collection. Enter Unit Price Excl. VAT To compute the TCS value, on Functions menu button, click Calculate TCS. The following fields are automated from the predefined setups: TDS/TCS Assessee Code: TDS/TCS %: TDS/TCS Amount: Surcharge %: Surcharge Amount: TDS/TCS Amount including Surcharge. eCess % on TDS/TCS Amount: eCess on TDS/TCS Amount: Total TDS/TCS Including eCess: Release and Post the SO.

34

Advance Payment using Cash Receipt Journal


TCS is collected when payment is received or debited to the customer which ever is earlier. At the time of receiving the advance, seller has to collect the TCS and this TCS will be calculated using the grossing up approach. Examples are shown in the Appendix.

NAVIGATION: Financial Management Receivables Cash Receipt Journal

Following are the steps for receiving the payment through Cash receipt journal: Select Document Type as Payment Enter Document no Select TDS/TCS Party Type as Customer/Party Select the TDS/TCS Party Do not Select Account Type and Account No as these are automatically populated. Enter the External Document No Select TCS Nature of collection. Select the T.C.A.N No from the look up button Enter Amount The following fields are automated from the setups predefined TDS/TCS Assessee Code TDS/TCS % TDS/TCS Amount: Surcharge %

35

Surcharge Amount TDS/TCS Amount including Surcharge eCess % eCess on TDS/TCS Amount Total TDS/TCS Including eCess Now Post the Journal

Adjustment of Advance Payment against Invoice / Order


Adjustment of advance can be made through the following windows where the TCS has already been collected in advance: Sales Journal Sales Invoice Sales Order General Journal TCS is not collected on Customer Invoices against which advance payment has been received and TCS collected at the time of receipt of advance payment.

NAVIGATION: Financial Management Receivables Sales Journals

Following are the steps for adjusting advance against an invoice: Enter the Posting Date Select Document Type as Invoice Enter the External Document No, for example- Cust

36

Select TDS/TCS Party Type as Customer Select the TDS/TCS Party Do not Select Account Type and Account No as these are automatically populated Select TCS Nature of Collection Select the T.C.A.N No Enter Amount Enter Balancing Account Select Applies to Doc. Type and Applies to Document No. for the payment that has been received against this invoice The following fields are automated from the predefined setups: TDS/TCS Assessee Code TDS/TCS % TDS/TCS Amount Surcharge % Surcharge Amount: TDS/TCS Amount including Surcharge eCess % eCess on TDS/TCS Amount: Total TDS/TCS Including eCess Post the Journal The program will not calculate TCS at the time of invoicing since the TCS has already been collected at the time of receipt of advance payment against the invoice.

Credit Memo through Return Order


NAVIGATION: Sales & Marketing Order Processing Return Orders

37

Following are the steps for creating credit memo through return order: Select Sell-to Customer No. Enter Posting Date Enter the External Document No On the Shipping tab -select Location Code Select Applies to Doc. Type and Applies to Doc No, if applicable On the Lines -Select account Type Item. Select Item No. Enter Quantity Select TCS Nature of Collection. Enter Unit Price Excl. VAT To compute the TCS value, on Functions menu button, click Calculate TCS. The following fields are automated from the setups predefined: TDS/TCS Assessee Code: TDS/TCS %: TDS/TCS Amount: Surcharge %: Surcharge Amount: TDS/TCS Amount including Surcharge. eCess % on TDS/TCS Amount: eCess on TDS/TCS Amount: Total TDS/TCS Including eCess: Release and Post the Sales Return Order. If Credit Memo is created before remittance of Tax to government, the TCS entries will get reversed proportionately, on the basis of the quantity returned.

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In case TCS amount has been remitted to Income Tax department, TCS Payable account will not be reversed, incase Applies to document type and Applies to document No has been selected.

Payment of TCS amount to government


The TCS that you have collected on various transactions described above has to be finally deposited with the government. Payment of TCS collected can be done through General Journal in General Ledger Module Navigation: Financial Management General Ledger General Journal Functions Pay TCS

On Functions menu button, click Payment and then select TCS. A form opens that will show all the TCS entries.

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Select the field or fields on which the filters need to be put. The form will show the TCS entries for the selected filters only Select the entries for which TCS amount needs to be paid. Click Pay button of the screen, so that the total of the selected entries is transferred to the General Journal. Post the journal.

PERIODIC ACTIVITIES (TCS) NAVIGATION: Financial Management Periodic Activities Tax Collection at Source

40

TCS Adjustment Journal


Adjustment Journals are to be used for correction of the TCS amount already collected but which are yet to be paid to the Income Tax Authority.

41

Select the Transaction number from the look up list and change the details to correct the transaction. You can increase or decrease the TCS rate, Surcharge rate, eCESS rate and the adjustments would be made accordingly.

NAVIGATION:
General Ledger Periodic Activities Tax Collected at Source TCS Adjustment Journal

1 2 3 4

Filter the entries for which you want to make the adjustments. The selected entry shows the TCS%, eCess %, surcharge % that was applied to it at the time of posting. Now fill in the new TCS%, surcharge % and eCESS % for this entry. Post the journal. The revised TCS Amount has now updated in the relevant GL accounts for TCS payable and Customer account.

42

Update TCS Register


In update TCS register window you can update the challan details against the amount deposited in the bank. NAVIGATION: General Ledger Periodic Activities TCS Update TCS Register

TCS register is maintained to keep track of all the TCS payments made to the government with relevant challan details. The challan number, challan date and bank name is updated using this functionality which has to be updated for each transaction to be printed on TCS certificate.

43

Field
Pay TCS Document No

Comments
This field specifies the Pay TCS Document No. of the line selected from the update TCS register.

Challan No

This field specifies the Challan No. Challan is a mode of payment of tax to the government account. A bank gives the Challan No. by stamping on the challan, through which TCS amount has been deposited. This field specifies the date of the challan.

Challan Date

Bank Name

This field specifies the name of the bank branch where you deposited the TCS amount.

BSR Code

This field specifies the BSR Code. BSR code is the identification code of the bank branch, where TCS amount is deposited. BSR code is applicable to both Government and Non government organizations. This code must have seven characters.

Cheque No

This field specifies the Cheque / DD number through which challan is paid. The value of this field must be zero if tax is deposited in cash. No value will be provided if tax is deposited by book entry. This field can contain 10 integers.

Cheque Date

This field specifies the issue date of Cheque / DD through which challan is paid.

These details get updated on individual TCS entries. Challan details can be changed before filing of eTCS returns. Once the return is filed, any changes in the challan details can be done only through C2/C3 correction.

44

TCS Challan Register


NAVIGATION: General Ledger Periodic Activities TCS TCS Challan Register

This window will show Challan wise TCS details. In this window, you will update the challan information with the following details: 1 2 3 Interest Amount Others TCS deposited by Book-entry (Boolean, with default value No)

45

Field
Interest Amount

Comments
TCS interest amount is paid to the government, when TCS has not been paid or collected on or before the due date. After entering the interest amount in Update Challan Register, it will be simultaneously updated in Challan Register and Quarterly Return 27EQ .

Others

TCS Others is paid to the government, when the user deposits the TCS amount, but does not debit to any customer account or other cases. The amount, entered in this field can be updated from Update Challan Register and it would simultaneously be updated in Challan Register and Quarterly Return 27EQ.

Paid by Book entry

This field is relevant, when the collection of TCS is made by the government or, by any person on behalf of the government, from the customer. A check mark in this field shows the TCS has been paid through book entry and simultaneously TCS amount and challan details will be updated in challan registers and Quarterly return 27EQ.

Generation of TCS Certificate


TCS certificates need to be issued to the buyers from whom TCS has been collected. These are generated with a unique serial number.

NAVIGATION: General Ledger Periodic Activities TCS Generate TCS Certificates

46

Click Functions Generate Certificate Nos.

Fill in the fields according to these guidelines:

Field
Party type

Comments
Specify whether party type is either Customer or Party. Select the Customer No. /Party from the available list based on the Party type filled above.

Party

47

Field
TCS Type

Comments
Select the TCS Type applicable.

Monthly Certificate

Checkmark if generating a monthly certificate for the customer/party.

Starting Date, Ending Date

Specify the date range for the generation of certificate.

The Certificate Nos. would be generated for TCS entries from the No. series defined in the TCS Group setup.

To generate report 27D, click Functions27D

48

TCS 27D

Fill in the fields according to these guidelines:

Field
Duplicate

Comments
A checkmark means that the certificate can be used as a Duplicate copy. The word DUPLICATE will also appear on the TCS certificate, that is, Form 27D.

49

Form 27EQ
NAVIGATION: General Ledger Periodic Activities TCS Form 27EQ

Fill in the fields according to these guidelines:

Field
TCAN Location

Comments
Select the T.C.A.N. No from the look up list for which TCS to be generated.

Report Frequency

Select the Quarters from the drop down list for which 27EQ is to be generated .The available options of quarters are (Quarter 1, Quarter 2, Quarter 3, and Quarter 4)

TCS Accounting Period

Select the Financial Year from the lookup list for which TCS is to be generated.

Full Name

Specify the name of the person whose name will be printed on the Report 27EQ.

Designation

Specify the designation of the person whose name will be printed on the Report 27EQ.

50

Field
Printing date

Comments
Specify the date on which the Report 27EQ will be printed.

Generate eTCS
For generating the eTCS in text format as required by the Income Tax Department, place a checkmark in 27EQ. eTCS return is furnished in a CD / floppy duly filled with Income Tax Department and signed Form 27 B in physical form.

NAVIGATION: General Ledger Periodic Activities TCS Generate eTCS

After you click Generate eTCS, a new window opens where you need to define certain information for which eTCS is to be generated.

51

Fill in the fields according to these guidelines:

Field
File Name

Comments
In this field, you specify the path where the eTCS in text format is saved. For example, Desktop, My Documents, C:\, or D:\. Input filename should not be more than 12 characters (including the .txt extension) and should not contain any special characters. For example, a colon or a slash, otherwise at the time of passing text file through FVU it will show an error: File name is too long. An example of a valid filename is FORM27EQ.txt.

TCAN Location

Select the T.C.A.N. No from the look up list for which the 27EQ in text format will be generated.

Report Frequency

Select the quarter from the drop down list.

Financial Year

Choose Financial Year from the look up list.

Full Name

Specify the name of the person whose name will be printed on the Report 27EQ.

Designation

Specify the designation of the person whose name will be printed on the Report 27EQ.

Printing date

Specify the date on which the Report 27EQ is printed.

This process will create eTCS return in text format for a period and also generate 27B report as per the specified format. This process cannot be run if the generation for 27EQ report has not been run for at least once.

52

You have the option to run only the 27EQ report without generation of eTCS. After filing with the government, you need to click File eTCS to update the file status to mark the entries as filed.

The following information will be entered for updating the status of the return 27EQ: Quarter Financial year Filing Date Provisional Receipt No. eTCS filed will run only under the following conditions: The Report selected is Report 27EQ The quarter selected in the field Period is in open status that is, the eTCS Filed for the Report selected for the relevant period is not marked. TCS report has been run once. The program will capture the following information: 1 2 eTCS Filed ( Yes or No) Date of filing

Return Status displays information about eTCS returns and revised returns that have been filed. The information will be displayed financial year and Quarter wise.

53

You can view all the Previous RRR Nos. defined for the quarter through the lookup.

Correct 27EQ Entries


There are six different types of Correction Statements that can be furnished by the deductor for various correction types. These are as follows. C1: Correction in Deductor / Collector Details (excluding TAN) C2: Correction in Deductor/Collector (excluding TAN) and / or Challan Details C3: Correction in Deductor/Collector (excluding TAN) and / or Challan Details and / or Deductee Details C5: Correction of PAN of Deductee. C9: Addition of Challan(s) Y: Cancellation of statement to be made for rectification of Deductor/Collector TAN In a C1 correction statement a deductor can update its PAN, name, demographic details, responsible persons details, and type of deductor. Details mentioned in the regular statement or last correction statement furnished will be updated with the details provided in the current correction statement. Hence fields where no corrections are required should contain values as mentioned in the regular or last correction statement. A C2 correction statement can be furnished when: There are corrections only in challan detail (CD) records OR There are corrections in challan detail (CD) records and in deductor details (except TAN) (BH), like PAN, name, demographic details, responsible persons details, type of deductor, etc. A C3 correction statement can be furnished when: There are corrections only in deductee detail (DD) records or, There are corrections in deductee detail (DD) records and challan detail (CD) records and/or deductor details (except TAN) like PAN, name, demographic

54

details, responsible persons details, type of deductor, and so on. Details mentioned in the regular or last correction statement furnished will be updated with the details provided in the current correction statement. A C5 correction statement can be furnished when: There are updation in deductee PAN, that is, a valid 10-digit PAN to be replaced in place of PANINVALID, PANNOTAVBL and PANAPPLIED or A valid 10-digit deductee PAN stated in the regular or last corresponding statement to be replaced with another valid 10-digit PAN. Details mentioned in the regular or last correction statement furnished will be updated with the details provided in the current correction statement. A C9 Correction Statement can be furnished when: A new challan along with underlying deductee records (if any) is to be added to the regular statement. A Y Correction Statement can be furnished when: There is a change in the TAN number of the deductor / collector. The corrections statements can be furnished as a single statement. Statements with multiple corrections are called Multiple Batch-Correction Statement. Each type of correction in a Multiple Batch-Correction Statement is termed a Batch. Multiple Batch Correction Statement can contain various corrections pertaining to corrections in the regular statement furnished (same TAN, Form no., Period, F.Y., A.Y.) only. For example, if there are different types of corrections in different forms (Form 24Q / 26Q / 27EQ) for the same TAN and Periodicity, separate files with respective batches need to be furnished for each kind of form. A Multiple Batch Correction Statement contains a File Header (FH) record. There will be multiple Batch Header (BH) records depending on the number of batches (C1, C2, C3, C5, C9). There are various combinations in which a Multiple Batch Correction Statement can be prepared and furnished. A Multiple Batch Correction Statement can be furnished only for C1, C2, C3, C5 and C9 type of Correction Statements. Y type of Correction Statement should be furnished separately. It cannot be part of Multiple Batch Correction Statement. In case of a Multiple Batch Correction Statement, separate provisional receipts will be generated for each batch within the statement. For example, if there are three batches like C5, C3, and C9 then, three separate provisional receipts would be generated. A new form is available for corrections in the Quarterly Statement. You need to enter the financial year and the quarter for which you want to post the corrections. The form will display the entries from 27EQ table for particular quarter with all the details including challan and invoice details. The corrections in a return will be allowed only when the original return has been filed.

55

NAVIGATION: General LedgerPeriodic ActivitiesTax Collected at SourceCorrect 27EQ Entries

Fill in the fields according to these guidelines:

Field
Quarter

Comments
Select the Quarter for which correction is to be done (Q1, Q2, Q3, Q4)

Financial Year

Financial year for which correction is done.

Correction of

Select type of correction from the dropdown with values Collector/ Challan/ Party/ Collector T.C.A.N.

You can then make corrections for the respective entries in the form. If Correction is to be made on Collector Record, the following Form will open.

56

If Correction is to be made on Challan Record, the following Form will open.

If Correction is to be made on Party Record, the following Form will open.

If Correction is to be made on Collectors T.C.A.N., the following form will open:

57

58

Revised Form 27EQ


Once the corrections are done, a form is provided for the generation of revised 27EQ.

NAVIGATION: Financial Management General Ledger Periodic Activities Tax Collected at Source Revised Form 27EQ

.
Fill in the fields according to these guidelines:

Field
TCAN Location

Comments
Select the T.C.A.N. No from the look up list for which the Revised 27EQ return will be generated.

Report Frequency

Choose Quarter from the drop down list for which revised 27EQ will be generated. Select the financial year from the look up list for which 27 EQ return to be generated.

Financial Year

Full Name

Specify the name of the person, whose name will be printed on the Revised 27EQ return. Specify the designation of the person, whose name will be printed on the Revised 27EQ return

Designation

59

Field
Printing date

Comments
Specify the date on which the Revised 27EQ return will be printed.

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Generate Revised eTCS


After doing specific corrections, you can generate eTCS through Generate Revised eTCS for 27EQ.

NAVIGATION: Financial Management General Ledger Periodic Activities Tax Collected at Source Generate Revised eTCS

A form will be opened where you need to define various filter conditions for the generation of revised 27EQ.

A Multiple Batch Correction Statement can be furnished only for C1, C2, C3, C5 and C9 type of Correction Statements. Y type of correction statement should be furnished

61

separately. It cannot be part of Multiple Batch Correction Statement. Hence for a correction entry involving C1, C2, C3, C5, C9 and Y type of corrections, three different eTCS files need to be created. 1. eTCS for C1, C2, C3, C5 or C9 corrections 2. eTCS for Y type corrections 3. eTCS for regular Y Revised 27B will be generated with the generation of Revised eTCS After preparation of the Correction Statement the same is to be validated through the File Validation Utility (FVU). The procedure for validation is the same as that for regular statements. Thereafter, furnish the validated correction statement with a TIN-FC or directly through the NSDL web-site (www.tin-nsdl.com). The Revised eTCS can be filed for a specific quarter.

This option requires following information to be entered: Quarter Financial year Date of filing Provisional Receipt No. In case of a Multiple Batch Correction Statement separate provisional receipts will be generated for each batch within the statement. For example, if there are three batches like C5, C3, and C9, three separate provisional receipts will be generated. You can enter multiple provisional receipt nos. in the field. The last Provisional Receipt No. will be used for generation of Batch Header.

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The program will maintain the full revision history of the following 1 2 3 4 Records modified Number of times modified Dates of filing of revised returns Receipt No. of Previous Return.

Return Status will display Revised Returns that have been filed. The data will be displayed according to Financial Year and Quarters.

You can view all the Previous RRR No.s defined for the quarter through the lookup.

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Reports
NAVIGATION: TCS Reporting: Financial ManagementReportsTCS Reporting

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Issued TCS Certificates

This report shows all the TCS certificates generated for the TCS Party based on the filters defined above.

65

TCS Challan Register

This report shows the TCS Challan Register details based on the filters defined above.

66

TCS Entries

This report shows the invoice wise details for Excise amount, Sales Tax Amount, and TCS amount.

67

Appendix
Example 1:
M/S ABC has sold the Scrap to M/S XYZ for Rs. 10,000/(1% as TCS rate, 10% Surcharge rate, 2% eCess rate) Following entry will be posted in the program. M/S XYZ A/c To TCS Payable A/c To Sales A/c Dr. Cr. Cr. Rs. 10112 Rs. 112 Rs. 10000

Customer (M/S XYZ) Account will be debited by Rs. 10112/ABC will deposit TCS to the government authority by passing the following entry. TCS Payable- A/C To Cash / Bank A/C Dr. Cr. Rs.112 Rs112

Now M/S ABC will receive the payment from M/S XYZ. Bank A/c To M/S XYZ A/c Dr. Cr. Rs.10112 Rs.10112

ABC will issue a TCS certificate (form 27D) for Rs. 112 to XYZ.

Example 2:
M/S ABC has sold the Scrap to M/S XYZ for Rs. 10,000/- and received the advance payment from M/S XYZ. (1% as TCS rate, 10% Surcharge rate, 2% eCess rate) Following entry will be posted in the program. Bank A/c To TCS Payable A/c To M/S XYZ A/c Dr. Cr. Cr. Rs.10000 Rs. 111 Rs. 9889

In this case, a grossing up method will be used for calculation of TCS amount on Rs.10000. At the time of raising Invoice to the customer the following entry will be posted. M/S XYZ A/c Dr. Rs.9889

68

To Sales A/c

Cr.

Rs.9889

ABC will deposit TCS to the government authority by passing the following entry. TCS Payable- A/C To Cash / Bank A/C Dr. Cr. Rs.111 Rs111

ABC will issue a TCS certificate (form 27D) for Rs. 111 to XYZ.

Example 3:
Raising Invoice to M/S XYZ against partial Advance received from the customer (with reference to Example 2) In this case, if the invoice has to be made for Rs.20000 for M/S XYZ and already a payment of Rs.10000 received against the invoice. The program will calculate TCS on the remaining amount. Rs.20000-Rs.9889 = Rs.10111. Entry will be. M/S XYZ A/c To TCS Payable A/c To Sales A/c Dr. Cr. Cr. Rs.10224 Rs.113 Rs.10111

ABC will deposit TCS to the government authority by passing the following entry. TCS Payable- A/C To Cash / Bank A/C Dr. Cr. Rs.113 Rs113

ABC will issue a TCS certificate (form 27D) for Rs. 113 to XYZ.

Example 4:
Correction in TCS: A regular statement containing four challans / transfer voucher details where: Challan 1 has 10 Party records Challan 2 has 5 Party records Challan 3 has 15 Party records Challan 4 has 20 Party records Subsequently, there are corrections in the following records in the regular statement; Corrections in Collector Details In challan 1, update CIN Details

69

In challan 3, CIN Details to be rectified and for underlying party 4 incorporate 10digit PAN instead of PANINVALID in the Party PAN field, for party 10 replace valid PAN with another valid PAN In Challan 4, add a party record. An additional challan with two underlying parties needs to be added. There are no changes in challan 2 or its underlying party records. The sequence of these batches (correction statements in a file) will be as follows: File header record (FH) Batch Header record 1 (BH) C5 (updation of party PAN) Challan detail record 3 (CD) Party detail record 10 (DD) update valid to valid PAN Batch Header record 2 (BH) C2 (updation of Challan) with batch updation indicator 1 for corrections in Collector Details. Challan / Transfer Voucher Detail record 1 (CD) updation of CIN Batch Header record 3 (BH) C3 Challan / Transfer Voucher Detail record 3 (CD) Party Detail record 4 (DD) update PANINVALID with valid PAN Challan / Transfer Voucher Detail record 4 (CD) Party Detail record 21 (DD) addition of a Party Batch Header record 4 (BH) C9 addition of a Challan Challan / Transfer Voucher Detail record 5 (CD) Party Detail record 1 (DD) Party Detail record 2 (DD) If there are no corrections in Challan or Party Details except for updation of party PAN and corrections in Collector Details along with addition of Challan, the sequence will be: C1, C5, and C9 A Multiple Batch Correction Statement can be furnished only for C1, C2, C3, C5 and C9 type of Correction Statements. Y type of Correction Statement should be furnished separately. It cannot be part of Multiple Batch Correction Statement. In case of a Multiple Batch Correction Statement separate provisional receipts will be generated for each batch within the statement. For example, if there are three batches like C5, C3, and C9 three separate provisional receipts will be generated.

70

Microsoft Business Solutions Navision 4.0- VAT Opening

Table of Contents
Overview of Functionality......................................................................................3 Detailed Setup...................................................................................................3 Comprehensive Functionality ............................................................................3 Reports..............................................................................................................3 Value Added Tax Opening ....................................................................................3 Setup for VAT Opening.........................................................................................4 Source Code Setup ...........................................................................................4 VAT Batches .....................................................................................................4 VAT Opening Journal............................................................................................5 Input VAT Opening (Normal Item) .....................................................................8 Viewing the Posted Transaction ....................................................................9 Input VAT Opening (Capital Goods) - VAT Deferment with Settled Period. ....12 Viewing the Posted Transaction ..................................................................13 Input VAT Opening (Fixed Asset) - VAT Deferment without Settled Period ....15 Viewing the Posted Transaction ..................................................................16 Output VAT Opening (sale) .............................................................................18 Viewing the Posted Transaction ..................................................................18

Overview of Functionality
VAT Opening functionality facilitate the entry of opening balances in the statuary records which helps in maintaining and generating appropriate & accurate statutory records and reports using the existing Navision Localization feature.

Detailed Setup
Detailed setup of Sales Tax is required for entering opening balances of VAT in the statutory records.

Comprehensive Functionality
Following are the comprehensive functionalities covered under VAT Opening. Opening Balances of Input VAT. Opening Balances of VAT Deferment. Opening Balances of Output VAT.

Reports
The existing reports of VAT for examples: Intrastate Purchase/Sales, Purchase Book, Sales Book, and VAT Deferment will get updated with opening transaction.

Value Added Tax Opening


To update the opening balances of VAT, the user has to create the Sales Tax Setup in the following ways: Create State Code with Tax Account (Sales), Tax Account (Purchase), and VAT Deferred Account No. in the States setup. Mention the deferments period in the Sates setup. Create tax group code in the Tax Groups setup. Create tax jurisdiction with tax type VAT and map it with state code in the Tax Jurisdiction setup. Make the combination of tax jurisdiction with tax group code in the Tax Details setup and define the VAT % in the Tax below Maximum field with some effective

date. Place a check mark in the Capital Goods field and in the Creditable Goods field. Create the Tax Area Code and select it in the Tax Area Location setup. Mention the same state code in Vendor/Customer and Location card.

Setup for VAT Opening Source Code Setup


Navigation:
Financial Management General Ledger Setup Trial Codes Source Code Setup

Choose the source code from the lookup list in the VAT Opening field.

VAT Batches
NAVIGATION: Financial Management Setup Sales Tax VAT Batches

You must create batch in the VAT Batches form before entering the opening balances of VAT.

Create the VAT batches by entering the following fields: Fields Batch Name Description No. Series Description Define the code of the batch, you want to create (For example: Opening). Define the description of the code, you have entered. Choose the number series from the lookup list. VAT opening journal will be posted with this number series. Choose the source code from the lookup list.

Source code

VAT Opening Journal


Navigation:
Financial Management General Ledger Periodic Activity Value Added Tax VAT Opening Journal

A new Interface has been provided to enter the opening balances of VAT.
Fill in the fields according to these guidelines: Fields Transaction Type Description Choose the transaction type from the drop down button. The available options are: Purchase and Sale. This field shows the document number of the selected transaction. This field is editable. This field shows the posting date of the selected transaction. This field is editable. Choose the type from the drop down button. The available options are: G/L Account, Item and Fixed Asset. If you are selecting item for purchase transaction then you have to select the item ledger entry for which you are entering the opening balances. Item Ledger Entry No. No. Choose the item ledger entry from the lookup list for type Item. Choose the number for selected type (Item No., G/L Account No. and Fixed Asset No.). Enter the date of purchase of capital goods in case entering the opening balances of input VAT for the purchase capital item. Source type will automatically display while selecting the transaction type. If transaction type is Purchase then source type will be Vendor and if transaction type

Document No.

Posting date Type

Date of Purchase (Capital Goods)

Source type

Fields Source no. Location Code

Description is Sale then source type will be Customer. Choose the vendor/customer number from the lookup list. Choose the location code from the lookup list. Note: Location state code and vendor/customer state code should be same for entering VAT opening. If state code is blank then company state code should match with vendor/customer state code.

Quantity

Value in the Quantity field will be transferred after selecting item ledger entry number in case of type item. This field is editable.

Unit Price Amount Tax %

Enter the unit price of the Item, G/L Account, and Fixed Asset. The system calculates amount by multiplying quantity with unit price. This field shows the tax percentage that has been defined in the setup This field shows input credit/output tax amount of the transaction. Enter the Non ITC Claimable Usage % if applicable. This is applicable in purchase transactions. This field shows the amount that has been loaded on Item. This field shows the number of deferment settled if the purchase transaction has deferments and some deferments have already been settled. By default the system will show the Tax Account (Purchase), Tax Account (Sales) and VAT Deferred Account number in this field.

Input Credit/Output Tax Amount Non ITC Claimable Usage %

Amount Loaded on Item No. of Deferment Settled

G/L Account No.

Fields Bal. G/L Account No.

Description By default the system will show the Tax Account (Purchase), Tax Account (Sales) and VAT Deferred Account in this field.

Note: You can also post the transactions with dimensions available on the Line menu button in the form.

Input VAT Opening (Normal Item)


There should be item ledger entry for the item in case entering the opening balance of input VAT for normal item.

Enter the following Information in the VAT Opening Journal. Transaction Type: Document No.: Posting Date: Type: Item ledger Entry No.: No.: Description: Source Type: Source No.: Location Code: Quantity: Unit Price: Amount: Tax %: Input Credit/Output Tax Amt.: G/L Account No.: G/L Account No.: Post the VAT Opening Journal. Purchase OP000127 19/03/07 Item 1475 (Selected from item ledger entries) 1000 Bicycle. Vendor 10000 Blue 10 1000 10000 10 1000 (10% of 10000) 5912 (Tax Account (Purchase)) 5912 (Tax Account (Purchase))

Viewing the Posted Transaction


Navigation:
Financial Management General Ledger History Navigate

G/L Entry

The program creates the following G/L entry: Particulars Sales Tax Account (Purchase) Sales Tax Account (Purchase) Type DR CR Amount(Rs) 1000 1000

Detailed Tax Entry

The system will create detailed tax entry with Input credit/output tax amount and with other details. Further this transaction will be available in VAT settlement form for doing VAT settlement. Note 1: User can also use the Type as G/L Account to enter the opening of Input VAT. Note 2: In case of purchase of item for Export or Deemed Export place a check mark in the Location card in Export or deemed export filed and enter the opening balances. The

system will create the detailed tax entry with Export or Deemed export filed true and also show the amount of ITC Input VAT Credit (Exports Sales) in VAT Settlement form. Note 3: If user wants to enter the balances of Input VAT for items then first he/she has to enter/create Item Ledger entry. If user wants to enter the balances of Input VAT consolidated then he/she can use G/L Account for that, in this case no need to create item ledger entry.

Input VAT Opening (Capital Goods) - VAT Deferment with Settled Period.
In case of entering the opening balance of input VAT for capital goods there should be item ledger entry for that item. In the states setup 12 deferments periods has been defined.

Enter the following Information in the VAT Opening Journal. Transaction Type: Document No.: Posting Date: Type: Item ledger Entry No.: No.: Description: Date of Purchase (capital Goods): Source Type: Source No.: Location Code: Quantity: Unit Price: Amount: Tax %: Input Credit/Output Tax Amt.: No. of Deferments settled: G/L Account No.: G/L Account No.: Purchase OP000130 19/03/07 Item 1476 (Selected from item ledger entries) 80206 (FA is true in Item card) Webcam 01/03/06 Vendor 10000 Blue 10 50000 500000 10 50000 (10% of 500000) 12 (from 01/03/06 to 28/02/07 deferments has been settled) 5913 (VAT Deferred A/C) 5913 (VAT Deferred A/C)

Post the VAT Opening Journal.

Viewing the Posted Transaction


Navigation:
Financial Management General Ledger History Navigate

G/L Entry

The program creates the following G/L entry: Particulars VAT Deferred A/C VAT Deferred A/C Type DR CR Amount(Rs) 50000 50000

Detailed Tax Entries

The system will create 13 detailed tax entries from number 0 to 12. For first 12 entries the Settlement field will be marked True (from no. 0 to 11). The last entry will be available for VAT settlement.

Input VAT Opening (Fixed Asset) - VAT Deferment without Settled Period
Case: Entering the opening balance of input VAT for fixed asset. In the States setup, 12 deferments periods have been defined.

Enter the following Information in the VAT Opening Journal. Transaction Type: Document No.: Posting Date: Type: Item ledger Entry No.: No.: Description: Date of Purchase (capital Goods): Source Type: Source No.: Location Code: Quantity: Unit Price: Amount: Tax %: Input Credit/Output Tax Amt.: No. of Deferments settled: G/L Account No.: G/L Account No.: Post the VAT Opening Journal. Purchase OP000131 19/03/07 Fixed Asset Blank FA000050 Conveyor Belt 01/03/07 Vendor 10000 Blue 1 50000 50000 10 5000 (10% of 50000) 0 5913 (VAT Deferred A/C) 5913 (VAT Deferred A/C)

Viewing the Posted Transaction


Navigation:
Financial Management General Ledger History Navigate

G/L Entry

The program creates the following G/L entry: Particulars VAT Deferred A/C VAT Deferred A/C Type DR CR Amount(Rs) 5000 5000

Detailed Tax Entries

The system will create 13 detailed tax entries from number 0 to 12. And distribute the tax amount as Input Credit/Output Tax amount in 13 installments. These transactions will be available for VAT settlement accordingly.

Output VAT Opening (sale)


In case of entering opening balance of Output VAT

Enter the following Information in the VAT Opening Journal. Transaction Type: Document No.: Posting Date: Type: Item ledger Entry No.: No.: Description: Source Type: Source No.: Location Code: Quantity: Unit Price: Amount: Tax %: Input Credit/Output Tax Amt.: G/L Account No.: G/L Account No.: Post the VAT Opening Journal. Sale OP000132 19/03/07 Item Blank 1000 Bicycle Customer 10000 Blue 10 4000 40000 10 4000 (10% of 40000) 5911 (Sales Tax Account (Sale)) 5911 (Sales Tax Account (Sale))

Viewing the Posted Transaction


Navigation:
Financial Management General Ledger History Navigate

G/L Entry

The program creates the following G/L entry: Particulars Sales Tax Account (Sale) Sales Tax Account (Sale) Type DR CR Amount(Rs) 4000 4000

Detailed Tax Entry

The system will create detailed tax entry with input credit/output tax amount with negative value and this will be available in the VAT Settlement form for doing VAT settlement. Note1: The user can also enter the opening balances of Output VAT for type G/L Account and Fixed Asset. Note 2: Further all transactions means; purchase and sale will be available for VAT settlement in the VAT Settlement form according to the tax period. Note 3: Existing VAT reports for example: Intrastate Purchase/Sales, Purchase Book, Sales Book and VAT Deferment will also show the opening transactions.

Microsoft Business Solutions Navision 4.0- Excise Reports

Table of Contents
Overview of Functionality......................................................................................4 Detailed Setup...................................................................................................4 Comprehensive Functionality ............................................................................5 Reports..............................................................................................................5 Annexure 58 .........................................................................................................5 Setup Required .................................................................................................5 Viewing the Posted Transaction ....................................................................7 Viewing the Ledger Entries ..........................................................................10 Viewing the Posted Transaction ..................................................................14 Sample Register .................................................................................................19 Setup Required............................................................................................19 Viewing the Posted Transaction ..................................................................21 Waste & Scrap Register......................................................................................29 Setup Required ...............................................................................................29 Viewing the Posted Transaction ..................................................................31 Inter Unit Transfer Register.................................................................................35 Setup Required ...............................................................................................35 Viewing Inter Unit Transfer Register report..................................................37 Daily Register......................................................................................................40 Setup Required ...............................................................................................40 Viewing Daily Register report.......................................................................43 Monthly Register .................................................................................................46 Viewing Monthly Register report ..................................................................46 ER-1....................................................................................................................49 Set ups for ER-1..............................................................................................49 Company Information ......................................................................................49 Assigning the type of unit to E.C.C. Nos. ........................................................50 Viewing the Ledger Entries ..........................................................................55 Viewing the Ledger Entries ..........................................................................59 Viewing the Ledger Entries ..........................................................................66 Report .............................................................................................................72 ER 1 ................................................................................................................72 ER-2....................................................................................................................78 Set ups for ER-2..............................................................................................78 Viewing the Ledger Entries ..........................................................................80 Viewing the Ledger Entries ..........................................................................84 Viewing the Ledger Entries ..........................................................................91 Report .................................................................................................................98 ER 2 ................................................................................................................98

Overview of Functionality
This feature is developed for the user engaged in manufacturing activity and is submitted the ER1 or ER 2 return monthly with the excise authority. There are some records which need to be maintained by the user as per excise rule though it is not necessary to be submitted with excise authority like Annexure 58 (Accountal of return goods) Registers for Sample Wastage and Scrap Register Inter Unit Transfer Register Raw Material and Component Register Daily Raw Material And Component Register Monthly

Detailed Setup
Annexure 58
The user needs to create Excise setup for the calculation of excise duty and also needs to create Process carried out setup in excise setup.

Sample Register
The user needs to create Excise setup for calculating excise duty and also needs to create Location card with a check mark in the Testing Location field.

Waste & Scrap Register


The user needs to create Excise, Sales Tax, and TCS setup for calculating all taxes for scrap item and also needs to place a check mark in the Scrap field in the Item card.

Inter Unit Transfer Register


The user needs to create Excise setup for calculating excise duty and also needs to select Intermediate goods in the Item card based on E.C.C number.

Daily Register
The user needs to create Excise setup for calculating excise duty and also needs to create nature of Disposals setup in the Excise setup. The user needs to select Intermediate goods or raw material based on E.C.C number in the Item card

ER 1
In Company Information master, place a check mark in the Large Tax Payer Unit field if the assessee is coming under Large Tax payer under excise rule.

Choose large tax payer city from the look up list if the assessee is coming under Large Tax Payer. In the Excise set up E.C.C no assign the type of unit with E.C.C number. Choose the type of unit from the drop down box. The available options are: Manufacturer and 100 % E.O.U. In the Excise set up E.C.C no .series assign the number series for LTU RM and LTU IM In the Item card, define the type of item as Intermediate or Raw Material based on the E.C.C number.

ER 2:
In the Excise set up E.C.C no assign the type of unit with E.C.C number. Choose the type of unit from the drop down box. The available options are: Manufacturer and 100 % E.O.U.

Comprehensive Functionality
Following reports are handled by the application Annexure 58 (Accountal of return goods) Registers for Sample Wastage and scrap register Inter Unit Transfer Register Raw Material and Component Register Daily Raw Material and Component Register Monthly ER 1 ER 2

Reports

Annexure 58
This report contains the details of Excisable goods returned from customer and their re dispatch if any. Annexure 58 report provides quantitative and excise details of Return of Excisable goods and re dispatch if any.

Setup Required
User has to create Excise setup for calculation Excise duty and also needs to create Process carried out setup in excise setup.

Process Carried Out


When returned goods have been re-dispatched, the process carried out to rectify the defected goods should be mentioned in the returned goods register. In the process carried out window define the type of process this will select at the time of re-dispatching the return goods.

Navigation Financial Management Setup Excise Process Carried Out

Fill in the fields according to these guidelines:

Field
Code

Description
Enter the code for process carried out. The program accepts the values which are, Unique Up to 10 characters Enter the description of process carried out code.

Description

Calculation of Excise through Sales order/Invoice for Excisable Goods Navigation: Financial Management Setup Excise Process Carried Out

To calculate Excise, fill the fields in the Sales Order window as follows:

On the Header:
No: Structure: On the Line: Type: No.: Description: Quantity: Unit Price: Line Amount: Calculate Structure Press F9 to view the excise amount Item 1000 Bicycle 10 4000 40000 10000 Excise

Post the Sales order.

Viewing the Posted Transaction

Navigation: Sales & Marketing History Posted Invoice

G/L Entry

The program creates the following entry: Particulars Customer Excise Payable Sales Type Dr Cr Cr Amount(Rs) 57920 17920 40000

System will calculate Excise according to the Excise posting setup. Calculation of Excise in case of sales Return through return Order In case when goods has been returned back by the customer for some process like repair.

Navigation: Sales & marketing Order Processing Return Orders

Field Description: Field Identification Mark Description Define identification mark for the returned goods. For example-returned goods with identification mark of colour or lot no.

To create a return order, fill the fields as follows:


Customer: Location: Structure: Applies-to Doc. Type: Applies-to Doc No: Item: Quantity: Direct Unit Price: Line Amount: Return reason Code: Identification mark: Calculate Structure Values. Post the Return Order. 10000 Location 4 Excise Invoice 103411 1000 10 4000 40000 (The program will calculate it.) P-repair Red Coloured Bicycle

Viewing the Ledger Entries


Navigation: Sales & Marketing Order Processing History Posted Credit Memos

G/L entry

The program creates the following entry: Particulars Customer Excise Payable Sales Type Cr Dr Dr Amount(Rs) 57920 17920 40000

Incase of re-dispatch of returned goods Create Sales Order for resale of 5 quantities of bicycle out of 10 returned quantity, and sale of 1 quantity of touring Bicycle. Also change the Unit Price of bicycle from 4000 to 5000. On the header level of sales order place a check in Re-Dispatch field and select the Return receipt No. from Posted return receipt Lines. Navigation: Sales & marketing Order Processing Orders

Field Description (Header): Field Re-Dispatch Description Place a check mark in the re dispatch field when the returned goods has re dispatched to the customers.

Return receipt No.

This field will be visible only when the Re dispatch field is true. Choose the return receipt no from which goods has returned to the customers.

Field Description (Line): Field Process Carried out Description Select the Process carried out from lookup list.

To calculate Excise, fill the fields in the Sales Order window as follows:

On the Header:
No: Structure: Re-Dispatch: Return Receipt No.: On the first Line: Type: No.: Description: Quantity: Unit Price: Line Amount: On the Second Line: Type: No.: Description: Quantity: Unit Price: Line Amount: Calculate Structure Press F9 to view the excise amount Item 1001 Touring Bicycle 1 4000 4000 Item 1000 Bicycle 5 5000 25000 10000 Excise Place a check mark (Shipping Tab) 107049 (Shipping Tab)

Post the Sales order.

Viewing the Posted Transaction


Navigation: Sales & Marketing History Posted Invoice

G/L Entry

The program creates the following entry: Particulars Customer Excise Payable Excise payable Sales Sales Type Dr Cr Cr Cr Cr Amount(Rs) 41992 1792 11200 4000 25000

System will create two excise entries and also update the Annexure 58 report. Note: The user can also post the transaction from Sales Invoice.

Preview Annexure-58 report Navigation: Financial Management General Ledger Reports Excise Reporting Annexure-58

Fill in the fields according to these guidelines:

Fields
ECC No

Description
Choose the ECC number from the lookup list for which you want to generate the report. Choose customer no for which report is to be generated. Choose item no for which report is to be generated. Choose Posted Return Receipt No. for which report is to be generated. Mention the starting date of report is to be generated Mention the ending date of report to be

Customer No

Item No

Return Rcpt No

Start Date

End Date

Fields

Description
generated.

The report contains following columns Sr 1 2 3 Column Heading


Sr. No Name & address, ECC No. Of Manufacturing unit Details of duty paying Documents & Date Description, Qty. of Goods Received Identification Marks Name, Address, ECC No. of the Customer Purpose For Which Received

Comment
This column contains Sr. No of report lines. This field contains Name, Address and ECC No of the Location. This column contains details of sales return document. The program populates external document no and posting date of sales return document in this column. This column contains description and quantity of goods returned. This column contains Identification mark of goods returned. The program copies the value from Return Receipt lines. This column contains Name, Address, ECC No of the customer from whom goods returned. This column contains purpose for which goods returned from customer. The program populates

4 5 6 7

Process Carried Out Whether any excisable goods are used in repairs/ replacements.

10 11

Duty Paid on such additions/ replacements CENVAT Credit Availed on returned goods CENVAT Credit Reversed Details of Invoice Clearance

12

13

description of return reason code, which is selected in lines of sales return document. This column contains process carried out on item resold. The program populates description of Process Carried Out code, which is selected in lines of sales order/invoice. This column contains the value Yes or No. Yes: If duty payable on re dispatched goods is more than proportionate duty reversed (col 11 ) on sale return then program populates value yes in this column No: If duty payable on re dispatched goods is not more than proportionate duty reversed (col 11 ) on sale return then program populates value No in this column This column contains the value excess duty paid over proportionate duty reversed in col 11 Cenvat Credit Reversed. This column contains the value of CENVAT credit availed on returned goods. The program calculates the value as proportionate value of excise duty paid on original sale. This column contains the value of CENVAT Credit Reversed on resale. The program populates the value on the basis of proportionate value of excise credit taken on Sales Return. This column contains the details of Resale: Customer Name, Sales Invoice No, Posting date of sales document and Quantity of re sold goods This column contains the details of additional item sold at the time of resale.The program populates the description of such item(s) and Quantity

14

15

Qty. of description of goods recleared separate account for disposal of replaced (defective parts removed) parts should be maintained. Signature of assessee or his authorised agent

The program keeps this field blank for manual signature of assessee or his authorised agent.

Sample Register
This report contains details of Excisable item sold as free sample or send for laboratory test or returned back from laboratory test. This report is in two sections: Free Supply Lab Test

Setup Required
User has to create Excise setup for calculation Excise duty and also needs to create Location card with Testing Location True Location Card

Navigation: Warehouse Setup Locations

Field Description: Field Testing Location Description Place a check mark in the Testing Location field when any sample goods has been sent to the out side premises for laboratory test and which will come after testing the sample goods.

Note: It will help to identify how much goods have been sent for the testing purposes.

Calculation of Excise in case of Free Supply For Free Supply section program generates report on the basis of Posted Sales Order and Sales Invoice where Free Supply field on Sales Header is checked. When Free Supply field in Sales Order or Sales Invoice header is checked, the program populates value in Line Discount % column of Sales Order/Invoice line as 100. Thus Line amount Excl VAT becomes nil. Navigation: Sales & marketing Order Processing Orders

To calculate Excise, fill the fields in the Sales Order window as follows:

On the Header:

No: Structure: Free Supply: On the first Line: Type: No.: Description: Location: Quantity: Unit Price: Line Amount: Line Discount %: Calculate Structure

10000 Excise Place a check mark

Item 1000 Bicycle Blue Loc 10 4000 Nil 100

Press F9 to view the excise amount

Post the Sales order.

Viewing the Posted Transaction


Navigation: Sales & Marketing History Posted Invoice

G/L Entry

The program creates the following entry: Particulars Sales Discount Excise payable Excise Expense Type Cr Dr Cr Dr Amount(Rs) 40000 40000 4320 4320

In this case you have to enter the Excise expense account in general ledger setup.

Incase of Lab Test Lab Test section of Sample Register report provides details of excisable goods send to lab test location and returned from lab test location. In this if excisable goods has been purchased in Blue Loc. And after wards transferred to testing location through Item Reclass journal.

Item Reclass journal Navigation: Warehouse Inventory Item Reclass. Journal

Field Description Field Laboratory Test Description Place a check mark in the laboratory Test field when any item is sending for laboratory test to testing location.

Fill the fields as follows:


Item No.: Location: New Location: Quantity: Laboratory Test: Post the Item Reclass. Journal. After posting program will decrease the quantity in Blue location and increase the quantity in yellow location. Goods return from testing location after laboratory test. 10 quantities have been sent for laboratory test and 5 have been received from testing location. Receive the goods through item Reclass journal by applying the original entry. 1000 blue Loc (Enter the location from where goods have to be transferred) Yellow (Enter the testing location, to which goods has to be transferred) 10 Yes

Item Reclass journal Navigation: Warehouse Inventory Item Reclass. Journal

Fill the fields as follows:


Item No.: Location: New Location: Quantity: Laboratory Test: Applies-to entry: Post the Item Reclass. Journal. 1000 Yellow (Enter the testing location) Blue Loc (Enter the original Location) 5 Yes 2139

After posting, the program will transfer 5 quantities from Yellow location to Blue location.

Report Sample Register Report NAVIGATION: Financial Management General Ledger Reports Excise Reporting Sample Register

FREE SUPPLY tab Fields Description: Fields


No. Sell-to Customer No.

Description
Select the No. of item for which you want to generate the report. Select the customer No. for which you want to generate the report.

LAB TEST tab Fields Description: Fields


Item No. Source No.

Description
Select the Item No. for which you want to generate the report. Select the source No. for which you want to generate the report.

Options tab Fields Description: Fields


E.C.C. No. Start Date End Date

Description
Select the E.C.C. No. for which you want to generate the report. Enter the start date for which you want to generate the report Enter the end date for which you want to generate the report

Report column
Description of various columns in Sample report for Free Supply section is as follows Sr 1 2 3 Column Heading Date Item Description Type of Sample Comment This column contains the date on which free sample sold. This column contains the description of Item sold. This field contains the text FREE SUPPLY. Since in this section of report the program consider Sales Invoice lines where value in Free Supply field is checked, the program populates the text FREE SUPPLY Not relevant for FREE SUPPLY section This field contains the Name of customer. This field contains Sales Invoice No. This field contains the Quantity of Free Sample sold. This field contains the value of Assessable amount on which excise duty is calculated. This field contains effective rate excise duty payable. The program calculates the rate as, Excise % = Excise Amount (Col 10) * 100 Assessable Value (Col 8) This field contains the total amount of Excise duty payable. The program copies the value in this field from Excise amount field in Sales Invoice Line. Not relevant for FREE SUPPLY section Not relevant for FREE SUPPLY section Not relevant for FREE SUPPLY section

4 5 6 7 8 9

Name of Testing Location Name of Customer Invoice No Quantity Assessable Value Excise %

10

Excise Amount

11 12 13

Date of Return Quantity Returned Remaining Quantity

The report contains following columns for LAB Test Sr 1 Column Heading Date Comment This field contains the date on which goods send to testing location. The program copies value in this field from posting date field in Item Ledger Entry. This field contains the description of item send to testing location. This column contains the text LAB TEST. Since in this section of report the program consider Item Ledger Entry lines where value in Laboratory Test field is checked, the program populates the text LAB TEST

2 3

Item Description Type of Sample

4 5 6

Name of Testing Location Name of Customer Invoice No

This field contains the name of testing location. Not relevant for LAB TEST section This field contains the Document no on which goods transferred to testing location. The program copies the value in this field from Document No field in Item Ledger Entry. This field contains the Quantity of item transferred to testing location. The program copies the value in this field from Quantity field in Item Ledger Entry. Not relevant for LAB TEST section Not relevant for LAB TEST section Not relevant for LAB TEST section This field contains the date on which goods returned from Testing Location. The program copies the value in this field from Posting Date field in Item Ledger Entry. This field contains the quantity of goods returned from Testing Location. The program copies the value in this field from Quantity field in Item Ledger Entry. This field contains remaining quantity to be returned from testing location. The program populates the value by deducting returned quantity quantities from dispatched quantity

Quantity

8 9 10 11

Assessable Value Excise % Excise Amount Date of Return

12

Quantity Returned

13

Remaining Quantity

Waste & Scrap Register


This report contains details of Sales of excisable items which are defined as Scrap Item in item card. The program checks whether item is defined as Scrap or not at the time of generating the report. This report is based on Posted Sales Invoice. The program considers only invoiced quantity.

Setup Required
User has to create Excise, Sales tax, TCS setup for calculation of all taxes for scrap item and also needs to place a check mark in scrap field in Item card. Item Card NAVIGATION: Purchase Planning Items

Place a check mark in scrap filed in item card

Calculation of Excise, VAT and TCS on Scrap item through Sales Order/invoice
Navigation: Sales & marketing Order Processing Orders

To calculate Excise, VAT and TCS, fill the fields in the Sales Order window as follows:

On the Header:
No: Structure: On the Line: Type: No.: Description: Quantity: Unit Price: Line Amount: TCS Nature of Collection: Item 1100 Front Wheel 10 1000 10000 A 10000 Taxes (Type in structure is Excise and Sales Tax)

Calculate Structure and calculate TCS Press F9 to view the excise, Tax and TCS amount Post the Sales order.

Viewing the Posted Transaction


Navigation: Sales & Marketing History Posted Invoice

G/L Entry

The program creates the following entry:

Particulars Sales Sales tax A/C (Sales) Excise payable TCS Payable Customer

Type Cr Cr Cr Cr Dr

Amount(Rs) 10000 900 3480 1507 15887

System will also create Excise entry, TCS entry and Detailed Tax entry with relevant information.

Preview Waste & Scrap Register report

NAVIGATION: Financial Management General Ledger Reports Excise Reporting


Waste & Scrap Register

Sales Invoice tab Fields Description: Fields


No. Sell-to Customer No.

Description
Select the No. of Item for which you want to generate the report. Select the customer No. for which you want to generate the report.

Options tab Fields Description: Fields


E.C.C. No. Start Date End Date

Description
Select the E.C.C. No. for which you want to generate the report. Enter the start date for which you want to generate the report Enter the end date for which you want to generate the report

System will generate the report with all relevant fields of Excise, VAT, charges and TCS.

Inter Unit Transfer Register


This report contains the details of Excisable goods transferred from one location to another.

Setup Required
User has to create Excise setup for calculation Excise duty and also needs to select Intermediate goods in Item card. Item Card NAVIGATION: Purchase Planning Items Item ECC No. /Item Categories.

Select type of Item as Intermediate for E.C.C. no. Transfer Order

Navigation:
Purchase Order Processing Transfer Orders

To calculate Excise, fill the fields in the transfer Order window as follows:

On the Header:
No: Transfer from code: Transfer to Code: In-transit Code: Structure: On the Line: Item No.: Description: Quantity: Transfer Price: Amount: Calculate Structure Post the Transfer Order as Ship and Receive. After posting, the program will create the G/L entries, excise entries in both the locations. 1000 Bicycle 10 1000 10000 1132 Manf. Loc manufact Out. Log Excise

Viewing Inter Unit Transfer Register report


NAVIGATION: Financial Management General Ledger Reports Excise Reporting Inter Unit Transfer Register Generate report for shipping location MANF. LOC

Options tab Fields Description: Fields


E.C.C. No. Start Date End Date

Description
Select the E.C.C. No. for which you want to generate the report. Enter the start date for which you want to generate the report Enter the end date for which you want to generate the report

For E.C.C. No. of Shipping location report will show the Issue details, for example, the location you have issued the goods to. Generate report for receiving location MANUFACT

Options tab Fields Description: Fields


E.C.C. No. Start Date End Date

Description
Select the E.C.C. No. for which you want to generate the report. Enter the start date of the date range for which you want to generate the report Enter the end date of the date range for which you want to generate the report

For E.C.C. No. of receiving location report will show the receipt details, for example from which location you have received the goods.

Daily Register
This report contains details of daily movement of inflow and outflow of excisable goods under various heads.

Setup Required
User has to create Excise setup for calculation Excise duty and also needs to create nature of Disposals setup in excise setup.

Navigation Financial Management Setup Excise Nature of Disposals

Fields Description:
Fields Type Description Choose the type of nature of disposal from the drop down box, the option of the nature of disposal are Purchase return ,Transfer shipment, Sale ,Negative adjustment. If the set up for nature of disposal is not defied than in the raw material & component register the field will be populated against the nature of disposal is blank Define the code for the type field and it will be populated in the report as it defined in the code field. Enter the description of code

Code

Description

Item Card NAVIGATION: Purchase Planning Items Item ECC No. /Item Categories.

Also define the type of item as Raw Material in Item card for particular E.C.C. No. In case of Disposal and Wasted & Destroyed In this case post the transaction through item reclass Journal if the items are disposed or Wasted/destroyed.

Item Reclass journal Navigation: Warehouse Inventory Item reclass. Journal

Fields Description: Fields Other Usage Nature of Disposal Description Select the other usage from drop down button. The available options are Disposal, wasted/destroyed. Select the nature of disposal from lookup list.

Fill the fields as follows:

First Line
Entry type: Item No.: Location: Quantity: Other Usage: Nature of Disposal: Negative Adj. 1000 Blue 50 Disposal Fire

Second Line
Entry type: Item No.: Location: Quantity: Other Usage: Post the Item Reclass. Journal. System will create item ledger entries with negative adj. and also will update the daily register with other usage and nature of disposal. Negative Adj. 1000 Blue 100 Wasted/Destroyed

Viewing Daily Register report


NAVIGATION: Financial Management General Ledger Reports Excise Reporting Daily Register

Item Ledger Entry tab Fields Description:


Fields Location Code Description Select the location code for which you want to generate the report

Options tab Fields Description: Fields


E.C.C. No. Start Date End Date Item No

Description
Select the E.C.C. No. for which you want to generate the report. Enter the start date of the date range for which you want to generate the report Enter the end date of the date range for which you want to generate the report Select the item no. for which you want to generate the report

System will generate the report with all the relevant information.

The report contains following columns Sr Column Heading Comment 1 Description of Raw This column contains description of item. Material/Component 2 Opening Balance This column contains opening balance of item. 3 Quantity Received This column contains quantity received of item during the period given in report filter. 4 Unit This column contains unit of measure code. 5 Total This column contains total of opening balance and quantity received. 6 Excisable This column contains quantity consumed in the Quantity Goods manufacturing of excisable goods. used in the 7 Other This column contains quantity consumed in the manufactu Goods manufacturing of other goods. re of 8 Nature of This column contains the nature of disposal. Quantity otherwise Disposal disposed 9 Quantity This column contains quantity disposal of other of than consumption or wastage. 10 Quantity wasted or This column contains quantity of item wasted or destroyed destroyed. 11 Closing Balance This column contains closing balance of item at the end of given period. 12 Quantity of Excisable This column contains total output of excisable goods manufactured goods, if any, for which item consumed. 13 Quantity of other goods This column contains total output of other goods, if manufactured any, for which item consumed. 14 REMARKS Program keeps this column blank for remarks. 15 Signature of the Program keeps this column blank for manual Assessee or his agent signature of the assessee or his agent.

Monthly Register
This report contains details of Monthly movement of inflow and outflow of excisable goods under various heads.

Viewing Monthly Register report


Navigation: Financial Management General Ledger Reports Excise Reporting Monthly Register .

Item tab Fields Description: Fields


No

Description
Select the Item No. for which you want to generate the report

Options tab Fields Description:


Fields E.C.C. No. Month Description Select the E.C.C. No. for which you want to generate the report Select the month from drop down button

Fields Year

Description for which you want to generate the report. Enter the year for which you want to generate the report.

System will generate the report on monthly basis. The report contains following columns: Sr 1 2 3 4 5 6 7 Column Heading Date Opening Balance Quantity Received Unit Total Quantity used in the manufactu re of Excisa ble Goods Other Goods Comment This column contains dates of month given in report filter. This column contains opening balance of item. This column contains quantity received. This column contains unit of measure code. This column contains total of opening balance and quantity received. This column contains quantity consumed in the manufacturing of excisable goods. This column contains quantity consumed in the manufacturing of other goods.

9 10 11 12 13 14 15

Nature This column contains the nature of disposal. of Dispos al Quantit This column contains quantity disposal of other than y consumption or wastage. Quantity wasted or This column contains quantity of item wasted or destroyed destroyed. Closing Balance This column contains closing balance of item. Quantity of This column contains total output of excisable goods, Excisable goods if any, for which item consumed. manufactured Quantity of other This column contains total output of other goods, if goods any, for which item consumed. manufactured REMARKS Program keeps this column blank for remarks. Signature of the Program keeps this column blank for manual Assessee or his signature of the assessee or his agent. agent Quantity otherwise disposed of

ER-1
Set ups for ER-1
Company Information Navigation: Administration Application Setup General Company Information

Fields Description:
Field Large Tax Payer Description Place a check mark in the Large Tax Payer Unit field if the company is categorized as large tax payer unit as per excise rule. Choose the city code of the large tax payer unit from the look up list.

Large Tax payer city

Assigning the type of unit to E.C.C. Nos. Navigation: Financial Management Set Up Excise E.C.C.Nos

Fields Description:
Field Type of Unit Description Choose the type of unit from the drop down box. The available options are: Manufacturer and 100 % E.O.U. It will help in generating different type of returns which are submitted with the excise authority. For example For manufacturer, ER 1 return to be submitted with the excise authority. For 100 % E.O.U, ER 2 return to be submitted with the excise authority

Navigation: Financial Management Set up Excise Excise No Series

Fields Description:
Field LTU RM Description Choose the number series from the look list. In the ER -1 return, the number of transfer challan, used in the inter unit by the large tax payer unit for the raw material which is coming under Rule 12A of CENVAT credit rule 2004 will be populated in the topic d of table 10. LTU IM Choose the number series from the look list. In the ER -1 return, the transfer challan number used in the inter unit by the large tax payer unit with out payment duty, is to be specified in the topicd of table 10.

Navigation: Purchase Planning Item E.C.C No /Item Categories In the Item Card, click the Item menu button. The following form opens:

Fields Description
Field Item No E.C.C.No Description By default the item number will get populated from the Item Card. Choose the E.C.C. number from the look up list. Choose the item as Raw Material or Intermediate Goods from the drop down box. If the type of item is not defined according to the E.C.C number, then the Inter unit Transfer register and ER 1 Return table No-4 and 5 will not get populated

Type of Item

The following transactions are necessary to populate the ER1 return: Purchase of excise able goods, sales return, and sales credit memo where CENVAT credit has taken through Purchase Invoice /Order/Sales Return Order./Sales Credit Memo Manufacture of finished goods with excise product posting group. Sale of goods through Sales Order, Invoice, and Transfer Shipment Utilization of service tax credit for excise payment Utilization of excise credit for service tax payment Deposition of TR-6 challan in Public Ledger Account (PLA) through Journal and updation of the challan details through Periodical Activities in PLA form. Settlement of the excise liability through the Settlement form from the followings: RG 23A, RG 23 C, PLA, Service Tax Credit.

If any excise charge liability has been paid then with Periodical Activities update the ER 1 payment type and assign the amount to: Arrears of duty under rule 8, Interest Payment, and so on.

Transactions Navigation: Purchase Order Processing Orders

To create a purchase order, fill the fields as follows:


Vendor: Vendor type: Location: Structure: Item: Quantity: Direct Unit Cost : Line Amount: Calculate Structure Values. The program will calculate excise according to the defined setups Post the order with Receive and Invoice. 10000 Manufacturer 5555 Excise 70204 1000 50 50000 (The program will calculate it.)

Viewing the Ledger Entries


Navigation: Purchase Order Processing History Posted Invoices

View the G/L entries

In the excise entry you will find the BED and E Cess amount according to the set up.

In the above window you can see the followings:


BED Amount: RS 5000 ECess Amount: Rs 100 This amount will be shown in the ER 1 return column number 8 under credit taken on input on invoice issued by the manufacturer of CENVAT credit availed and utilized. Note 1: Incase of excisable capital goods, purchased and CENVAT amount will be show in ER 1 return according to the vendor type. Note 2: If CVD is calculated and the item is input in the Purchase Invoice, then it will be shown in credit taken on imported goods irrespective of vendor type. If no CVD is calculated then the program will check the vendor type. If the vendor type is Importer

then it will be shown in the credit taken on imported inputs if the item is not a capital goods.

To create an output for a finished goods the following steps to be followed


Create a item card where the following fields to be filled 70206 MS Finished goods retail 16.32 Finished Production P00040 where raw material No-70204 has been attached with quantity-2

Item No: Description: Gen. Product Posting Group: Excise Product Posting Group: Inventory Posting Group: Replenishment System: Production BOM No:

Released production order through Manufacturing Execution Released Production Order 200 05/04/06 5555

Quantity: Due Date: Location:

Create consumption journal for the above production with location as: 5555 Create out put for the finished goods number: 70206 200 5555

Quantity: Location:

ER 1 report with the Excise Product Posting Group as: 16.32, will show the quantity manufactured as: 200 in table number 3 of Details of manufacture, clearance and duty payable.

Sales Order Navigation: Sales & Marketing Order Processing Orders

To create a Sales order, fill the fields as follows


Customer: Location: Structure: Item: Quantity: Direct Unit Cost : Line Amount: Calculate Structure Values. The program will calculate excise according to the defined setups Post the Order with Ship and Invoice. 20000 5555 Excise 70206 30 300 9000 (The program will calculate it.)

Viewing the Ledger Entries


Navigation: Sales &Marketing History Posted Invoices

In the G/L entry, the following entry has been made by the program

BED eCess Line Amount BED Amount eCess Total Duty Amount

10% 2% Rs9000 = 30*300 Rs9000*10/100 =900 900*2/100 =18 900+18 =Rs918

In the Excise Entries, the following duty amount as shown in the image below are created

Now in the ER1 return following amount of data you will find against the Excise Product Posting Group as: 16.32 Quantity Rate of Duty CENVAT % e Cess Duty Amount eCess 30 10 2% Rs 900 Rs 18

Note: Excise product posting group makes different group in the Details of the manufacture, clearance, and duty payable, under the following cases Incase rate of duty is different for different finished goods of same excise product group, it will make different group for rate of duty. For supplementary bill, it makes different group for the same excise product posting group For intermediate goods, in case of large payer tax unit it makes different group for same excise product group For goods removed as such it makes different group for same excise product posting group

Excise credit utilized for service tax payment


The following steps to be followed

1. Create a purchase order and calculate the excise amount


Vendor: Vendor type: Location: Structure: Item: Quantity: Direct Unit Cost : Line Amount: Calculate Structure Values. The program will calculate excise according to the defined setups Post the order with Receive and Invoice. Now the BED amount is RS300 and eCess amount is Rs6 Under Credit taken on input on invoice issued by I or II stage dealer topic in table 8, the ER 1 return will show Rs 300 in the CENVAT field and Rs 6 in the eCess column. 20000 Ist stage dealer 5555 Excise 70204 60 50 3000 (The program will calculate it.)

2. Place a check mark in the Excise as Service Tax field Navigation: Financial Management General Ledger Periodical Activities Service Tax Excise as Service Tax
Place a check mark in the Excise as Service Tax field.

3. Create a purchase invoice and fill the following fields

Vendor: Location: Service tax registration for location 5555 Structure: G/L Account: Quantity: Payment method Direct Unit Cost : Line Amount:

10000 5555 5555SER Service 8410 1 Cash 10000 10000 (The program will calculate service according to the defined setup)

Post the order with Receive and Invoice. Now the Service tax amount is RS1000 and eCess amount is Rs20. Under Credit taken on input service topic in table 8, the ER 1 return will show Rs 1000 in the Service Tax columnand Rs 20 in the eCess on taxable service column.

4. Create a sales invoice and fill the following fields

Customer Location: Structure: G/L Account: Quantity: Direct Unit Cost : Payment method Line Amount:

10000 5555 Service 8410 1 20000 Cash 20000 (The program will calculate service according to the defined setups

Post the order with Receive and Invoice. Now the Service tax amount is RS 2000 and eCess amount is Rs40

5. Settle the service tax liability through Excise Credit and Service Tax Credit Navigation: Financial Management General Ledger periodical activities Service Tax Payment

Click Apply Entries

You need to keep the cursor in the Excise as Service Credit line then click the Line menu button, and then select the Excise as cenvat claim

From the RG 23A you can utilize RS 300 and Rs 6 from eCESS

Particulars A/C no-5923 Setoff against RG-A/C no 2993 Setoff against service tax credit-A/C No 2998 Payment through cash-A/C No 2910

Service tax liability 2000 300 500 1200

eCess on service tax liability 40 6 10 24

Viewing the Ledger Entries


Navigation: Financial Management General Ledger History Register

In the ER 1 return Under Credit taken on inputs on invoices issued by I or II stage dealers topic in table 8, the ER 1 return will show Rs 300 in the Service Tax column and Rs 6 in the eCess on Taxable Service column. Under Credit utilised for payment of tax on services topic in table 8, the ER 1 return will show Rs 300 in the CENVAT column, Rs 6 in the eCess on exisable goods column, Rs 800(Rs 300+Rs500) in the Service Tax column, and Rs 16 in the eCess on Service Tax column.

Depositing the amount into PLA Navigation: Financial Management General Ledger General Journal

Fill the following field in the General Journal window Place a check mark in the PLA field PLA BED Amount PLA eCess Amount PLA Excise Charge Amount Rs50000 Rs10000 Rs30000

Under Add TR-6/GAR-7 Challan Payments made in the month (in aggregate) topic in table 7, the ER 1 return will show Rs 90000 in the Amount column. Under Self assessment memorandum topic in table 10, the ER 1 return will show Rs 90000 in the During the month, total Rs. column.

Updating the challan details Navigation: Financial Management General Ledger Periodical Activities Excise PLA PLA form

On the Function menu button, click the Update Challan Detail

Click OK after entering the challan details

Settlement of excise duty liability Navigation: Financial Management General Ledger General Journal
Document Type: G/L Account: E.C.C No: Payment 2994 5555

Click Apply Entries

Particulars Setoff against RG-A/C no 2993 Set off against PLA

Excise Duty Liability 900 500 400

eCess on Excise Liability 18 18

Post the journal


Under CENVAT topic in table 6, the ER 1 return will show Rs 400 in the Account current (Rs.) column and Rs 500 in the Credit account (Rs.) column. Under eCess topic in table 6, the ER 1 return will show Rs 18 in the Credit account (Rs.) column. Under Credit utilised for payment of duty on goods topic in table 8, the ER 1 return will show Rs 500 in the CENVAT column and Rs 18 in the eCess on excisable goods column.

Settlement of excise charge liability Navigation: Financial Management General Ledger General Journal
Create the excise charge liability Document Type: G/L Account: E.C.C No: Payment 2994 5555

Place a check mark in the Excise Charge field Enter the excise charge amount as Rs -20000

Now Rs 20000 as excise charge liability has been created for the E.C.C No-5555 Make the payment for excise charges

Click Applied Entries.

Enter the excise charge amount as Rs 20000 against PLA Post the journal Now Rs 20000 will get populated in table 7 (Abstract of current account )under utilization towards the other payments made during the month . Assigning the amount Rs 20000 into Arrears of duty, Interest, and so on Navigation: Financial Management General Ledger Periodical Activities Excise Update ER 1 Payment Type

Click the Update Payment Type in the Function menu button.

Select the entry and click the Update Payment Type in the Function menu button. The following form opens.

Enter the amount in the fields. These will be populated in the ER 1 report.

Procedure for Inter unit transfer of intermediate goods by large tax payer unit
Create item-70251 (MS intermediate) which is an intermediate goods for the location E.C.C 5555 and for location E.C.C No GOA 123 Create the Transfer Order with the following information: 5555 GOA 5 Blank 70251 15/04/06

Transfer from Code: Transfer to Code: Quantity: Structure: Select Item: Posting Date:

Now ER I return, for Excise Product Posting Group 16.32 will create separate group for inter unit transfer by large payer tax unit in table 3 and clearance details of inter unit transfer of intermediate goods will be shown with the qty as 5 which has been sent to GOA location with excise product posting group in table 4..

Report ER 1
Navigation:

Financial Management General Ledger Reports Excise Reporting ER 1

Fill in the fields according to these guidelines:

Fields
Return for the Month of

Description
Choose the month from the drop down box for which the ER 1report to be generated Choose the location ECC number from the lookup list for which you want to generate the report. Define the year for which ER 1 return to be generated.

Return for the Location of

Year

Note:Credit utilized for goods removed as such and inter unit transfer by large tax payer unit.
In the request form for generating the ER1 return, you can manually enter the amount in these field and it will automatically reduce the amount of credit utilized for payment of goods and the amount will get populated in the credit utilized when input or capital goods removed as such and credit utilized for inter unit transfer by a large payer tax unit.

Entered amount will not store in any table it will only help to get the printout of ER1 return. Preview of the ER1 return.

ER-2

Set ups for ER-2


Navigation: Financial Management Set up Excise E.C.C.Nos

Fields Description:
Field Type of unit Description Choose the type of unit from the drop down box. The available options are: Manufacturer and 100 % E.O.U. It will help in generating different type of returns which are submitted with the excise authority. For example For manufacturer, ER 1 return to be submitted with the excise authority. For 100 % E.O.U, ER 2 return to be submitted with the excise authority

The following transactions are necessary to populate the ER2 return:

Purchase of excise able goods, sales return, and sales credit memo where CENVAT credit has taken through Purchase Invoice /Order/Sales Return Order./Sales Credit Memo Manufacture of finished goods with excise product posting group. Sale of goods through Sales Order, Invoice, and Transfer Shipment Utilization of service tax credit for excise payment Utilization of excise credit for service tax payment Deposition of TR-6 challan in Public Ledger Account (PLA) through Journal and updation of the challan details through Periodical Activities in PLA form. Settlement of the excise liability through the Settlement form from the followings: RG 23A, RG 23 C, PLA, Service Tax Credit. If any excise charge liability has been paid then with Periodical Activities update the ER 2 payment type and assign the amount to: Arrears of duty under rule 8, Interest Payment, and so on.

Transactions Navigation: Purchase Order Processing Orders

To create a purchase order, fill the fields as follows:

Vendor: Vendor type: Location: Structure: Item: Quantity: Direct Unit Cost : Line Amount: Calculate Structure Values.

10000 Manufacturer 6666 Excise 70204 1000 50 50000 (The program will calculate it.)

The program will calculate excise according to the defined setups Post the order with Receive and Invoice.

Viewing the Ledger Entries


Navigation: Purchase Order Processing History Posted Invoices

View the G/L entries

In the excise entry we will find the amount of BED and E cess amount according to set up

In the above window you can see the followings: BED Amount: RS 5000 ECess Amount: Rs 100 This amount will be shown in the ER 2 return table no 6 under credit availed on input of CENVAT credit availed and utilized. Note 1: Incase of excisable capital goods, purchased and CENVAT amount will be show in ER 2 return under topic Credit availed on capital goods

To create an output for a finished goods the following steps to be followed

Create a item card where the following fields to be filled 70206 MS Finished goods retail 16.32 Finished Production P00040 where raw material No-70204 has been attached with quantity-2 of unit of measurement K.G

Item No: Description: Gen. Product Posting Group: Excise Product Posting Group: Inventory Posting Group: Replenishment System: Production BOM No:

Released production order through Manufacturing Execution Released Production Order 200 06/04/06

Quantity: Due Date: Location:

6666

Create consumption journal for the above production with location as: 6666 Create out put for the finished goods number: 70206 200 6666

Quantity: Location:

ER 2 report with the Excise Product Posting Group as: 16.32, will show the quantity manufactured as: 200 in table number 3 of Details of manufacture, clearance and duty payable.

Sales Order Navigation: Sales & Marketing Order Processing Orders

To create a Sales order, fill the fields as follows


Customer: Location: Structure: Item: Quantity: Direct Unit Cost: Line Amount: Calculate Structure Values. The program will calculate excise according to the defined setups Post the order with Ship and Invoice. 20000 6666 Excise 70206 30 300 9000 (The program will calculate it.)

Viewing the Ledger Entries


Navigation:

Sales &Marketing History Posted Invoices

In the G/L entry, the following entry has been made by the program.

BED eCess Line Amount BED Amount eCess Total Duty Amount

10% 2% Rs9000 = 30*300 Rs9000*10/100 =900 900*2/100 =18 900+18 =Rs918

In the Excise Entries, the following duty amount as shown in the image below are created

Now in the ER 2 return following amount of data you will find against the Excise Product Posting Group as: 16.32 Quantity Rate of Duty CENVAT % e Cess Duty Amount eCess 30 10 2% Rs 900 Rs 18

Note: Excise product posting group makes different group in the Details of the manufacture, clearance, and duty payable, under the following cases Incase rate of duty is different for different finished goods of same excise product group, it will make different group for rate of duty. For supplementary bill, it makes different group for the same excise product posting group For goods removed as such it makes different group for same excise product posting group

Excise credit claimed for service tax payment


The following steps to be followed

1. Create a purchase order and calculate the excise amount


Vendor: Location: Structure: Item: Quantity: Direct Unit Cost: Line Amount: Calculate Structure Values. The program will calculate excise according to the defined setups Post the order with Receive and Invoice. Now the BED amount is RS 1000 and eCess amount is Rs20 Under Credit availed on capital goods topic in table 6, the ER 2 return will show Rs 500 in the CENVAT field, Rs 10 in the eCess column, As it is a capital item 50% of credit will be taken in the current year and 50% will be taken in next year 20000 6666 Excise 70207 1 10000 10000 (The program will calculate it.)

2. Place a check mark in the Excise as Service Tax field Navigation: Financial Management General Ledger Periodical Activities Service tax Excise as Service Tax
Place a check mark in the Excise as Service Tax field.

3. Create a purchase invoice and fill the following fields

Vendor: Location: Service Tax Registration for location 6666 Structure: G/L Account: Quantity: Payment method Direct Unit Cost : Posting date Line Amount:

10000 6666 6666SR Service 8410 1 Cash 10000 01/04/06 10000 (The program will calculate service according to the defined setup)

Post the order with Receive and Invoice. Now the Service tax amount is RS1000 and eCess amount is Rs20. Under Credit taken on input service topic in table 6, the ER 2 return will show Rs 1000 in the Service Tax column and Rs 20 in the eCess on taxable service column.

4. Create a sales invoice and fill the following fields

Customer Location: Structure: G/L Account: Quantity: Direct Unit Cost : Payment method: Line Amount:

10000 6666 Service 8410 1 20000 Cash 20000 (The program will calculate service according to the defined setup)

Post the order with Receive and Invoice. Now the Service tax amount is RS 2000 and eCess amount is Rs40

5. Settle the service tax liability through excise credit and service tax credit Navigation: Financial Management General Ledger periodical activities Service Tax Payment

Click Apply Entries

You need to keep the cursor in the Excise as Service Credit line then click the Line menu button, and select the Excise as cenvat claim

From the RG 23C you can utilize RS 500 and Rs 10 from eCESS.

Particulars A/C no-5923 Setoff against RG-23C Setoff against service tax credit-A/C No 2998 Payment through cash-A/C No 2910

Service tax liability 2000 500 1000 500

eCess on service tax liability 40 10 10 20

Viewing the Ledger Entries


Navigation: Financial Management General Ledger History Register

In the ER 2 return Under Credit availed from capital goods topic in table 6, the ER 2 return will show Rs 500 in the Service Tax column and Rs 10 in the eCess on Service Tax column. Under Credit utilized for payment of duty on services topic in table 6, the ER 2 return will show Rs 500 in the CENVAT column, Rs 10 in the eCess column, Rs 1500 (Rs 1000+Rs500) Service Tax column, and Rs 20 (Rs10+Rs10) in the eCess on Taxable Services column.

Depositing the amount into PLA Navigation: Financial Management General Ledger General Journal

Fill the following field in the General Journal window Place a check mark in the PLA field PLA BED Amount PLA eCess Amount PLA Excise Charge Amount E.C.C No Rs50000 Rs10000 Rs30000 66666 RS 90000

Total Amount

In table 8, During the month total Rs get the value as 90000

Updating the challan details Navigation: Financial Management General Ledger Periodical Activities Excise PLA PLA Form

In the Function menu button, click the Update Challan Detail

Click the OK button after entering the challan details

Settlement of excise duty liability Navigation: Financial Management General Ledger General Journal
Document Type: G/L Account: E.C.C No: Payment 2994 6666

Click Apply Entries

Particulars Setoff against RG-A/C no 2993 Set off against PLA Post the journal

Excise duty liability 900 518 400

eCess on Excise liability 18

Under CENVAT topic in table 4, the ER 2 return will show Rs 400 in the Account current (Rs.) column and Rs 518 in the Credit account (Rs.) column. Under Credit utilized for payment of duty on goods topic in table 6, the ER 2 return will show Rs 518 in the CENVAT column.

Settlement of excise charge liability Navigation: Financial Management General Ledger General journal
Create the excise charge liability Document Type: G/L Account: E.C.C No: Payment 2994 66666

Place a check mark in the Excise Charge field Enter the excise charge amount as Rs -11000 Now Rs 11000 as excise charge liability has been created for the E.C.C No-66666

Make the payment for excise charges

Click Applied Entries.

Enter the excise charge amount Rs 11000 against PLA

Post the journal

. Assigning the amount Rs 11000 into arrears of duty ,Interest so on Navigation:


Financial Management General Ledger Periodical Activities Excise Update ER 2 Payment Type

Click the Update Payment Type in the Function menu button

Select the entry and click the Update Payment Type in the Function menu button. The following form opens.

Enter the amount in the fields. These will be populated in the ER 2 report.

Procedure for Input or capital goods received without payment


Create item-70208 (MS goods) Excise Posting Group 16.34 Notification No-WODUTY CTSH No-16.345 Quantity-5 Create a purchase order where the structure is blank Structure-Blank Select item as 70208 Posting date-15/04/06 Now in table no 5 of ER 2 return, it will show the product posting group 16.34 with custom tariff heading and value of the goods. To view this table the following conditions are necessary: 1) Excise product posting set up notification no. and serial no. of notification are must 2) No excise duty is to be calculated

Report
ER 2
Navigation: Financial Management General Ledger Reports Excise Reporting ER 2

Fill in the fields according to these guidelines:

Fields
Return for the Month of

Description
Choose the month from the drop down box for which the ER 2 report to be generated Choose the location ECC number from the lookup list for which you want to generate the report. Enter the year for which ER 2 return to be generated.

Return for the location of

Year

Note:

Credit utilized for goods removed as such:


In the request form for generating the ER 2 return, you can manually enter the amount in these field and it will automatically reduce the amount of credit utilized for payment of goods and the amount will get populated in the credit utilized when input or capital goods removed as such. Entered amount will not store in any table it will only help to get the printout of ER 2 return. Preview of the ER 2 return:

Microsoft Business Solutions Navision 4.0- Additional Duty of Custom & Special CVD in Lieu of VAT

Table of Contents
Overview of Functionality......................................................................................3 Detailed Setup...................................................................................................3 Comprehensive Functionality ............................................................................3 Reports..............................................................................................................4 Setups Required ...................................................................................................4 Excise Setup .....................................................................................................5 Duties ............................................................................................................6 Posting Setup ................................................................................................7 Claim Setoff ...................................................................................................9 Structure..........................................................................................................11 Calculation of CVD and ADC through Purchase Transactions ...........................12 Calculation of CVD in case of Normal Item through Purchase Order/Invoice..12 Viewing the Posted Transaction ..................................................................13 Calculation of CVD in case of Capital Item through Purchase Order/Invoice ..20 Viewing the Posted Transaction ..................................................................21 Calculation of CVD through purchase Credit Memo........................................30 Viewing the Posted Transaction ..................................................................31 Calculation of CVD through Sales Order.........................................................38 Viewing the Posted Transaction ..................................................................39 Calculation of CVD through Transfer Order ....................................................44 Transfer of Normal Items .............................................................................44 Viewing the Posted Transaction (Transfer Shipments)................................45 Viewing the Posted Transaction (Transfer Receipts)...................................50 Transfer of Capital Items .............................................................................57 Viewing the Posted Transaction (Transfer Shipments)................................58 Viewing the Posted Transaction (Transfer Receipts)...................................65 Excise CENVAT Claim ....................................................................................74 Calculation of CVD and ADC in case of Trading Items .......................................79 Calculation of CVD in case of Trading Item through Purchase Order .............79 Viewing the Posted Transaction ..................................................................80 Calculation of CVD in case of Trading Item through Sales Order....................86 Viewing the Ledger Entries ..........................................................................87 Calculation of CVD in case of Trading Item through Purchase Return Order..93 Viewing the Ledger Entries ..........................................................................94 Calculation of CVD in case of Trading Item through Sales Return Order......100 Viewing the Ledger Entries ........................................................................101 Goods Purchased for Trading and Further Transferred for Manufacturing .......107 Transfer of Goods to Manufacturing Unit from Trading Unit ..........................107 Viewing the Ledger Entries ........................................................................109 Capital Goods Purchased for Trading and further Transferred for Manufacturing ..........................................................................................................................115 Transfer of Capital Goods to Manufacturing Unit from Trading Unit..............115 Viewing the Ledger Entries ........................................................................117 Appendix...........................................................................................................123

Overview of Functionality
Additional duty of Custom (CVD) equivalent to duty of excise and Additional duty of customs equivalent to value Added tax, Sales Tax, or local tax are specified for the purpose of eligibility of CENVAT. Additional duty of customs equal to the, excise duty leviable on like goods produced or manufactured in India. This is levied under Section 3 of Customs Tariff Act, 1975. This is usually referred to as "Countervailing Duty" (CVD). However, the correct description of this duty is Additional Duty of Customs. In order to determine the applicable rate, the user has to obtain the correct classification of the goods under the Central Excise Tariff Act, 1986. The duties under the Central Excise Tariff are on ad valorem basis. However, specific rates have been prescribed for some items.

Detailed Setup
CVD functionality contains the detailed setup of Excise and Structure which you need to create before calculating CVD and ADC VAT. Followings are the setups required for calculating CVD and ADC. Excise Structure Claim Setoff

Comprehensive Functionality
Following are the comprehensive functionalities covered under CVD in case of Normal Items and Capital Goods: Calculation of CVD and ADC VAT through Purchase, Sale Order/Invoice. Updation of RG 23 A/C Part I & II registers. Additional duty in lieu of VAT is not available for deferments in case of purchase of capital item. Additional duty component is not available for settlement of service tax on output service. Settlement of one duty element against multiple sub-duty elements Calculation of CVD in case of purchase of trading items. CVD can also be calculated while transferring goods from trading unit to manufacturing unit. Updating RG 23 D and Quarterly Return for Traders reports.

Reports
All statutory reports related to excise for example RG 23 A Part I & II, RG 23 C Part I & II, RG 23 D, and Quarterly Return for Traders will get updated with this functionality.

Setups Required
Followings are the setups required to be fill for calculating CVD and ADC. Excise Structure Claim Setoff

Excise Setup
Navigation: Financial Management General Ledger Setup Excise

Duties
Navigation: Financial Management General Ledger Setup Excise Duties

In the Excise Duties setup, following new codes has been introduced for the calculation of CVD and ADC: ADC VAT Amount BCD Amount CIF Amount SHE CESS Amount

These codes will be used for setting up the calculation formulas in the Excise Posting setup.

Posting Setup
Navigation: Financial Management General Ledger Setup Excise Posting Setup

Fill in the fields according to these guidelines for calculating CVD and ADC: Fields Excise Bus. Posting Group Excise Prod. Posting Group From Date CENVAT Cr. Receivable Account CENVAT Cr. Receivable (Trading) CENVAT Transferred (Trading) Excise Payable Account CENVAT Cr. (Deferred) Account BED Calculation Type Description Choose the excise business posting group from the lookup list. Choose the excise production posting group from the lookup list. Enter the date, from which you want to calculate CVD and ADC. Choose the CENVAT Cr. Receivable Account from the lookup list. Choose the CENVAT Cr. Receivable (Trading) from the lookup list. Choose the CENVAT Transferred (Trading) from the lookup list. Choose the Excise Payable Account from the lookup list. Choose the CENVAT Cr. (Deferred) Account from the lookup list. Choose the BED Calculation type from drop down button.

BED % BED Calculation Formula

Define the BED %. Define the BED calculation formula as the sum of BCD Amount, CIF Amount (New field introduced for the calculation of CVD). Choose the AED(GSI) Calculation Type from drop down button. Define the AED(GSI) %. Define the AED(GSI) calculation formula as the sum of BCD Amount, CIF Amount. Choose the SED Calculation type from drop down button. Define the SED % Define the SED calculation formula as the sum of BCD Amount, CIF Amount. Choose the SAED Calculation type from drop down button. Define the SAED %. Define the SAED calculation formula as the sum of BCD Amount, CIF Amount. Choose the eCess Calculation type from drop down button. Define the eCess %. Define the eCess calculation formula as the sum of BED Amount, AED Amount, SED Amount and SAED Amount. Place a check mark If you want to setoff against excise payable eCess and SHE CESS. Choose the SHE CESS Calculation type from drop down button. (New field has been introduced to calculate SHE CESS). Define the SHE CESS % (New Field has been introduced to calculate SHE CESS).

AED(GSI) Calculation Type AED(GSI) % AED(GSI) calculation formula SED Calculation type SED % SED Calculation formula SAED calculation Type SAED % SAED calculation formula eCess calculation type eCess % eCess calculation formula

Setoff Available for eCess

SHE CESS calculation type

SHE CESS %

SHE CESS calculation formula

Define the SHE CESS calculation formula as the sum of BED Amount, AED Amount, SED Amount and SAED Amount (New Field has been introduced to calculate SHE CESS). Choose the ADC VAT Calculation type from drop down button. (New field has been introduced for the calculation of ADC). Enter the ADC VAT %(New field has been introduced for the calculation of ADC). Define the ADC VAT calculation formula as the sum of BCD Amount, CIF Amount, BED Amount, AED Amount, SED Amount, SAED Amount, eCess Amount and SHE CESS Amount (New field has been introduced for the calculation of ADC).

ADC VAT calculation type

ADC VAT % ADC VAT calculation formula

The program will calculate CVD and ADC, based on the formula defined in the Excise Posting setup.

Claim Setoff
Navigation: Financial Management General Ledger Setup Excise Claim Setoff

In the Claim Setoff list, you can map a duty against another duty which you want to take the credit while using CENVAT Claim form. Fields Description: Fields BED Amount Description Choose duties from the duty code list against which you want to settle the BED

Fields AED(TTA) Amount

Description Amount. Choose duties from the duty code list against which you want to settle the AED (TTA) Amount. Choose duties from the duty code list against which you want to settle the AED (GSI) Amount. Choose duties from the duty code list against which you want to settle the ADET Amount. Choose duties from the duty code list against which you want to settle the ADE Amount. Choose duties from the duty code list against which you want to settle the CESS Amount. Choose duties from the duty code list against which you want to settle the NCCD Amount. Choose duties from the duty code list against which you want to settle the SAED Amount. Choose duties from the duty code list against which you want to settle the SED Amount. Choose duties from the duty code list against which you want to settle the eCess Amount. Choose duties from the duty code list against which you want to settle the SHE CESS Amount. Choose duties from the duty code list against which you want to settle the ADC VAT Amount.

AED(GSI) Amount

ADET Amount

ADE Amount

CESS Amount

NCCD Amount

SAED Amount

SED Amount

eCESS Amount

SHE CESS Amount

ADC VAT Amount

Structure
Navigation: Financial Management General Ledger Setup Structure Structure

Create new structure for CVD calculation with Type Excise.

Fields Description Fields CVD CVD Payable to Third Party Description Place a check mark in this field to calculate the CVD. Place a check mark in this field if the CVD and ADC amount is payable to Third Party means Customs House. Select the third party code from the G/L Account List by clicking lookup button.

CVD Third party Code

Note: The program will calculate CVD only if the CVD is True in Structure and will update third party account if CVD payable to third party field is checked and CVD third party code is defined in structure. Third party feature is only applicable in case of Purchase Transactions.

Calculation of CVD and ADC through Purchase Transactions


Calculation of CVD in case of Normal Item through Purchase Order/Invoice
Navigation: Purchases Order Processing Orders

To calculate CVD, fill the fields in the Purchase Order form as follows: On the Header: Buy from Vendor No: Structure: On the Line: Type: No.: Description: Quantity: Direct Unit Cost: Line Amount: CIF Amount: Item 1000 Bicycle 10 1000 10000 10000 10000 CVD

BCD Amount: Calculate Structure

10000

Press F9 to view the excise amount

Post the Order.

Viewing the Posted Transaction


Navigation: Purchases History Posted Invoice

G/L Entry

The program creates the following entry: Particulars Purchase CENVAT Cr. Receivable Vendor Custom House Type DR DR CR CR Amount(Rs) 10000 4228 10000 4228

In this case, the program will credit the Custom House with CVD and ADC amount. Calculation of CVD and ADC The program will calculate the CVD and ADC based on the following information: CIF + BCD Amount: CVD % (BED+AED+SED+SAED): ADC VAT %: Ecess %: SHE CESS %: Calculation: 20000*16%: 3200*2%: 3200*1%: 20000+3296 = 23296*4%: Total CVD & ADC Amount: 3200 (CVD) 64 (ECESS) 32 (SHE CESS) 932 (ADC VAT) 3200+ 64+ 32+ 932= 4228 20000 16% 4% 2% 1%

Excise Entry

The program will create Excise Entry with value in the CVD field as Yes and will also update the ADC VAT Amount.

RG 23 A Part I

The program will create RG 23 A Part I entry with Received Quantity.

RG 23 A Part II

The program will create RG 23 A Part II entry with CVD Yes and will also update the ADC VAT Amount fields. You can also post the transaction from the Purchase Invoice. Note 1: The user can also calculate CVD for type G/L Account and Charge (Item) from the Purchase Order / Invoice. Note 2: If CVD is True in Structure then the user should enter the amount in the CIF and BCD Amount fields on Purchase line of Order /Invoice.

Note 3: ADC VAT amount will not be available for taking excise credit while making payment of service tax.

Calculation of CVD in case of Capital Item through Purchase Order/Invoice


Navigation: Purchases Order Processing Orders

To calculate CVD, fill the fields in the Purchase Order as follows:

On the Header:
Buy from Vendor No: Structure: On the Line: Type: No.: Description: Quantity: Direct Unit Cost: Line Amount: CIF Amount: BCD Amount: Calculate Structure Item 80206 (Capital Item field is true in Item Card) WEBCAM 10 1000 10000 10000 10000 10000 CVD

Press F9 to view the excise amount Post the Order

Viewing the Posted Transaction


Navigation: Purchases History Posted Invoice

G/L Entry

The program creates the following entry: Particulars Purchase CENVAT Cr. Receivable CENVAT Deferred Vendor Custom House Type DR DR DR CR CR Amount(Rs) 10000 2580 1648 10000 4228

Note: In case of capital item the program will not consider ADC VAT amount as deferred. ADC VAT amount will be treated as CENVAT Cr. Receivable. Calculation of CVD and ADC The program will calculate the CVD and ADC based on the following information: CIF + BCD Amount: CVD % (BED+AED+SED+SAED): ADC VAT %: Ecess %: SHE CESS %: Calculation: 20000*16%: 3200*2%: 3200*1%: 20000+3296 = 23296*4%: Total CVD & ADC Amount: 3200 (CVD) 64 (ECESS) 32 (SHE CESS) 932 (ADC VAT) 3200+ 64+ 32+ 932= 4228 20000 16% 4% 2% 1%

4228-932=3296, 3296/2= 1648 Means 1648 as CENVAT Deferred and 2580 as CENVAT Receivable Excise Entries First Entry

The program will create the Excise Entry with ADC VAT amount while taking the value in the CVD field as Yes and in the Deferred field as: No.

Second Entry

In the second entry you see that the Deferred field and the CVD field have the values as: Yes but there is no ADC VAT amount because ADC VAT amount is not considered as deferred.

RG 23 C Part I

The program will create RG 23 C Part I entry with the Received Quantity.

RG 23 C Part II

The program will create RG 23 C Part II entry with the value in the CVD field as: Yes and will update the ADC VAT Amount fields. You can also post the transaction from the Purchase Invoice. Note 1: The user can also calculate the CVD for type: Fixed Asset, G/L Account, and Charge (Item) from the Purchase Order / Invoice. Note 2: If CVD is True in Structure then the user should enter the amounts in the CIF and BCD Amount fields on the purchase line of Order/Invoice.

Calculation of CVD through purchase Credit Memo


Navigation: Purchases Order Processing Credit Memo

To calculate CVD, fill the fields in the Purchase Credit Memo window as follows:

On the Header:
No: Structure: On the Line: Type: No.: Description: Quantity: Direct Unit Cost: Line Amount: CIF Amount: BCD Amount: Calculate Structure Press F9 to view the excise amount Item 1000 Bicycle 10 1000 10000 10000 10000 10000 CVD

Post the Credit Memo.

Viewing the Posted Transaction


Navigation: Purchases History Posted Credit Memos

G/L Entry

The program creates the following entry: Particulars Custom House Vendor CENVAT Cr. Receivable Purchase Type Dr Dr Cr Cr Amount(Rs) 4228 10000 4228 10000

In this case, the program will reverse the original transaction that has been created after posting the Purchase Order / Invoice. Calculation of CVD and ADC The program will calculate the CVD and ADC based on the following information: CIF + BCD Amount: CVD % (BED+AED+SED+SAED): ADC VAT %: Ecess %: SHE CESS %: Calculation: 20000*16%: 3200*2%: 3200*1%: 20000+3296 = 23296*4%: Total CVD & ADC Amount: 3200 (CVD) 64 (ECESS) 32 (SHE CESS) 932 (ADC VAT) 3200+ 64+ 32+ 932= 4228 20000 16% 4% 2% 1%

Excise Entry

The program will create Excise Entry with the value in the CVD field as Yes and will update the ADC VAT Amount.

RG 23 A Part I

The program will create RG 23 A Part I entry with negative value in the Quantity Received field.

RG 23 A Part II

The program will create RG 23 A Part II entry with the value in the CVD field as Yes and will update the ADC VAT Debit field also. You can also post the transaction from the Purchase Return Order. The program will only create RG 23 A/C part I & II entries if the user has Return Order granule. Note 1: The user can also calculate CVD for type: Fixed Asset, G/L Account and Charge (Item) from the Purchase Credit Memo/Return Order. Note 2: If the CVD is True in Structure then the user should enter the amount in the CIF and BCD Amount fields on the purchase line of Credit Memo/Return Order.

Calculation of CVD through Sales Order


Navigation: Sales & marketing Order Processing Orders

To calculate CVD, fill the fields in the Sales Order window as follows:

On the Header:
No: Structure: On the Line: Type: No.: Description: Quantity: Unit Price: Line Amount: CIF Amount: BCD Amount: Calculate Structure Press F9 to view the excise amount Item 1000 Bicycle 10 4000 40000 10000 10000 10000 CVD

Post the Sales order.

Viewing the Posted Transaction


Navigation: Sales & Marketing History Posted Invoice

G/L Entry

The program creates the following entry: Particulars Customer Excise Payable Sales Type Dr Cr Cr Amount(Rs) 44228 4228 40000

The program will create the Credit Excise Payable entry with CVD and ADC VAT amount. Calculation of CVD and ADC The program will calculate the CVD and ADC based on the following information: CIF + BCD Amount: CVD % (BED+AED+SED+SAED): ADC VAT %: Ecess %: SHE CESS %: Calculation: 20000*16%: 3200*2%: 3200*1%: 20000+3296 = 23296*4%: Total CVD & ADC Amount: 3200 (CVD) 64 (ECESS) 32 (SHE CESS) 932 (ADC VAT) 3200+ 64+ 32+ 932= 4228 20000 16% 4% 2% 1%

Excise Entry

The program will create Excise Entry with value in the CVD field as Yes and will also update the ADC VAT Amount field.

RG 23 A Part I

The program will create RG 23 A Part I entry with value in the Quantity Sold field. In case of sales, the user can also enter the CVD (duties) and ADC VAT amount manually in all duties fields on the sales line only after calculating Structure. Note 1: The user can calculate CVD by selecting Type: Fixed Asset, G/L Account, and Charge (item) in the Sales Order/Invoice.

Note 2: : If the CVD field is True in Structure then the user should enter the amount in the CIF and BCD Amount fields on the sales line of Order/Invoice. Note 3: The user can also calculate CVD through the Sales Credit Memo and Return Order. In this case the program will update RG 23 A/C Part I & II entries with the value in the CVD field as Yes.

Calculation of CVD through Transfer Order


Transfer of Normal Items
First purchase normal Items and calculate CVD and ADC VAT through the Purchase Order/Invoice. Then the transfer of normal items from one location to another occurs.

Navigation: Purchase Order Processing Transfer Orders

To calculate CVD, fill the fields in the transfer Order window as follows:

On the Header:
No: Transfer from Code: Transfer to Code: In-transit Code: Structure: 1089 Loc 1. Loc 2. Out. Log CVD

On the Line: Item No.: Description: Quantity: Transfer Price: Amount: CIF Amount: BCD Amount: Calculate Structure Post the Transfer order Ship and Receive. 1000 Bicycle 10 1000 10000 10000 10000

Viewing the Posted Transaction (Transfer Shipments)


Navigation: Warehouse History Posted Transfer Shipments

G/L Entry

The program will credit the Excise Payable with CVD and ADC VAT amount, as goods has been transferred to new location. Calculation of CVD and ADC The program will calculate the CVD and ADC based on the following information: CIF + BCD Amount: CVD % (BED+AED+SED+SAED): ADC VAT %: Ecess %: SHE CESS %: Calculation: 20000*16%: 3200*2%: 3200*1%: 20000+3296 = 23296*4%: Total CVD & ADC Amount: 3200 (CVD) 64 (ECESS) 32 (SHE CESS) 932 (ADC VAT) 3200+ 64+ 32+ 932= 4228 20000 16% 4% 2% 1%

Excise Entry

The program will create Excise Entry with the value in the CVD field as Yes and will update the ADC VAT Amount field with the negative value.

RG 23 A Part I

The program will create RG 23 A Part I entry with value in the Quantity Sold field.

Viewing the Posted Transaction (Transfer Receipts)


Navigation: Warehouse History Posted Transfer Receipts

G/L Entry

The program will debit CENVAT Cr. Receivable account with CVD and ADC VAT
amount. Calculation of CVD and ADC The program will calculate the CVD and ADC based on the following information: CIF + BCD Amount: CVD % (BED+AED+SED+SAED): ADC VAT %: Ecess %: SHE CESS %: Calculation: 20000*16%: 3200*2%: 3200*1%: 20000+3296 = 23296*4%: Total CVD & ADC Amount: 3200 (CVD) 64 (ECESS) 32 (SHE CESS) 932 (ADC VAT) 3200+ 64+ 32+ 932= 4228 20000 16% 4% 2% 1%

Excise Entry

The program will create Excise Entry with the value in the CVD field as Yes and will update the ADC VAT Amount field also.

RG 23 A Part I

The program will create RG 23 A Part I entry with value in the Quantity Received field.

RG 23 A Part II

The program will create RG 23 A Part II entry with the value in the CVD field as Yes and will update the ADC VAT Amount fields.

Transfer of Capital Items


First purchase the capital items and calculate CVD and ADC VAT through the Purchase Order/Invoice. Then transfer of the capital items from one location to another occurs.

Navigation: Purchase Order Processing Transfer Orders

To calculate CVD, fill the fields in the transfer Order window as follows:

On the Header:
No: Transfer from code: Transfer to Code: In-transit Code: Structure: On the Line: Item No.: Description: Claim Deferred Excise: Quantity: Transfer Price: Amount: CIF Amount: BCD Amount: 80206 Webcam True 10 1000 10000 10000 10000 1091 Loc 1 Loc 2 Out. Log CVD

Calculate Structure Post the Transfer Order as Ship and Receive.

Viewing the Posted Transaction (Transfer Shipments)


Navigation: Warehouse History Posted Transfer Shipments

G/L Entry

First the program will transfer the amount from the Deferred account to CENVAT Cr. Receivable account and then credit the Excise Payable account. Calculation: In the original entry the program has debited CENVAT Cr. Receivable A/C with 2580 and debited CENVAT Deferred A/C with 1648 as you have purchased a capital item. After transferring capital item from Loc 1. To Loc 2. The program has credited CENVAT Deferred A/C with 1648 and debited CENVAT Cr. Receivable A/c with 1648. Now, CENVAT Cr. Receivable A/C in Loc 1 has a debit balance of 4228 and the program has credited Excise Payable A/C with 4228 after transferring capital items to Loc 2.

Excise Entry

The program will create Excise Entry with the value in the CVD field as Yes and will update the ADC VAT Amount field with negative value.

RG 23 C Part I

The program will create RG 23 C part I entry with the value in the Quantity Sold field.

RG 23 C Part II

The program will create RG 23 C Part II entry and transfer the duties amount from next year to current year.

Viewing the Posted Transaction (Transfer Receipts)


Navigation: Warehouse History Posted Transfer Receipts

G/L Entry

Note: The program will debit CENVAT Cr. Receivable and CENVAT Deferred account. Note: In case of capital item, the program will not consider ADC VAT amount as Deferred. ADC VAT amount will be treated as CENVAT Cr. Receivable. Calculation of CVD and ADC The program will calculate the CVD and ADC based on the following information: CIF + BCD Amount: CVD % (BED+AED+SED+SAED): ADC VAT %: Ecess %: SHE CESS %: Calculation: 20000*16%: 3200*2%: 3200*1%: 20000+3296 = 23296*4%: Total CVD & ADC Amount: 3200 (CVD) 64 (ECESS) 32 (SHE CESS) 932 (ADC VAT) 3200+ 64+ 32+ 932= 4228 20000 16% 4% 2% 1%

4228-932 = 3296, 3296/2= 1648 1648 as CENVAT Deferred and 2580 as CENVAT Receivable

Excise Entry First entry

The program will create the Excise entry with ADC VAT amount while taking the value in the CVD field as Yes and value in the Deferred field as No.

Second entry

In the second entry the value in both of the Deferred and CVD field is Yes but there is no ADC VAT Amount, because ADC VAT amount should not be consider as deferred.

RG 23 C Part I

The program will create RG 23 C Part I entry with Quantity Received.

RG 23 C Part II

The program will create RG 23 C Part II entry with the value in the CVD field as Yes and will also update the ADC VAT Amount fields. Note 1: If the CVD is True in Structure then user should enter the amounts in CIF and BCD Amount fields on the Transfer Order line. Note 2: All transactions posted from Sales, Purchase and Transfer Order documents can be viewed in RG 23 A/C Part II reports.

Excise CENVAT Claim


In case of making adjustment of excise payable amount with CENVAT credit available for the particular ECC number.

Navigation: Financial Management General Ledger General journal

Click the Functions menu button, select the Payment option, and then click Excise. A new window opens.

In the Pay Excise window, the program will show the pending transactions of sales which have to be paid. Click Apply Entries.

In this form all field except Service Tax are non-editable Click Detail menu button to enter the values. A new form opens, where you can take the credit or settle your excise payable according to the claim setoff list defined in the Excise Setup. The program will show you the total liability according to the duty on each tab. The program will also show you the credit available for each component on the top line.

In the above form, you can see that for each duty the program is displaying liability and remaining liability. When you settle amount of duty with credit available then the remaining liability will be reduced to zero.

In the above form; you can see that for each duty, the program is displaying liability and remaining liability. When you settle amount of duty with credit available then the remaining liability will be reduced to zero.

In the above form; you can see that for each duty, the program is displaying liability and remaining liability. When you settle amount of duty with credit available then the remaining liability will be reduced to zero.

In the above form; you see that three tabs are available for RG 23 A Part II, RG 23 C Part II, and PLA. You can settle your components according to the setup. After entering amounts on each tab, close the form.

The program will automatically fill in the fields according to the values entered in the previous form.

Close the form.

Now the program populates the Amount field with the total value that has been adjusted against CENVAT Credit. Post the Journal.

Note: As discussed above, the user can take the credit while using Direct Debit to PLA and creating Sales Order / Invoice. In this case only PLA tab is editable. In case of CVD, the user can adjust ADC VAT with any component of PLA based on the setup created in Claim Setoff list.

Calculation of CVD and ADC in case of Trading Items


Calculation of CVD in case of Trading Item through Purchase Order
Navigation: Purchases Order Processing Orders

To calculate CVD, fill the fields in the Purchase Order window as follows:

On the Header:
Buy from Vendor No: Location: Structure: On the Line: Type: No.: Item 1000 10000 Trading (Place a check mark in Trading Location Field in the Location Card). CVD

Description: Quantity: Direct Unit Cost: Line Amount: CIF Amount: BCD Amount: Calculate Structure

Bicycle 10 1000 10000 10000 10000

Press F9 to view the excise amount On the Invoicing tab, Trading Item field will get a default check mark if the Trading Co. field in the Company Information window has been checked. Post the Order.

Viewing the Posted Transaction


Navigation: Purchases History Posted Invoice

G/L Entry

The program creates the following entry: Particulars Purchase CENVAT cr. Receivable(Trading) Vendor Custom house Type Dr Dr Cr Cr Amount(Rs) 10000 4228 10000 4228

In this case the program will credit the Custom House with CVD and ADC Amount. Calculation of CVD and ADCs The program will calculate the CVD and ADC based on the following information: CIF + BCD Amount: CVD % (BED+AED+SED+SAED): ADC VAT %: Ecess %: SHE CESS %: Calculation: 20000*16%: 3200*2%: 3200*1%: 20000+3296 = 23296*4%: Total CVD & ADC Amount: 3200 (CVD) 64 (ECESS) 32 (SHE CESS) 932 (ADC VAT) 3200+ 64+ 32+ 932= 4228 20000 16% 4% 2% 1%

Excise Entry

The program will create excise entry with the value in the CVD field as Yes and will also update the ADC VAT Amount field.

RG 23 D Entry

The program will create RG 23 D entry with the value in the CVD field as Yes and will update the ADC VAT Amount Per Unit, Line Amount Per Unit, Excise Amount Per Unit and Excise Base Amount Per Unit fields. You can also post the transaction from the Purchase Invoice. Note 1: If the CVD is True in Structure then the user should enter the amount in CIF and BCD Amount fields on the purchase line of Order / Invoice.

Calculation of CVD in case of Trading Item through Sales Order


NAVIGATION: Sales & Marketing Order Processing Orders

To create a sales order, fill the fields as follows:


Customer: Location: Structure: Item: Quantity: Unit Price: Line Amount: Calculate Structure Values. The program will calculate excise according to the defined setups. On the Invoicing tab, Trading Item field will get a default check mark if the Trading Co. field in the Company Information window has been checked. Post the Order with Ship and Invoice. 10000 Blue Excise/CVD 1000 10 4000 40000 (The program will calculate it.)

Viewing the Ledger Entries


NAVIGATION: Sales & Marketing Order Processing History Posted Invoices

G/L Entry

The program creates the following entry: Particulars Customer CENVAT Transfer trading Sales Type Dr Cr Cr Amount(Rs) 44228 4228 40000

Following steps are needed to calculate excise amount on FIFO (First in First Out) basis: Step 1: Purchase has been made for 10 quantities and the CVD amount is Rs. 4228 Step 2: While creating Sales Order, quantity is 10 Step 3: The Program will calculate the CVD amount on FIFO basis. Step 4: From Purchase Order Rs. 4228 as CVD amount for 10 quantities have been taken Step 5: The value will come after calculating structure values.

Excise Entry

The program will create Excise Entry with the value in the CVD field as Yes and will update the ADC VAT Amount field with negative value.

RG 23 D Entry

The program will create RG 23 D entry with negative values. Entry will be created against Purchase Order, where quantity is 10 and CVD amount is 4228. You can also post the transaction through Sales Invoice Note 1: The CVD amount will be calculated through Structures. The program will calculate the CVD amount on pro-rata basis where the Trading Item field has a check mark in the Sales Order form and that will be displayed in RG 23 D.

Note 2: The CVD amount will be calculated on FIFO basis for the item, purchased through Purchase Order/Invoice.

Calculation of CVD in case of Trading Item through Purchase Return Order


NAVIGATION: Purchase Order Processing Return Orders

To create a return order, fill the fields as follows:


Vendor: Location: Structure: Applies-to Doc. Type: Applies-to Doc No: Item: Quantity: Direct Unit Price: Line Amount: CIF Amount: BCD Amount: Calculate Structure Values. The program will calculate CVD according to the defined setups. On the Invoicing tab, Trading Item field will get a default check mark if the Trading Co. field in the Company Information window has been checked. 10000 Trading CVD Invoice 108562 1000 10 1000 10000 (The program will calculate it.) 10000 10000

Post the Return Order.

Viewing the Ledger Entries


NAVIGATION: Purchase Order Processing History Posted Credit Memos

G/L Entry

The program creates the following entry: Particulars Customs house Vendor CENVAT Cr. Receivable (Trading) Purchase Type Dr Dr Cr Cr Amount(Rs) 4228 10000 4228 10000

Note: In this case the program will reverse the original transaction which has been created at the time of posting the Purchase order. Calculation of CVD and ADC The program will calculate the CVD and ADC based on the following information: CIF + BCD Amount: CVD % (BED+AED+SED+SAED): ADC VAT %: Ecess %: SHE CESS %: Calculation: 20000*16%: 3200*2%: 3200*1%: 20000+3296 = 23296*4%: Total CVD & ADC Amount: 3200 (CVD) 64 (ECESS) 32 (SHE CESS) 932 (ADC VAT) 3200+ 64+ 32+ 932= 4228 20000 16% 4% 2% 1%

Excise Entry

The program will create Excise Entry with the value in the CVD field as Yes and will update the ADC VAT Amount field with negative value.

RG 23 D Entry

The program will create RG 23 D entry with the value in the CVD field as Yes. Note 1: In case of Purchase Return Order, all values in RG 23 D table will come in negative. Note 2: It is mandatory to enter the document number in the Applies-to Doc. No field while creating Purchase Return Order. Note 3: If the purchase is made and the user has also sold the quantity, after that the user is doing purchase return with the program, then the program will not allow this process. There should be some minimum quantity in RG 23 D for return.

Calculation of CVD in case of Trading Item through Sales Return Order


NAVIGATION: Sales & Marketing Order Processing Return Orders

To create a return order, fill the fields as follows:


Customer: Location: Structure: Applies-to Doc. Type: Applies-to Doc No: Item: Quantity: Direct Unit Price: Line Amount: Calculate Structure Values. The program will calculate CVD according to the defined setup. On the Invoicing tab, Trading Item field will get a default check mark if the Trading Co. field in the Company Information window has been checked. Post the Return Order. 10000 Trading CVD Invoice 107611 1000 10 4000 40000 (The program will calculate it.)

Viewing the Ledger Entries


NAVIGATION: Sales & Marketing Order Processing History Posted Credit Memos

G/L Entry

The program creates the following entry: Particulars Sales CENVAT Transfer Trading Customer Type Dr Dr Cr Amount(Rs) 40000 4228 44228

The original sales invoice is posted with CVD amount as 4228. The sales invoice has been applied and the program has taken the same CVD amount in the Return Order.

Calculation of CVD and ADC The program will calculate the CVD and ADC based on the following information: CIF + BCD Amount: CVD % (BED+AED+SED+SAED): ADC VAT %: Ecess %: SHE CESS %: Calculation: 20000*16%: 3200*2%: 3200*1%: 20000+3296 = 23296*4%: Total CVD & ADC Amount: Excise Entry 3200 (CVD) 64 (ECESS) 32 (SHE CESS) 932 (ADC VAT) 3200+ 64+ 32+ 932= 4228 20000 16% 4% 2% 1%

The program will create Excise entry with the value in the CVD field as Yes and will update the ADC VAT Amount field.

RG 23 D Entry

In the above window the Excise Amount Per Unit field has the value as: 422.8. Note 1: In case of Sales Return Order positive values will come in the RG 23 D table. Note 2: It is mandatory to enter the document no. in Applies-to Doc field while creating the Sales Return Order.

Goods Purchased for Trading and Further Transferred for Manufacturing


Create a Purchase Order / Invoice with a check mark in the Trading Item field and the following values: Quantity: Unit Cost: Line Amount: CIF Amount: BCD Amount: CVD Amount: Post the Order/Invoice. The program will create the following entry: Purchase A/C Dr. CENVAT Cr. Rec. (Trading) Dr. Vendor A/C Cr. Customs House A/C Cr. 10000 4228 10000 4228 10 1000 10000 10000 10000 4228

The posted entry will store in the RG 23 D.

Transfer of Goods to Manufacturing Unit from Trading Unit


NAVIGATION: Warehouse Planning & Execution Item Reclass. Journal

Fill the fields as follows:


Item No.: Location: New Location: Quantity: Applies-to Entry (RG 23 D): 1000 Trading (Enter the trading location from where goods have to be transferred) Manu fact (Enter the manufacturing location, to which goods has to be transferred) 10 6

From Apples-to Entry (RG 23 D) lookup list, choose the entry number which you want to transfer.

Click Ok. The selected entry number will be displayed in the Applies-to Entry (RG 23 D) field in the Item Reclass. Journal. Post the Item Reclass. Journal.

Viewing the Ledger Entries


Now the user can view the posted entries from the Posted Purchase Invoice.

G/L Entry

The program will create the following entry. Purchase A/C Purchase (Trading) A/C Cenvat Cr. Receivable A/C Cenvat Cr. Receivable (Trading) Dr. Cr. Dr. Cr. 10000 10000 4228 4228

The purchase and the CVD amount will be transferred to the Manufacturing G/L accounts from the Trading G/L account. The program will create RG 23 D entry.

The program will reverse the original entry in RG 23 D table with negative values as the item has been transferred to manufacturing unit with the value in the CVD field as Yes.

Excise Entries

The program will also reverse the excise with negative values in trading location and in manufacturing location. The program will create excise entry with positive values while taking the value in the CVD field as Yes. The program will also create RG 23 A Part I & II entries in manufacturing location.

RG 23 A Part I Entry

The program will create RG 23 A Part I entry with value in the Quantity Received field.

RG 23 A Part II Entry

The program will create RG 23 A Part II entry with the value in the CVD field as Yes and will also update the ADC VAT Amount field.

Capital Goods Purchased for Trading and further Transferred for Manufacturing
Create a Purchase Order / Invoice with a check mark in the Trading Item field and the following values: Quantity: Unit Cost: Line Amount: CIF Amount: BCD Amount: Excise Amount: Post the Order/Invoice. The program will create the following entry: Purchase A/C CENVAT Cr. Rec. (Trading) Vendor A/C Customs house A/C Dr. Dr. Cr. Cr 10000 4228 10000 4228 10 1000 10000 10000 10000 4228

The posted entry will store in the RG 23 D.

Transfer of Capital Goods to Manufacturing Unit from Trading Unit


NAVIGATION: Warehouse Planning & Execution Item Reclass. Journal

Fill the fields as follows:

Item No.: Location: New Location: Quantity: Applies-to Entry (RG 23 D):

80206 Trading (Enter the trading location from where goods have to be transferred) Manu fact (Enter the manufacturing location to which goods has to be transferred) 10 8

From Apples-to Entry (RG 23 D) lookup list, choose the entry number which you want to transfer.

Click OK. The chosen entry number will be displayed in the Applies-to Entry (RG 23 D) field in the Item Reclass. Journal. Post the Item Reclass. Journal.

Viewing the Ledger Entries


Now the user can view the posted entries from the Posted Purchase Invoice

G/L Entry

The program will create the following entry. Purchase A/C Purchase (Trading) A/C Cenvat Cr. Receivable A/C Cenvat Cr. Deffered Account Cenvat Cr. Receivable (Trading) Dr. Cr. Dr. Dr. Cr. 10000 10000 2580 1648 4228

The program will divide the CVD amount as Capital item field is checked in the Item Card. The program will not consider ADC VAT amount in the Deferred account. The purchase and the CVD amount will be transferred to the Manufacturing G/L account from the Trading G/L account. The program will create RG 23 D entry.

The program will reverse the original entry in the RG 23 D table with negative values as the item has been transferred to manufacturing unit.

Excise Entries

The program will reverse the excise entry in trading location with negative values and also create two more entries in manufacturing location, one for non deferred with taking the value in the CVD field as Yes and the second one for deferred with taking the value in the CVD as Yes.

RG 23 C Part I Entry

The program will create the RG 23 C Part I entry with value in the Quantity Received field from manufacturing location.

RG 23 C Part II Entry

In manufacturing location, the program will create RG 23 C Part II entry with the value in the CVD field as Yes and will also update the ADC VAT Amount field. Note: All the transactions related to trading items, purchase, sales, and transfer of items from trading to manufacturing locations can be viewed in the RG 23 D and Quarterly Return for Traders reports.

Appendix
Illustration: Import of goods
CIF: BCD: BED: AED: SED: SAED: ECESS: SHE CESS: ADC VAT: 10000 10000 10% 2% 2% 2% 2% 1% 4%

Calculation: CIF + BCD = 20000 20000*16%: 3200*2%: 3200*1%: 20000+3296 = 23296*4%: Total CVD & ADC Amount: 3200 (CVD) 64 (ECESS) 32 (SHE CESS) 932 (ADC VAT) 3200+ 64+ 32+ 932= 4228

Microsoft Business Solutions Navision 4.0- Gate Entry

Table of Contents
Overview of Functionality......................................................................................3 Detailed Setup...................................................................................................3 Comprehensive Functionality ............................................................................3 Reports..............................................................................................................4 Setups- Gate Entry ...............................................................................................4 Inventory Setup .................................................................................................6 Gate Entry Location Setup ................................................................................7 Gate Entry Inward ............................................................................................11 Gate Entry - Inward if the Source Type is Purchase Order .............................13 Viewing Posted gate Entry Inward ............................................................14 Get Gate Entry Lines ...................................................................................15 Gate Entry - Inward if the Source Type is Sales return Order .........................24 Viewing Posted Gate Entry Inward ...........................................................25 Get Gate Entry Lines ...................................................................................26 Gate Entry - Inward if the Source Type is Transfer Receipt ............................31 Viewing Posted Gate Entry Inward ...........................................................32 Get Gate Entry Lines ...................................................................................33 Gate Entry - Inward if the Source Type is Blank..............................................38 Create Gate Entry Inward (In case of Purchase Invoice)..........................38 Viewing Posted Gate Entry Inward ...........................................................39 Get Gate Entry Lines ...................................................................................40 Create Gate Entry Inward (In case of Sales Credit Memo) .......................45 Viewing Posted Gate Entry Inward ...........................................................46 Get Gate Entry Lines ...................................................................................47 Create Gate Entry Inward (In Case of Gifts and Others without Challan Number).......................................................................................................52 Viewing Posted Gate Entry Inward ...........................................................53 Gate Entry Outward .........................................................................................54 Gate Entry - Outward if the Source Type is Sales Shipment ...........................56 Viewing Posted Gate Entry Outward ........................................................58 Gate Entry - Outward if the Source Type is Purchase Return Shipment .........60 Viewing Posted Gate Entry Outward ........................................................62 Gate Entry - Outward if the Source Type is Transfer Shipment.......................64 Viewing Posted Gate Entry Outward ........................................................66 Gate Entry - Outward if the Source Type is Blank ...........................................68 Viewing Posted Gate Entry Outward ........................................................69 Reports ...............................................................................................................70 Gate Entry .......................................................................................................70 Posted Gate Entry ...........................................................................................73 Gate Entry List.................................................................................................77 Posted Gate Entry List ....................................................................................78 Gate Entry Inward Status .............................................................................79 Appendix.............................................................................................................81

Overview of Functionality
A process in any organization, used to keep track of entrance and exit of materials or other entities, to and from the organizations premises, is termed as Gate Entry. This functionality provides the facility to keep the record of the gate entries (Inward/Outward) of the goods and also helps in relating these entries with the Purchase Order / Sales Order / Return Order / Transfer Orders. The Gate Entry system provides a physical control over the goods, which are the movable assets of the organization. Gate Entry also helps in audit trail.

Detailed Setup
Gate Entry functionality requires a detailed setup, which is used to maintain the number series based on location. Setup Inventory Setup Gate Entry Location Setup Description Select the No Series for Inward Gate Entries and Outward Gate Entries. Select the Posting No Series for the combination of Entry Type and Location Code.

Comprehensive Functionality
The Gate Entry functionality covers the following points: a) For Gate Entry Inward It provides the facility to create Gate Entry Inward against Purchase Order, Sales Return Order and Transfer Receipt. It provides the facility to create Gate Entry Inward in case of samples, gifts and so on. It provides the facility to attach posted Gate Entry Inward with Purchase Order; Sales Return Order, Transfer Receipt, Purchase Invoice and Sales Credit Memo. It provides the facility to view the attached Gate Entry Inward.

b) For Gate Entry Outward It provides the facility to create Gate Entry Outward against Purchase Return Order, Sales Order and Transfer Shipment

It provides the facility to create Gate Entry Outward in case of repairs, and others. It provides the facility to attach Gate Entry Outward at the time of posting with Purchase Return Order, Sales Order, Transfer Shipment, Sales Invoice and Purchase Credit Memo. It provides the facility to view attached Gate Entry Outward.

Reports
Following reports are provided to solve the needs of the Indian business scenarios: Gate Entry Posted Gate Entry Gate Entry List Posted Gate Entry List

Setups- Gate Entry


Following are the functional areas where setup is required: Inventory Setup Gate Entry Location Setup

Inventory Setup
Navigation: Warehouse Setup Inventory Setup

Fill in the fields on the Numbering tab, according to these guidelines: Fields Inward Gate Entry Nos. Description Select the number series for inward gate entry, from the lookup list. Select the number series for outward gate entry, from the lookup list.

Outward Gate Entry Nos.

By clicking the AssistButton in the Inward / Outward Gate Entry Nos. fields, No. Series form will be opened. You can select the number series for the inward and outward gate entry. When you create new inward and outward gate entry, the selected number series will show the number defined in the No. Series setup. CP-PRTNR-1 is defined in the No. Series setup for Inward Gate Entry Nos. and CP-SORD-1 is defined for Outward Gate Entry Nos. as in the screen below.

Gate Entry Location Setup


Navigation: Warehouse Gate Entry Setup Gate Entry Location Setup

Fill in the fields according to these guidelines: Fields Entry Type Description Choose the entry type from the drop down box. The available options are: Inward and Outward. Choose the location code from the lookup list. You can assign No. Series for blank location code also. Choose the posted number series from the lookup list.

Location Code

Posted No. Series

Choose the entry type as Inward and click the AssistButton to the right of the Location Code field.

Location List window opens in which you can choose the location.

After selecting location, click the AssistButton to the right of the Posting No. Series field.

No. Series window opens, in which you can select the posted number series for the entry type.

In the above screen posted number series has been assigned for entry type: Inward and Outward. This is location specific. Note: If the user is not using Location granule then he can assign the Posted No. Series with blank location code for the entry type: Inward or Outward. In the Gate EntryInward and Outward Card, the user has to keep the location code blank if he wants to post the documents with the number series assigned for blank location code in the setup.

Gate Entry Inward


Navigation: Warehouse Gate Entry Gate Entry Inward

Fill in the fields according to these guidelines:

On the Header Fields


No.

Description
Number of Gate Entry- Inward will flow while pressing F3 to create new inward and the number which you have defined in the No. Series will flow in this field. Choose the location code from the lookup list. Enter the station name from which goods are coming to your factory/location. Enter the description (For example: Goods received from Vendor). Enter items description, which you are receiving. Document date will automatically flow and it will be your system date. You can also

Location Code Station From Description Item Description Document Date

Fields
Document Time

Description
change the document date. Document time will automatically flow and it will be your system time. You can also change the document time. Posting date will automatically flow and it will be same as the document date. You can also change the posting date. Posting time will automatically flow and it will be as same as the posting time. User can also change the Posting time. Enter the LR/RR number in this field.

Posting Date

Posting Time

LR/RR No. Enter the LR/RR date in this field. LR/RR Date Vehicle No. Enter the vehicle number, in which goods are coming.

On the Line Fields Challan No. Challan Date Source Type Description Enter the challan number received from goods Enter the challan date in this field. Choose the source type from the drop down box. Available options are: Blank, Sales Return Order, Purchase Order, and Transfer Receipt. It shows that against which document you are receiving goods and maintaining gate entry-inward. If the source type is blank, it means you are receiving the goods against Purchase Invoice, Sales Credit Memo or some other type of goods like samples, gifts, and so on which are not based on any document. Select the Source No. from the lookup list for the selected source type. There is no need to select the Source No. if the source type is blank.

Source No.

Fields Source Name

Description This field shows the source name depending on the source type you have selected. If the source type is selected as Sales Return Order then it will show the customer name. If the source type is selected as Purchase Order then it will show the vendor name. If the source type is Transfer Receipt then it will show the location name. Enter the description in this field, if the source type is blank.

Description

Gate Entry - Inward if the Source Type is Purchase Order


Note: Please create the Purchase Order before creating Gate Entry Inward. Create Gate Entry Inward

Enter the following information while making Gate Entry Inward On the Header No.: Location Code: Station from: Home-00012 Blue New Delhi

Description: Item Description: Document Date: Document Time: Posting Date: Posting Time: LR/RR No.: LR/RR Date: Vehicle No.: On the Line Challan No.: Challan Date: Source Type: Source No.: Source name: Description: Post the Gate Entry Inward

Goods received from Vendor 100 Bicycles 20/01/07 10:28:35 AM 20/01/07 10:28:35 AM A54123 20/01/07 DL 9C P 8888

1201 20/01/07 Purchase Order 106030 Delhi Postmaster P.O. Date 20/01/07

Viewing Posted gate Entry Inward


Navigation: Warehouse Gate Entry History Posted Gate Entry Inward

In the posted Gate Entry Inward window, the Status field on the line level has the value as Open, it means gate entry inward is still open for attachment with the purchase order no. 106030.

You can view the list of posted Gate Entry Inward by clicking Gate Entry menu button in the form and then by clicking the List. You can also create multiple lines in Gate Entry Inward with different source type.

Get Gate Entry Lines


Attach posted gate entry inward with the purchase order you have created earlier and mentioned in the Source No. in Gate Entry Inward.

Navigation: Purchase Order Processing Orders

To get gate entry lines, click Functions menu button and select Get gate Entry Lines menu item in the Purchase Order window. A new form will be opened where you can select the posted gate entry line you want to attach.

Click OK. After attaching gate entry with purchase order, click Order menu button in the Purchase Order window and select the Attached Gate Entry menu item to view the attached gate entry.

A new form opens.

In this form you can view the attached gate entry line that you have attached earlier. Post the Purchase Order.

The user can also view the attached gate entry line from posted purchase receipt.

Navigation: Purchase History Posted Receipt

To view the attached gate entry line, click the Receipt menu button and select the Attached Gate Entry menu item

A new form opens.

In this form you can view the attached gate entry with the purchase order. After posting the purchase order, again view the posted gate entry inward that you have attached with the purchase order.

You can see in the above screen that Status field has value as Closed, after posting the purchase order with gate entry inward.

The user can also get Gate Entry lines from Warehouse Receipts. If the user has posted the purchase order with partial receipt, after posting purchase order and releasing it, this will be available for warehouse receipt.

Create Gate Entry - Inward

Enter the following information while making Gate entry Inward On the Header No.: Location Code: Station From: Description: Item Description: Document Date: Document Time: Posting Date: Posting Time: LR/RR No.: LR/RR Date: Vehicle No.: On the Line Challan No.: Challan Date: Source Type: Source No.: Source name: Post the Gate Entry Inward 1001 20/01/07 Purchase Order 10009 Delhi Postmaster Home-00028 Blue New Delhi Warehouse receipt Bicycles 20/01/07 2:46:39 PM 20/01/07 2:46:39 PM 7412 20/01/07 DL 8P 9632

Warehouse Receipt Navigation: Warehouse Planning & Execution Receipts

To get gate entry lines, click Functions menu button and select Get gate Entry Lines menu item in the Warehouse Receipt window. A new form opens in which you can select the posted gate entry line you want to attach.

Click OK. After attaching gate entry with warehouse receipt, click Receipt menu button and select the Attached Gate Entry menu item in the Warehouse Receipt window to view the attached gate entry.

A new form opens.

In this form you can view the attached gate entry line that you have attached earlier. Post the Receipts. After posting the warehouse receipt, again view the posted gate entry inward that you have attached with the warehouse receipt.

You can see in the above screen shot that Status is Closed now after posting the warehouse receipt with gate entry inward.

Gate Entry - Inward if the Source Type is Sales return Order


Note: Please create the Sales Return Order before creating Gate Entry Inward. Create Gate Entry Inward

Enter the following information while making Gate Entry Inward On the Header: No.: Location Code: Station from: Description: Item Description: Document Date: Document Time: Posting Date: Posting Time: LR/RR No.: LR/RR Date: Vehicle No.: On the Line: Challan No.: Challan Date: Source Type: 80 20/01/07 Sales return Order Home-00015 Blue New Delhi Sales Return from Customer 10 Bicycles 20/01/07 12:07:51 PM 20/01/07 12:07:51 PM 96542 20/01/07 DL 7L 1234

Source No.: Source name: Description: Post the Gate Entry Inward

1005 The Canon Group PLC return Order Date 20/01/07

Viewing Posted Gate Entry Inward


Navigation: Warehouse Gate Entry History Posted Gate Entry Inward

In the Posted Gate Entry Inward window the Status field on the line level has the value as Open, it means gate entry inward is still open for attachment with the sales return order no. 1005. The user can also view the list of posted Gate entry inward by clicking Gate Entry menu button in the form and click list. You can also create multiple lines in Gate Entry Inward with different source types.

Get Gate Entry Lines


Attach posted gate entry inward with the sales return order you have created earlier and mentioned in the source No. in gate entry inward.

Navigation: Sales & Marketing Order Processing Return Orders

To get gate entry lines, click Functions menu button and select Get gate Entry Lines menu item in the Sales Return Order. A new form opens in which you can select the posted gate entry line, you want to attach.

Click OK. After attaching gate entry with Sales Return Order, click Ret. Order menu button and select the Attached Gate Entry menu item to view the attached gate entry in the Sales Return Order.

A new form opens.

In this form you can view the attached gate entry line that you have attached earlier. Post the Sales Return Order.

The user can also view the attached gate entry line from Posted Return Receipt

Navigation: Sales & Marketing History Posted Return Receipt

Click the Return Receipt menu button and select Attached Gate Entry menu item to view the attached gate entry line. After clicking Attached Gate Entry, a new form opens.

In this form, you can view the attached gate entry with return order. After posting the Sales Return Order again you can view the posted gate entry inward that you have attached with the sales return order.

You can see in the above screen that Status field has the value as Closed now; after posting the sales return order with gate entry inward.

Gate Entry - Inward if the Source Type is Transfer Receipt


Note: Please create the Transfer Order before creating gate Entry Inward. Create Gate Entry Inward

Enter the following information while making Gate Entry Inward On the Header No.: Location Code: Station From: Description: Item Description: Document Date: Document Time: Posting Date: Posting Time: LR/RR No.: LR/RR Date: Vehicle No.: On the Line Challan No.: 2501 Challan Date: 15/01/07 Source Type: Transfer Receipt Source No.: 1019 Source name: Green Warehouse Description: Dated 15/01/07 Post the Gate Entry Inward Home-00023 Blue Mumbai Received from Green Location 50 Bicycles 20/01/07 01:40:14 PM 20/01/07 01:40:14 PM MH87452 15/01/07 MH 8L 4125

Viewing Posted Gate Entry Inward


Navigation: Warehouse Gate Entry History Posted Gate Entry Inward

In the posted Gate Entry Inward window, the Status field on the line level has the value as Open. It means gate entry inward is still open for attachment with the transfer order no. 1019. The user can also view the list of posted Gate entry inward by clicking Gate Entry menu button in the form and click List. You can also create multiple lines in Gate entry inward with different Source Type.

Get Gate Entry Lines


Attach posted gate entry inward with the transfer order you have created earlier and mentioned in the source number in gate entry inward.

Navigation: Purchase Order Processing Transfer Orders

To get gate entry lines, click Functions menu button and select Get gate Entry Lines menu item in the Transfer Order window. A new form opens in which you can select the posted gate entry line you want to attach.

Click OK. After attaching gate entry with transfer order, click Order menu button and select the Attached Gate Entry menu item in the Transfer Order window to view the attached gate entry.

A new form opens.

In this form you can view the attached gate entry line that you have attached earlier. Post the Transfer Order as Receive. (First the user has to post the transfer order as Ship and after that he has to post the transfer order as Receive).

You can also view the attached gate entry line from posted Return receipt

Navigation: Warehouse History Posted Transfer Receipt

Click the Receipt menu button and select Attached Gate Entry menu item to view the attached gate entry line.

A new form opens.

In this form you can view the attached gate entry. After posting the transfer order again view the posted gate entry inward that you have attached with the transfer order.

You can see in the above screen that Status field has the value as Close after posting the transfer order with gate entry inward.

Gate Entry - Inward if the Source Type is Blank


Source type as Blank is applicable only if the goods are received against Purchase Invoice or Sales Credit Memo. Otherwise any other goods/items, which are coming in your premises against gifts, samples and so on without any documents.

Create Gate Entry Inward (In case of Purchase Invoice)

Enter the following information while making Gate entry Inward On the Header No.: Location Code: Station from: Description: Item Description: Document Date: Document Time: Posting Date: Posting Time: LR/RR No.: LR/RR Date: Vehicle No.: On the Line Challan No.: Challan Date: Source Type: 0006 20/01/07 Blank Home-00029 Blue New Delhi Received from Vendor Bicycle 20/01/07 4:06:20 PM 20/01/07 4:06:20 PM 85412 20/01/07 DL 2C 1241

Source No.: Source Name: Description: Post the Gate Entry Inward

Blank Blank Invoice to be Prepaired

Viewing Posted Gate Entry Inward


Navigation: Warehouse Gate Entry History Posted Gate Entry Inward

In the Posted Gate Entry Inward window, the Status field on the line level has the value as Open. It means gate entry inward is still open for attachment with Purchase Invoice. The user can also view the list of posted gate entry inward by clicking Gate Entry menu button in the form and selecting the List. You can also create multiple lines in Gate Entry Inward with different source types.

Get Gate Entry Lines


Attach posted gate entry with Purchase Invoice which is yet to be prepared.

Navigation: Purchase Order Processing Invoices


Create a Purchase Invoice.

To get gate entry lines, click Functions menu button and select Get gate Entry Lines in the Purchase Invoice. A new form opens in which you can select the posted gate entry line you want to attach. The program will show gate entry lines with source type as Blank.

Click OK.
After attaching gate entry with purchase invoice, click Invoice menu button in the Purchase Invoice and select the Attached Gate Entry menu item to view the attached gate entry.

A new form opens.

In this form you can view the attached gate entry line that you have attached earlier. Post the Purchase Invoice.

You can also view the attached gate entry line from the Posted Receipt

Navigation: Purchase History Posted Receipt

Click the Receipt menu button and select the Attached Gate Entry menu item to view the attached gate entry line.

A new form opens.

In this form you can view the attached gate entry. After posting the purchase invoice; again view the posted gate entry inward that you have attached with the purchase invoice.

You can see in the above screen that the Status field has the value as Closed, after posting the purchase invoice with gate entry inward.

Create Gate Entry Inward (In case of Sales Credit Memo)

Enter the following information while making Gate entry Inward On the Header No.: Location Code: Station from: Description: Item Description: Document Date: Document Time: Posting Date: Posting Time: LR/RR No.: LR/RR Date: Vehicle No.: On the Line Challan No.: Challan Date: Source Type: Source No.: Source name: Description: Post the Gate Entry Inward 100 16/01/07 Blank Blank Blank Sales Credit Memo to be Prepared Home-00030 Blue Mumbai Received from Customer Bicycle 20/01/07 4:33:35 PM 20/01/07 4:33:35 PM 63214 16/01/07 MH 8P 7777

Viewing Posted Gate Entry Inward


Navigation: Warehouse Gate Entry History Posted Gate Entry Inward

In the Posted Gate Entry Inward window the Status field on the line level has the value as Open. It means gate entry inward is still open for attachment with Sales Credit Memo. The user can also view the list of posted gate entry inward by clicking Gate Entry menu button and selecting List in the form. You can also create multiple lines in gate entry inward with different source types.

Get Gate Entry Lines


Note: Attach posted gate entry with Sales Credit Memo which is yet to be prepared. Navigation: Sales & Marketing Order Processing Credit Memos
Create a Purchase Invoice.

To get gate entry lines, click Functions menu button and select Get Gate Entry Lines in the Credit Memo. A new form opens in which you can select the posted gate entry line you want to attach. The program will show the gate entry lines with source type as Blank.

Click OK. After attaching gate entry with credit memo, click Credit Memo menu button and select the Attached Gate Entry in credit memo to view the attached gate entry.

A new form opens.

In this form you can view the attached gate entry line that you have attached earlier. Post the Credit Memo.

You can also view the attached gate entry line from Posted Receipt.

Navigation: Purchase History Posted Receipt

Click the Return Receipt menu button and select Attached Gate Entry menu item to view the attached gate entry line.

A new form opens.

In this form you can view the attached gate entry. After posting the credit memo; again view the posted gate entry inward that you have attached with the credit memo.

You can see in the above screen that the Status field has the value as Close, after posting the credit memo with gate entry inward.

Create Gate Entry Inward (In Case of Gifts and Others without Challan Number)

Enter the following information while making Gate entry Inward On the Header: No.: Location Code: Station from: Description: Item Description: Document Date: Document Time: Posting Date: Posting Time: LR/RR No.: LR/RR Date: Vehicle No.: On the Line Challan No.: Challan Date: Source Type: Source No.: Source name: Description: Post the Gate Entry Inward Blank Blank Blank Blank Blank Gift for CEO from Bank Home-00031 Blue New Delhi Gifts Gift of CEO 20/01/07 4:51:17 PM 20/01/07 4:51:17 PM Blank Blank DL 9J 1234

Viewing Posted Gate Entry Inward


Navigation: Warehouse Gate Entry History Posted Gate Entry Inward

In the posted Gate Entry Inward window the Status field on the line level has the value as Open. Since there is no document for which this gate entry has been made and it will not further attached with any other document the status will remain Open for this gate entry. The user can also view the list of posted gate entry inward by clicking Gate Entry menu button and click List in the form. You can also create multiple lines in gate entry inward with different source types.

Gate Entry Outward


Navigation: Warehouse Gate Entry Gate Entry Outward

Fill in the fields according to these guidelines: On the Header

Fields
No.

Description
Number which you have defined in the No. Series will flow in this field. while pressing F3 in case of creating new gate entry outward Choose the location code from the lookup list. Enter the station name, to which goods are dispatching from your factory / location. Enter general description in this field (For example: Goods delivered to customer). Enter items description, which you are dispatching. By default the document date will be your system date. You can also change the

Location Code Station To Description Item Description

Document Date

Fields
Document Time

Description
document date. By default the document time will be your system time. You can also change the document time. The program automatically shows the document date in this field. You can also change the posting date. Posting time will automatically flow and it will be as same as the document time. You can also change the posting time. Enter the Lorry Receipt / Railway Receipt number in this field. Enter the Lorry Receipt / Railway Receipt date in this field. Enter the vehicle number or carrier number in this field.

Posting Date

Posting Time

LR/RR No. LR/RR Date Vehicle No.

On the Line Fields Challan No. Challan Date Source Type Description Enter the challan number issued for dispatching goods from your factory. Enter the challan date in this field. Choose the source type from the drop down box. Available options are: Blank, Sales Shipment, Purchase Return Shipment, and Transfer Shipment. Source Type specifies about the document against which you are dispatching goods and maintaining Gate Entry- Outward. If the Source Type field is blank, it means you are dispatching goods for some other purposes like repairing and so on, which are not based on any documents. Source No. Select the source number from the lookup list for the selected source type. There is

Fields

Description no need to select the Source No. field if the source type is blank. This field shows the source name depending on the source type you have selected. If the source type is selected as Sales Shipment then it will show the customer name. If the source type is selected as Purchase Return Shipment then it will show the vendor name. If the source type is Transfer Shipment then it will show the location name. Enter the description in this field, if the source type is blank.

Source Name

Description

Gate Entry - Outward if the Source Type is Sales Shipment


Note: Please create and post the Sales Order / Invoice before creating Gate Entry Outward. Create Gate Entry Outward

Enter the following information while making Gate Entry Outward On the Header No.: Location Code: Station to: Description: Item Description: Document Date: Document Time: Posting Date: Posting Time: LR/RR No.: LR/RR Date: Vehicle No.: On the Line Challan No.: Challan Date: Source Type: Source No.: Source name: Description: 3001 07/02/07 Sales Shipment 102050 The Cannon Group PLC against sales shipment Home-00005 Blue Mumbai Sale of Goods 10 Bicycles 07/02/07 03:05:53 PM 07/02/07 03:05:53 PM 987654 07/02/07 DL 2C B 1234

Post the Gate Entry Outward

Viewing Posted Gate Entry Outward


Navigation: Warehouse Gate Entry History Posted Gate Entry Outward

The program will post the gate entry-outward with detailed information. The program will automatically attach the Gate Entry-Outward with the source number you have entered. You can view the list of posted Gate Entry Outward by clicking the List menu item on the Gate Entry menu button. You can create multiple lines in Gate Entry Outward with different source type.

You can also view the attached gate entry line from the Posted Sales Shipment form.

NAVIGATION: Sales & Marketing History Posted Shipment

To view the attached gate entry line, click the Shipment menu button and select the Attached Gate Entry menu item

A new form opens.

In this form you can view the attached gate entry with the Sales Shipment.

Gate Entry - Outward if the Source Type is Purchase Return Shipment


Note: Please create and post the Purchase Return Order before creating Gate Entry Outward. Create Gate Entry Outward

Enter the following information while making Gate Entry Outward On the Header No.: Location Code: Station to: Description: Item Description: Document Date: Document Time: Posting Date: Posting Time: LR/RR No.: LR/RR Date: Vehicle No.: On the Line Challan No.: Challan Date: Source Type: Source No.: Source name: Description: 3002 07/02/07 Purchase Return Shipment 105012 Delhi Postmaster against purchase return order Home-00006 Blue New Delhi Goods Returned 5 Bicycles 07/02/07 03:26:30 PM 07/02/07 03:26:30 PM 777 07/02/07 DL 2C V 1111

Post the Gate Entry Outward

Viewing Posted Gate Entry Outward


Navigation: Warehouse Gate Entry History Posted Gate Entry Outward

The program will post the Gate Entry-Outward detailed information. The program will automatically attach the Gate Entry-Outward with the source number you have entered. You can view the list of posted Gate Entry Outward by clicking the List menu item on the Gate Entry menu button. You can create multiple lines in Gate Entry Outward with different source type.

You can also view the attached gate entry line from the Posted Return Shipment form.

Navigation: Purchase History Posted Return Shipment

To view the attached gate entry line, click the Attached Gate Entry menu item on the Return Shipment menu button.

A new form opens.

In this form you can view the attached gate entry with the Purchase Return Shipment.

Gate Entry - Outward if the Source Type is Transfer Shipment


Note: Please create and post the Transfer Order before creating Gate Entry Outward. Create Gate Entry Outward

Enter the following information while making Gate Entry Outward On the Header No.: Location Code: Station to: Description: Item Description: Document Date: Document Time: Posting Date: Posting Time: LR/RR No.: LR/RR Date: Vehicle No.: On the Line On the Line Challan No.: Challan Date: Source Type: Source No.: Source name: Description: 3003 07/02/07 Transfer Shipment 108007 Green warehouse Transfer shipment Home-00007 Blue New Delhi Transfer 5 SYDNEY Swivel Chair, green 07/02/07 03:47:29 PM 07/02/07 03:47:29 PM 888 07/02/07 DL 2N D 2222

Post the Gate Entry Outward

Viewing Posted Gate Entry Outward


Navigation: Warehouse Gate Entry History Posted Gate Entry Outward

The program will post the gate entry-outward detailed information. The program will automatically attach the gate entry-outward with the source number you have entered after the posting. You can view the list of posted Gate Entry Outward by clicking the List menu item on the Gate Entry menu button. You can also create multiple lines in Gate Entry Outward window with different source types.

You can also view the attached gate entry line from the Posted Transfer Shipment form.

Navigation: Warehouse History Posted Transfer Shipment

To view the attached gate entry line, click the Shipment menu button and select the Attached Gate Entry menu item A new form opens.

In this form you can view the attached gate entry with the Transfer Shipment.

Gate Entry - Outward if the Source Type is Blank


Note: Create Gate Entry Outward in case, some goods are dispatching from your factory premises for repairing without source document type. Create Gate Entry Outward

Enter the following information while making Gate Entry Outward On the Header No.: Location Code: Station to: Description: Item Description: Document Date: Document Time: Posting Date: Posting Time: On the Line Challan No.: Challan Date: Source Type: Source No.: Source name: Description: 5555 07/02/07 Blank Blank Blank goods dispatching for repairing. Home-00008 Blue Bby Repair 10 Bicycles 07/02/07 04:03:45 PM 07/02/07 04:03:45 PM

Post the Gate Entry Outward

Viewing Posted Gate Entry Outward


Navigation: Warehouse Gate Entry History Posted Gate Entry Outward

The program will post the gate entry outward. In this case program will not attach this gate entry with any source document type.

Reports
Navigation: Warehouse Gate Entry Reports

Gate Entry

Navigation: Warehouse Gate Entry Report Gate Entry


This report will show you the details of unposted Gate Entry Inward/Outward. Enter the following information in the filter options:

On the Gate Entry Header tab: Fields Entry Type Description Select the entry type for which you want to generate report. The available options are: Blank, Inward and Outward. If you want to generate the report for entry type inward then select Inward. If you want to generate report for entry type outward then select Outward and if you want to generate report for both then keep it blank. No. Location code Document Date Click Preview button to generate the report. Enter the number of gate entry for which you want to generate the report. Select the location code for which you want to generate the report. Enter the document date.

Posted Gate Entry


Navigation: Warehouse Gate Entry Report Posted Gate Entry
This report will show you the details of posted Gate Entry Inward/Outward. Enter the following information in the filter options:

Posted Gate Entry Header tab: Fields Entry Type Description Select the entry type for which you want to generate report. The available options are: Blank, Inward and Outward. If you want to generate the report for entry type inward then select Inward. If you want to generate report for entry type outward then select Outward and if you want to generate report for both then keep it blank. No. Location code Posting Date Enter the number of gate entry for which you want to generate the report. Select the location code for which you want to generate the report. Enter the posting date

Posted Gate Entry Line tab: Fields Source Type Description Select the source type for which you want to generate report. The available options are: Sales Shipment, Sales Return Order, Purchase Order, Purchase Return Shipment, Transfer Shipment and Transfer receipt. Select the status for which you want to generate the report. The available options are: Blank, Open and Close.

Status

Click Preview button to generate the report.

Gate Entry List


Navigation: Warehouse Gate Entry Report Gate Entry List
This report will show you the list of unposted Gate Entry Inward/Outward. Enter the following information in the filter options:

On the Gate Entry Header tab: Fields Entry Type Description Select the entry type for which you want to generate report. The available options are: Blank, Inward and Outward. If you want to generate the report for entry type inward then select Inward. If you want to generate report for entry type outward then select Outward and if you want to generate report for both then keep it blank. Location code Document Date Click Preview button to generate the report. Select the location code for which you want to generate the report. Enter the document date.

Posted Gate Entry List


Navigation: Warehouse Gate Entry Report Posted Gate Entry List
This report will show you the list of posted Gate Entry Inward/Outward. Enter the following information in the filter options:

On the Posted Gate Entry Header tab: Fields Entry Type Description Select the entry type for which you want to generate report. The available options are: Blank, Inward and Outward. If you want to generate the report for entry type inward then select Inward. If you want to generate report for entry type outward then select Outward and if you want to generate report for both then keep it blank. Location code Posting Date Click Preview button to generate the report. Select the location code for which you want to generate the report. Enter the posting date

Gate Entry Inward Status


Navigation:

Warehouse Gate Entry Report Gate Entry Inward Status


This report will show the status of Inward gate entries that has been attached or not attached with Source Type. Enter the following information in the filter options:

On Options tab: Fields Source Type Description Select the source type from drop down button for which you want to generate report. The options available are Blank, Return Order, Purchase Order and Transfer receipt. If you select blank option then system will generate the report for all source type. Select the location code for which you want to generate the report.

Location code Click Preview button to generate the report.

Appendix
Case 1 (Gate Entry Inward) 100 bicycles have been received from the vendor in the factory premises with challan number 5001 against the purchase order. Now you are required to make the entry on the gate before entering the goods into the factory premises. Solution:

Create a new Gate Entry Inward and enter the detailed information like: On the Header No.: Location Code: Station from: Description: Item Description: Document Date: Document Time: Posting Date: Posting Time: LR/RR No.: LR/RR Date: Vehicle No.: On the Line Challan No.: Challan Date: Source Type: Source No.: Source name: Description: 5001 20/01/07 Purchase Order 106030 Delhi Postmaster P.O. Date 20/01/07 Home-0001 Blue New Delhi Goods received from Vendor 100 Bicycles 20/01/07 10:28:35 AM 20/01/07 10:28:35 AM A54123 20/01/07 DL 9C P 8888

After that you can attach the posted gate entry inward with the purchase order.

Case 2 (Gate Entry Outward) 100 bicycles have been sold to the customer and goods are dispatching out from your factory premises with challan number 1001 against the sales order. Now you are required to make the entry on the gate before dispatching the goods out from your factory premises. Solution: Create a new Gate Entry Outward and enter the detailed information like: On the Header No.: Location Code: Station from: Description: Item Description: Document Date: Document Time: Posting Date: Posting Time: LR/RR No.: LR/RR Date: Vehicle No.: On the Line Challan No.: Challan Date: Source Type: Source No.: Source name: Description: 1001 20/01/07 Sales Order 106030 Canon Group S.O. Date 20/01/07 Home-0001 Blue New Delhi Goods received from Vendor 100 Bicycles 20/01/07 10:28:35 AM 20/01/07 10:28:35 AM 52141 20/01/07 DL 7C J 7777

The program will automatically attach the gate entry outward with sales order after posting.

Microsoft Business Solutions Navision 4.0- Service Tax on Advance Payment

Table of Contents
Overview...............................................................................................................3 Detailed Setup...................................................................................................3 Comprehensive Functionality ............................................................................3 Service Tax on Advance Payment ....................................................................3 Set-up for Service Tax Functionality .....................................................................4 Service Tax Accounts in Chart of Accounts ......................................................4 Service Tax .......................................................................................................5 Service Tax Groups...........................................................................................6 Service Tax Set Up ...........................................................................................7 Service Tax Registration No..............................................................................8 Company Information ........................................................................................8 Mapping of GL Accounts .................................................................................10 Add Service Tax Component in the Structure Card.........................................11 Transactions of Advance Payment .....................................................................11 Advance Payment made to Vendor.................................................................11 History - Service Tax on Advance Payment made to Vendor .....................14 Purchase Transactions....................................................................................15 Direct Invoices using Purchase Order.........................................................16 History - Advance Payment applied in Purchase Order ..............................18 Advance Payment received from Customer ....................................................25 History - Service Tax on Advance Payment received from Customer.........28 Sales Transactions..........................................................................................29 Direct Invoices using Sales Order...............................................................29 History - Advance Payment applied in Sales Order ....................................31 Refund of Advance Payment...........................................................................37 Reports ...............................................................................................................42 Service Tax on Advance Payment ..................................................................42 Appendix.............................................................................................................44 Accounting of Service Tax on Advance Payment............................................44

Overview
The Service Tax on Advance payment functionality calculates and updates the service tax records, which is required in India for service tax liability and credit availability on advance payments/ receipts.

Detailed Setup
You use the following setups to prepare Service Tax on Advance Payment functionality. Setup Area Chart of Accounts Service Tax Setup Service Tax Rate Structure G/L Mapping Description Service tax accounts are defined here Service group code and service tax registration number are created here Rates of service tax are to be defined in the Tax Setup Structure to be created based on service tax Service input account and service output accounts are to be mapped with the service tax group

Comprehensive Functionality
The focus of this functionality to enable calculation of Service Tax on Advance Payment received from the customer and advance payment made to the vendor. This functionality is applicable when you provide a checkmark on Serv. Tax on Advance Payment filed with other information like Service tax Group code and Service Tax Registration No. When you create invoice and apply the advance payment, Dynamics NAV will calculate the service tax considering the advance payment amount and the service tax amount involved in it, so that the service tax liability and the service tax credit amount remain accurate.

Report Service Tax on Advance Payment


This report shows the details of advance payment received or made according to the checkmark provided on Serv. Tax on Advance Payment field while creating journals. In this report you can find if the advance payment received or made has been applied against invoices or not.

Set-up for Service Tax Functionality


Service Tax Accounts in Chart of Accounts
Create the Service Tax G/L Accounts which are compulsory for the Service Tax Setup:

Navigation: General Ledger Chart of Accounts

Types of Service Tax G/L Account you need to create for the Service Tax Setup are: Service Tax Payable Account: All service tax liability on output service sales will be transferred to this account from the interim account, after passing a payment from customer that has been applied against the sales invoice. Service Tax Receivable Account: All input service tax credit on purchases ultimately will be transferred to this account from the interim account, after passing a payment to vendor and applying the same against the purchase invoice. Service Tax Payable Interim Account: All sales related service tax entries are posted in this account for the service tax amount charged temporarily. The amount gets transferred to the Service Tax Payable account after passing a payment entry which has been applied against the particular sales invoice. Service Tax Receivable Interim Account: Service Tax Receivable Interim account is a control account, which gets recorded on posting of an invoice and gets knocked off at the time of passing of a payment that applied against the vendor purchase invoice

Service Tax
Navigation: General Ledger Setup Service Tax
You can create the Service Tax setup for both of Excise as Service Credit and Service Tax as Excise Credit.

Service Tax Groups


Navigation: General Ledger Setup Service Tax Tax Group
Service Tax Group defines the nature of services for which service tax are applicable.

Define service tax groups according to your business scenario or services. For example: Banking and finance services, Advertisement services, Job work, and so on. Fill in the fields according to these guidelines: Field Code Description Description Define the service tax group code. Describe the name of the service tax group.

Service Tax Set Up


Navigation: General Ledger Setup Service Tax Tax Setup

Fill in the fields according to these guidelines: Field Code From date Percentage Percentage (eCess) Percentage (SHE eCess) Service Tax Receivable Account Service Tax Payable Account Receivable Account (Interim) Payable Account (Interim) Description Choose the service tax group from the drop down list. Specify the effective date from which the service tax rate becomes applicable. Specify the service tax rate percentage applicable for the service tax group. Specify the education cess rate applicable for the service tax group Specify the secondary and higher education cess rate applicable for the service tax group Choose the Service Tax Receivable account, where an input credit is recorded. Choose the Service Tax Payable account. Choose the Service Tax receivable account (Interim). Choose the Service Tax Payable account (Interim).

Service Tax Registration No.


Navigation: General Ledger Setup Service Tax Tax Registration No.

Fill in the fields according to these guidelines: Field Service Tax Registration No. Description Define the various service tax registration no. as per location from where you provide services.

Company Information
According to the business scenario, specify a registration number either in the Company Information or in the Location Card. Specify service tax registration number in the Company Information if centralized billing is applied, or specify registration number in the Location Card if decentralized billing and multi-location environment are applied.

Navigation: Administration Application Setup General Company Information


Attach a service tax registration number on the Others tab of the Company Information.

Navigation: Administration Application Setup Warehouse Locations

Note: By default the program takes the registration number attached in the Company Information card in all transaction screens if location field is left blank. If the billing

location is specified then the program will take the service tax registration number of the respective location.

Mapping of GL Accounts
In the GL Account card, different accounts are created for various types of services. Relevant service tax groups are to be attached with the specific G/L accounts on the Posting tab.

Navigation: General Ledger Chart of Accounts

Fill in the fields according to these guidelines: Field Service Tax Group Code Note: As there is a one to one mapping between the services group and GL accounts, you need to create as many GL accounts for each of the services. For example: If you are providing chartered accountant services and also providing financial services, then you need to create two GL accounts, to cater to both the services. Even when availing services, you need to create as many GL accounts in your purchases so that each service should be mapped. Description Select the relevant service tax group for the GL account.

10

Add Service Tax Component in the Structure Card


Navigation: General Ledger Setup Structure Structure
Include Service Tax in the structure card, as done for taxes like Excise and Sales Tax.

Transactions of Advance Payment


Advance Payment made to Vendor
Navigation: Financial Management General Ledger General Journal

11

In case of Service Tax on Advance Payment, the following fields are mandatory: Field Document Type Serv. Tax on Advance Payment Description You should specify the Document Type as Payment while recording advance payment. You should provide a check mark on this field while making advance payment. The program enables the service tax calculation functionally based on this check mark. Select the service tax group code in this field. According to the service tax group code the percentage of service tax and eCess will be captured to calculate the service tax on advance payment. Specify a service tax registration number here. You should refer the service tax registration number to enable the program to maintain service tax record according to the service tax registration number. Select the E.C.C No. in this filed. You should provide the E.C.C. number if you want to utilize service tax as excise credit against discharging excise liability.

Service Tax Group Code

Service Tax Registration No.

E.C.C. No.

Enter the following information in the General Journal: Document Type Document No. Serv. Tax on Advance Payment Account Type Account No. Service Tax Group Code Service Tax Registration No. Bal. Account No. Payment Program will assign number from number series setup Please a check mark on this field Vendor Select the vendor code from the list ADV HXJ118910111357 Select Cash/Bank account

While making an advance payment to vendors through the General Journal, you should mark Serv. Tax on Advance Payment to allow the program to calculate service tax on the advance payment made. You also require mentioning service tax group code and service tax registration number in the general journal. Note: You should not apply the advance payment with any other document. Program will generate an error message and will not post the document if you use application functionality on this document. Press CTRL+F8 to see the detail calculation of service tax on the advance payment on this transaction.

12

In the above screen, the calculation of service tax on advance payment is displayed. The entry will be reflected in the Service Tax Entry table, so that service tax credit gets recorded to the extent of the advance payment made to vendor. Post the general journal.

13

History - Service Tax on Advance Payment made to Vendor


Navigation: Financial Management General Ledger History Navigate

Select the Service Tax Entry line and then click Show to view the service tax details.

Select the G/L Entry line and then click Show to view the accounting affect of the advance payment made to vendor.

14

The above payment entry has made the following GL entry in the program: Description Vendor Account Bank/Cash Account Dr/Cr Dr Cr Amount 11030.00 11030.00

Note: In case of advance payment made to vendor with the checkmark on Serv. Tax on Advance Payment, Dynamics NAV will not create any GL entry for Service Tax Receivable Interim Account or Service Tax Receivable Account. But Service Tax Entry table will be updated to keep track of advance payment made to vendor.. You also could use the following templates to create payments to vendor where service tax on advance payment could be calculated. a) Payment Journal b) Cash Payment Voucher c) Bank Payment Voucher

Purchase Transactions
The advance payment made to the vendor could be applied to the purchase invoice to enable the program to update the service tax table. In normal business scenario there could be two examples of advance payment made, 100 % payment made in advance or partial advance made against an input service. In the following examples both the scenario will be discussed

15

Direct Invoices using Purchase Order


Navigation: Purchases Order Processing Order

16

Enter the following details on the Purchase Order header: Buy-from Vendor No Location Code Structure Choose a vendor from the list. Keep this field blank Select structure denoting Service Tax

Enter the following details on the Purchase Order line: Type No. Quantity Direct Unit Cost Excl. VAT Service Tax Registration No. G/L account Select input service G/L Account which is mapped with Service Tax Group 1 10000 The program will capture the service tax registration number from the Company Information as you kept the Location field blank. If Location is specified, the program will capture the service tax registration number from the Location Card.

Enter the following details on the Purchase Order Application Tab: Field Applies-to Doc. Type Applies-to Doc. No. Description You should select the Payment type here. Select the appropriate advance payment made to the vendor that has been posted with the mark on Serv. Tax on Advance Payment.

Note: 1. In the above purchase order form, since the General Ledger is already mapped to a Service Tax Group, the program will calculate the service tax amount. However the service tax computation will happen only after attaching a structure, with service tax component. 2. Program will validate the service tax group code and service tax registration number entered in the purchase order with the payment document applied. If the service tax group code or service tax registration number of advance payment document is different than the purchase order, program will not allow you to post the purchase order and will generate error message. 3. At the time of posting the invoice, program will consider the amount of service tax on advance payment document. If the program finds the applied payment document which has been posted with a mark on Serv. Tax on Advance Payment, will then calculate the service tax, service tax eCess and service tax SHE eCess amount based on the service tax, service tax eCess and service tax SHE eCess amount involved in the applied advance payment. Click Functions Calculate Structure Values Post the purchase order

17

History - Advance Payment applied in Purchase Order


The posted information of purchase invoice where advance payment is applied would be stored in service tax entry tables.

Navigation: Purchases History Posted Invoices

18

Click Navigate to view the details of the entry that have been posted.

In the above window you can see that there is no service tax entry. The program already made a service tax entry while the advance payment made to vendor with a checkmark on Serv. Tax on Advance Payment. At the time of posting the above purchase document you have applied with similar nature of advance payment document If the invoice amount is lesser than or equal to the advance payment document amount, the program will not generate any service tax entry, but will create a GL entry as mentioned below: Select the G/L Entry line in the Navigate form and then click Show to view the G/L entry. Program will display the following General Ledger details: Description Advertisement Account Service Tax Receivable Account Vendor Domestic Account Dr/Cr Dr Dr Cr Amount 10000.00 1030.00 11030.00

19

The program calculates the Service Tax as per the setup below: Service Tax %: Service Tax Base: Service Tax Amount Service Tax eCess %: Service Tax eCess Amount: Service Tax SHE eCess %: Service Tax SHE eCess Amount: Amount To Vendor: 10 10,000 1,000 2 20 1 10 11,030

Now take up the scenario where the invoice amount is greater than the advance payment made the program will calculate the service tax on the remaining amount of advance payment made. Create another Advance Payment to Vendor according to the example below. Navigate to General Journal. Enter the following information in the General Journal: Document Type Document No. Serv. Tax on Advance Payment Account Type Account No. Service Tax Group Code Service Tax Registration No. Amount Bal. Account Type Bal. Account No. Post the advance payment document. Payment Program will assign number from number series setup Please a check mark on this field Vendor Select the vendor code from the list ADV HXJ118910111357 11,030 GL Account Select Cash/Bank account

20

Create purchase invoice using Purchase Order form according to the example given below and apply the advance payment that you have posted assuming you have made a payment of 50 % advance. Navigate to Purchase Order. Enter the following details on the Purchase Order header: Buy-from Vendor No Location Code Structure Choose a vendor from the list. Keep this field blank Select structure denoting Service Tax

Enter the following details on the Purchase Order line: Type No. Quantity Direct Unit Cost Excl. VAT Service Tax Registration No. G/L account Select input service G/L Account which is mapped with Service Tax Group 1 20000 The program will capture the service tax registration number from the Company Information as you kept the Location field blank. If Location is specified, the program will capture the service tax registration number from the Location Card.

Enter the following details on the Purchase Order Application Tab: Field Applies-to Doc. Type Applies-to Doc. No. Description You should select the Payment type here. Select the appropriate advance payment made to the vendor that has been posted with the mark on Serv. Tax on Advance Payment.

Click Functions Calculate Structure Values Post the purchase invoice See the posted information of the purchase entry made to understand how the program is managing the Service Tax on Advance payment where the invoice amount is greater than the advance payment made.

21

Navigation: Financial Management General Ledger History Navigate

Click Navigate to view the details of the entry that have been posted.

22

Select the Service Tax Entry line in the Navigate form and then click Show to view the service tax entry.

Select the G/L Entry line in the Navigate form and then click Show to view the G/L entry

23

Program will display the following General Ledger details: Description Advertisement Account Service Tax Receivable Interim Account Service Tax Receivable Account Vendor Domestic Account The program calculates the Service Tax as per the setup: Service Tax %: 10 Service Tax Base: 20,000 Service Tax Amount 2,000 Service Tax eCess %: 2 Service Tax eCess Amount: 40 Service Tax SHE eCess %: 1 Service Tax SHE eCess Amount: 20 Amount To Vendor: 22,060 Dr/Cr Dr Dr Dr Cr Amount 20000.00 1030.00 1030.00 22060.00

24

Advance Payment received from Customer


Navigation: Financial Management General Ledger General Journal

In case of Service Tax on Advance Payment the following fields are important Field Serv. Tax on Advance Payment Description You should provide a mark on this field. The program enables the service tax calculation functionally based on this check mark. Select the service tax group code in this field. According to the service tax group code the percentage of service tax and eCess will be captured to calculate the service tax on advance payment. Specify a service tax registration number here. You should refer the service tax registration number to enable the program to maintain service tax record according to the service tax registration number. Select the E.C.C No. in this filed. You should provide the E.C.C. number if you want to utilize service tax as excise credit against discharging excise liability.

Service Tax Group Code

Service Tax Registration No.

E.C.C. No.

25

Enter the following information in the General Journal: Document Type Document No. Serv. Tax on Advance Payment Account Type Account No. Service Tax Group Code Service Tax Registration No. Bal. Account No. Payment Program will assign number from number series setup Please a check mark on this field Customer Select the customer code from the list ADV HXJ118910111357 Select Cash/Bank account

While creating an advance payment from customer using the General Journal, you should mark Serv. Tax on Advance Payment to allow the program to calculate service tax on the advance payment made. You are also required to mention service tax group code and service tax registration number in the general journal. Note: You should not apply the advance payment with any other document. Program will generate an error message and will not post the document if you use application functionality on this document. Press CTRL+F8 to see the detail calculation of service tax on the advance payment on this transaction.

26

The above window is displaying the calculation of service tax on advance payment. The entry will be reflected in the Service Tax Entry table, so that service tax liability gets recorded to the extent of the advance payment received from customer. Post the general journal.

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History - Service Tax on Advance Payment received from Customer


Navigation: Financial Management General Ledger History Navigate

Select the Service Tax Entry line and then click Show to view the service tax details.

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Select the G/L Entry line and then click Show to view the accounting affect of the advance payment received from customer.

The above payment entry has made the following GL entry in the program: Description Bank/Cash Account Customers Domestic Account Service Tax Payable Account Service Tax Payable Interim Account Dr/Cr Dr Cr Cr Dr Amount 11030.00 11030.00 1030.00 1030.00

You also could use the following templates to create payments from customer where service tax on advance payment could be calculated. a) Cash Receipt Journal b) Cash Receipt Voucher c) Bank Receipt Voucher

Sales Transactions
The advance payment received from the customer could be applied to the sales invoice to enable the program to update the service tax table. In normal business scenario there could be two examples of advance received, 100 % advance received or partial advance received against a service deal. In the following examples both the scenario will be discussed.

Direct Invoices using Sales Order


Navigation: Sales & Marketing Order Processing Order

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Enter the following details on the Sales Order header: Sell-to Customer No Location Code Structure Choose a customer from the list. Keep this field blank Select structure denoting Service Tax

Enter the following details on the Sales Order line: Type No. Quantity Unit Price Excl. VAT Service Tax Registration No. G/L account Select input service G/L Account which is mapped with Service Tax Group 1 50000 The program will capture the service tax registration number from the Company Information as you kept the Location field blank. If Location is specified, the program will capture the service tax registration number from the Location Card.

Enter the following details on the Sales Order Invoice Tab: Field Applies-to Doc. Type Applies-to Doc. No. Description You should select the Payment type here. Select the appropriate advance payment received from the customer that has been posted with the mark on Serv. Tax on Advance Payment.

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Note: 1. In the above sales order form, since the General Ledger is already mapped to a Service Tax Group, the program will calculate the service tax amount. However the service tax computation will happen only after attaching a structure, with service tax component. 2. Program will validate the service tax group code and service tax registration number entered in the sales order with the advance payment received document applied. If the service tax group code or service tax registration number of advance payment document is different than the sales order, program will not allow you to post the sales order and will generate error message. 3. At the time of posting the invoice, program will consider the amount of service tax on advance payment. If the program finds the applied payment document which has been posted with a mark on Serv. Tax on Advance Payment, will then calculate the service tax and service tax eCess amount based on the service tax and service tax eCess amount involved in the applied advance payment. Click Functions Calculate Structure Values Post the sales order

History - Advance Payment applied in Sales Order


The posted information of purchase invoice where advance payment is applied would be stored in service tax entry tables. When you click on the Navigate button in the posted invoice entries, you will find that the program has made an entry in the Service Tax Entry Table.

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Navigation: Sales & Marketing History Posted Invoices

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Click Navigate to view the details of the entry that have been posted.

In the above window you can see that there is no service tax entry. The program already recorded a service tax entry with the advance payment document, which has been applied to this sales order. If the invoice amount is lesser than or equal to the advance payment made, the program will not generate any service tax entry. Select the G/L Entry line in the Navigate form and then click Show to view the G/L entry. Program will display the following General Ledger details: Description Customers Domestic Account Service Tax Payable Interim Account Advertisement Account Dr/Cr Dr Cr Cr Amount 11,030.00 1,030.00 10,000.00

The program calculates the Service Tax as per the setup below: Service Tax %: Service Tax Base: Service Tax Amount Service Tax eCess %: Service Tax eCess Amount: Service Tax SHE eCess %: Service Tax SHE eCess Amount: 10 10,000 1,000 2 20 1 10

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Now take up the scenario where the invoice amount is greater than the advance payment received the program will calculate the service tax on the remaining amount of advance payment made. Create another Advance Payment received from Customer according to the example below. Navigate to General Journal. Enter the following information in the General Journal: Document Type Document No. Serv. Tax on Advance Payment Account Type Account No. Service Tax Group Code Service Tax Registration No. Amount Bal. Account Type Bal. Account No. Post the advance payment document. Create sales invoice using Sales Order form according to the example given below and apply the advance payment that you have posted assuming you have received a payment of 50 % advance. Navigate to Sales Order. Enter the following details on the Sales Order header: Sell-to Customer No Location Code Structure Choose a customer from whom you have received the advance payment. Keep this field blank Select structure denoting Service Tax Payment Program will assign number from number series setup Please a check mark on this field Customer Select the customer code from the list ADV HXJ118910111357 -22,060 GL Account Select Cash/Bank account

Enter the following details on the Sales Order line: Type No. Quantity Unit Price Excl. VAT Service Tax Registration No. G/L account Select input service G/L Account which is mapped with Service Tax Group 1 40000 The program will capture the service tax registration number from the Company Information as you kept the Location field blank. If Location is

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specified, the program will capture the service tax registration number from the Location Card. Enter the following details on the Purchase Order Invoice Tab: Field Applies-to Doc. Type Applies-to Doc. No. Description You should select the Payment type here. Select the appropriate advance payment made to the vendor that has been posted with the mark on Serv. Tax on Advance Payment.

Click Functions Calculate Structure Values Post the purchase invoice See the posted information of the sales entry made to understand how the program is managing the Service Tax on Advance payment where the invoice amount is greater than the advance payment received.

Navigation: Financial Management General Ledger History Navigate

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Click Navigate to view the details of the entry that have been posted.

Select the Service Tax Entry line in the Navigate form and then click Show to view the service tax entry.

Select the G/L Entry line in the Navigate form and then click Show to view the G/L entry

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Program will display the following General Ledger details: Description Customers Domestic Account Service Tax Payable Interim Account Advertisement Account Dr/Cr Dr Cr Cr Amount 44120.00 4120.00 40000.00

The program calculates the Service Tax as per the setup below: Service Tax %: Service Tax Base: Service Tax Amount Service Tax eCess %: Service Tax eCess Amount: Service Tax SHE eCess %: Service Tax SHE eCess Amount: 10 40,000 4,000 2 80 1 40

Refund of Advance Payment


There could be a business scenario where you need to refund the entire or partial amount you have received or paid as advance payment. In that case the service tax amount calculated and stored, when advance payment made or received in the service tax register, must be reversed accordingly. You will see how Dynamics NAV manages the scenario, say, you have received an advance payment from you customer. Create the advance payment as per the following example.

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Navigation: Financial Management General Ledger General Journal


Enter the following information in the General Journal: Document Type Document No. Serv. Tax on Advance Payment Account Type Account No. Service Tax Group Code Service Tax Registration No. Amount Bal. Account No. Post the general journal. The program has created service tax entry details; your service tax liability is increased accordingly after this advance payment has been posted. Suppose there is a dispute and you need to refund the entire amount to the customer, then you also need to reduce your service tax liability accordingly. Payment Program will assign number from number series setup, say G00333 Please a checkmark on this field Customer Select the customer code from the list ADV HXJ118910111357 -11,030.00 Select Cash/Bank account

Navigation: Financial Management General Ledger General Journal

In case of creating a refund against Service Tax on Advance Payment, the following fields are mandatory:

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Field Serv. Tax on Advance Payment

Description You should provide a checkmark on this field. The program enables the service tax calculation functionally based on this checkmark. Select the service tax group code in this field. According to the service tax group code the percentage of service tax and eCess will be captured to calculate the service tax on the refund amount. Specify a service tax registration number here. You should refer the service tax registration number to enable the program to maintain service tax record according to the service tax registration number.

Service Tax Group Code

Service Tax Registration No.

Enter the following information in the General Journal: Document Type Document No. Serv. Tax on Advance Payment Account Type Account No. Service Tax Group Code Service Tax Registration No. Amount Bal. Account No. Applies-to Doc. Type Applies-to Doc. No. Post the refund Document. View the posted information of Refund that you have posted recently. Refund Program will assign number from number series setup, say G00068 Please a checkmark on this field Customer Select the customer code from the list ADV HXJ118910111357 11,030.00 Select Cash/Bank account Payment G00333

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Navigation: Financial Management General Ledger History Navigate

Select the Service Tax Entry line in the Navigate form and then click Show to view the Service Tax Entry.

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Select the G/L Entry line in the Navigate form and then click Show to view the G/L entry

Program will display the following General Ledger details: Here all the entry has been reversed in terms of the advance payment received from the customer: Description Customers Domestic Account Service Tax Payable Account Service Tax Payable Interim Account Bank/Cash Account Dr/Cr Dr Dr Cr Cr Amount 11,030.00 1,030.00 1,030.00 11,030.00

Now, if you compare the GL entry of the advance payment received from customer that you have posted recently, the GL entry will be as below. Description Bank/Cash Account Service Tax Payable Interim Account Service Tax Payable Account Customers Domestic Account Dr/Cr Dr Dr Cr Cr Amount 11,030.00 1,030.00 1,030.00 11,030.00

The above mentioned example was for full refund against the advance payment received. Dynamics NAV can also manage the scenario where the partial amount is refunded. You will have to follow the same procedure of refunding against the advance payment received, but the amount will be less the advance payment received. In case of refund to vendor against the advance payment made, Dynamics NAV will allow you to use the functionality as above.

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Reports
Service Tax on Advance Payment
Navigation: Financial Management General Ledger Report Service Tax Reporting Service Tax on Advance Payment
Enter the following information in the Report Request form: Field Description Customer/Vendor Choose an option from dropdown list as Customer or Vendor. Customer Code Select Customer from the list for which you want to generate the report Vendor Cose Select Vendor from the list for which you want to generate the report Starting Date Enter date (from which date the report to be generated) Ending Date Enter date (to which date the report to be generated) The program will generate the report as below:

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The above report displays following key information: Amount: Amount denotes the advance payment received from the customer. Applied Amount: Applied Amount denotes the amount applied against any document. Remaining Amount: Remaining Amount denotes the balance amount after application.

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Appendix
Accounting of Service Tax on Advance Payment
XYZ Ltd. enters into a quarterly agreement on 01/04/2006 with ABC Ltd to provide Legal consulting service. It was decided that XYZ Ltd. will raise an invoice of INR 2, 00,000 after rendering of services. On 15/04/2006 ABC Ltd. pays INR.50, 000 for advance against services. XYZ Ltd. starts rendering consulting on 15/05//2006. The rate of service tax is 10% and e-Cess rate is 2%. (a) The following financial entry will appear in the books of service provider at the time of posting of payment Journal for advance. Account Bank (Advance against Service) Customer Interim Service tax Payable Interim E-Cess on Service tax payable Service tax Payable E-Cess on Service Tax payable DR 50,000 50,000 6,000 120 6,000 120 CR

(b) At the time of invoice of services, the entry would be as follows: Account Customer Sales service (Consulting) Interim Service tax Payable Interim E-Cess on Service tax payable DR 2,24,480 2,00,000 24000 480 CR

(c) At the time of receipt of balance payment, the financial entry will appear as follows: Account Bank Customer Interim Service tax Payable Interim E-Cess on Service tax payable Service tax Payable E-Cess on Service Tax payable DR 1,50,000 1,50,000 18,000 360 18,000 360 CR

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Microsoft Business Solutions Navision 4.0- Excise as Service Tax Credit

Table of Contents
Overview:........................................................................................................................... 4 Detailed Setup: ................................................................................................................. 4 Comprehensive Functionality:........................................................................................ 5 Input Service Details.................................................................................................... 5 Set-up for Service Tax Functionality ............................................................................. 5 Service Tax Accounts in Chart of Accounts:............................................................ 5 Service Tax ................................................................................................................... 6 Service Tax Groups ..................................................................................................... 7 Service Tax Set Up: ..................................................................................................... 8 Service Tax Registration No.: .................................................................................... 9 Company Information: ............................................................................................... 10 Mapping of GL Accounts:.......................................................................................... 11 Add Service Tax component in the Structure Card: ............................................. 12 Transactions of Input Service and Output Service ................................................... 12 Purchase Transactions.............................................................................................. 13 Direct Invoices using Purchase Invoices........................................................... 13 Service Tax Entry History Purchase Invoice ................................................. 15 The above purchase entries have affected the following GL account:......... 17 Payments using Payment Journal ...................................................................... 17 Service Tax Entry History Payment ................................................................ 18 Sales Transactions .................................................................................................... 20 Direct Invoices using Sales Invoices.................................................................. 20 Service Tax Entry History - Sales Invoice ......................................................... 22 Payments using Receipt Journal ........................................................................ 24 Service Tax Entry History - Receipt ................................................................... 25 Excise as Service Tax Credit ....................................................................................... 27 Implication for the Service Provider ........................................................................ 27 Purchase Order ..................................................................................................... 27 Periodical Activities for managing Excise as Service Tax Credit and Service Tax Payment ............................................................................................................... 33 Excise as Service Tax Credit: ............................................................................. 33 Payment of Service Tax and Excise as Service Tax Credit:............................... 34 Service Tax as Excise ................................................................................................... 41 Implication for the Manufacturers ............................................................................ 41 Purchase Order ..................................................................................................... 42 Periodical Activities for managing Service Tax as Excise Credit and Excise Duty Payment ............................................................................................................. 43 Service Tax as Excise Credit: ............................................................................. 43 Payment of Excise Duty and Service Tax as Excise Credit:............................... 45 Update Challan Details.................................................................................................. 50 Reports............................................................................................................................. 50

Input Service Details.................................................................................................. 50 Appendix.......................................................................................................................... 52 Accounting of Service Tax ........................................................................................ 52

Overview:
Earlier service tax incurred on input service was allowed as credit, which might be utilized for the payment of service tax on output service. The service tax credit can only be utilized for payment of output service tax. Total service tax credit available as on the last date of the month can be used to discharge the service tax liability of the month. In case of individual or partnership firm assesees, the service tax credit as on the last date of the quarter can be utilized to discharge the service tax liability of the quarter. Presently the concern providing the output service using inputs (goods) and input services can avail the credit of the excise duty paid on the inputs and service tax paid on the services to discharge the service tax liability. Similarly the manufacturing concern can take credit on the service tax paid on the input services which are used for manufacturing and can use the service tax credit to discharge the excise liability.

Detailed Setup:
You use the following setups to incorporate Excise as Service Tax Credit and Service Tax as Excise Credit functionality in your organization. Setup Area Chart of Accounts Service Tax Setup Service Tax Rate Structure G/L Mapping Description Service tax accounts are defined here. Service group code and service tax registration number are to be created here Rates of service tax are to be defined in the Tax Setup. Structure to be created based on service tax. Service input account and service output accounts are to be mapped with the service tax group

Comprehensive Functionality:
The focus of this functionality is to utilize the availed Excise as Service Tax Credit and Service Tax as Excise Credit. This functionality is completely optional and it includes: Setup for both Service Tax as Excise and Excise as Service Tax will be done in the Periodical Activity application area. Provision for selecting the excise entries or service tax entries to facilitate the use of the availed credits in discharging the excise or service tax liability based on the setup.

Report

Input Service Details


This report shows the details of Credit Availed and Credit Utilised. The service tax credit opening, credit taken, credit utilized, and closing balance show the amount you have availed and utilized either for Service Tax as Excise Credit while paying excise duty or for credit utilized against the payment of service tax. This report also shows the balance of credit availed amount.

Set-up for Service Tax Functionality

Service Tax Accounts in Chart of Accounts:


Create the Service Tax G/L accounts which are compulsory for the Service Tax Setup:

Navigation: General Ledger Chart of Accounts

Types of Service Tax G/L account you need to create for the Service Tax Setup are: Service Tax Payable Account: All service tax liability on output service sales will be transferred to this account from the interim account, after passing a payment from customer that has been applied against the sales invoice. Service Tax Receivable Account: All input service tax credit on purchases ultimately will be transferred to this account from the interim account, after passing a payment to vendor and applying the same against the purchase invoice. Service Tax Payable Interim Account: All sales related service tax entries are posted in this account for the service tax amount charged temporarily. The amount gets transferred to the Service Tax Payable account after passing a payment entry which has been applied against the particular sales invoice. Service Tax Receivable Interim Account: Service Tax Receivable Interim account is a control account, which gets recorded on posting of an invoice and gets knocked off at the time of passing of a payment that applied against the vendor purchase invoice

Service Tax
Navigation: General Ledger Setup Service Tax
You can create the Service Tax setup for both of Excise as Service Credit and Service Tax as Excise Credit.

Service Tax Groups


Navigation: General Ledger Setup Service Tax Tax Group
Service Tax Group defines the nature of services for which service tax are applicable.

Define service tax groups according to your business scenario or services. For example: Banking and finance services, Advertisement services, Job work, and so on. Fill in the fields according to these guidelines: Field Code: Description: Description Define the service tax group code. Describe the name of the service tax group.

Service Tax Set Up:


Navigation: General Ledger Setup Service Tax Tax Setup

Fill in the fields according to these guidelines: Field Code From date Percentage Percentage (eCess) Percentage (SHE eCess) Service Tax Receivable Account Service Tax Payable Account Receivable Account (Interim) Payable Account (Interim) Description Choose the service tax group from the drop down list. Specify the effective date from which the service tax rate becomes applicable. Specify the service tax rate percentage applicable for the service tax group. Specify the education cess rate applicable for the service tax group Specify the secondary and higher education cess rate applicable for the service tax group Choose the Service Tax Receivable account, where an input credit is recorded. Choose the Service Tax Payable account. Choose the Service Tax receivable account (Interim). Choose the Service Tax Payable account (Interim).

Service Tax Registration No.:


Navigation: General Ledger Setup Service Tax Tax Registration No.

Fill in the fields according to these guidelines: Field Service Tax Registration No. Description Define the various service tax registration no. as per location from where you provide services.

Company Information:
According to your business scenario, specify registration number either in the Company Information or in the Location Card. You can specify service tax registration number in the Company Information if centralized billing is applied or specify registration number in the Location Card if decentralized billing and multi-location environment are applied.

Navigation: Administration Application Setup General Company Information


Attach a service tax registration number on the Others tab of the Company Information.

Navigation: Administration Application Setup Warehouse Locations

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Note: By default the program takes the registration number attached in the Company Information card in all transaction screens if location field is left blank. If the billing location is specified then the program will take the service tax registration number of the respective location.

Mapping of GL Accounts:
Mapping of GL Accounts to Service Tax Groups: In the GL Account card different accounts are created for various types of services. Relevant service tax groups are to be attached with the specific G/L accounts on the Posting tab.

Navigation: General Ledger Chart of Accounts

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Fill in the fields according to these guidelines: Field Service Tax Group Code: Description Select the relevant service tax group for the GL account.

Note: As there is a one to one mapping between the services group and GL accounts, you need to create as many GL accounts for each of the services. For example: If you are providing chartered accountant services and also providing financial services, then you need to create two GL accounts, to cater to both the services. Even when availing services, you need to create as many GL accounts in your purchases so that each service should be mapped.

Add Service Tax component in the Structure Card:


Navigation: General Ledger Setup Structure Structure
Include Service Tax in the structure card, as done for taxes like Excise and Sales Tax.

Transactions of Input Service and Output Service


In this section, you can understand how the program stores the service (purchase / sales) related entries, Service Tax Credit Availed, and Service Tax Liability

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In this section, you can also understand how the Service Tax Interim accounts are affected through different transactions.

Purchase Transactions

Direct Invoices using Purchase Invoices


Navigation: Purchases Order Processing Order

Enter the following details on the Purchase invoice/order header: Buy-from Vendor No Location Code Structure Choose a vendor from the list. Keep this field blank Select structure denoting Service Tax

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Enter the following details on the Purchase invoice line: Type No. Quantity Direct Unit Cost Excl. VAT Service Tax Registration No. G/L account Select input service G/L Account which is mapped with Service Tax Group 1 100000 The program will capture the service tax registration number from the Company Information as you kept the Location field blank. If Location is specified, the program will capture the service tax registration number from the Location Card.

(In the above window, since the GL account 8410 is already mapped to a Service Tax Group, the program will calculate the service tax amount. However the service tax computation will happen only after attaching a structure, with service tax component.)

Click Functions Calculate Structure Values


To view the computed Service Tax details press F9 (Statistics).

Post the purchase invoice

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Service Tax Entry History Purchase Invoice


Service Tax Entry Table stores all the purchase invoices involved in the service tax. It stores the posted invoice number and the posting date along with the service tax details like: service tax group, service tax registration number, service tax amount, and so on. When you click on the Navigate button in the posted invoice entries, you will find that the program has also made an entry in the Service Tax Entry table.

Navigation: Purchases History Posted Invoices

Click Navigate to view the details of the entry that have been posted.

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Select the Service Tax Entry line and then click Show to view the service tax entry.

Select the G/L Entry line in the Navigate form and then click Show to view the G/L entry.

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The above purchase entries have affected the following GL account: Description Advertisement Account Service Tax Receivable Interim Account Vendor Domestic Account Calculation of Service Tax as per the structure below: Service Tax %: 10 Service Tax Base: 100,000 Service Tax Amount 10,000 Service Tax eCess %: 2 Service Tax eCess Amount: 200 Service Tax SHE eCess %: 1 Service Tax SHE eCess Amount: 100 Amount To Vendor: 110,300 Dr/Cr Dr Dr Cr Amount 100000.00 10300.00 110300.00

Payments using Payment Journal


Navigation: Financial Management Payables Payment Journal
Note: While making payments using General Journal/Payment Journal, please ensure that the Document Type is selected as Payment, otherwise the service tax credit will not be updated.

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Enter the following information in the Payment Journal: Document Type Document No. Account Type Account No. Bal. Account No. Applies-to Doc. Type Applies-to Doc. No. Payment Number will be generated automatically Vendor Select the vendor code from the list Select Cash/Bank account Invoice Select the invoice for which you are making payment

While making payments to vendors through the Payment Journal, apply the entry with the relevant invoice. The entries are reflected in the Service Tax Entry table, so that service tax credit gets recorded to the extent of the payment made.

Service Tax Entry History Payment


Navigation: Purchases History Navigate

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Select the G/L Entry line and then click Show to view the G/L Entry.

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The above payment entry has made the following GL entry in the program: Description Vendor Account Service Tax Receivable Account Service Tax Receivable Interim Account Bank/Cash Account Dr/Cr Dr Dr Cr Cr Amount 110300.00 10300.00 10300.00 110300.00

In the above table, you will find that amount is transferred from the Service Tax Receivable Interim account to the Service Tax Receivable Account and is available for utilize against the service tax liability.

Sales Transactions

Direct Invoices using Sales Invoices


Navigation: Sales & Marketing Order Processing Invoices

Enter the following details in the Sales Invoice header: Sell-to Customer No. Location Code Structure Choose a customer from the list. Keep this field blank Select structure denoting Service Tax

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Enter the following details in the Sales Invoice line: Type No. Quantity Unit Price Excl. Vat Service Tax Registration No. G/L account Select output service G/L Account which is mapped with Service Tax Group 1 200000 The program will capture the service tax registration number from the Company Information as you have kept the Location field blank. If Location is specified, the program will capture the service tax registration number from the Location Card.

In the above window, since the GL account 8410-Advertising is already mapped to a Service Tax Group; the service tax will be calculated. However the service tax computation will happen only after attaching a structure with service tax component. Click Functions Calculate Structure Values To view the computed details press F9 (Statistics).

Post the Sales Invoice.

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Service Tax Entry History - Sales Invoice


Service Tax Entry table stores all the sales invoices including service tax. It stores the posted invoice number and the posting date along with the service tax details like: service tax group, service tax registration number, service tax amount, and so on. If you click the Navigate button in the posted invoice entries, you will find that the program has also made an entry in the Service Tax entry table.

Navigation: Sales & Marketing History Posted Invoices

Click Navigate to view the details of entries that have been posted.

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Select the Service Tax Entry line and then click Show to view the Service Tax entry.

Select the G/L Entry line and then click Show to view the GL entry.

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The above window displays the following accounts: Description Customer Account Service Tax Payable Interim Account Advertising Dr/Cr Dr Cr Cr Amount 220600.00 20600.00 200000.00

Calculation of service tax as per the structure below: Service Tax %: 10 Service Tax Base: 200,000 Service Tax Amount 20,000 Service Tax eCess %: 2 Service Tax eCess Amount: 400 Service Tax SHE eCess %: 1 Service Tax SHE eCess Amount: 200 Amount To Customer: 220,600

Payments using Receipt Journal


Navigation: Financial Management Receivables Receipt Journal
Note: While recording incoming payments using the Receipt Journal/General Journal, please ensure that the Document Type is selected as Payment, otherwise the service tax liability will not be updated to the extent of payment received.

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Enter the following information: Document Type Document No. Account Type Account No. Bal. Account No. Applies-to Doc. Type Applies-to Doc. No. Payment Document number will be generated automatically Customer Choose the customer code from the list Choose Cash /Bank account Invoice Choose the invoice, for which you are receiving payment

Note: While receiving payments from customers through the Receipt Journal/General Journal, apply the entry with the relevant invoice. The entries are reflected in the Service Tax Entry table, so that service tax liability gets recorded only to the extent of the payment received.

Service Tax Entry History - Receipt


If you see the posted document of the original invoice, you will find that the service tax entry is updated and the amount of payment received is reflected in the table.

Navigation: Sales & Marketing History Navigate

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Select the G/L Entry line and then click Show to view the GL entry.

The above payment entry has made the following GL entry in the program

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Description Cash/Bank Account Service Tax Payable Interim Account Service Tax Payable Account Customer Account

Dr/Cr Dr Dr Cr Cr

Amount 220600.00 20600.00 20600.00 220600.00

In the above table, you will find that amount is transferred from the Service Tax Payable Interim account to the Service Tax Payable account and standing as the service tax liability.

Excise as Service Tax Credit

Implication for the Service Provider


If the service provider is purchasing any excisable goods and using the material to provide the service, then the service provider can utilize the excise credit against the paying off the service tax. For example: CRONUS India Limited an advertisement agency has signed up an agreement to provide advertisement service to its client. The company bought a plotter from the vendor Delhi Postmaster for printing signboard. The excise duty paid by the company could be utilize as Excise as Service Tax Credit while paying off service tax. The purchase order entry will be made as follows:

Purchase Order
Navigation: Purchases Order Processing Purchase Order

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Enter the below mentioned information and post the Purchase order. Buy-from Vendor No. Location Code Structure Choose a vendor from the list. Keep this field blank Select structure denoting EXCISE

Enter the following details on the Purchase Invoice line: Type No. Item Select the capital item you have defined in the program (In the item card will mark the Capital Item field to specify an item as capital goods). 1 260000

Quantity Direct Unit Cost Excl. VAT

Calculate Structure Values from Functions and press F9 (Statistics) to see the Purchase Invoice Statistics:

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Press F11 to post the Order as Receive and Invoice

Excise Entry History - Purchase Invoice Navigation: Purchases History Posted Invoice

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Note: The computation of excise duty will be based on the excise setup. In case of Capital Item, 50 percent of excise duty paid on purchase could be utilized as CENVAT Credit in the current year and rest will be carry forwarded to the next year. You can also book excise credit by creating purchase invoice while buying input or capital goods to use for the output services. Click Navigate to see the entry details:

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Click Show to view the Excise entry:

As the type of bought item is Capital, the program will make two entries, which could assure the 50 percent credit for the current year and rest for the next year. To see the G/L effect, select the G/L Entry line and click Show in the Navigate window:

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The program has made the following G/L Entry: Description Purch., Raw Materials - Dom. Cenvat Cr. Receivable Account Cenvat Cr. Deffered Account Vendors, Domestic Dr/Cr Dr Dr Dr Cr Amount 200400.00 11200.00 11200.00 222800.00

The Structure has made the following calculation for the Excise entry: Excise Base Amount: BED % : Capital Item: AED(GSI) %: SED % : SAED %: eCess %: SHE Cess %: AED(TTA) %: ADE %: BED Amount: AED(GSI) Amount: SED Amount: SAED Amount: eCess Amount: SHE Cess Amount: AED (TTA) Amount: ADE Amount: Excise Amount: Amount Including Excise: Amount To Vendor: 200,000 10 Yes 2 2 2 2 2 2 2 20,000 400 400 400 400 400 400 400 22,800 222,800 222,800

Capital goods and any inputs purchased by a service provider are used for providing output service. The excise duty thus paid on purchasing the capital goods or inputs by

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the service provider, can be availed as a credit and can be offset against the service tax payable.

Periodical Activities for managing Excise as Service Tax Credit and Service Tax Payment
The user can take decision on the amount of Excise Credit to utilize as Excise as Service Tax Credit. This periodical activity will help the user to select the records of excise entries, which are to be carried out to take the credit against service tax liability based on Register Type as: RG and Location as: E.C.C. No.

Excise as Service Tax Credit:


Navigation: Financial Management General Ledger Periodic Activities Service Tax Excise as Service Tax Credit

Fill in the fields according to these guidelines: Field RG Register Type Description Choose the RG register type from the drop down box. Available options are: RG 23A and RG 23C. Choose the location from where you provide service and credit to be forwarded as Excise as Service Tax credit.

Location E.C.C. No

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Click OK to see all records of the respective RG registers.

Select the entry or entries and provide a check mark for which you want to carry out the availed credit. Click OK (Note: Beside the selection of RG 23A Part II or RG 23C Part II based on your decision to carry out the credit, you can also filter the records based on the Excise Business Posting Group, Excise Product Posting Group, Posting Date, and so on as per your requirement.) You use Function Select All, to select all the records or may use UnCheck All to remove check mark from the records. Remember that if you utilized the availed excise credit against Payment of Service Tax as Excise as Service Tax Credit, those document which are fully applied with the amount you utilized will be removed from this form by the program. Only the partial document if any will be lying in this form and will display the availed credit in form of Remaining BED, Remaining SED, Remaining eCess, Remaining SHE eCess and so on. This could be use for future setoff of Service Tax Payment. The cumulative excise credit amount (RG23A and RG23C) of selected records are now available in the Service Tax Payment form.

Payment of Service Tax and Excise as Service Tax Credit:


In this section, you can understand how does the program help you to pay Service Tax and how can you utilize the Excise as Service Tax.

Navigation: Financial Management General Ledger Periodic Activities Service Tax Payment

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Payment of Service Tax can be done through the Periodic Activities in General Ledger Module. In the Service Tax Payment window, you need to filter the details: Service Tax Regn No.: Choose the service tax registration number for the billing location, for which payment is to be made. Date Filter: Choose the date for which payment is to be made. You can enter from date and to date according to the business need. Document No: Enter the document number of the Service Tax Payment document. Posting Date: Specify the date on which the payment should be recorded in the program. Location E.C.C. No.: Set a filter on the location ECC number to allow the program to calculate the CENVAT credit available as per location.

You can see the sales related service tax entries for the specified filters in the above window. Click Apply Entries. Now you will see the screen below:

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Fill in the fields according to these guidelines: Field Credit Available RG23A Description Define the input credit available on the RG23A register. Define the input credit available on the RG23C register. Define the input credit eCess available on the RG23A register. Define the input credit SHE eCess available on the RG23A register. Define the input credit eCess available on the RG23C register Define the input credit SHE eCess available on the RG23C register Define the input credit on the value of services availed from vendors as well as the sum of input credit according to RG23A and RG23C on the Excise as Service Tax Credit line. Define the input credit (eCess) on the value of services availed from vendors as well as the sum of input credit (eCess) according to RG23A and RG23C on the Excise as Service Tax Credit line. Define the service tax liability against each of the service tax groups. Define the service tax eCess liability against each of the service tax groups. Enter the amount of credit, which will be taken.

Credit Available RG23C

Credit Available RG23A eCess

Credit Available RG23A SHE eCess

Credit Available RG23C eCess Credit Available RG23C SHE eCess Credit Available

Credit Available eCess

Payment Liability

Payment Liability (eCess)

Credit Availed

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Payment Amount

Enter the remaining amount, which needs to be paid, after setting off with credit.

Note: Credit Available RG23 A, Credit Available RG23 A eCess, Credit Available RG23 A SHE eCess Credit Available RG23 C, Credit Available RG23 C eCess and Credit Available RG23 C SHE eCess amount are based on the selection you made in the Excise as Service Tax Credit periodical activity as explained above. To utilize Excise as Service Tax Credit, select the specific row and then click Line Excise Cenvat Claim.

The program will display the following details of Excise as Service Tax Credit according to the Excise Component.

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Enter the component wise amount according to the credit available to be utilized against service tax liability. You can not enter the amount which is greater than Credit Availed or Service Tax Payment Liability. The program will show an error message if you do so. Press escape to come out of Excise as Service Tax Credit form.

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In the above mentioned Service Tax Payment form other details are also need to be entered as per specific service tax payment details. Enter the bank account and the cheque number, where the payment is to be made. Note: In case of a delayed payment, you need to pay interest, which you have to manually calculate and enter the amount in the payment screen. Fill in the fields in the Service Tax Payment form according to these guidelines: Field Interest Amount Description Enter the amount of interest, which has to be paid for delayed payment. Choose the relevant GL account for posting the interest entry. Enter any other amount, which has to be paid for penalty. Select the relevant GL account for posting the entry of other amount.

Int. Account No.

Other Amount

Other Account No.

Post the Service Tax Payment entry. The program will generate G/L entries. The G/L effects of this Service Tax Payment are explained below.

Navigation: Financial Management General Ledger History Navigate

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Click Show to view GL effects.

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The above window displays the following detail GL Entry: Description Service Tax Payable I Account Service Tax Receivable I Account Cenvat Cr. Receivable Account Dr/Cr Dr Cr Cr Amount 23,690.00 3,114.00 20,576.00

Service Tax as Excise


Implication for the Manufacturers
Manufacturers are entitled to utilize the credit availed of central excise duties paid on the inputs and capital goods purchased. Manufacturers are also entitled to utilize the credit availed of the service tax paid on input services consumed in manufacturing of finished goods. For example: A user is a manufacturer of excisable item and has got signed an agreement for developing the quality standard of the goods, the user manufacture with its vendor Delhi Postmaster. The service tax amount paid by the company could be utilized against the Service Tax Payment. The entry will help you to understand how the program is storing the Availed Credit on input service.

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Purchase Order
Navigation: Purchases Order Processing Purchase Order

In case of a manufacturer who is receiving services from a vendor, the following points are needed to be considered: a) Select the structure, which is denoting Service Tax info from the Service Tax setup. b) Type must be selected as G/L. The G/L account you are selecting should have the mapping with service tax group. c) The purchase document needs to specify the Services Tax Registration No. field on the lines as par the location where you are receiving the service. d) The outstanding amount to the vendor must be paid and applied to the respective purchase order/invoice to avail the Service Tax Credit. To see the service tax calculation press F9 (Statistic), and then post the purchase order.

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Periodical Activities for managing Service Tax as Excise Credit and Excise Duty Payment

Service Tax as Excise Credit:


Same as Excise as Service Tax Credit, you can decide on the Service Tax as Excise Credit amount. In this periodical activity you can select the records or groups of input service records, which are to be utilized against the excise liability.

Navigation: Financial Management General Ledger Periodic Activities Service Tax Service Tax as Excise Credit

Fill in the fields according to these guidelines: Field Service Tax Registration No. Location E.C.C. No Description Choose the service tax registration number. Choose the location from where you provide service and credit to be forwarded as Service Tax as Excise credit.

Choose the Service Tax Registration No. and Location ECC No. from the list Click OK to see all records of Input Services as par Location. If location is not applicable then Company ECC No. will be the default Location ECC No.

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Choose the entry and put a check mark, for which you want to avail credit. You use Function Select All, to select all the records or may use UnCheck All to remove check mark from the records. Remember that if you utilized the availed service tax credit against Payment of Excise Duty as Service Tax as Excise Credit, those documents which are fully applied with the amount you utilized will be removed from this form by the program. Only the partial document if any will be lying in this form and will display the availed credit in form of Remaining Credit, Remaining Credit (eCess) and Remaining Credit (SHE eCess). This could be use for future setoff of Excise Duty Payment. Click OK. Details of the entry you have selected are as below: Type: Service Tax Registration No.: Posting Date: Base Amount: Service Tax Amount: Amount: Service Tax SHE Cess Amount Service Tax eCess Amount GL Account: Service Tax Group Code: Service Tax as Excise Closed: Purchase BJX118910100578 01/04/06 1,800,000 180,000 1,985,400 1,800 3,600 2998 ADV Yes No

The above entry shows that INR 180,000 and will be available at the time of paying excise duty and the documents Closed status is No. Note: You can also apply filters on the available records if you are willing to. For example if you want to utilize credit of Advertisement Group, then filter the records on Service Tax Group Code. According to this selection, the sum of Service Tax input credit will be available while you will be using Pay Excise functionality.

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Now according to the selection the cumulative amount of input service tax will be appeared in the Excise CENVAT Claim form as Service Tax as Excise.

Payment of Excise Duty and Service Tax as Excise Credit:


In this section, you will understand how the program is helping you to pay excise and how you could make the Service Tax as Excise Credit utilized properly.

Navigation: Financial Management General Ledger General Journal

Fill up the following on the General Journal line: Journal Batch Name: Posting Date: Document Type: Document No.: E.C.C. No.: Service Tax Registration No.: DEFAULT Enter the date of Excise Payment Keep this field blank The program will automatically assign a number BXBVS7543890 (Select the Location ECC number for which you have to pay Excise) BXBVS7543890 (Select the Service Tax Registration No., if you want to avail input service credit while paying Excise Duty as per Service Tax as Excise Credit.)

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Account Type: Account No.: Description: Bal. Account Type: Bal. Account No.:

G/L Account 2994 (Excise Payable Account) Excise Payable Account G/L Account Keep this field blank

Now click Function Payment Excise The program will open the Pay Excise form. On clicking Apply Entries, the program will open the Excise Cenvat Claim form.

Service Tax as Excise Credit amount INR 180,000, eCess on Service Tax as Excise Credit amount INR 3,600 and SHE Cess on Service Tax as Excise Credit amount INR 1,800 are same as per your check mark in the Service Tax as Excise field of the Periodical Activity area of the Service Tax as Excise. The above form is displaying the credit according to the excise component that you availed from your purchase input / capital goods, and the liability that arises in your books by selling of excisable goods.

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(Note: The above figures are for example out of some entries made in sales, purchase, and journal. The Service Tax as Excise Credit amount is from the sum of the records based on your selection you have made in the Service Tax as Excise periodical activity.) Now suppose you want to utilize the whole amount of Service Tax as Excise Credit and eCess on Service Tax as Excise Credit amount. Fill up the form as per example given below:

(Note: The above figures are taken for example. You can make up the liability amount out of credit available in RG 23A, RG23C, PLA and Service Tax as Excise Credit amount if the liability is more.) Now click Apply Service Tax to allocate the Service Tax as Excise Credit amount with appropriate Service Group.

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(Note: You can allocate the amount from one Service Tax Group or even from different Service Tax Group according to the Credit Available.) Click Esc key to get back to the Excise Cenvat Claim form. Again click Esc key to get back to the General Journal line. Press CTRL+F8 to see the details. The field values will be as below: Journal Template Name: Account Type: Account No.: Posting Date: Document Type: Document No.: Description: Bal. Account No. Amount: Excise Bus. Posting Group: Excise Prod. Posting Group: ST SED Amount: ST BED Amount: ST AED(GSI) Amount: ST SAED Amount: ST eCESS Amount: ST SHE eCESS Amount: ADC VAT Amount: GENERAL G/L Account 2994 01/04/06 Blank G00339 Excise Payable Account Blank 4,228 GEN 84.15 400 2,000 400 400 64 32 932

(Note: If the Service Tax Credit you are utilizing against Excise Liability, the Service Tax Credit Amount must be applied to Service Tax Group. The program will restrict and generate an error message. The same message will be appeared in the Test Report.) You can see the posted information from the history.

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Navigation: Financial Management General Ledger History Navigate

Select the G/L Entry line and click Show to view the details G/L entry.

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The above window shows the following effect in G/L accounts Description Excise Payable Account CENVAT Credit. Receivable Account Service Tax Receivable Account Dr/Cr Dr Cr Cr Amount 4,228.00 932.00 3,296.00

Update Challan Details


Navigation: Financial Management General Ledger Periodic Activities Service Tax Update Challan Details

The service tax amount is required to be paid in the TR-6 Challan form in the specified branches of designated banks. This function will help to keep track of all the Service tax payments made to the government with relevant challan details. The challan number, challan date, and bank name are updated using this functionality, which in turn will be updated for each transaction. This will populate another form on which relevant challan details can be entered for a particular payment document. The challan details now get updated on each of the transaction lines.

Reports
Input Service Details
Navigation:

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Financial Management General Ledger Report Service Tax Reporting Input Service Details

Enter the following information in the Report Request form: Field Date Period From Date Period From Service Tax Group Service Tax Registration No Place Date Description Choose starting month and year Choose ending month and year Choose service group Choose the service tax registration number Define the place of origin Define the submission date

The program will generate the report as below:

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This return is to be filed along with ST-3 form, in case service tax credit on input services is availed. In this report Credit Utilised field shows the amount you have utilized as Service Tax as Excise Credit while Paying Excise Duty or as Credit Utlised against the payment of Service Tax. Note: The Service Tax reports currently do not address the excise availability as service tax credit, as the modified format has not been released by any government notification at the time of release of this functionality.

Appendix
Accounting of Service Tax
Example 1 ABC India Limited is a service provider, has got agreement with PVR Corporation for the advertisement of its services. The PVR has sent an invoice of INR 110200 on completion of advertisement campaign. The breakup of the invoice was INR 100000 for the service, INR 10000 for the Service Tax and INR 200 for eCess on Service Tax. ABC, as per agreement paid the amount within 30 days.

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There will be following accounting effect in the books of ABC.

Entry Type Purchase

Description Advertisement Account Service Tax Receivable Interim Account ABC India Ltd. Account ABC India Ltd. Account Service Tax Receivable Account Service Tax Receivable Interim Account Bank/Cash Account

Dr/Cr Dr Dr Cr Dr Dr Cr Cr

Amount 100000.00 10200.00 110200.00 110200.00 10200.00 10200.00 110200.00

Payment

Example 2 ABC India Limited as a service provider of sewage pollution control consultancy got a project from its client Washing Detergents LTD. On completion of the project, ABC sends the invoice of INR 220400 with the breakup of INR 200000 for the service, INR 20000 for the Service Tax and INR 400 for the eCess on Service Tax. The payment has been realized in due course. Following accounting effect will be there in the books of ABC.

Entry Type Sales

Description The Washing Detergents LTD. Service Tax Payable Interim Account Consultancy Fee Cash/Bank Account Service Tax Payable Interim Account Service Tax Payable Account The Washing Detergents LTD.

Dr/Cr Dr Cr Cr Dr Dr Cr Cr

Amount 220400.00 20400.00 200000.00 220400.00 20400.00 20400.00 220400.00

Receipt

Example 3 ABC India Limited gained Service Tax Credit of INR 10200 against the input service and reached to a liability of INR 20400. ABC can utilize the available credit to pay the Service Tax liability. The following entries will be made. Entry Type Service Tax Payment Description Service Tax Payable Account Service Tax Receivable Account Cash/Bank Dr/Cr Dr Cr Cr Amount 20400.00 10200.00 10200.00

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Example 4 ABC India Limited as a service provider of sewage pollution control buys a machinery for pollution check, which is excisable capital goods. The machinery is using by them to provide service and thus ABC can avail the credit they have gained on purchasing the machine while paying service tax. The purchase invoice of capital goods has got INR 8800 of Excise Duty. ABC India Limited gained Service Tax Credit of INR 10200 against the input service and reached to a liability of INR 20400. So ABC could utilize the available credit of Excise as Service Tax Credit and Service Tax Input Credit to pay the Service Tax liability.

(Excise as Service Tax Credit) Entry Type Service Tax Payment Description Service Tax Payable Account Cenvat Cr. Receivable Account Service Tax Receivable Account Cash/Bank Example 5 On the other hand XYZ Limited, a manufacturer of excisable goods requires outsourcing some of the process to produce the finished goods. The jobber prepares the invoice with service tax and sends it across to XYZ Limited. The invoice has got Service Tax Component of INR 15500. This amount of service credit can be utilized while paying excise. Say XYZ Limited has got an Excise Liability of INR 25000 and excise credit available is INR 15000. Now XYZ can utilize the Service Tax Credit against excise liability. Dr/Cr Dr Cr Cr Cr Amount 20400.00 8800.00 10200.00 1400.00

(Service Tax as Excise Credit) Entry Type Pay Excise Description Excise Payable Account Cenvat Cr. Receivable Account Service Tax Receivable Account Dr/Cr Amount Dr 25000.00 Cr 15000.00 Cr 10000.00

(Thus Service Tax as Excise Credit availed is INR 10000 and utilized against payment of excise the rest amount as (15500 10000) INR 5500 will be in the remaining amount)

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Microsoft Business Solutions Navision 4.0- Multi Location Taxes (II)

Table of Contents
Overview of Functionality......................................................................................3 Detailed Setup...................................................................................................3 Comprehensive Functionality ............................................................................3 Reports..............................................................................................................3 Calculation of taxes on General Ledger Account & Charge (Item) .......................3 Calculation of VAT on General Ledger Account ................................................5 Viewing the Posted Transaction ....................................................................8 Calculation of Excise on General Ledger Account ..........................................11 Calculation of Excise on General Ledger Account through Purchase Order (In case of Supplementary Invoice) .............................................................11 Viewing the Posted Transaction ..................................................................13 Calculation of excise on General Ledger account through Purchase Credit Memo (In case of Supplementary Credit Memo) .........................................20 Viewing the Posted Transaction ..................................................................22 Calculation of Excise on General Ledger Account through Sales Order (In case of Supplementary Invoice)...................................................................28 Viewing the Posted Transaction ..................................................................30 Calculation of Excise on General Ledger Account through Sales Credit Memo (In case of Supplementary Credit Memo) .........................................37 Viewing the Posted Transaction ..................................................................39 Calculation of Excise on Charge (Item) ...........................................................45 Calculation of excise on Charge (Item) through Purchase Order (In case of Supplementary Invoice) ...............................................................................45 Viewing the Posted Transaction ..................................................................49 Calculation of Excise on Charge (Item) through Purchase Credit Memo (In case of Supplementary Credit Memo) .........................................................57 Viewing the Posted Transaction ..................................................................62 Calculation of Excise on Charge (Item) through Sales Order (In case of Supplementary Invoice) ...............................................................................69 Viewing the Posted Transaction ..................................................................74 Calculation of Excise on Charge (Item) through Sales Credit Memo (In case of Supplementary Credit Memo) ..................................................................80 Viewing the Posted Transaction ..................................................................84 Calculation of Service Tax...............................................................................90 Calculation of Service Tax in case of Direct Payment made for Services Account........................................................................................................90 Viewing the Posted Transaction ..................................................................92 Calculation of Service Tax in case of Direct Payment Received against Services Account. ........................................................................................96 Viewing the Posted Transaction ..................................................................97 Calculation of Service Tax in case of other G/L Account. ..........................102 Viewing the Posted Transaction ................................................................103 Appendix...........................................................................................................108

Overview of Functionality
Multilocation taxes functionality facilitate the entry of opening balances and adjustments in the statutory records which enable in maintaining, generation of appropriate & accurate statutory records and reports using the existing Navision Localization feature. This feature includes the computation & recording of taxes on General Ledger Account & Charge (Item).

Detailed Setup
Detailed setups of Excise, Service Tax, and Sales Tax are required for entering opening balances and doing adjustments in the statuary records. The required setups are also used for calculating taxes on G/L Account and Charge (Item).

Comprehensive Functionality
Following are the comprehensive functionalities covered under Multilocation Taxes. Opening Balances in RG 23 A/C Part I Opening balances in RG 23 A/C Part II Opening Balances in Daily Stock Account (DSA) Opening Balances in Personal Ledger Account (PLA) Opening Balances of Service Tax and eCess Adjustments in excise reflecting to RG 23 A/C Part I & II and DSA Adjustments in Service Tax related transactions Adjustment in VAT Computation and recoding of Excise and VAT on General Ledger account Computation and recording of Excise on Charge (Item) Computation and recording of Service Tax on General Ledger account

Reports
All existing statutory reports of Navision generate the appropriate & accurate records.

Calculation of taxes on General Ledger Account & Charge (Item)

Setups required
G/L Account Card Item Charges

G/L Account Card Navigation: Financial Management General Ledger Chart of Account Account Card

Fill in the fields according to these guidelines: Fields Tax Group Code Description Choose the tax group code from the lookup list to calculate VAT on G/L Account. This field has already been introduced

13702(13705) _VAT Credit on Capital Goods, Setoff and Refund


Excise Prod. Posting Group Choose the excise production posting group from the lookup list to calculate Excise on G/L Account. Place a check mark in the Capital Item field to identify item as Capital Item while calculating Excise in G/L Account.

Capital Item

Item Charges Navigation: Sales & Marketing Order Processing Setup Item charges

Fill in the fields according to these guidelines: Fields Excise Prod. Posting Group Description Choose the excise production posting group from the lookup list to calculate excise on Item Charges. Place a check mark in Capital Item field to identify item as Capital Item while calculating Excise on Item Charges.

Capital Item

Note: Before calculating taxes on G/L Account and Item Charges, you need to maintain the other proper setups related to the Excise, Service Tax and VAT.

Calculation of VAT on General Ledger Account


Calculation of VAT on G/L account has already been introduced in 13702(13705)

_VAT Credit on Capital Goods, Setoff and Refund.


Please go through with the following example to calculate VAT on G/L account through the Purchase Order.

Initially you should maintain Sales Tax Setup to calculate VAT on G/L Account.

Navigation: Purchases Order Processing Orders

To calculate VAT, fill the fields in the Purchase Order window as follows:

On the Header:
Buy from Vendor No: Location Code: Structure: On the Line: Type: No.: Description: Quantity: Direct Unit Cost: Line Amount: Calculate Structure Press F9 to view the tax amount. Post the Order. G/L Account 1401 Lease 1 10000 10000 10000 (Vendor State is Andhra Pradesh) Blue (Location state is Andhra Pradesh) VAT

Viewing the Posted Transaction


Navigation: Purchases History Posted Invoice

G/L Entry

The program creates the following entry: Particulars Lease A/C Purchase Tax To, Vendor Calculation of VAT Base amount is Rs. 10000 and VAT % is 10. Tax Amount = 10000*10% = 1000 Type DR DR CR Amount(Rs) 10000 1000 11000

In the Detailed Tax Entry window, Input Credit/Output Tax Amount field has the value as 1000 and it is further taken for credit in the settlement process. Note 1: You can calculate VAT/CST on G/L Account through Purchase Order/Invoice, Purchase Credit Memo, Sales Order/Invoice, and Sales Credit Memo. Note 2: You are also requested to go through the User Manual of 13705_Vat setoff & refund which has been released earlier.

Calculation of Excise on General Ledger Account


Initially you should prepare the excise setup.

Calculation of Excise on General Ledger Account through Purchase Order (In case of Supplementary Invoice)
Navigation: Purchases Order Processing Orders

Fill in the fields according to these guidelines: Fields Supplementary Description Place a check mark in this field so that the program can identify it as a supplementary invoice. If this field is true then in the invoice print after posting the program will show the Supplementary invoice. Choose the source document type from drop down box. The available options are: Posted Invoice and Posted Credit Memo. Choose the source number from the lookup list for the selected source type.

Source Document Type

source Document No.

To calculate excise, fill the fields in the Purchase Order window as follows: On the Header: Buy from Vendor No: Location Code: Structure: 10000 Blue Excise

On the Line:
Type: No.: Description: Quantity: Direct Unit Cost: Line Amount: Supplementary: Source Document Type: Source Document No.: Calculate Structure Press F9 to view the tax amount. Post the Order. G/L Account 7110 Purchase, Retail Dom. 1 10000 10000 True Posted Invoice 108054.

Viewing the Posted Transaction


Navigation: Purchases History Posted Invoice

G/L Entry

The program creates the following entry: Particulars Purchase A/C CENVAT Cr. Receivable A/C To, Vendor Calculation of Excise Base amount is Rs. 10000 and BED % is 10. Excise Amount = 10000*10% = 1000 Type DR DR CR Amount(Rs) 10000 1000 11000

Excise Entry

The program will create excise entry in case of Supplementary Invoice.

RG 23 A Part II Entry Through Posted Receipts

The program will also create RG 23 A Part II entry with BED Credit amount. You can also print/preview the posted supplementary invoice through posted purchase invoice by clicking Print.

The program displays Supplementary Invoice on the right hand side of the invoice and shows the Ref: Posted Invoice with invoice number in the description column. Note 1: If the Supplementary field in the order line is checked then only report will show Supplementary Invoice. For each line there is an option to select the original invoice number for which you are generating supplementary invoice. You can also calculate excise without placing a check mark in the Supplementary field. Note 2: If the source document type is posted credit memo it means initially you have posted a credit memo to your vendor and now you want to adjust some amount with CENVAT against posted credit memo. In this case the program will show ref: posted credit memo with number in the posted invoice print/preview. Note 3: If the user wants to calculate excise on G/L account (capital Item) Deferred account, then he has to place a check mark in the Capital Item field in G/L Account card. In this case the program will automatically segregate the excise amount and the entry will be:

Particulars Purchase A/C CENVAT Cr. Receivable A/C CENVAT Cr. Deferred A/C To, Vendor

Type DR DR DR CR

Amount(Rs) 10000 500 500 11000

And the posted transaction will flow in RG 23 C Part II in BED Credit field. You can also calculate excise through the Purchase Invoice. Note: User can also calculate Secondary and higher education CESS (SHE CESS) by defining the percentage in excise posting setup.

Calculation of excise on General Ledger account through Purchase Credit Memo (In case of Supplementary Credit Memo)
Navigation: Purchases Order Processing Credit memos

Fill in the fields according to these guidelines: Fields Supplementary Description Place a check mark in this field so that the program can identify it as Supplementary Credit Memo. If this field is checked then in the credit memo print after posting program will show the Supplementary credit memo. Choose the source document type from

Source Document Type

Fields

Description the drop down box. The available options are: Posted Invoice and Posted Credit Memo. It means against which posted document you are generating supplementary credit memo. Choose the source document number from the lookup list for the selected source type.

Source Document No.

To calculate excise, enter the following in the Purchase Credit Memo window. On the Header: Buy from Vendor No: Location Code: Structure: On the Line: Type: No.: Description: Quantity: Direct Unit Cost: Line Amount: Supplementary: Source Document Type: Source Document No.: Calculate Structure Press F9 to view the tax amount. Post the Credit memo. G/L Account 7110 Purchase, Retail Dom. 1 5000 5000 True Posted Credit Memo 109010. 10000 Blue Excise

Viewing the Posted Transaction


Navigation: Purchases History Posted Credit Memo

G/L Entry

The program creates the following entry: Particulars Purchase A/C CENVAT Cr. Receivable A/C To, Vendor Calculation of Excise Base amount is Rs. 5000 and BED % is 10. Excise Amount = 5000*10% = 500 Type CR CR DR Amount(Rs) 5000 500 5500

Excise Entry

The program creates Excise entry in case of Supplementary Credit Memo.

RG 23 A Part II Entry Through posted return shipments

The program will also create RG 23 A Part II entry with BED Debit amount. You can also print/preview the posted supplementary credit memo through posted credit memo by clicking Print.

The program displays Supplementary Credit Memo on the right hand side of the Credit Memo and will show the Ref: Posted Credit memo with credit memo number in the Description column. Note 1: If the Supplementary field in the credit memo line is checked then only the report will show the Supplementary Credit memo. For each line there is an option to select the original credit memo number for which you are generating supplementary credit memo. You can also calculate excise without placing a check mark in the Supplementary field. Note 2: If the source document type is posted invoice it means initially you have posted an invoice/order to your vendor and now you want to adjust some amount with CENVAT against posted invoice In this case the program will show ref: posted invoice with number in the posted credit memo print/preview. Note 3: If the user wants to calculate excise on G/L account (capital Item) Deferred account, then he has to place a check mark in the Capital Item field in G/L Account card. In this case the program will automatically segregate the excise amount and the entry will be:

Particulars Purchase A/C CENVAT Cr. Receivable A/C CENVAT Cr. Deferred A/C To, Vendor

Type CR CR CR DR

Amount(Rs) 5000 250 250 5500

And the posted transaction will flow in the BED Debit field of RG 23 C Part II. Note 4: If the user does not have the Return Order granule and the user calculates excise through credit memo then excise amount will not reflect in RG 23 A/C Part II. The user can also calculate excise through Return Order. Note: User can also calculate Secondary and higher education CESS (SHE CESS) by defining the percentage in excise posting setup.

Calculation of Excise on General Ledger Account through Sales Order (In case of Supplementary Invoice)
Navigation: Sales & Marketing Order Processing Orders

Fill in the fields according to these guidelines: Fields Supplementary Description Place a check mark in this field so that the program can identify it as supplementary invoice. If this field is checked, then the

Fields

Description program will show the Supplementary Invoice in the invoice print after posting. Choose the Source document type from drop down box. Available options are: Posted Invoice and Posted Credit Memo. It means against which posted document you are generating supplementary invoice. Select the source number from lookup list for the selected source type.

Source Document Type

Source Document No.

Enter the following in the Sales Order to calculate excise. On the Header: Buy from Vendor No: Location Code: Structure: On the Line Type: No.: Description: Quantity: Unit Price: Line Amount: Supplementary: Source Document Type: Source Document No.: Calculate Structure Press F9 to view the tax amount. Post the Order. G/L Account 6110 Sales, Retail Dom. 1 10000 10000 True Posted Invoice 103028. 10000 Blue Excise

Viewing the Posted Transaction


Navigation: Sales & marketing History Posted Invoice

G/L Entry

The program creates the following entry: Particulars Sales A/C Excise Payable A/C Customer A/C Type CR CR DR Amount(Rs) 10000 1000 11000

Calculation of Excise Base amount is Rs. 10000 and BED % is 10. Excise Amount = 10000*10% = 1000

Excise Entry

The program will create Excise Entry in case of Supplementary Invoice. You can also print/preview the posted supplementary invoice through posted sales invoice by clicking Print.

The program displays Supplementary Invoice on the right hand side of the invoice and Ref: Posted Invoice with invoice number in the description column. Note 1: If the Supplementary field in the order line is checked then only the report will show Supplementary Invoice. Also for each line there is an option to choose the original invoice number for which you are generating supplementary invoice. You can also calculate excise without placing a check mark in Supplementary field. Note 2: If the source document type is posted credit memo it means initially you have posted a credit memo to your customer and now you want to adjust some amount with CENVAT against posted credit memo. In this case the program will show ref: posted credit memo with number in the posted invoice print/preview. You can also calculate excise through Sales Invoice.

Note: User can also calculate Secondary and higher education CESS (SHE CESS) by defining the percentage in excise posting setup.

Calculation of Excise on General Ledger Account through Sales Credit Memo (In case of Supplementary Credit Memo)
Navigation: Sales & Marketing Order Processing Credit memos

Fill in the fields according to these guidelines: Fields Supplementary Description Place a check mark in this field so that the program can identify it as supplementary credit memo. If this field is checked, then the program will show the Supplementary Credit Memo in the credit memo print after posting. Select the source document type from drop down box. The available options are: Posted Invoice and Posted Credit Memo. It means against which posted document you are generating supplementary credit memo. Choose the source number from lookup list for the selected source type.

Source Document Type

Source Document No.

Enter the following in the Credit Memo to calculate excise. On the Header: Buy from Vendor No: Location Code: Structure: On the Line: Type: No.: Description: Quantity: Direct Unit Cost: Line Amount: Supplementary: Source Document Type: Source Document No.: Calculate Structure Press F9 to view the tax amount. Post the Credit Memo. 10000 Blue Excise

G/L Account 6110 Sales, Retail Dom. 1 10000 10000 True Posted Credit Memo 104007.

Viewing the Posted Transaction


Navigation: Sales & Marketing History Posted Credit Memo

G/L Entry

The program creates the following entry:


Particulars Sales A/C Excise Payable A/C Customer A/C Type DR DR CR Amount(Rs) 10000 1000 11000

Calculation of Excise Base amount is Rs. 10000 and BED % is 10. Excise Amount = 10000*10% = 1000

Excise Entry

The program creates excise entry in case of Supplementary Credit Memo.

RG 23 A Part II Entry Through posted return shipments

The program will also create RG 23 A Part II entry with BED credit amount. You can also print/preview the posted supplementary credit memo through posted credit memo by clicking Print.

The program displays Supplementary Credit Memo on the right hand side of the Credit Memo and show the Ref: Posted Credit memo with credit memo number in the description column. Note 1: If the Supplementary field in the credit memo line is checked then only the report will show the Supplementary Credit memo. For each line there is an option to select the original credit memo number for which you are generating supplementary credit memo. You can also calculate excise without placing a check mark in the Supplementary field. Note 2: If the source document type is posted invoice it means initially you have posted an invoice/order to your vendor and now you want to adjust some amount with CENVAT against posted invoice In this case the program will show ref: posted invoice with number in the posted credit memo print/preview. Note 3: If the user wants to calculate excise on G/L account (capital Item) Deferred account, then he/she has to place a check mark in the Capital Item field in G/L Account card. And the posted transaction will flow in BED Credit field of RG 23 C Part II.

Note 4: If the user does not have the Return Order granule and the user calculates excise through credit memo then excise amount will not reflect in RG 23 A/C Part II. The user can also calculate excise through the Return Order. Note: User can also calculate Secondary and higher education CESS (SHE CESS) by defining the percentage in excise posting setup.

Calculation of Excise on Charge (Item)


Initially you should prepare the excise setup.

Calculation of excise on Charge (Item) through Purchase Order (In case of Supplementary Invoice)
Navigation: Purchases Order Processing Orders

Fill in the fields according to these guidelines: Fields Supplementary Description Place a check mark in this field so that the program can identify it as supplementary invoice. If this field is checked then the program will show the Supplementary Invoice in the invoice print after posting.

Fields Source Document Type

Description Select the source document type from the drop down box. The available options are: Posted Invoice and Posted Credit Memo. It means against which posted document you are generating supplementary invoice. Select the source number from lookup list for the selected source type.

Source Document No.

Enter the following in the Purchase Order to calculate excise. On the Header: Buy from Vendor No: Location Code: Structure: On the Line: Type: No.: Description: Quantity: Direct Unit Cost: Line Amount: Supplementary: Source Document Type: Source Document No.: Calculate Structure Press F9 to view the tax amount. After calculating excise, assign the Item Charge. Charge (Item) PRICEDIFF Price difference 1 10000 10000 True Posted Invoice 108065 10000 Blue Excise

Click Line menu button and select Item Charge Assignment menu item to assign the item charge with posted receipt. After clicking Item charge Assignment a new window opens

Click Get Receipt Lines menu item in the Functions menu button to get receipt lines in the Item charge assignment (purch) window.

After clicking Get Receipt Lines, Purch. Receipt lines window will open. Select the line for which you want to calculate excise on charge (item). Click OK.

After clicking OK in the Purchase Receipt Lines window, the selected receipt line will be displayed in the Item Charge Assignment window. You can see that Qty. to Assign field and Amount to Assign field are blank.

Click Suggest Item Charge Assignment with Amount menu item in the Functions menu button to get the quantity and amount.

After suggesting item charge assignment with amount, you can see that the Qty. to Assign and Amount to Assign fields have got values. Close the form. Post the Order.

Viewing the Posted Transaction


Navigation: Purchases History Posted Invoice

G/L Entry

The program creates the following entry:


Particulars Purchase A/C CENVAT Cr. Receivable A/C To, Vendor Type DR DR CR Amount(Rs) 10000 1000 11000

Calculation of Excise Base amount is Rs. 10000 and BED % is 10. Excise Amount = 10000*10% = 1000

Excise Entry

The program creates excise entry in case of Supplementary Invoice.

RG 23 A Part II Entry Through posted receipts

The program will also create RG 23 A Part II entry with BED Credit Amount. You can also print/preview the posted supplementary invoice through posted invoice by clicking Print.

The program displays Supplementary Invoice on the right hand side of the invoice and shows the Ref: Posted Invoice with invoice number in the description column. Note 1: If the Supplementary field in the order line is checked then only the report will show Supplementary Invoice. For each line there is an option to select the original invoice no. for which you are generating supplementary invoice. You can also calculate excise without placing a check mark in the Supplementary field. Note 2: If the source document type is posted credit memo it means initially you have posted a credit memo to your vendor and now you want to adjust some amount with CENVAT against posted credit memo. In this case the program will show ref: posted credit memo with number in the posted invoice print/preview. Note 3: If the user wants to calculate excise on Charge (Item) (capital Item) Deferred account, then he has to place a check mark in the Capital Item field of the Item Charges form. In this case the program will automatically segregate the excise amount and the entry will be:

Particulars Purchase A/C CENVAT Cr. Receivable A/C CENVAT Cr. Deferred A/C To, Vendor

Type DR DR DR CR

Amount(Rs) 10000 500 500 11000

And the posted transaction will flow in the BED Credit field of RG 23 C Part II. Note 4: By getting receipt lines, cost amount in the item ledger entry of the original invoice will be updated. The user can also calculate excise through Purchase Invoice. Note: User can also calculate Secondary and higher education CESS (SHE CESS) by defining the percentage in excise posting setup.

Calculation of Excise on Charge (Item) through Purchase Credit Memo (In case of Supplementary Credit Memo)
Navigation: Purchases Order Processing Credit Memos

Fill in the fields according to these guidelines: Fields Supplementary Description Place a check mark in this field so that the program can identify it as supplementary credit memo. If this field is checked then the program will show the Supplementary

Fields

Description Credit Memo in the credit memo print after posting. Choose the source document type from drop down box. The available options are: Posted Invoice and Posted Credit Memo. It means against which posted document you are generating supplementary credit memo. Choose the source number from lookup list for the selected source type.

Source Document Type

Source Document No.

Enter the following in the Credit Memo window to calculate excise. On the Header: Buy from Vendor No: Location Code: Structure: On the Line: Type: No.: Description: Quantity: Direct Unit Cost: Line Amount: Supplementary: Source Document Type: Source Document No.: Calculate Structure Press F9 to view the Tax Amount. After calculating excise, assign the Item Charge. Charge (Item) PRICEDIFF Price difference 1 5000 5000 True Posted Credit Memo 109012 10000 Blue Excise

Click Item Charge Assignment menu item in the Line menu button to assign the item charge with posted receipt. A new window opens.

Click Functions menu button to get return receipt lines in the Item Charge Assignment (purch) window.

After clicking Get Return Receipt Lines menu item, Return Receipt Lines window will be opened. Select the line for which you want to calculate excise on charge (item). Click OK.

After clicking OK in the Return Receipt Lines window, the selected receipt line will be displayed in the Item Charge Assignment window. You can see that Qty. to Assign field and Amount to Assign field are blank.

Click Functions menu button and select Suggest Item Charge Assignment with Amount to get the quantity and amount.

After suggesting item charge assignment with amount, you can see that the Qty. to Assign and Amount to Assign fields have got the values. Close the form. Post the Order.

Viewing the Posted Transaction


Navigation: Purchases History Posted Credit Memo

G/L Entry

The program creates the following entry:


Particulars Purchase A/C CENVAT Cr. Receivable A/C To, Vendor Type CR CR DR Amount(Rs) 5000 500 5500

Calculation of Excise Base amount is Rs. 5000 and BED % is 10. Excise Amount = 5000*10% = 500

Excise Entry

The program will create excise entry in case of Supplementary Credit Memo.

RG 23 A Part II Entry Through posted return shipments

The program will also create RG 23 A Part II entry with BED Debit Amount. You can also print/preview the posted supplementary credit memo through posted credit memo by clicking Print.

The program displays Supplementary Credit Memo on the right hand side of the Credit Memo and show the Ref: Posted Credit memo with credit memo number in the description column. Note 1: If the Supplementary field in the credit memo line is checked then only the report will show Supplementary Credit memo. For each line there is an option to select the original credit memo number for which you are generating supplementary credit memo. You can also calculate excise without placing a check mark in supplementary field. Note 2: If the source document type is Posted Invoice, it means initially you have posted an invoice/order to your vendor and now you want to adjust some amount with CENVAT against posted invoice In this case the program will show ref: posted invoice with number in the posted credit memo print/preview. Note 3: If the user wants to calculate excise on Charge (Item) (capital Item) Deferred account, then he has to place a check mark in the Capital Item field in the Item Charges window. In this case the program will automatically segregate the excise amount and the entry will be:

Particulars Purchase A/C CENVAT Cr. Receivable A/C CENVAT Cr. Deferred A/C To, Vendor

Type CR CR CR DR

Amount(Rs) 5000 250 250 5500

And the posted transaction will flow in the BED Debit field of RG 23 C Part II. Note 4: If the user does not have the Return Order granule and the user calculates excise through credit memo then excise amount will not reflect in RG 23 A/C Part II. The user can also calculate excise through Return Order. Note: User can also calculate Secondary and higher education CESS (SHE CESS) by defining the percentage in excise posting setup.

Calculation of Excise on Charge (Item) through Sales Order (In case of Supplementary Invoice)
Navigation: Sales & Marketing Order Processing Orders

Fill in the fields according to these guidelines: Fields Supplementary Description Place a check mark in this field so that the program can identify it as supplementary

invoice. If this field is checked then the program will show the supplementary invoice in the invoice print after posting. Source Document Type Choose the source document type from drop down box. The available options are: Posted Invoice and Posted Credit Memo. It means against which posted document you are generating supplementary invoice. Choose the source number from lookup list for the selected source type.

Source Document No.

Enter the following in the Sales Order to calculate excise. On the Header: Buy from Vendor No: Location Code: Structure: On the Line: Type: No.: Description: Quantity: Unit price: Line Amount: Supplementary: Source Document Type: Source Document No.: Calculate Structure Press F9 to view the tax amount. After calculating excise, assign the Item Charge. Charge (Item) PRICEDIFF Price difference 1 10000 10000 True Posted Invoice 103032 10000 Blue Excise

Click Item Charge Assignment menu item in the Line menu button, to assign the item charge with posted receipt. A new window opens

Click Functions menu button to get shipment lines in the Item Charge Assignment (sales) window.

After clicking Get Shipment Lines menu item, Sales Shipment Lines window will be opened. Select the line for which you want to calculate excise on charge (item). Click OK.

After clicking OK in the Sales Shipment Lines window, the selected shipment line will be displayed in the Item Charge Assignment window. You can see that Qty. to Assign and Amount to Assign fields are blank. Click Suggest Item Charge Assignment with Amount menu item in the Functions menu button to get the quantity and amount.

After suggesting item charge assignment with amount, you can see that the Qty. to Assign and Amount to Assign fields have got the values. Close the form. Post the Order.

Viewing the Posted Transaction


Navigation: Sales & Marketing History Posted Invoice

G/L Entry

The program creates the following entry:


Particulars Sales A/C Excise Payable A/C Customer A/C Type CR CR DR Amount(Rs) 10000 1000 11000

Calculation of Excise Base amount is Rs. 10000 and BED % is 10. Excise Amount = 10000*10% = 1000

Excise Entry

The program will create Excise entry in case of Supplementary Invoice. You can also print/preview the posted supplementary invoice through posted invoice by clicking Print.

The program displays Supplementary Invoice on the right hand side of the invoice and shows the Ref: Posted Invoice with invoice number in the description column. Note 1: If the Supplementary field in the order line is checked then only the report will show the Supplementary Invoice. Also for each line there is an option to select the original invoice number for which you are generating supplementary invoice. You can also calculate excise without placing a check mark in the Supplementary field. Note 2: If the source document type is Posted Credit Memo, it means initially you have posted a credit memo to your customer and now you want to adjust some amount with CENVAT against posted credit memo. In this case the program will show ref: posted credit memo with number in the posted invoice print/preview. The user can also calculate excise through the Sales Invoice. Note: User can also calculate Secondary and higher education CESS (SHE CESS) by defining the percentage in excise posting setup.

Calculation of Excise on Charge (Item) through Sales Credit Memo (In case of Supplementary Credit Memo)
Navigation: Sales & Marketing Order Processing Credit memos

Fill in the fields according to these guidelines: Fields Supplementary Description Place a check mark in this field so that the program can identify it as supplementary credit memo. If this field is checked then the program will show the Supplementary credit memo in the credit memo print after posting. Choose the source document type from the drop down box. The available options are: Posted Invoice and Posted Credit Memo. It means against which posted document you are generating supplementary credit memo. Select the source number from the lookup list for the selected source type.

Source Document Type

Source Document No.

Enter the following in the credit memo to calculate excise. On the Header: Buy from Vendor No: Location Code: Structure: On the Line: Type: No.: Description: Quantity: Direct Unit Cost: Line Amount: Supplementary: Source Document Type: Source Document No.: Calculate Structure Press F9 to view the tax amount. After calculating excise, assign the Item Charge. Charge (Item) PRICEDIFF Price difference 1 5000 5000 True Posted Credit Memo 104008 10000 Blue Excise

Click Item Charge Assignment menu item in the Line menu button to assign the item charge with posted receipt. A new window opens

Click Functions menu button to get return receipt lines in the Item Charge Assignment (sales) window.

After clicking Get Return Receipt Lines, Return Receipt Lines window will open. You can select the line for which you want to calculate excise on charge (item). Click OK.

After clicking OK in the Return Receipt Lines window the selected return receipt line will be displayed in the Item Charge Assignment window. You can see that Qty. to Assign field and Amount to assign field are blank. Click Suggest Item Charge Assignment with amount menu item in the Functions menu button to get the quantity and amount.

After suggesting item charge assignment with amount, you can see that the Qty. to Assign and Amount to assign fields have got the values. Close the form. Post the Credit Memo.

Viewing the Posted Transaction


Navigation: Sales & Marketing History Posted Credit Memo

G/L Entry

The program creates the following entry: Particulars Sales A/C Excise Payable A/C Customer A/C Type DR DR CR Amount(Rs) 5000 500 5500

Calculation of Excise Base amount is Rs. 5000 and BED % is 10. Excise Amount = 5000*10% = 500

Excise Entry

The program creates excise entry in case of Supplementary Credit Memo.

RG 23 A Part II Entry Through posted return shipments

The program will also create RG 23 A Part II entry with BED credit Amount. You can also print/preview the posted supplementary credit memo through Posted Credit Memo by clicking Print.

The program displays Supplementary Credit Memo on the right hand side of the Credit Memo and show the Ref: Posted Credit memo with credit memo number in the description column. Note 1: If the Supplementary field in the credit memo line is checked then only the report will show the Supplementary Credit memo. Also for each line there is an option to select the original credit memo number for which you are generating supplementary credit memo. You can also calculate excise without placing a check mark in supplementary field. Note 2: If the source document type is posted invoice it means initially you have posted an invoice/order to your customer and now you want to adjust some amount with CENVAT against posted invoice In this case the program will show ref: posted invoice with number in the posted credit memo print/preview. Note 3: If the user wants to calculate excise on Charge (Item) (capital Item) Deferred account, then he/she has to place a check mark in the Capital Item field in Item Charges window. And the posted transaction will flow in the BED Credit field of RG 23 C Part II. Note 4: If the user does not have the Return Order granule and the user calculates excise through credit memo then excise amount will not reflect in the RG 23 A/C Part II.

The user can also calculate excise through Return Order. Note: User can also calculate Secondary and higher education CESS (SHE CESS) by defining the percentage in excise posting setup.

Calculation of Service Tax


Calculation of Service Tax in case of Direct Payment made for Services Account.
Direct payment made in cash/cheque through the Cash Payment Voucher & Bank Payment Voucher. Cash Payment Voucher

Navigation: Financial Management Cash Management Cash Payment Voucher

Fill in the fields according to these guidelines: Fields Service Tax Type Description Choose the service tax type from the dropdown button. Available options are: Sale and Purchase Choose the required type from the drop down button. Newly available options are: Service Tax Vendor in case service tax type is Purchase and Service Tax Customer in case service tax type is

TDS/TCS/Service Tax Party Type

Fields

Description Sale. This is only applicable in case of calculating service tax GL to GL and GL to Bank. Choose the required value from the vendor or customer list.

TDS/TCS/Service Tax Party

To calculate service tax while making direct payment against advertisement bill, enter the following information in the Cash Payment Voucher: Posting Date: Document Type: Document No.: Service Tax Type: TDS/TCS/Service Tax Party Type: TDS/TCS/Service Tax Party: Account Type: Account No.: Debit Amount: Bal. Account Type: Bal. Account No.: Post the Cash Payment Voucher 01/02/07 Payment 26 Purchase (select from the dropdown box) Service Tax Vendor (select from the dropdown box) 10000 G/L Account 8410 (Advertisement) 10000 G/L Account 2910 (Cash)

Viewing the Posted Transaction


Navigation: Financial Management General Ledger History Navigate

G/L Entry

The program creates the following entry: Particulars Advertisement Service Tax Recoverable To, Cash Type DR DR CR Amount(Rs) 10000 1224 11224

Calculation of Service Tax Base amount = Rs. 10000 Service tax % = 12 eCess % = 2 Tax Amount = 10000*12.24% = 1224

Service Tax Entry

The program will create service tax entry with detailed information and you can also view the service tax entry detail by clicking Amount Received/Paid field in the Service Tax Entry field.

Service Tax Entry Detail

The program will create the service tax entry detail and the value of service tax and eCess will be available for input service credit. Note: In case payment has been made by cheque, the user can post the transaction through the Bank Payment Voucher. In case payment has been made by cash or cheque has been refunded due to some reason fully or partially then also service tax can be calculated with document type Refund.

Note: User can also calculate Secondary and higher education CESS (SHE CESS) by defining the percentage in service tax setup.

Calculation of Service Tax in case of Direct Payment Received against Services Account.
Direct payment received in cash/cheque through the Cash Receipt Voucher & Bank Receipt Voucher. Bank Receipt Voucher

Navigation: Financial Management Cash Management Bank Receipt Voucher

Fill in the fields according to these guidelines: Fields Service Tax Type Description Choose the service tax type from the dropdown box. Available options are: Sale and Purchase. Choose the required type from the drop down button. Newly available options are: Service Tax Vendor in case service tax type is Purchase and Service Tax Customer in case service tax type is Sale. This is only applicable in case of calculating service tax GL to GL and GL to Bank.

TDS/TCS/Service Tax Party Type

TDS/TCS/Service tax Party

Choose the required value from the vendor or customer list.

To calculate service tax while receiving direct payment against advertisement bill, enter the following information in the Bank Receipt Voucher. Posting Date: Document Type: Document No.: Service Tax Type: TDS/TCS/Service Tax Party Type: TDS/TCS/Service Tax Party: Account Type: Account No.: Credit Amount: Bal. Account Type: Bal. Account No.: Post the Cash Payment Voucher 01/02/07 Payment 253 Sale (select from the dropdown box) Service Tax Customer (select from dropdown box) 10000 G/L Account 8410 (Advertisement) 10000 Bank Account Giro

Viewing the Posted Transaction


Navigation: Financial Management General Ledger History Navigate

G/L Entry

The program creates the following entry: Particulars Advertisement Service Tax Payable Bank Type CR CR DR Amount(Rs) 10000 1224 11224

Calculation of Service Tax Base amount = Rs. 10000 Service tax % = 12 eCess % = 2. Tax Amount = 10000*12.24% = 1224

Service Tax Entry

The program will create service tax entry with detailed information and you can also view the service tax entry detail by clicking Amount Received/Paid field in the Service Tax Entry window.

Service Tax Entry Detail

The program will create the service tax entry detail. The value of service tax and eCess will be available for making payment of service tax. Note 1: In case payment has been received in cash, the user can post the transaction through Cash Receipt Voucher. In case payment has been received by cash or cheque has been refunded due to some reason fully or partially then also service tax can be calculated with document type Refund.

Note: User can also calculate Secondary and higher education CESS (SHE CESS) by defining the percentage in service tax setup.

Calculation of Service Tax in case of other G/L Account.


Direct payment made by Employee. General Journal

Navigation: Financial Management General Ledger General Journal

Fill in the fields according to these guidelines: Fields Service Tax Type Description Choose the service tax type from the dropdown box. Available options are: Sale and Purchase. Choose the required type from the drop down button. Newly available options are: Service Tax Vendor in case service tax type is Purchase and Service Tax Customer in case service tax type is Sale. This is only applicable in case of calculating service tax GL to GL and GL to Bank.

TDS/TCS/Service Tax Party Type

TDS/TCS/Service tax Party

Choose the required value from the vendor or customer list.

To calculate service tax when advertisement bill has been paid directly by the employee, enter the following information in the General Journal. Posting Date: Document Type: Document No.: Service Tax Type: TDS/TCS/Service Tax Party Type: TDS/TCS/Service Tax Party: Account Type: Account No.: Amount: Bal. Account Type: Bal. Account No.: Post the Journal 09/02/07 Payment G00166 Purchase (select from the dropdown box) Service Tax Vendor (select from dropdown box) 10000 G/L Account 8410 (Advertisement) 10000 G/L Account 5430 (Employee Balances)

Viewing the Posted Transaction


Navigation: Financial Management General Ledger History Navigate

G/L Entry

The program creates the following entry:

Particulars Advertisement Service Tax recoverable Employee balances

Type DR DR CR

Amount(Rs) 10000 1224 11224

Calculation of Service Tax Base amount = Rs. 10000 Service tax % = 12 eCess % = 2. Tax Amount = 10000*12.24% = 1224 Service Tax entry

The program will create service tax entry with detailed information and you can also view the service tax entry detail by clicking Amount Received/Paid field in the Service Tax Entry window.

Service Tax Entry Detail

The program will create the service tax entry detail. The value of service tax and eCess will be available for taking credit while making payment of service tax. Note 1: Service tax can be calculated from the General Journals, Journal Voucher by selecting the balancing account as any general ledger account. Note: User can also calculate Secondary and higher education CESS (SHE CESS) by defining the percentage in service tax setup.

Appendix
Opening Tax Entries The existing balances in the tax records (means Central Excise and Service tax) should be posted into the Tax Records as opening balance. Central Excise The journal from which one can post the a. RG 23 A/C Part I (opening quantity particulars). b. DSA (opening quantity particulars). c. PLA (opening balance and components like BED, e-Cess, and so on). d. RG 23A/C Part II (opening balance of CENVAT credit and the components like BED, e-Cess, and so on). e. CENVAT Credit Deferred (opening balance of CENVAT credit and the components like BED, e-Cess, and so on). All the above should be recorded location wise with relevant location details like E.C.C No. For example: X Ltd. has a opening balance of 10 units with a CENVAT Credit Rs 10000 (Components: BED Rs 9000 and e-Cess Rs1000), PLA with Rs 5000 (Components: BED Rs 4500 and e-Cess Rs 500), Finished Goods Stock with 10 units and CENVAT Credit Deferred pertaining to 2 units of capital assets which were Installed on 12-10-2005 is Rs 6000 (Components: BED Rs 5800 and e-Cess Rs 200). The RG 23A Part I should be updated with opening quantity of 10 units PLA should be updated with the opening balance of Rs 5000, the components BED Rs 4500 and e-Cess Rs 500 should also be updated DSA should be updated with opening quantity of 10 units RG 23 A part II should be updated with the opening balance as Rs 10000, the components BED as Rs 9000 and e-Cess as Rs1000 CENVAT Credit Deferred should be updated with opening balance as Rs 6000. The components: BED as Rs 5800

and e-Cess as Rs 200 should be updated along with the entry in RG 23C Part I for 2 units. The date of Installation (12-10-2005) should also be updated.

Service Tax The journal from which one can post the: a. Opening balance of the service tax credit is carried forwarded with the details of the period from which the balance is carried forwarded and the components like service tax and e-Cess. b. Opening balance of the service tax credit with details of components like service tax and e-Cess c. Opening balance of the service tax payable with details of components like service tax and e-Cess d. Opening balance of the service tax receivable with details of components like service tax and e-Cess. All the above should be recorded location wise with relevant location details like Service Tax Registration No.

For example: X Ltd. has opening balances as: I. Service tax credit carried forward Rs 1000 pertaining to the period ending on 01-4-2006 with components: Service Tax as Rs 800 and e-Cess as 200 II. Service tax credit of the period Rs 5000 with components as Service Tax Rs 4500 and e-Cess 500. III. Service tax payable of Rs 6000 with components as Service Tax Rs 5600 and e-Cess 400 IV. Balance receivable for the service tax of Rs 1200 with components as Service Tax Rs 900 and e-Cess 300 Service tax credit carried forward should be updated with Rs 1000 with the details of the carried forward from period ending 1-4-2006, Service Tax Rs 800 and e-Cess Rs 200. Service tax credit for the period should be updated with Rs 5000 with particulars of Service Tax Rs 4500 and e-Cess 500. Service tax of for the period should be updated with Rs 6000 with particulars of Service Tax Rs 5600 and e-Cess Rs 400 Service tax receivable should be updated with Rs 1200 with particulars of Service tax Rs 900 and e-Cess Rs 300

Adjustment of Tax Entries Option for the correction / modification / rectification / adjustment in the tax record (Central excise, Sales tax & VAT, Service tax) components of the tax records against any GL account and posting into respective tax records should be available. Correction / modification / rectification / adjustment may arise due to occurrence of any internal or external event. Internal event may be wastage, scraped mistakes and external event may be change in price or changes in provisions of the respective act. There are three types of adjustments as: positive adjustment, negative adjustment, and correction adjustment. Positive Adjustment: A positive adjustment is the increase in the tax liability, increase in the indirect tax due to increase in sale price or increase in the tax rate. For example: X Ltd. has initially charged its customer Y, service tax of Rs 200 @ 20%; the rate got changed to 22% before the receipt of the amount. The original entry was: Service tax receivable A/C Customer Y A/C Dr Cr 200 200 20 20

Now the adjustment entry will be: Service Tax receivable A/C Dr Customer Y A/C Cr

In this case there should be provision to post the GL accounts: Service Tax Receivable A/C and Customer A/C with Rs 20 along with tax records & tax components. Negative Adjustment: A negative adjustment is the decrease in the tax liability like decrease in the indirect tax due to decrease in sale price or decrease in the tax rate. For example: X Ltd. has initially charged its customer Y service tax of Rs 200 @ 20%; the rate got changed to 15% before the receipt of the amount. The original entry was: Service Tax Receivable A/C Customer Y A/C Now the adjustment entry will be: Customer Y A/C Service Tax Receivable A/C Dr Cr Dr Cr 200 200 50 50

In this case there should be provision to post the GL accounts: Service Tax Receivable A/C and Customer A/C with Rs 50 along with tax records & tax components.

Microsoft Business Solutions Navision 4.0- Multi Location Taxes (I)

Table of Contents
Overview of Functionality......................................................................................5 Detailed Setup...................................................................................................5 Comprehensive Functionality ............................................................................5 Reports..............................................................................................................5 Opening Balances.................................................................................................5 Opening Balance in RG 23 A Part I (Raw Material)...........................................6 Viewing the Posted Transaction ....................................................................7 Opening Balance in RG 23 A Part II (Raw Material)..........................................9 Viewing Posted Transaction ........................................................................10 Opening Balance in RG 23 C Part I (Capital Item) ..........................................13 Viewing the Posted Transaction ..................................................................14 Opening Balance in RG 23 C Part II (Capital Item) .........................................16 Viewing Posted Transaction ........................................................................17 Opening Balance in RG 23 C Part I (Fixed Asset)...........................................20 Viewing the Posted Transaction ..................................................................21 Opening Balance in RG 23 C Part II (Fixed Assets)........................................23 Viewing Posted Transaction ........................................................................24 Opening Balance in Daily Stock Account (DSA)..............................................27 Viewing Posted Transaction ........................................................................29 Opening Balance in Personal Ledger Account (PLA)......................................31 Viewing Posted Transaction ........................................................................31 Opening Balance in CENVAT Cr. Deferred Account (Capital Item).................35 Viewing the Posted Transaction ..................................................................37 Opening Balance of Service tax ......................................................................41 Service Tax Opening ..........................................................................................43 Service Tax Opening in case of Interim (Purchase) ........................................46 Viewing the Posted Transaction ..................................................................48 Service Tax Opening in case of Interim & Recoverable (Purchase)................51 Viewing the Posted Transaction ..................................................................53 Service Tax Opening in case of Interim (Purchase Credit Memo)...................57 Viewing the Posted Transaction ..................................................................58 Service tax Opening in case of Interim & Recoverable (Purchase Credit Memo & Refund) ........................................................................................................61 Viewing the Posted Transaction ..................................................................63 Service Tax Opening in case of Full Payment Paid to the Vendor and the Vendor Invoice is closed. .............................................................................67 Viewing the Posted Transaction ..................................................................68 Service Tax Entry................................................................................................70 Service Tax Opening in case of Interim (Sale) ................................................72 Viewing the Posted Transaction ..................................................................73 Service tax Opening in case of Interim & Payable (Sale) ................................76 Viewing the Posted Transaction ..................................................................78 Service Tax Opening in case of Interim (Sales Credit Memo).........................82 Viewing the Posted Transaction ..................................................................83

Service Tax Opening in case of Interim & Payable (Sales credit memo & Refund) ...........................................................................................................86 Viewing the Posted Transaction ..................................................................88 Service Tax Opening in case of Full Payment is Received from the Customer and the Customer Invoice is closed.................................................................92 Viewing the Posted Transaction ..................................................................93 Service Tax Opening Balance in case of Advance Payment & Refund .......97 Service Tax in case of Advance Payment is Paid to the Vendor .....................97 Viewing the Posted Transaction ................................................................100 Service Tax in case of Refund Payment Paid; is Received from Vendor against Advance Payment. ........................................................................................103 Viewing the Posted Transaction ................................................................105 Service tax in case of Advance payment received from Customer................108 Viewing the Posted Transaction ................................................................110 Service tax in case of Refund payment made to the customer against advance payment. .......................................................................................................114 Viewing the Posted Transaction ................................................................116 Adjustments ......................................................................................................120 Positive Adjustment in Quantities ..................................................................120 Positive adjustment in Quantities (increase in the quantity) and reflected in RG 23 A Part I. ..........................................................................................120 Viewing the Posted Transaction ................................................................121 Positive adjustment in Quantities (increase in the quantity) and reflected in RG 23 C Part I. ..........................................................................................123 Viewing the Posted Transaction ................................................................124 Negative Adjustment in Quantities ................................................................126 Negative adjustment in Quantities (Decrease in the quantity) and reflected in RG 23 A Part I. ..........................................................................................126 Viewing the Posted Transaction ................................................................127 Negative adjustment in Quantities (Decrease in the quantity) and reflected in RG 23 C Part I. ..........................................................................................129 Viewing the Posted Transaction ................................................................130 Positive Adjustment related to RG 23 A Part II entries ..................................132 Viewing Posted Transaction ......................................................................133 Negative Adjustment related to RG 23 A Part II entries ................................136 Viewing Posted Transaction ......................................................................137 Positive Adjustment related to RG 23 C Part II entries..................................140 Viewing Posted Transaction ......................................................................141 Negative Adjustment related to RG 23 C Part II entries ................................145 Viewing Posted Transaction ......................................................................146 Positive Adjustment related to DSA...............................................................149 Viewing Posted Transaction ......................................................................151 Negative Adjustment related to DSA .............................................................152 Viewing Posted Transaction ......................................................................154 VAT Adjustments...........................................................................................155 Service Tax Adjustments...............................................................................155

Adjustment in case of Posted Purchase Invoice. .......................................159 Viewing the Posted Transaction ................................................................162 Adjustment in case of Posted Sales Invoice. .............................................165 Viewing the Posted Transaction ................................................................166 Appendix...........................................................................................................170

Overview of Functionality
Multilocation taxes functionality facilitate the entry of opening balances and adjustments in the statuary records which enable in maintaining, generation of appropriate & accurate statutory records and reports using the existing Navision Localization feature. This feature includes the computation & recording of taxes on General Ledger Account & Charge (Item).

Detailed Setup
Detailed setups of Excise, sales Tax and Service Tax are required for entering opening balances and doing adjustments in the statutory records. The required setups are also used for calculating taxes on G/L Account and Charge (Item).

Comprehensive Functionality
Following are the comprehensive functionalities covered under Multilocation Taxes. Opening Balances in RG 23 A/C Part I Opening balances in RG 23 A/C Part II Opening Balances in Daily Stock Account (DSA) Opening Balances in Personal Ledger Account (PLA) Opening Balances of Service Tax and eCess Adjustments in excise reflecting to RG 23 A/C Part I & II and DSA Adjustments in Service Tax related transactions Adjustment in VAT Computation and recoding of Excise and VAT on General Ledger account Computation and recording of Excise on Charge (Item) Computation and recording of Service Tax on General Ledger account

Reports
All existing statutory reports of Navision generate the appropriate & accurate records.

Opening Balances
Opening balances of central excise are recoded in the registers, for statutory requirement. Note: It is recommended to create setups related to excise, before updating the excise opening balances in the registers.

Opening Balance in RG 23 A Part I (Raw Material)


Navigation: Purchase Inventory & Costing Item Journal

Fill in the fields according to these guidelines: Field Excise Entry Description Place a check mark in this field if you want to reflect the transaction in RG 23 A Part I and RG 23 C Part I.

To update the opening balances in RG 23 A Part I (in case of Raw Material), fill the fields in the Item Journal window as follows:

Posting Date: Entry Type: Document No.: Item No.: Description: Location: Quantity: Unit of Measurement: Unit Amount: Excise Entry: Amount: Post the Item Journal

31/03/06 Purchase or Positive Adjustment T00042 1000 Bicycle Blue 100 Pcs 350.595 True 35059.50

Viewing the Posted Transaction


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RG 23 A Part I Entry

In the above screens, you can see that the program has updated the following information based on the posted transaction through the Item Journal. Posting date: Description: Base Unit of Measure: Quantity Received: 31/03/06 Bicycle Pcs. 100

Closing Stock: Location Code: Location ECC No.: Item No.: Document No.: Type: Quantity:

100 Blue BXBVS7543890 1000 T00042 Purchase 100

In the report RG 23 A Part I, you can view this Quantity Received as opening balance if there is any other transaction posted after this entry. Note: At the time of updating opening balances for Item/Capital Item, you have to update the quantity in RG 23 A Part I and in RG 23 C Part I.

Opening Balance in RG 23 A Part II (Raw Material)


Navigation: Financial Management General Ledger General Journal

To update the opening balances in RG 23 A Part II (in case of Raw Material), fill the fields in the General Journal window as follows: Posting Date: Document No.: Account No.: E.C.C. No.: Description: Excise Charge: Excise Record: BED Amount: AED (GSI) Amount: ECess Amount: Amount: Bal. Account Type: Bal. Account No.: Post the General Journal 31/03/06 G00029 2993 BXBVS7543890 Cenvat Cr. Receivable Account True RG 23 A 5000 1000 500 6500 G/L Account 2993

Viewing Posted Transaction


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G/L Entry

The program creates the following entry: Particulars Cenvat Cr. Receivable Account To, Cenvat Cr. Receivable Account Type DR CR Amount(Rs) 6500 6500

RG 23 A Part II Entry

In the above screen, you can see that the program has updated the following information based on the posted transaction through the General Journal. Posting date: BED Credit: AED (GSI) Credit: Closing Bal. BED/AED: 31/03/06 5000 1000 6000

Closing Bal. other duties: Total BED Amount: Total AED (GSI) Amount: Total eCess Amount: Location E.C.C. No.: Document No.: Type: ECess Credit:

500 5000 1000 500 BXBVS7543890 G00029 Purchase 500

In the report RG 23 A Part II, you can view the amounts as Opening Balance of Duty in Credit if there is any other transaction posted after this entry. In the above transaction there will be no effect of amount in the G/L Account (2993), because 2993 is debited as well as credited at the same time. Note: User can also update the opening balances for Secondary and higher education CESS (SHE CESS)

Opening Balance in RG 23 C Part I (Capital Item)


Navigation: Purchase Inventory & Costing Item Journal

Fill in the fields according to these guidelines: Field Excise Entry Description Place a check mark in this field, if you want to reflect the transaction in RG 23 A Part I and RG 23 C Part I.

To update the opening balances in RG 23 C Part I (in case of Capital Item), fill the fields in the Item Journal window as follows: Posting Date: 31/03/06

Entry Type: Document No.: Item No.: Description: Location: Quantity: Unit of Measurement: Unit Amount: Excise Entry: Amount: Post the Item Journal

Purchase or Positive Adjustment T00043 1001 (Capital Item field is True in Item Card) Touring Bicycle Blue 50 Pcs 350.595 True 17529.75

Viewing the Posted Transaction


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RG 23 C Part I Entry

In the above screen, you can see that the program has updated the following information based on the posted transaction through the Item Journal.

Posting date: Description: Base Unit of Measure: Quantity Received: Closing Stock: Location Code: Location ECC No.: Item No.: Document No.: Type: Quantity:

31/03/06 Touring Bicycle Pcs. 50 50 Blue BXBVS7543890 1001 T00043 Purchase 50

In the report RG 23 C Part I, you can view this Quantity Received as opening balance if any other transaction is posted after this entry. Note: At the time of updating opening balances for Item/Capital Item, you have to update the quantity in RG 23 A and C Part I.

Opening Balance in RG 23 C Part II (Capital Item)


Navigation: Financial Management General Ledger General Journal

To update the opening balances in RG 23 C Part II (in case of Capital Item); fill the fields in the Item Journal window as follows: Posting Date: Document No.: Account No.: E.C.C. No.: Description: Excise Charge: Excise Record: BED Amount: AED (GSI) Amount: ECess Amount: Amount: 31/03/06 G00030 2993 BXBVS7543890 Cenvat Cr. Receivable Account True RG 23 C 10000 5000 1000 16000

Bal. Account Type: Bal. Account No.: Post the General Journal

G/L Account 2993

Viewing Posted Transaction


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G/L Entry

The program creates the following entry:


Particulars Cenvat Cr. Receivable Account To, Cenvat Cr. Receivable Account Type DR CR Amount(Rs) 16000 16000

RG 23 C Part II Entry

In the above screen, you can see that the program has updated the following information based on the posted transaction through the General Journal.

Posting date: BED Credit: AED (GSI) Credit: Closing Bal. Credit CY: ECess Credit: Location E.C.C. No.: Total BED for current year: Total AED (GSI) for CY: Total eCess for CY:

31/03/06 10000 5000 16000 1000 BXBVS7543890 10000 5000 1000

In the report RG 23 C Part II, you can view the amounts as opening Balance of Duty in Credit if there is any other transaction posted after this entry. There will not be any effect of amount in the G/L Account (2993) in the above transaction, because 2993 is debited as well as credited at the same time. Note: User can also update the opening balances for Secondary and higher education CESS (SHE CESS)

Opening Balance in RG 23 C Part I (Fixed Asset)


Navigation: Financial Management Fixed Asset FA Journal

Fill in the fields according to these guidelines: Field Excise Entry Location Code Description Place a check mark in this field, if you want to reflect the transaction in RG 23 C Part I. Choose the location code from lookup list to flow the Location ECC No. in RG 23 C Part I.

To update the opening balances in RG 23 C Part I (in case of Fixed Assets), fill the fields in the Fixed Assets Journal window as follows: Posting Date: Document No.: FA No.: Description Book Code: FA Posting Type: Description: Amount: Location: Excise Entry: Post the FA Journal 31/03/06 F00007 FA000010 Company Acquisition Mercedes 300 500000 Blue True

Viewing the Posted Transaction


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RG 23 C Part I

In the above screen, you can see that the program has updated the following information based on the posted transaction through the FA Journal. Posting date: Description: Quantity Received: Document No.: Closing Stock: FA No. /Item No.: Location Code: Location ECC No.: Type: Quantity: Product Type: 31/03/06 Mercedes 300 1 F00007 1 FA 000010 Blue BXBVS7543890 Purchase 1 FA

In the report RG 23 C Part I, you can view this Quantity Received as opening Balance if any other transaction is posted after this entry. Note: As suggested in the User Guide of Fixed Assets that for each Asset, you have to create separate FA Card. Taking this into consideration there is no need to enter the quantity in FA Journal while updating the opening balance, the program will automatically take the quantity as 1. Note: At the time of updating opening balances for fixed assets, you have to update the quantity in RG C Part I.

Opening Balance in RG 23 C Part II (Fixed Assets)


Navigation: Financial Management General Ledger General Journal

To update the opening balances in RG 23 C Part II (in case of Fixed Assets), fill the fields in General Journal window as follows: Posting Date: 31/03/06

Document No.: Account No.: E.C.C. No.: Description: Excise Charge: Excise Record: BED Amount: AED (GSI) Amount: ECess Amount: Amount: Bal. Account Type: Bal. Account No.: Post the General Journal

G00031 2993 BXBVS7543890 Cenvat Cr. Receivable Account True RG 23 C 20000 10000 5000 35000 G/L Account 2993

Viewing Posted Transaction


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G/L Entry

The program creates the following entry:


Particulars Cenvat Cr. Receivable Account To, Cenvat Cr. Receivable Account Type DR CR Amount(Rs) 35000 35000

RG 23 C Part II Entry

In the above screen, you can see that the program has updated the following information based on the posted transaction through the General Journal. Posting Date: Opening Balance Cr. CY: Closing Bal. Credit CY: BED Credit: AED (GSI) Credit: ECess Credit: Location ECC No.: Total BED for Current Y: Excise Accounting Type: Total AED (GSI) for CY: Total eCess for CY: 31/03/06 16000 (Value that has been entered for Capital Item in the previous Screen) 51000 (16000 previous + 35000 for this transaction) 20000 10000 5000 BXBVS7543890 30000 (10000 previous + 20000 for this transaction) With CENVAT 15000 (5000 previous + 10000 for this transaction) 6000 (1000 previous + 5000 for this transaction)

In the report RG 23 C Part II, you can view the amounts as opening Balance of Duty in Credit if there is any other transaction posted after this entry. There will not be any effect of amount in the G/L Account (2993) in the above transaction, because 2993 is debited as well as credited at the same time. Note: User can also update the opening balances for Secondary and higher education CESS (SHE CESS)

Opening Balance in Daily Stock Account (DSA)


Navigation: Purchase Inventory & Costing Item Journal

To update the opening balances in DSA, fill the fields in Item Journal window as follows: Posting Date: Entry Type: Document No.: 31/03/06 Purchase or Positive Adjustment T00062

Item No.: Description: Location: Quantity: Unit of Measurement: Post the Item Journal

70062 (In Item Card Replenishment The program should be prod. Order) Finished Goods Blue 100 Pcs

Generate DSA to populate the opening balance in the DSA.

Navigation: Financial Management General Ledger Periodic Activity Excise Generate DSA

Enter the following information on the Item tab No.: 70062 (Item No. for which you want to update the DSA)

Enter the following information on the Options tab Location Code: Date: Click Ok Blue (Choose from lookup list) 31/03/06 (Enter the date in which you have posted the Item Journal)

Viewing Posted Transaction


DSA Entry

In the above screen, you can see that the program has updated the following information based on the posted transaction through the Item Journal. Posting date: Item No.: 31/03/06 70062

Closing Balance: Location Code: Other Quantity:

100 Blue 100

If you run the DSA report for 31/03/06, Other Qty field will show the value as 100 and Closing Stock field will show the value as 100. In the Daily Stock Account report, you can view the opening balance (100) if any other transaction is posted after this entry.

Opening Balance in Personal Ledger Account (PLA)


Navigation: Financial Management General Ledger General Journal

To update the opening balances in PLA, fill the fields in General Journal window as follows: Posting Date: Document No.: Account No.: E.C.C. No.: Description: PLA: PLA BED Amount: PLA AED (GSI) Amount: PLA ECess Amount: Amount: Bal. Account Type: Bal. Account No.: Post the General Journal 31/03/06 G00033 2997 BXBVS7543890 PLA True 5000 1000 500 6500 G/L Account 2997

Viewing Posted Transaction

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G/L Entry

The program creates the following entry: Particulars PLA To, PLA Type DR CR Amount(Rs) 6500 6500

PLA Entry

In the above screen, you can see that the program has updated the following information based on the posted transaction through the General Journal. Description: Document No.: Posting Date: BED Credit: BED Balance: Other Duties Credit: Other Duties Balance: PLA G00033 31/03/06 5000 5000 1500 1500

Balance BED: Balance AED (GSI): Balance eCess: Location ECC No.: BED Credit: AED (GSI) Credit: ECess Credit:

5000 1000 500 BXBVS7543890 5000 1000 500

In the PLA report, you can view the amounts as opening balance if any other transaction is posted after this entry. There will not be any effect of amount in the G/L Account (2997) in the above transaction, because 2997 is debited as well as credited at the same time. Note: User can also update the opening balances for Secondary and higher education CESS (SHE CESS)

Opening Balance in CENVAT Cr. Deferred Account (Capital Item)


Navigation: Financial Management General Ledger General Journal

To update the opening balances in CENVAT Cr. Deferred A/C (Capital Item), fill the fields in the General Journal window as follows: Posting Date: Document No.: Account No.: E.C.C. No.: Description: Excise Charge: Deferred: BED Amount: AED (GSI) Amount: Amount: Bal. Account Type: 31/03/06 (Enter the date of purchase of capital item) G00034 2996 BXBVS7543890 CENVAT Cr. Deferred True True 10000 5000 15000 G/L Account

Bal. Account No.: Post the General Journal

2996

After posting the General Journal, the program will update the RG 23 C Part II with the Total BED and AED (GSI) for the next year. After updating the RG 23 C Part II for Deferred amount, now run the Claim Deferred Excise batch job to take the credit of the excise amount in the next year.

Navigation: Financial Management General Ledger Periodic Activity Excise Claim Deferred Excise.

Enter the following Information on the Option tab: Document No.: Posting Date: G00034 (Document number of the posted transaction at the time of updating opening balance) 01/04/07 (Posting date on which the program will reverse the transaction from CENVAT Cr. Deferred A/C to CENVAT Cr. Receivable A/C), Date should be next year date of the purchase. BXBVS7543890 (Same as entered in the opening balance transaction).

Location E.C.C. No.: Click OK to run the batch job.

Viewing the Posted Transaction


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G/L Entry

The program creates the following entries: G/L entry for opening balance Particulars CENVAT Cr. Deferred A/C To, CENVAT Cr. Deferred A/C Type DR CR Amount(Rs) 15000 15000

G/L entry after running the batch job (transferring the excise amount from deferred account to Receivable account) Particulars CENVAT Cr. Receivable A/C To, CENVAT Cr. Deferred A/C Type DR CR Amount(Rs) 15000 15000

Now CENVAT Cr. Deferred A/C has a credit balance of Rs. 15000 and it will only settled if the user will update the opening balance of G/L account (Debit the CENVAT Cr. Deferred A/C) with Rs. 15000 while updating the Trial Balance.

RG 23 C Part II Entry (Opening balance)

In the above screen, Total BED for Next Year field has the value as 10000 and Total AED (GSI) for Next Year field has the value as 5000. The program has also updated the Location ECC No. with posting date. Also Deferred field in the excise entry will get the checked status after posting the transaction.

RG 23 C Part II Entry after running the batch job (transferring the excise amount from deferred account to Receivable account)

In the above screen, you can see that the program has transferred the 10000 amount from Total BED for Next Year field to Total BED for Current Year field and 5000 amount from Total AED (GSI) for Next Year field to Total AED (GSI) for CY field. It means that, you can avail the credit of the excise amount.

Note: The posting date of deferred entry at the time of updating the RG23 C Part II should be the date of purchase and the posting date in Claim Deferred Excise batch job should be one year later to the date of purchase. Note: User can also update the opening balances for Secondary and higher education CESS (SHE CESS)

Opening Balance of Service tax


Note 1: It is recommended to create setups related to Service tax before updating service tax opening balances in the service tax entry and service tax entry details tables. Note 2: Initially user is advised to update vendor and customer balances in the system before entering the opening balances of service tax. Also update the payments related to vendor and customer. After entering invoice and payment for vendor and customer you have to apply both before entering the opening balances of service tax. It is mandatory to have vendor and customer ledger entry before entering opening balances of service tax in the system. Examples: 1. In case of Customer closing balance as on 31/03/06 is Rs. 11224 (10000 is base, 1200 service tax and 24 is eCess) and if you have received Rs. 10000 from the customer and the balance 1224 is yet to be received. Solution: Update the opening balance of customer for Rs. 11224 and also update payment opening for Rs. 10000. After entering the customer details apply these two entries before entering the opening balances of service tax and eCess. 2. In case of vendor closing balance as on 31/03/06 is Rs. 22448 (20000 is base, 2400 is service tax and 48 is eCess amount) and if you have paid Rs. 20000 to the vendor and the balance of 2448 is yet to be paid. Solution: Update the opening balance of vendor for Rs. 22448 and also update payment opening for Rs. 20000. After entering the vendor details apply these two entries before entering the opening balances of service tax and eCess.

Setup for Service Tax Opening

Navigation: Financial Management General Ledger Setup Trial Codes Source Code Setup

Select the source code from lookup list in Service Tax Opening and Service Tax Adjustment fields. Service Tax Batches

Navigation: Financial Management Setup Service Tax Service Tax Batches


Before entering the opening balances of service tax, you must create batch through service tax batches.

Create the Service Tax batches by entering the following fields: Fields Journal Batch Name Description Type Description Enter the code of the batch, you want to create (For example: Opening) Enter the description of the code, you have entered. Choose the type from the down button. The available options are: Opening and Adjustment. Choose the source code from the lookup list.

Source code

Service Tax Opening


Navigation: Financial Management General Ledger Periodic Activity Service Tax Service Tax Opening

New Interface has been provided to enter the opening balances of service tax. Fill in the fields according to these guidelines: Fields Type Description Choose the type from the drop down button. The available options are: Sale and Purchase. Choose the transaction number from the lookup list. By clicking the assist button customer/vendor ledger entries will be open. The program will show the posting date of the selected transaction in this field. This field is editable. This field is not editable and will be flow (True) in case of advance payment from vendor and customer ledger entries. The program will show the document type of the selected transaction in this field. This field is editable. The program will show the document number of the selected transaction in this field. This field is editable. This field will show the party code of the selected transaction. This field is editable. Choose the service tax group code from the lookup list. Select the service tax registration number from the lookup list.

Transaction No.

Posting date

Service Tax on Advance Payment

Document Type

Document No.

Party Code Service tax group code Service tax registration No.

Fields Location Code

Description Select the Location Code from Lookup button. Program will flow the Location ECC No. in the service tax entry and service tax entry details after selecting location code. This exercise will help the user to take the credit of service tax while making payment of Excise duty. Enter the service tax base amount on which service tax has to be calculated. The program will automatically calculate the service tax amount based on the percentage defined in the Service Tax setup. The program will automatically calculate the eCess amount based on the percentage defined in the setup. This field shows the amount which is related to the selected transaction number. This field shows the service tax percentage that has been defined in the setup. This field shows the service tax eCess percentage that has been defined in the setup. This field contains the Service Tax Receivable/Payable Account (Interim) account. This field contains the Service Tax Recoverable and Payable account number. This field shows the amount, which will be based on the selected transaction. In case of purchase transaction, the program will show the remaining amount of service tax in this field, which is still pending to take credit. In case of purchase transaction, the

Service tax base amount Service tax amount

eCess Amount

Payable/Receivable Amount Service Tax % Service Tax eCess %

ST Rec./Pay. Account (Interim)

ST Rec. /Pay. Account

Amount received/paid Remaining amount

Remaining eCess amount

Fields

Description program will show the remaining amount of eCess in this field, which is still pending to take credit. This field shows the remaining amount of service tax in case of advance payment. This field shows the remaining amount of service tax eCess in case of advance payment This field shows the remaining amount of service tax base in case of advance payment By default the program will show G/L Account in this field By default the program will show the interim account number in this field. By default the program will show the G/L Account in this field. By default the program will show the payable or recoverable account number in this field.

Remaining Service tax Amount Remaining Service tax eCess amount

Remaining Service tax base amount

Bal. Account Type (Interim) Bal. Account No. (Interim) Bal. Account Type Bal. Account No.

Note: Also you can post the transactions with dimensions available on the Line menu button in the form.

Service Tax Opening in case of Interim (Purchase)


Enter the opening balance in case of vendor invoice which is still pending for payment and service tax has been calculated at the time of creating invoice. Initially enter the opening balance of vendor including service tax amount. In Service Tax Opening form, select the type as Purchase and select the transaction from the lookup list. After clicking the assist button, Vendor Ledger Entry window opens, in which you can select the transaction for which you want to update the opening balances of service tax. Some fields will get populated on selection of transaction no. like Doc. No., date, Party code, Payable Amount, Amount received/paid.

Enter the following Information in the Service Tax Opening form Type: Transaction No.: Posting Date: Document Type: Document No.: Party Code: Service Tax Group Code: Service Tax Registration No.: Service Tax Base Amount: Service Tax Amount: eCess Amount: Payable/Receivable Amount: Service Tax %: Service tax eCess %: ST. Rec./ Pay. (Interim)A/C: Bal. Account Type (Interim): Bal. Account No. (Interim): Purchase 257 (Selected from vendor ledger entry) 31/03/07 Invoice G00032 10000 Adv. BJX118910100578 10000 1200 24 -11224 12 2 5926 G/L Account 5926

Post the Service Tax Opening Journal.

Viewing the Posted Transaction


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G/L Entry

The program creates the following G/L entry: Particulars Service Tax Receivable Interim A/C To, Service Tax receivable Interim A/C Type DR CR Amount(Rs) 1224 1224

Service Tax Entry

The program will update service tax entry for the posted transaction with service tax registration number and other details. At the time of making payment to vendor from Navision, journals applying with vendor entry system will create the Service Tax Entry Detail.

Note: User can also update the opening balances for Secondary and higher education CESS (SHE CESS)

Service Tax Opening in case of Interim & Recoverable (Purchase)


Enter the opening balance in case vendor invoice and partial payment have been made to the vendor and service tax has been calculated at the time of creating invoice. Initially enter the opening balance of vendor including service tax amount. Also enter the payments that have been paid to the vendor and apply both entries before entering the opening balances of service tax. In Service Tax Opening form select the type as Purchase and select the transaction from the lookup list. After clicking the assist button, Vendor Ledger Entry window opens, in which you can select the transaction for which you want to update the opening balances of service tax.

Enter the following Information in the Service Tax Opening form Type: Transaction No.: Posting Date: Document Type: Document No.: Party Code: Service Tax Group Code: Service Tax Registration No.: Service Tax Base Amount: Service Tax Amount: eCess Amount: Payable/Receivable Amount: Service Tax %: Service Tax eCess %: ST. Rec./Pay. (Interim)A/C: Bal. Account Type (Interim): Bal. Account No. (Interim): ST. Rec/Pay Account: Amount Received/Paid: Remaining Amount: Remaining eCess Amount: Bal. Account type: Bal. Account No.: Purchase 275 (Selected from vendor ledger entry) 31/03/07 Invoice G00045 10000 Adv. BJX118910100578 10000 1200 24 -11224 12 2 5926 G/L Account 5926 2998 10000 1069.14 21.38 G/L Account 2998

Post the Service Tax Opening Journal.

Viewing the Posted Transaction


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G/L Entry

The program creates the following G/L entry: Particulars Service Tax Receivable Interim A/C To, Service Tax Receivable Interim A/C Service Tax Recoverable A/C Service Tax Recoverable A/C Type DR CR DR CR Amount(Rs) 1224 1224 1090.52 1090.52

Service Tax Entry

The program will update service tax entry for the posted transaction with service tax registration number and other details. You can view the service tax entry details by clicking the lookup button in Amount Received/Paid field of the Service Tax Entry window.

The program will create service tax entry detail and the transaction will available to take credit while making payment of service tax liability. At the time of making the balance payment to the vendor, the program will create the service tax entry details. Note: User can also update the opening balances for Secondary and higher education CESS (SHE CESS)

Service Tax Opening in case of Interim (Purchase Credit Memo)


Enter the opening balance of service tax in case of purchase credit memo. Initially enter the opening balance of vendor (Credit memo) including service tax amount. In Service Tax Opening form, select the type as Purchase and select the transaction from the lookup list. After clicking the assist button, Vendor Ledger Entry window opens, in which you can select the transaction for which you want to update the opening balances of service tax.

Enter the following Information in the Service tax Opening form Type: Transaction No.: Posting Date: Document Type: Document No.: Purchase 282 (Selected from vendor ledger entry) 31/03/07 credit memo G00048

Party Code: Service Tax Group Code: Service Tax Registration No.: Service Tax Base Amount: Service Tax Amount: eCess Amount: Payable/Receivable Amount: Service Tax %: Service Tax eCess %: ST. Rec./Pay. (Interim)A/C: Bal. Account Type (Interim): Bal. Account No. (Interim):

10000 Adv. BJX118910100578 -5000 -600 -12 5612 12 2 5926 G/L Account 5926

Post the Service tax Opening Journal.

Viewing the Posted Transaction


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G/L Entry

The program creates the following G/L entry: Particulars Service Tax Receivable Interim A/C To, Service Tax Receivable Interim A/C Type DR CR Amount(Rs) 612 612

Service Tax Entry

The program will update service tax entry for the posted transaction with service tax registration number and other details. At the time of making refund to vendor from Navision, journals applying with vendor entry system will create the service tax entry detail. Note: User can also update the opening balances for Secondary and higher education CESS (SHE CESS)

Service tax Opening in case of Interim & Recoverable (Purchase Credit Memo & Refund)
Enter the opening balance in case of vendor purchase credit memo and the partial payment has been refunded by the vendor and service tax has been calculated at the time of creating credit memo. Initially enter the opening balance of vendor including service tax amount and also the refund that have been paid received by the vendor and apply both entries before entering the opening balances of service tax. In Service Tax Opening form, select the type as Purchase and select the transaction from the lookup list. After clicking the assist button, Vendor ledger Entry window opens in which you can select the transaction for which you want to update the opening balances of service tax.

Enter the following Information in the Service tax Opening form Type: Transaction No.: Posting Date: Document Type: Document No.: Party Code: Service Tax Group Code: Service Tax Registration No.: Service Tax Base Amount: Service Tax Amount: eCess Amount: Payable/Receivable Amount: Service Tax %: Service tax eCess %: ST. Rec./Pay. (Interim)A/C: Bal. Account Type (Interim): Bal. Account No. (Interim): ST. Rec/Pay Account: Amount Received/Paid: Remaining Amount: Remaining eCess Amount: Bal. Account type: Bal. Account No.: Purchase 296 (Selected from vendor ledger entry) 31/03/07 credit memo G00065 10000 Adv. BJX118910100578 -5000 -600 -12 5612 12 2 5926 G/L Account 5926 2998 -2000 -213.83 -4.28 G/L Account 2998

Post the Service Tax Opening Journal.

Viewing the Posted Transaction


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G/L Entry

The program creates the following G/L entry: Particulars Service Tax Receivable Interim A/C To, Service Tax receivable Interim A/C Service Tax Recoverable Service Tax Recoverable Type DR CR DR CR Amount(Rs) 612 612 218.11 218.11

Service Tax Entry

The program will update service tax entry for the posted transaction with service tax registration number and other details. You can view the service tax entry detail by clicking the the lookup button in Amount Received/Paid field of the Service Tax Entry window.

The program will update service tax entry detail with negative values and document type will be refunded. At the time of receiving balance payment (refund) from the vendor, the program will create the service tax entry details. Note: User can also update the opening balances for Secondary and higher education CESS (SHE CESS)

Service Tax Opening in case of Full Payment Paid to the Vendor and the Vendor Invoice is closed.
In case full payment is paid to the vendor and the vendor invoice is closed, you can directly enter the opening balances of service tax and there is no need to create the vendor balances. Service Tax Opening form

Navigation: Financial Management General Ledger Periodic Activity Service Tax Service Tax Opening

Enter the following Information in the Service Tax Opening form: Type: Transaction No.: Posting Date: Document Type: Document No.: Party Code: Service Tax Group Code: Service Tax Registration No.: Service Tax Base Amount: Service Tax Amount: eCess Amount: Payable/Receivable Amount: Purchase Blank 31/03/07 Payment Op001 Blank or you can give the party code. Adv. BJX118910100578 100000 12000 240 -112240

Service Tax %: Service Tax eCess %: ST. Rec./Pay. (Interim)A/C: Bal. Account Type (Interim): Bal. Account No. (Interim): ST. Rec/Pay Account: Amount Received/Paid: Remaining Amount: Remaining eCess Amount: Bal. Account Type: Bal. Account No.:

12 2 5926 G/L Account 5926 2998 112240 12000 240 G/L Account 2998

Post the Service tax Opening Journal.

Viewing the Posted Transaction


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G/L Entry

The program creates the following G/L entry: Particulars Service Tax Recoverable Service Tax Recoverable Type DR CR Amount(Rs) 12240 12240

Service Tax Entry

The program will update service tax entry for the posted transaction with service tax registration number and other details. You can view the service tax entry detail by clicking the lookup button in Amount Received/Paid field of the Service Tax Entry window.

The program will update service tax entry detail with positive values. Document type will be payment and the service tax amount will be available for credit at the time of making payment of service tax liability. Note: You can enter the opening balances of document type refund in case all credit notes are closed. Note: User can also update the opening balances for Secondary and higher education CESS (SHE CESS)

Service Tax Opening in case of Interim (Sale)


Enter the opening balance in case of customer invoice which is still pending for payment and service tax has been calculated at the time of creating invoice. Initially enter the opening balance of customer including service tax amount. In Service Tax Opening form, select the type as Sale and select the transaction from the lookup list. After clicking the assist button, Customer Ledger Entry window opens in which you can select the transaction for which you want to update the opening balances of service tax.

Enter the following Information in the Service Tax Opening form Type: Transaction No.: Posting Date: Document Type: Document No.: Party Code: Service Tax Group Code: Service Tax Registration No.: Sale 324 (Selected from customer ledger entry) 31/03/07 Invoice G00067 10000 Adv. BJX118910100578

Service Tax Base Amount: Service Tax Amount: eCess Amount: Payable/Receivable Amount: Service Tax %: Service tax eCess %: ST. Rec./Pay. (Interim)A/C: Bal. Account Type (Interim): Bal. Account No. (Interim):

-10000 -1200 -24 11224 12 2 5925 G/L Account 5925

Post the Service Tax Opening Journal.

Viewing the Posted Transaction


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G/L Entry

The program creates the following G/L entry: Particulars Service Tax Payable Interim A/C To, Service Tax Payable Interim A/C Type DR CR Amount(Rs) 1224 1224

Service Tax Entry

The program will update service tax entry for the posted transaction with service tax registration number and other details. At the time of receiving payment from customer from Navision, journals applying with customer entry system will create the service tax entry detail.

Note: User can also update the opening balances for Secondary and higher education CESS (SHE CESS)

Service tax Opening in case of Interim & Payable (Sale)


Enter the opening balance in case of customer invoice and the partial payment have been received from the customer and service tax has been calculated at the time of creating invoice. Initially enter the opening balance of customer including service tax amount and also the payment that have been received from the customer. Apply both entries before entering the opening balance of service tax. In Service Tax Opening form select the type as Sale and select the transaction from the lookup list. After clicking the assist button, Customer Ledger Entry window opens, in which you can select the transaction for which you want to update the opening balances of service tax.

Enter the following Information in the Service Tax Opening form Type: Transaction No.: Posting Date: Document Type: Document No.: Party Code: Service Tax Group Code: Service Tax Registration No.: Service Tax Base Amount: Service Tax Amount: eCess Amount: Payable/Receivable Amount: Service Tax %: Service Tax eCess %: ST. Rec./Pay. (Interim)A/C: Bal. Account Type (Interim): Bal. Account No. (Interim): ST. Rec/Pay Account: Amount Received/Paid: Remaining Amount: Remaining eCess Amount: Bal. Account Type: Bal. Account No.: Sale 327 (Selected from customer ledger entry) 31/03/07 Invoice G00069 10000 Adv. BJX118910100578 -10000 -1200 -24 11224 12 2 5925 G/L Account 5925 5923 -10000 0 (Only applicable in purchase type transaction) 0(Only applicable in purchase type transaction) G/L Account 5923

Post the Service tax Opening Journal.

Viewing the Posted Transaction


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G/L Entry

The program creates the following G/L entry: Particulars Service Tax Payable Interim A/C To, Service Tax payable Interim A/C Service Tax Payable A/C Service Tax Payable A/C Type DR CR DR CR Amount(Rs) 1224 1224 1090.52 1090.52

Service Tax Entry

The program will update service tax entry for the posted transaction with service tax registration number and other details. You can view the service tax entry detail by clicking the lookup button in Amount Received/Paid field in the Service Tax Entry window.

The program will create service tax entry detail and the transaction will be available in Service Tax Payment form. At the time of receiving the balance payment from customer, the program will create the service tax entry details. Note: User can also update the opening balances for Secondary and higher education CESS (SHE CESS)

Service Tax Opening in case of Interim (Sales Credit Memo)


Enter the opening balance of service tax in case of sales credit memo. Initially enter the opening balance of customer (Credit memo) including service tax amount. In Service Tax Opening form select the type as Sale and select the transaction from the lookup list. After clicking the assist button, Customer Ledger Entry window opens in which you can select the transaction for which you want to update the opening balances of service tax.

Enter the following Information in the Service Tax Opening form: Type: Transaction No.: Posting Date: Document Type: Document No.: Party Code: Service Tax Group Code: Service Tax Registration No.: Service Tax Base Amount: Service Tax Amount: Sale 331 (Selected from customer ledger entry) 31/03/07 credit memo G00071 10000 Adv. BJX118910100578 5000 600

eCess Amount: Payable/Receivable Amount: Service Tax %: Service tax eCess %: ST. Rec./Pay. (Interim)A/C: Bal. Account Type (Interim): Bal. Account No. (Interim):

12 -5612 12 2 5925 G/L Account 5925

Post the Service tax Opening Journal.

Viewing the Posted Transaction


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G/L Entry

The program creates the following G/L entry: Particulars Service Tax Payable Interim A/C To, Service Tax Payable Interim A/C Type DR CR Amount(Rs) 612 612

Service Tax Entry

The program will update service tax entry for the posted transaction with service tax registration number and other details. Document type will be credit memo and values will be in positive. At the time of making refund to customer from Navision, journals applying with customer entry system will create the service tax entry detail.

Note: User can also update the opening balances for Secondary and higher education CESS (SHE CESS)

Service Tax Opening in case of Interim & Payable (Sales credit memo & Refund)
Enter the opening balance in case of customer sales credit memo and the partial payment has been refunded to the customer and service tax has been calculated at the time of creating credit memo. Initially enter the opening balance of customer including service tax amount. Also enter the refund that have been paid to the customer and apply both entries before entering the opening balances of service tax. In Service Tax Opening form, select the type as Sale and select the transaction from the lookup list. After clicking the assist button, Customer Ledger Entry window opens, in which you can select the transaction for which you want to update the opening balances of service tax.

Enter the following Information in the Service Tax Opening form Type: Transaction No.: Posting Date: Document Type: Document No.: Party Code: Service Tax Group Code: Service Tax Registration No.: Service Tax Base Amount: Service Tax Amount: eCess Amount: Payable/Receivable amount: Service Tax %: Service tax eCess %: ST. Rec./Pay. (Interim)A/C: Bal. Account Type (Interim): Bal. Account No. (Interim): ST. Rec/Pay Account: Amount Received/Paid: Remaining Amount: Remaining eCess Amount: Bal. Account Type: Bal. Account No.: Sale 333 (Selected from customer ledger entry) 31/03/07 credit memo G00072 10000 Adv. BJX118910100578 5000 600 12 -5612 12 2 5925 G/L Account 5925 5923 2000 0 (Only applicable in purchase transaction) 0 (Only applicable in purchase transaction) G/L Account 5923

Post the Service Tax Opening Journal.

Viewing the Posted Transaction


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G/L Entry

The program creates the following G/L entry: Particulars Service Tax payable Interim A/C To, Service Tax payable Interim A/C Service Tax payable Service Tax payable Type DR CR DR CR Amount(Rs) 612 612 218.11 218.11

Service Tax Entry

The program will update service tax entry for the posted transaction with service tax registration number and other details. You can view the service tax entry details by clicking the lookup button in Amount Received/Paid field of the Service Tax Entry window.

The program will create service tax entry detail with positive values and document type will be refunded. At the time of making balance payment (refund) to the customer, the program will create the service tax entry details. Note: User can also update the opening balances for Secondary and higher education CESS (SHE CESS)

Service Tax Opening in case of Full Payment is Received from the Customer and the Customer Invoice is closed.
In case full payment is received from the customer and the customer invoice is closed, you can directly enter the opening balances of service tax and there is no need to create the customer balances. Service Tax Opening form

Navigation: Financial Management General Ledger Periodic Activity Service Tax Service Tax Opening

Enter the following Information in the Service Tax Opening form: Type: Transaction No.: Posting Date: Document Type: Document No.: Party Code: Service Tax Group Code: Service Tax Registration No.: Service Tax Base Amount: Service Tax Amount: eCess Amount: Payable/Receivable Amount: Sale Blank 31/03/07 Payment Op002 Blank or you can give the party code. Adv. BJX118910100578 -200000 -24000 -480 224480

Service Tax %: Service Tax eCess %: ST. Rec./Pay. (Interim)A/C: Bal. Account Type (Interim): Bal. Account No. (Interim): ST. Rec/Pay Account: Amount Received/Paid: Remaining Amount: Remaining eCess Amount: Bal. Account Type: Bal. Account No.:

12 2 5925 G/L Account 5925 5923 -224480 0 (Only applicable in case of purchase transaction) 0 (Only applicable in case of purchase transaction) G/L Account 5923

Post the Service Tax Opening Journal.

Viewing the Posted Transaction


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G/L Entry

The program creates the following G/L entry: Particulars Service Tax Payable Service Tax Payable Type DR CR Amount(Rs) 24480 24480

Service Tax Entry

The program will update service tax entry for the posted transaction with service tax registration number and other details. You can view the service tax entry details by clicking the lookup button in Amount Received/Paid field of the Service Tax Entry window.

The program will create service tax entry detail with negative values. Document type will be payment and the service tax amount will be available for payment in the Service Tax Payment form. Note: You can also enter the opening balances of document type as Refund in case all credit notes are closed.

Note: User can also update the opening balances for Secondary and higher education CESS (SHE CESS)

Service Tax Opening Balance in case of Advance Payment & Refund

Service Tax in case of Advance Payment is Paid to the Vendor


In case advance payment is paid to the vendor, user has to update the opening balance of vendor with a check mark in Serv. Tax on Advance Payment field in Vendor Ledger Entry.

Service Tax Opening form

Navigation: Financial Management General Ledger Periodic Activity Service Tax Service Tax Opening

Enter the following Information in the Service Tax Opening form Type: Transaction No.: Posting Date: Service Tax on Adv. Payment: Document Type: Document No.: Party Code: Service Tax Group Code: Service Tax registration No.: Service Tax Base Amount: Service Tax Amount: eCess Amount: Payable/Receivable amount: Service Tax %: Service Tax eCess %: ST. Rec./Pay. (Interim)A/C: Bal. Account Type (Interim): Bal. Account No. (Interim): ST. Rec/Pay Account: Amount Received/Paid: Remaining Amount: Remaining eCess Amount: Remaining Service Tax Amount: Remaining ST ECess Amount: Remaining ST Base Amount: Bal. Account Type: Bal. Account No.: Purchase 354 (Select from vendor ledger entry) 31/03/07 True Payment 3427 10000. Adv. BJX118910100578 10000 1200 24 11224 12 2 5926 G/L Account 5926 2998 0 0 0 1200 24 10000 G/L Account 2998

Post the Service Tax Opening Journal.

Viewing the Posted Transaction


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G/L Entry

The program creates the following G/L entry: Particulars Service Tax Receivable Interim Service Tax Receivable Interim Type DR CR Amount(Rs) 1224 1224

Service Tax Entry

The program will create the service tax entry with a check mark in the Serv. Tax on Advance Payment field and also will update the Remaining Serv. Tax Amount field, Remaining Serv. Tax eCess Amount field and Remaining Serv. Tax Base Amount field with values. Note: User can also update the opening balances for Secondary and higher education CESS (SHE CESS)

Service Tax in case of Refund Payment Paid; is Received from Vendor against Advance Payment.
In case refund payment paid; is received from the vendor against advance payment then you have to update the opening balance of vendor with a check mark in the Serv. Tax Advance Payment field of the Vendor Ledger Entry window. Service Tax Opening form

Navigation: Financial Management General Ledger Periodic Activity Service Tax Service Tax Opening

Enter the following Information in the Service Tax Opening form Type: Transaction No.: Posting Date: Service Tax on Adv. Payment: Document Type: Document No.: Party Code: Service Tax Group Code: Service Tax Registration No.: Service Tax Base Amount: Service Tax Amount: eCess Amount: Payable/Receivable Amount: Service Tax %: Service Tax eCess %: ST. Rec./Pay. (Interim)A/C: Bal. Account Type (Interim): Bal. Account No. (Interim): ST. Rec/Pay Account: Amount Received/Paid: Remaining Amount: Remaining eCess Amount: Remaining Service Tax Amount: Remaining ST ECess Amount: Remaining ST Base Amount: Bal. Account Type: Bal. Account No.: Purchase 356 (Select from vendor ledger entry) 31/03/07 True Refund 3428 10000. Adv. BJX118910100578 -10000 -1200 -24 -11224 12 2 5926 G/L Account 5926 2998 0 0 0 -1200 -24 -10000 G/L Account 2998

Post the Service Tax Opening Journal.

Viewing the Posted Transaction


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G/L Entry

The program creates the following G/L entry: Particulars Service Tax Receivable Interim Service Tax Receivable Interim Type DR CR Amount(Rs) 1224 1224

Service Tax Entry

The program will create the service tax entry with a check mark in the Serv. Tax on Advance Payment field and also will update the Remaining Serv. Tax Amount field, Remaining Serv. Tax eCess Amount field and Remaining Serv. Tax Base Amount field with values. Note: User can also update the opening balances for Secondary and higher education CESS (SHE CESS)

Service tax in case of Advance payment received from Customer


In case advance payment is received from the customer, you have to update the opening balance of customer with a check mark in the Serv. Tax on Advance Payment field of the Customer Ledger Entry window. Service Tax Opening form

Navigation: Financial Management General Ledger Periodic Activity Service Tax Service Tax Opening

Enter the following Information in the Service Tax Opening form Type: Transaction No.: Posting Date: Service Tax on Adv. Payment: Document Type: Document No.: Party Code: Service Tax Group Code: Service Tax Registration No.: Service Tax Base Amount: Service Tax Amount: eCess Amount: Payable/Receivable Amount: Service Tax %: Service Tax eCess %: ST. Rec./Pay. (Interim)A/C: Bal. Account Type (Interim): Bal. Account No. (Interim): ST. Rec/Pay Account: Amount Received/Paid: Remaining Amount: Remaining eCess Amount: Remaining Service Tax Amount: Remaining ST ECess Amount: Remaining ST Base Amount: Bal. Account Type: Bal. Account No.: Sale 358 (Select from customer ledger entry) 31/03/07 True Payment 3429 10000. Adv. BJX118910100578 -10000 -1200 -24 -11224 12 2 5925 G/L Account 5925 5923 0 0 0 -1200 -24 -10000 G/L Account 5923

Post the Service tax Opening Journal.

Viewing the Posted Transaction


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G/L Entry

The program creates the following G/L entry: Particulars Service Tax Payable Interim Service Tax Payable Interim Service Tax Payable Service Tax Payable Type DR CR DR CR` Amount(Rs) 1224 1224 1224 1224

Service Tax Entry

The program will create the service tax entry with a check mark in the Serv. Tax on Advance Payment field and also will update the Remaining Serv. Tax Amount field, Remaining Serv. Tax eCess Amount field and Remaining Serv. Tax Base Amount field with values You can view the service tax entry detail by clicking the assist button in Amount Received/Paid field in the Service Tax Entry window.

Service Tax Entry Detail

The program will create the service tax entry detail and the amount of service tax and ecess will be available for payment.

Note: User can also update the opening balances for Secondary and higher education CESS (SHE CESS)

Service tax in case of Refund payment made to the customer against advance payment.
In case refund payment is made to the customer against advance payment then you have to update the opening balance of customer with a check mark in the Serv. Tax Advance Payment field of the Customer Ledger Entry window. Service Tax Opening form

Navigation: Financial Management General Ledger Periodic Activity Service Tax Service Tax Opening

Enter the following Information in the Service Tax Opening form Type: Transaction No.: Posting Date: Service Tax on Adv. Payment: Document Type: Document No.: Party Code: Service Tax Group Code: Service Tax Registration No.: Service Tax Base Amount: Service Tax Amount: eCess Amount: Payable/Receivable Amount: Service Tax %: Service Tax eCess %: ST. Rec./Pay. (Interim)A/C: Bal. Account Type (Interim): Bal. Account No. (Interim): ST. Rec/Pay Account: Amount Received/Paid: Remaining Amount: Remaining eCess Amount: Remaining Service Tax Amount: Remaining ST ECess Amount: Remaining ST Base Amount: Bal. Account Type: Bal. Account No.: Sale 360 (Select from customer ledger entry) 31/03/07 True Refund 3430 10000. Adv. BJX118910100578 10000 1200 24 11224 12 2 5925 G/L Account 5925 5923 0 0 0 1200 24 10000 G/L Account 5923

Post the Service tax Opening Journal.

Viewing the Posted Transaction


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G/L Entry

The program creates the following G/L entry: Particulars Service Tax Payable Interim Service Tax Payable Interim Service Tax Payable Service Tax Payable Type DR CR DR CR` Amount(Rs) 1224 1224 1224 1224

Service Tax Entry

The program will create the service tax entry with a check mark in the Serv. Tax on Advance Payment field and also will update the Remaining Serv. Tax Amount field, Remaining Serv. Tax eCess Amount field and Remaining Serv. Tax Base Amount field with values. You can view the service tax entry detail by clicking the assist button in Amount Received/Paid field of the Service Tax Entry window.

Service Tax Entry Detail

The program will create the service tax entry detail. The amount of service tax and ecess will be available for the adjustment in Service Tax Payment form. Note: Second option to enter the opening balances in case of advance payment received from customer or paid to vendor, you can also use General Journal, Cash receipt/payment voucher, Bank receipt/payment voucher, payment journal or cash

receipt journal by making a transaction for vendor/customer with Serv. Tax on Advance payment field true and calculate service tax in the transaction itself. System will create vendor/customer ledger entries and also service tax entry and service tax entry details. You will need to keep same account in interim receivable/payable account in service tax setup. Note: User can also update the opening balances for Secondary and higher education CESS (SHE CESS)

Adjustments
Positive Adjustment in Quantities
Positive adjustment in Quantities (increase in the quantity) and reflected in RG 23 A Part I.
Navigation: Purchase Inventory & Costing Item Journal

To do the positive adjustment of quantity (Raw Material) and RG 23 A Part I to be affected fill the fields in Item Journal window as follows:

Posting Date: Entry Type: Document No.: Item No.: Description: Location: Quantity: Unit of Measurement: Unit Amount:

10/11/07 Positive Adjustment T00055 1000 Bicycle Blue 10 Pcs 350.595

Excise Entry: Amount: Post the Item Journal

True 3505.95

Viewing the Posted Transaction


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RG 23 A Part I Entry

In the above screen, you can see that the program has updated the following information based on the posted transaction through the Item Journal.

Posting date: Description: Base Unit of Measure: Quantity Received: Closing Stock: Location Code: Location ECC No.: Item No.: Document No.: Type: Quantity: Opening Stock:

10/11/07 Bicycle Pcs. 10 145 Blue BXBVS7543890 1000 T00055 Purchase 10 135

The program will update the closing stock as the quantity has been increased. Item Ledger Entry will also get affected with the entry type Positive Adjustment.

Positive adjustment in Quantities (increase in the quantity) and reflected in RG 23 C Part I.


Navigation: Purchase Inventory & Costing Item Journal

To do the positive adjustment of quantity (Capital Item) and RG 23 C Part I to be affected, fill the fields in the Item Journal window as follows: . Posting Date: Entry Type: Document No.: Item No.: Description: Location: Quantity: Unit of Measurement: Unit Amount: Excise Entry: 10/11/07 Positive Adjustment T00057 1001 (Capital Item) Touring Bicycle Blue 10 Pcs 350.595 True

Amount: Post the Item Journal

3505.95

Viewing the Posted Transaction


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RG 23 C Part I Entry

In the above screen, you can see that the program has updated the following information based on the posted transaction through the Item Journal.

Posting date: Description: Base Unit of Measure: Quantity Received: Closing Stock: Location Code: Location ECC No.: FA/Item No.: Document No.: Type: Quantity: Opening Stock: Product Type:

10/11/07 Touring Bicycle Pcs. 10 250 Blue BXBVS7543890 1001 T00057 Purchase 10 240 Item

The program will update the closing stock as the quantity has been increased. Item Ledger Entry will also get affected with the entry type Positive Adjustment.

Negative Adjustment in Quantities


Negative adjustment in Quantities (Decrease in the quantity) and reflected in RG 23 A Part I.
Navigation: Purchase Inventory & Costing Item Journal

To do the negative adjustment of quantity (Raw Material) and RG 23 A Part I to be affected, fill the fields in the Item Journal window as follows: . Posting Date: Entry Type: Document No.: 10/11/07 Negative Adjustment T00056

Item No.: Description: Location: Quantity: Unit of Measurement: Unit Amount: Excise Entry: Amount: Post the Item Journal

1000 Bicycle Blue 5 Pcs 350.595 True 1752.98

Viewing the Posted Transaction


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RG 23 A Part I Entry

In the above screen, you can see that the program has updated the following information based on the posted transaction through the Item Journal.

Posting date: Description: Base Unit of Measure: Quantity Sold: Closing Stock: Location Code: Location ECC No.: Item No.: Document No.: Type: Quantity: Opening Stock:

10/11/07 Bicycle Pcs. 5 140 Blue BXBVS7543890 1000 T00056 Sale -5 145

Quantity field will get affected with (-) sign and the closing stock will be decreased. Item Ledger Entry will also get affected with the entry type Negative Adjustment.

Negative adjustment in Quantities (Decrease in the quantity) and reflected in RG 23 C Part I.


Navigation: Purchase Inventory & Costing Item Journal

To do the negative adjustment of quantity (Capital Item) and RG 23 C Part I to be affected, fill the fields in the Item Journal window as follows: . Posting Date: 10/11/07 Entry Type: Negative Adjustment Document No.: T00058 Item No.: 1001 (Capital Item) Description: Touring Bicycle Location: Blue Quantity: 5 Unit of Measurement: Pcs Unit Amount: 350.595 Excise Entry: True

Amount: Post the Item Journal

1752.98

Viewing the Posted Transaction


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RG 23 C Part I Entry

In the above screen, you can see that the program has updated the following information based on the posted transaction through the Item Journal.

Posting date: Description: Base Unit of Measure: Quantity Sold: Closing Stock: Location Code: Location ECC No.: FA No./Item No.: Document No.: Type: Quantity: Opening Stock: Product Type:

10/11/07 Touring Bicycle Pcs. 5 245 Blue BXBVS7543890 1001 T00058 Sale -5 250 Item

Quantity field will get affected with (-) sign and the closing stock will be decreased. Item Ledger Entry will also get affected with the entry type Negative Adjustment.

Positive Adjustment related to RG 23 A Part II entries


Navigation: Financial Management General Ledger General Journal

To do the Positive adjustment in RG 23 A Part II, fill the fields in the Item Journal window as follows: . Posting Date: Document No.: Account No.: E.C.C. No.: Description: Excise Charge: Excise Record: BED Amount: Amount: 10/11/07 G00045 2993 BXBVS7543890 Cenvat Cr. Receivable Account True RG 23 A 5000 5000

Bal. Account Type: Bal. Account No.: Post the General Journal

G/L Account 9370 (Adjustment in RG 23 A/C Part II)

Viewing Posted Transaction


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G/L Entry

The program creates the following entry Particulars Cenvat Cr. Receivable Account To, Adjustment in RG 23 A/C Part II Type DR CR Amount(Rs) 5000 5000

The program has debited CENVAT Cr. Receivable Account and credited Adjustment in RG 23 A/C part II Account.

RG 23 A Part II Entry

The program will update RG 23 A Part II with BED Credit amount and Location ECC No. will also flow.

Note: User can also do the positive adjustment for Secondary and higher education CESS (SHE CESS)

Negative Adjustment related to RG 23 A Part II entries


Navigation: Financial Management General Ledger General Journal

To do the Negative adjustment in RG 23 A Part II fill the fields in the General Journal window as follows: . Posting Date: Document Type: Document No.: Account No.: E.C.C. No.: Description: Excise Charge: Excise Record: BED Amount: Amount: Bal. Account Type: Bal. Account No.: Post the General Journal 10/11/07 Credit Memo G00046 2993 BXBVS7543890 Cenvat Cr. Receivable Account True RG 23 A -2000 -2000 G/L Account 9370 (Adjustment in RG 23 A/C Part II)

Viewing Posted Transaction


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G/L Entry

The program creates the following entry: Particulars Cenvat Cr. Receivable Account To, Adjustment in RG 23 A/C Part II Type CR DR Amount(Rs) 2000 2000

The program has credited CENVAT Cr. Receivable Account and debited Adjustment in RG 23 A/C part II Account. Note: In case of negative adjustment in RG 23 A Part II, document type should be Credit Memo in the General Journal.

RG 23 A Part II Entry

The program will update RG 23 A Part II with BED Debit amount and Location ECC No. will also flow. Note: User can also do the negative adjustment for Secondary and higher education CESS (SHE CESS)

Positive Adjustment related to RG 23 C Part II entries


Navigation: Financial Management General Ledger General Journal

To do the Positive adjustment in RG 23 C Part II, fill the fields in the General Journal window as follows: Posting Date: Document No.: Account No.: E.C.C. No.: Description: Excise Charge: Excise Record: BED Amount: Amount: Bal. Account Type: Bal. Account No.: Post the General Journal 10/11/07 G00047 2993 BXBVS7543890 Cenvat Cr. Receivable Account True RG 23 C 10000 10000 G/L Account 9370 (Adjustment in RG 23 A/C Part II)

Viewing Posted Transaction


Navigation: Financial Management General Ledger History Navigate

G/L Entry

The program creates the following entry: Particulars Cenvat Cr. Receivable Account To, Adjustment in RG 23 A/C Part II Type DR CR Amount(Rs) 10000 10000

The program has debited CENVAT Cr. Receivable Account and credited Adjustment in RG 23 A/C part II Account.

RG 23 C Part II Entry

The program will update RG 23 C Part II with BED Credit amount and Location ECC No. will also flow. Note: User can also do the positive adjustment for Secondary and higher education CESS (SHE CESS)

Negative Adjustment related to RG 23 C Part II entries


Navigation: Financial Management General Ledger General Journal

To do the Negative adjustment in RG 23 C Part II, fill the fields in the General Journal window as follows: Posting Date: Document Type: Document No.: Account No.: E.C.C. No.: Description: Excise Charge: Excise Record: BED Amount: Amount: Bal. Account Type: Bal. Account No.: Post the General Journal 10/11/07 Credit Memo G00050 2993 BXBVS7543890 Cenvat Cr. Receivable Account True RG 23 C -5000 -5000 G/L Account 9370 (Adjustment in RG 23 A/C Part II)

Viewing Posted Transaction


Navigation: Financial Management General Ledger History Navigate

G/L Entry

The program creates the following entry: Particulars Cenvat Cr. Receivable Account To, Adjustment in RG 23 A/C Part II Type CR DR Amount(Rs) 5000 5000

The program has credited CENVAT Cr. Receivable Account and debited Adjustment in RG 23 A/C part II Account. Note: In case of Negative adjustment in RG 23 C Part II, document type should be Credit Memo in the General Journal.

RG 23 C part II Entry

The program will update RG 23 C Part II with BED Debit amount and Location ECC No. will also flow. Note: User can also do the negative adjustment for Secondary and higher education CESS (SHE CESS)

Positive Adjustment related to DSA


Navigation: Purchase Inventory & Costing Item Journal

To do the Positive adjustment in DSA, fill the fields in the Item Journal window as follows:. Posting Date: Entry Type: Document No.: Item No.: Description: Location: Quantity: Unit of Measurement: Post the Item Journal 18/01/07 Positive Adjustment T00064 70062 (In Item Card Replenishment, the Replenishment system should be Prod. Order) Finished Goods Blue 10 Pcs

Generate DSA to populate the Quantity in the DSA.

Navigation: Financial Management General Ledger Periodic Activity Excise Generate DSA

Enter the following information on the Item tab No.: 70062 (Item No. for which you want to update the DSA)

Enter the following information on the Options tab Location Code: Date: Click OK Blue (Select from lookup list) 18/01/07 (Enter the date in which you have posted the Item Journal)

Viewing Posted Transaction


DSA Entry

In the above screen, you can see that the program has updated the following information based on the posted transaction through the Item Journal. Posting date: Item No.: Opening Stock: Closing Balance: Location Code: Other Quantity: 18/01/07 70062 100 110 Blue 10

Other Quantity field has been updated with value 10 as positive adjustment has been done through the Item Journal. If you run the DSA report, Opening Balance field will show the value as 100, Other Qty field will show the value as 10 and Closing Balance field will show the value as 110.

Negative Adjustment related to DSA


Navigation: Purchase Inventory & Costing Item Journal

Enter the following information to do the Negative adjustment in DSA. Posting Date: Entry Type: Document No.: Item No.: 19/01/07 Negative Adjustment T00065 70062 (In Item Card Replenishment The program should be prod. Order) Finished Goods Blue 5 Pcs

Description: Location: Quantity: Unit of Measurement: Post the Item Journal

Generate DSA to populate the Quantity in the DSA.

Navigation: Financial Management General Ledger Periodic Activity Excise Generate DSA

Enter the following information on the Item tab No.: 70062 (Item No. for which you want to update the DSA)

Enter the following information on the Options tab Location Code: Date: Click Ok Blue (Select from lookup list) 19/01/07 (Enter the date in which you have posted the Item Journal)

Viewing Posted Transaction


DSA Entry

In the above screen, you can see that the program has updated the following information based on the posted transaction through the Item Journal. Posting date: Item No.: Opening Stock: Closing Balance: Location Code: Other Quantity: 19/01/07 70062 110 105 Blue -5

Other Quantity field has been updated with value as -5, as negative adjustment has been done through Item Journal. If you run the DSA report, Opening Balance field will show the value as 110, Other Qty field will show the value as -5, and Closing Balance field will show the value as 105.

VAT Adjustments
Note: For VAT Adjustments please refer the 13702(13705) _VAT Credit on Capital Goods, Setoff and Refund (User Guide)

Service Tax Adjustments


Service tax adjustments can be handled in case of increase or decrease of service tax and eCess percentages of posted Purchase Invoice/credit memo, Sale Invoice/credit memo and Payment/refund.

Setup for Service Tax Adjustment

Navigation: Financial Management General Ledger Setup Trial Codes Source Code Setup

Select the source code from lookup list in the Service Tax Opening field and in the Service tax adjustment field. Service Tax Batches

Navigation: Financial Management Setup Service Tax Service Tax Batches


Before entering the opening balances of service tax, you must create batch through Service Tax Batches window.

Create the service tax batches by entering the following fields: Fields Journal Batch Name Description Type Description Enter the code of the batch, you want to create (For example: Opening) Enter the description of the code you have entered. Select the type from the down button. The available options are: Opening and Adjustment. Select the source code from lookup list in this field.

Source code

Service Tax Adjustment form

Navigation: Financial Management General Ledger Periodic Activity Service Tax Service Tax Adjustment

New Interface has been provided to handle the adjustments related to service tax entries.

Fill in the fields according to these guidelines Fields Apply ST Entry No. Description Select the service tax entry number from the lookup list for which posted transaction you want to make adjustments. The program will automatically flow the type after selecting the service tax entry number. The available options are: Sales and Purchase. The program will show the posting date of the selected transaction. This field is editable. The program will show the document number of the selected transaction. This field is editable Enter the external document number in this field, in case of purchase type transaction. This field will show the party code of the selected transaction. The program will show the service tax group of selected transaction. The program will show the service tax registration number of selected transaction. The program will show the applied document type of the selected transaction. The program will show the applied document number of the selected transaction. The program will show the applied posting date of the selected transaction. The program will show the applied service tax base amount of the selected transaction. The program will show the applied service tax amount of the selected transaction.

Type

Posting date

Document No.

External Document No. Party Code Service tax group code Service tax registration No.

Applied Document Type Applied Document No.

Applied Posting Date Applied ST Base Amount

Applied Service Tax Amount

Fields Applied eCess amount Applied Service Tax % Applied Service Tax eCess % New Service Tax % New Service Tax eCess % Diff Service Tax Amount

Description The program will show the applied eCess amount of the selected transaction. The program will show the applied service tax % of the selected transaction. The program will show the applied service tax eCess % of the selected transaction. Enter the new service tax % in this field. Enter the new service tax eCess % in this field. The program will show the difference of service tax amount which arrives after entering the new service tax %. The program will show the diff of eCess amount which arrives after entering the new service tax eCess % The program will show the Interim account after selecting the transaction. This field shows the type of Balance account (Interim). This field shows the Balance account number (Interim). This field shows the Balance account type of the transaction. This field shows the Balance account number of the transaction.

Diff eCess Amount

ST. Rec./Pay. Account (Interim) Bal. Account Type (Interim) Bal. Account No. (Interim) Bal. Account Type Bal. Account No.

Note: You can post the transactions with available dimensions in the form on Line menu button.

Adjustment in case of Posted Purchase Invoice.


Initially there should be some posted purchase invoice with service tax calculation. Service Tax Adjustment form

Navigation:

Financial Management General Ledger Periodic Activity Service Tax Service Tax Adjustment
Click the Applied ST Entry No. field to select the service tax entry. Service tax entry window opens in which you can the select the entry.

Click OK.

The transaction that is selected was posted with services % 10 and eCess % 1, now you have to make service tax % as 12 and eCess % as 2. Enter the following fields in the service tax adjustment form.

Applied ST Entry No: Type: Posting Date: Document No.: External Document No.: Party Code: Service Tax Group Code: Service Tax Registration No.: Service Tax Base Amount: Applied Document Type: Applied Document No.: Applied Posting Date: Applied ST Base Amount: Applied Service Tax Amount: Applied eCess Amount: Applied Service Tax %: Applied Service Tax eCess %: New Service Tax %: New Service Tax eCess %: Diff Service Tax Amount: Diff Service Tax eCess Amount: ST. Rec./Pay. Account (Interim): Bal. Account Type (Interim): Bal. Account No. (Interim): Bal. Account Type: Bal. Account No.:

52 (Selected from service tax entry) Purchase 01/04/07 3432A ADJ004 10000. Adv. HXJ118910111357 10000 Invoice G00089 01/04/07 10000 1000 10 10 1 12 (New %) 2 (New%) 200 14 5926 Vendor 10000 G/L Account 2998

Post the Service tax Adjustment Journal.

Viewing the Posted Transaction


Navigation: Financial Management General Ledger History Navigate

G/L Entry

The program creates the following entry: Particulars Service Tax Receivable Interim Vendor Type DR CR Amount(Rs) 214 214

The program has created the GL entry with difference amount of service tax and eCess.

Service Tax Entry

The program will also create the new service tax entry with a check mark in the Adjusted field. Note 1: The user can also do the adjustment where he wants to decrease the service tax and eCess % and the same can be done for Purchase credit memo. The program will create the GL entries and service tax entry accordingly.

Note 2: The user can also do the multiple adjustments, in this case system will give the confirmation message and the original entry will be updated with the previous adjustments. Note: User can also do the adjustments for Secondary and higher education CESS (SHE CESS)

Adjustment in case of Posted Sales Invoice.


Initially there should be some posted sales invoice with service tax calculation. Service tax Adjustment form

Navigation: Financial Management General Ledger Periodic Activity Service Tax Service Tax Adjustment
Click the Applied ST entry No. field to select the service tax entry. Service tax entry window opens, in which you can select the entry.

Click OK.

The transaction that is selected is posted with services % 10 and eCess % 1, now you have to make service tax % as 12 and eCess % as 2. Enter the following fields in the service tax adjustment form. Applied ST entry No: Type: Posting Date: Document No.: External Document No.: Party Code: Service Tax Group Code: Service Tax Registration No.: Service Tax Base amount: Applied Document Type: Applied Document No.: Applied Posting Date: Applied ST Base Amount: Applied Service Tax Amount: Applied eCess Amount: Applied Service Tax %: Applied Service Tax eCess %: New Service Tax %: New Service Tax eCess %: Diff Service Tax Amount: Diff Service Tax eCess Amount: ST. Rec./Pay. Account (Interim): Bal. Account Type (Interim): Bal. Account No. (Interim): Bal. Account Type: Bal. Account No.: 54 (Selected from service tax entry) Sale 01/04/07 3433A ADJ003 10000. Adv. HXJ118910111357 10000 Invoice G00090 01/04/07 -10000 -1000 -10 10 1 12 (New %) 2 (New%) -200 -14 5925 Customer 10000 G/L Account 5923

Post the Service tax Adjustment Journal.

Viewing the Posted Transaction


Navigation:

Financial Management General Ledger History Navigate

G/L Entry

The program creates the following entry:

Particulars Service Tax Payable Interim Customer

Type CR DR

Amount(Rs) 214 214

The program has created the GL entry with difference amount of service tax and eCess.

Service Tax Entry

The program will also create the new service tax entry with a check mark in the Adjusted field. Note 1: User can also do the adjustment where he wants to decrease the service tax and eCess % and the same can be done for Sales credit memo. The program will create the GL entries and service tax entry accordingly.

Note 2: User can also do the multiple adjustments, in this case the program will give the confirmation message and the original entry will be updated with the previous adjustments. Note 3: User can also do the adjustments for the posted transactions where services account is debited and cash or bank is credited or services account is credited and cash or bank is debited. Note 4: If the Purchase Invoice and Sale Invoice have been utilized fully or partially (taken for credit or payment of service tax) then no adjustment is allowed. Note: User can also do the adjustments for Secondary and higher education CESS (SHE CESS)

Appendix
Opening Tax Entries The existing balances in the tax records (means Central Excise and Service tax) should be posted into the Tax Records as opening balance. Central Excise The journal from which one can post the: a. RG 23 A/C Part I (opening quantity particulars). b. DSA (opening quantity particulars). c. PLA (opening balance and components like BED, e-Cess, and so on). d. RG 23A/C Part II (opening balance of CENVAT credit and the components like BED, e-Cess, and so on). e. Cenvat Credit Deferred (opening balance of CENVAT credit and the components like BED, e-Cess, and so on). All the above should be recorded location wise with relevant location details like E.C.C No. For example: X Ltd. has a opening balance of 10 units with a Cenvat Credit Rs 10000 (Components: BED Rs 9000 and e-Cess Rs1000), PLA with Rs 5000 (Components: BED Rs 4500 and e-Cess Rs 500), Finished goods stock with 10 units and Cenvat Credit Deferred pertaining to 2 units of capital assets which were Installed on 12-10-2005 is Rs 6000 (Components: BED Rs 5800 and e-Cess Rs 200). The RG 23A Part I should be updated with opening quantity of 10 units

PLA should be updated with the opening balance of Rs 5000, the components BED Rs 4500 and e-Cess Rs 500 should also be updated DSA should be updated with opening quantity of 10 units RG 23 A part II should be updated with opening balance of Rs 10000, the components BED Rs 9000 and e-Cess Rs1000 should also be updated CENVAT Credit Deferred should be updated with opening balance of Rs 6000. The components: BED Rs 5800 and e-Cess Rs 200 should also be updated along with the entry in RG 23C Part I for 2 units, the date of Installation ( 12-10-2005) should also be updated.

Service Tax The journal from which one can post the: a. Opening balance of the service tax credit carried forward with the details of the period from which the balance is carried forward and the components like service tax and e-Cess. b. Opening balance of the service tax credit with details of components like service tax and e-Cess c. Opening balance of the service tax payable with details of components like service tax and e-Cess d. Opening balance of the service tax receivable with details of components like service tax and e-Cess. All the above should be recorded location wise with relevant location details like Service Tax Registration No.

For example: X Ltd. has opening balances as: I. Service tax credit carried forward Rs 1000 pertaining to the period ending on 1-4-2006 with components: Service Tax as Rs 800 and e-Cess as 200 II. Service tax credit of the period Rs 5000 with components as Service Tax Rs 4500 and e-Cess 500. III. Service tax payable of Rs 6000 with components as Service Tax Rs 5600 and e-Cess 400 IV. Balance receivable for the service tax of Rs 1200 with components as Service Tax Rs 900 and e-Cess 300

Service tax credit carried forward should be updated with Rs 1000 with the details of the carried forward from period ending 1-4-2006, Service Tax Rs 800 and e-Cess Rs 200. Service tax credit for the period should be updated with Rs 5000 with particulars of Service Tax Rs 4500 and e-Cess 500. Service tax of for the period should be updated with Rs 6000 with particulars of Service Tax Rs 5600 and e-Cess Rs 400 Service tax receivable should be updated with Rs 1200 with particulars of Service tax Rs 900 and e-Cess Rs 300

Adjustment of Tax Entries Option for the correction / modification / rectification / adjustment in the tax records (Central excise, Sales tax & VAT, Service tax) components of the tax records against any GL account and posting into respective tax records should be available. The reason of the correction / modification / rectification / adjustment may arise due to occurrence of any internal or external event. Internal event may be wastage, scraped mistakes and external event may be change in price or changes in provisions of the respective act. There are three types of adjustments as: positive adjustment, negative adjustment, and correction adjustment. Positive Adjustment: A positive adjustment is the increase in the tax liability, increase in the indirect tax due to increase in sale price or increase in the tax rate. For example: X Ltd. has initially charged its customer Y, service tax of Rs 200 @ 20%, the rate got changed to 22% before the receipt of the amount. The original entry was: Service tax receivable A/C Dr Customer Y A/C Cr Now the adjustment entry will be: Service Tax receivable A/C Dr Customer Y A/C Cr 200 200 20 20

In this case there should be provision to post the GL accounts Service Tax Receivable A/C and Customer A/C with Rs 20 along with tax records & tax components. Negative Adjustment: A negative adjustment is the decrease in the tax liability like decrease in the indirect tax due to decrease in sale price or decrease in the tax rate.

For example: X Ltd. has initially charged its customer Y service tax of Rs 200 @ 20%, the rate got changed to 15% before the receipt of the amount. The original entry was: Service Tax Receivable A/C Dr Customer Y A/C Cr Now the adjustment entry will be: Customer Y A/C Dr Service Tax Receivable A/C Cr 200 200 50 50

In this case there should be provision to post the GL accounts Service Tax Receivable A/C and Customer A/C with Rs 50 along with tax records & tax components.

Microsoft Business Solutions Navision 4.0- Voucher Interface

Table of Contents
Overview of Functionality ....................................................................................3 Detailed Setup...................................................................................................3 Comprehensive Functionality............................................................................4 Reports ..............................................................................................................4 Setups- Voucher Interface ....................................................................................5 No. Series ..........................................................................................................6 Company Information........................................................................................6 Location Card ..................................................................................................11 Source Codes ...................................................................................................17 Source Code Setup ..........................................................................................17 General Journal Templates .............................................................................19 Standard Text Codes .......................................................................................21 General ledger Setup ......................................................................................21 Transactions........................................................................................................23 Cash Receipt Voucher .....................................................................................23 Viewing the Ledger Entries..........................................................................27 Cash Payment Voucher....................................................................................33 Viewing the Ledger Entries..........................................................................37 Bank Receipt Voucher .....................................................................................41 Viewing the Ledger Entries..........................................................................45 Bank Payment Voucher ...................................................................................51 Viewing the Ledger Entries..........................................................................55 Contra Voucher ...............................................................................................61 Viewing the Ledger Entries..........................................................................65 Journal Voucher ..............................................................................................71 Viewing the Ledger Entries..........................................................................75 Reports................................................................................................................80 Day Book..........................................................................................................81 Cash Book ........................................................................................................86 Bank Book........................................................................................................89 Ledgers............................................................................................................91 Voucher Register .............................................................................................94 Appendix .............................................................................................................98

Overview of Functionality
Voucher Interface functionality covers the Indian Business scenario comprehensively. The functionality is a standard solution for the companies who are recording the transactions like Cash, Bank, and Journals. Following are the vouchers needed to record the transactions like Cash, Bank, and Journals for this functionality: Cash Receipt Voucher: Entries which affect the Cash accounts while receiving cash payments from Customers. Cash Payment Voucher: Entries which affect the Cash accounts while making cash payments to Vendors. Bank Receipt Voucher: Entries which affect the Bank accounts while receiving payments from Customers. Bank Payment Voucher: Entries which affect the Bank accounts while making payments to Vendors. Contra Voucher: Entries which affect the Cash and Bank Account together are termed as Contra Vouchers. For example, withdrawal from bank is one such transaction. Journal Voucher: Entries which are affecting neither the Cash Account nor the Bank account are termed as Journal Vouchers. Facility provided to enter the Cheque Number and Cheque Date in Bank Receipt, Bank Payment and Contra Vouchers.

Detailed Setup
Voucher Interface functionality contains a detailed setup, which is used to maintain the different types of vouchers and no. series location-wise.

Setup Area
No. Series

Description
Define different No. Series for different type of vouchers and for different locations. If the company is not using Location granule then map No. series with different type of voucher; also, with that voucher you can map the G/L account and Bank Account. Define No. Series with different types of vouchers and select the G/L account and Bank account with particular voucher.

Company Information

Location Card

Setup Area
Source Codes Source Code Setup

Description
On Company Initializing, Source codes will be inserted automatically. System will automatically assign Source code with different type of voucher. System will automatically creates Journal template for different type of vouchers and define the batches with Sub-Type. Define Standard Text codes which will available at the time of entering Narrations. Place a check mark in Activate Cheque No. field.

General Journal Templates Standard Text Codes General Ledger Setup

Comprehensive Functionality
The Voucher Interface functionality covers the following points: Different types of vouchers like Cash Receipt, Cash Payment, Bank Receipt, Bank Payment, Contra and Journal. Facility for recording the transactions for different locations with different no. series. Separate screen for different voucher types. Standard text selection in Narration. Provision to enter Narration for single line or multiple lines. Provision to enter Narration for Voucher. Provision to view and print posted vouchers with narrations. Provision to view and print Day Book containing all types of transactions. Provision to view and print Cash Book and Bank Book location-wise. Provision to view and print Control accounts with sub-ledgers details. Provision to enter cheque number and cheque date in Bank Receipt, Bank Payment and Contra Voucher and also cheque number and cheque date will flow in Bank Book and Posted Vouchers.

Reports
The following reports are provided to solve the needs of the Indian Business scenarios: Posted Vouchers Day Book Cash Book Bank Book Control Accounts (Ledgers)

Voucher Register

Setups- Voucher Interface


Following are the areas where setup is required: No. Series Company Information Location Card Source Codes Source Code Setup General Journal Templates Standard text Codes General Ledger Setup

No. Series
NAVIGATION:
FINANCIAL MANAGEMENT SETUP NO. SERIES

Define No. series for each type of voucher and for each location. Further a user can select the No. series in Company Information master and Location card.

Company Information
NAVIGATION:
ADMINISTRATION APPLICATION SETUP GENERAL COMPANY INFORMATION

Click the Company menu button, select - Voucher No. Series, to define the No. series for different types of vouchers.

After selecting the option Voucher No. Series in Company menu button, a new window is opened. Here a user can define the Posting No. Series for different vouchers.

Fields Descriptions: Fields


Sub Type

Description
Select the Sub Type from drop down button. The available options are: Cash Receipt Voucher, Cash Payment Voucher, Bank Receipt Voucher, Bank Payment Voucher, Contra Voucher and Journal

Fields

Description
Voucher. Select No. Series defined in the No. Series for different Sub type from the lookup list.

Posting No. Series

After assigning a Posting No. Series for all sub-types click the Voucher menu button and select the Account option.

After selecting the Account option, a new window will open where the user can define the accounts for different sub-types.

Select the Account type and define Account no. for the selected Account type.

Fields Description: Fields Description


Select the Account type from Drop down button; the options available are: G/L Account and Bank Account. If a user wants to select the Cash account then he or she should select G/L Account and if a user wants to select a Bank account then he or she should select Bank Account. Select the Account no. from Lookup list. G/L Account No. should be selected for the Account type.

Account Type

Account No.

Select the Account No. from G/L Account List and click Ok.

In the above screen, for Account Type G/L Account Account No. 2910 (cash account) has been selected. Note 1: The program will allow selection of G/L Account as Account type if the Sub Type is Cash Receipt Voucher or Cash Payment Voucher. Note 2: The program will allow selection of the Bank Account as Account Type if the Sub Type is Bank Receipt Voucher or Bank Payment Voucher. Note 3: The program will not allow the user to select any G/L Account in case of Contra voucher and Journal voucher. In case of a Contra voucher, a user has already selected Cash and Bank accounts in Cash Receipt/Payment voucher and Bank Receipt/Payment voucher. Hence, there is no need to define it again. If a user wants to make any transaction in Imprest account through Contra Voucher then he or she has to define the same account in Cash Receipt/Payment voucher. In Journal voucher, the program will

not allow selection of any G/L Account as in Journal voucher, neither the cash nor the bank accounts reflect. If a user is not using the Location Granule then the program picks the entire related information from the Company Information master.

Location Card
NAVIGATION:
WAREHOUSE MANAGEMENT SETUP LOCATIONS

Click the Location menu button to select the Voucher No. Series so as to define the Posting No. series for different type of vouchers for Particular Locations.

After selecting Voucher No. Series option in the Location menu button a new window is opened where a user can define the Posting No. Series for different vouchers.

Fields Descriptions: Fields


Sub Type

Description
Select the Sub Type from the drop down button; the available options are: Cash Receipt Voucher, Cash Payment Voucher, Bank Receipt Voucher, Bank Payment Voucher, Contra Voucher and Journal Voucher. Select No. Series defined in the No. Series for different Sub type from the Lookup list.

Posting No. Series

After assigning No. Series for all Sub Types click the Voucher menu button and select G/L Account option:

After selecting the G/L Account option, a new window will open where the user can define G/L Account for different Sub Types.

Select the Account type and define Account no. for the selected Account type.

Fields Description: Fields


Account Type

Description
Select the Account type from the drop down button; the options available are: G/L Account and Bank Account. If a user wants to select the Cash account then he or she should select G/L Account and if a user wants to select the Bank account then he/she should select Bank Account.

Account No.

Select the Account no. from Lookup list. G/L Account No. should be selected for the Account type.

Select the Account No. from G/L Account List and click Ok.

In the above screen for Account Type Bank Account, Account No GIRO (bank account) has been selected. Note 1: The program will allow selecting the G/L Account as Account type if the Sub Type is Cash Receipt Voucher or Cash Payment Voucher. Note 2: The program will allow selecting the Bank Account as Account Type if the Sub Type is Bank Receipt Voucher or Bank Payment Voucher. Note 3: The program will not allow a user to select any G/L Account in case of Contra voucher and Journal voucher. In case of Contra voucher, a user has already selected Cash and Bank accounts in Cash Receipt/Payment Voucher and Bank Receipt/Payment Voucher so there is no need to define it again. If the user wants to make any transaction in Imprest account through Contra Voucher then he or she has to define the same account in Cash Receipt/Payment Voucher. In Journal Voucher, the program will not allow selection of any G/L Account as in the Journal voucher neither the cash nor bank accounts will reflect. If a User is not using Location Granule then the entire related information has to be mentioned in the Company Information master. A User can define different types of Vouchers for different Locations with different No. Series.

Source Codes
NAVIGATION:
FINANCIAL MANAGEMENT SETUP TRIAL CODES SOURCE CODES

On Company Initializing, Source Codes will be inserted automatically.

Fields Description: Fields


Code Description

Description
Enter the Code for different type of vouchers like: BANKPYMT. Enter the Description of the defined Code.

Source Code Setup


NAVIGATION:
FINANCIAL MANAGEMENT SETUP TRIAL CODES SOURCE CODE SETUP

System will automatically assign the source code with different type of Vouchers.

On General Tab
Attach the following fields with Source codes:

Fields
Cash Receipt Voucher Cash Payment Voucher Contra Voucher Bank Receipt Voucher Bank Payment Voucher Journal Voucher

Source Codes
Select CASHRCPT from lookup list. Select CASHPYMT from lookup list. Select CONTRAVOU from lookup list. Select BANKRCPT from lookup list. Select BANKPYMT from look list. Select JOURNALVOUC from lookup list.

General Journal Templates


NAVIGATION:
FINANCIAL MANAGEMENT SETUP

GENERAL JOURNAL TEMPLATES

The system will automatically create the Journal templates for different vouchers and also select the Sub Type for each template. In the Sub Type field the available options are: Cash Receipt Voucher Cash Payment Voucher Bank Receipt Voucher Bank Payment Voucher Contra Voucher Journal Voucher

Click the Template menu button and select Batches to create different batches for different templates.

In the above screen, a batch has been created for Bank receipt template as Bank and the Location Blue has been defined. Also Sub Type Bank Receipt Voucher has been selected. Also, the No. Series has been defined for each batch.

Note 1: User has to create different batches for different Locations. Note 2: If the Location is mapped with particular batch with a Sub Type then the
program will allow the user to enter the transactions for the defined G/L accounts in the Location card with defined No. Series. If a user does not define any Location code in the

batch, then the program will take the G/L accounts and No. Series defined in the Company Information master.

Note 3: If user has not defined any Sub Type in the template then the particular batch in
the template will run as Standard Navision Journals.

Standard Text Codes


NAVIGATION: FINANCIAL MANAGEMENT SETUP GENERAL STANDARD TEXT CODES

Fields Description: Fields Code Description Description Enter the Code Enter the Description for the defined code

General ledger Setup


NAVIGATION: FINANCIAL MANAGEMENT SETUP GENERAL LEDGER SETUP

Fields Description: Fields Activate Cheque No. Description In case check mark is true then following will happen: - Document No will not be replaced by Cheque No while using Computer or Manual Cheque option. Cheque No & Cheque date will flow in Bank ledger Entry in case of Bank Receipt, Bank Payment and Contra Voucher. Cheque No. and Cheque Date will also flow in Check Ledger Entry in case of Manual or Computer Cheque is used.

In case check mark is false then following will happen, it will work like default navision.

Transactions

Cash Receipt Voucher


NAVIGATION: FINANCIAL MANAGEMENT CASH MANAGEMENT CASH RECEIPT VOUCHER

Select the batch in which the voucher should be posted. Here select Cash to post the transaction. In the above screen, the batch is attached with the Location Blue.

To make the transactions in Cash Receipt Voucher as received Cash payment from the Customer, fill the fields in Cash receipt Voucher as follows:

First Line
Posting Date: Document Type: Document No.: Account Type: Account No.: Description: Debit Amount: 01/04/06 Payment UCR/0010 G/L Account 2910 Cash 10000

Second Line
Posting Date: Document Type: Document No.: Account Type: Account No.: Description: Credit Amount: Narration 01/04/06 Payment UCR/0010 Customer 10000 The Cannon Group PLC 10000

Click Narration menu button to enter the Line Narration or Voucher Narration.

Click the Line Narration option to enter the narration for particular line. A new window will open.

On the header part, the program will show the Document No. On Line level enter the narration for the selected line. User can also select the Standard text from lookup list available on the line level.

Click the Voucher Narration option to enter the narration for Voucher. A new window will open.

On the header part, the program will show the Document No. for which the narration has been entered. On line level the narration can be entered for particular voucher. User can also select the Standard text from lookup list available on the line level.

Post the Journal.

Viewing the Ledger Entries

NAVIGATION: FINANCIAL MANAGEMENT GENERAL LEDGER HISTORY REGISTERS


The user can view the posted transaction - G/L Entry.

The program will create the following entries: For the document number: CASHRCPT014

Particulars Cash To, Customer

Type DR CR

Amount(Rs) 10000 10000

User can view the Line Narration and Voucher Narration entered at the time of posting of Cash receipt voucher.

Click the Entry menu button and select Narration option to view the voucher narration.

Click the Entry menu button and select Line Narration option to view the Line narration.

A user can also view the Narration in Customer Ledger entry. User can take the print of the poster voucher by clicking Print voucher option in Entry menu button.

In Options tab user can view the voucher with line narration by clicking the option Print Line narration

Program will by default show the filter options. Click Preview menu button to view the voucher or click Print menu button to print the voucher.

User can also print the voucher by click Post and Print option in posting menu button at the time of posting the voucher.

Note 1: The system allows posting of the Cash Receipt Voucher if the Debit amount contains those Cash accounts which are mapped with Location or Company Information master. Note 2: The system will not allow posting of the voucher if a user has selected Bank Account either in Debit side or in Credit side. A user can post the transaction when he or she receives amount in terms of Cash. Cash account should always be debited when using Cash Receipt voucher. Cash receipt Voucher can also be entered from the Receivables Section. A user can enter multiple vouchers in Cash Receipt Voucher with different posting dates. A user can also view the error texts from Test report before posting the voucher. A user can post any type of cash receipt transaction through Cash Receipt Voucher.

Cash Payment Voucher


NAVIGATION: FINANCIAL MANAGEMENT CASH MANAGEMENT CASH PAYMENT VOUCHER

Select the batch in which you want to post the voucher. Here select the batch as Cash to post the transaction. In the above screen, you can view the batch attached with Location Blue.

To make the transactions in Cash Payment Voucher as making Cash payment to the Vendor, fill the fields in Cash Payment Voucher as follows:

First Line
Posting Date: Document Type: Document No.: Account Type: Account No.: Description: Debit Amount: 01/04/06 Payment UCP/0029 Vendor 10000 Delhi Postmaster 10000

Second Line
Posting Date: Document Type: Document No.: Account Type: Account No.: Description: Credit Amount: Narration 01/04/06 Payment UCP/0029 G/L Account 2910 Cash 10000

Click Narration menu button to enter the Line Narration or Voucher Narration.

Click Line Narration option to enter the narration for particular line. A new window will open.

On the header part, the program will show the Document No. On the Line level, the narration can be entered for the selected lines. A user can also select the Standard text from lookup list available on the line level.

Click Voucher Narration option to enter the narration for the Voucher. A new window will open.

On the header part, the program will show the Document No. for which narration can be entered. On line level enter the narration for the particular voucher. A user can also select the Standard text from lookup list available on the line level.

Post the Journal.

Viewing the Ledger Entries


NAVIGATION: FINANCIAL MANAGEMENT GENERAL LEDGER HISTORY REGISTERS
The user can view the posted transaction - G/L Entry.

The program will create the following entries: For the document number: CASHPYMT032 Particulars Vendor To, Cash Type DR CR Amount(Rs) 10000 10000

A user can view the Line Narration and Voucher Narration entered at the time of posting Cash Payment voucher.

Click the Entry menu button and select Narration option to view the voucher narration.

Click the Entry menu button and select the Line Narration option to view the Line narration.

A user can also view the Narration in the Vendor Ledger entry. User can take the print of the poster voucher by clicking Print voucher option in Entry menu button.

In Options tab user can view the voucher with line narration by clicking the option Print Line narration

Program will by default show the filter options. Click Preview menu button to view the voucher or click Print menu button to print the voucher.

User can also print the voucher by click Post and Print option in posting menu button at the time of posting the voucher.

Note 1: The program will allow posting of the Cash Payment Voucher if the Credit amount contains those Cash accounts which are mapped with Location or Company Information master. Note 2: The program will not allow posting of the voucher if user has selected Bank Account either in Debit side or in Credit side. Users can post the transaction when he or she pays amount in terms of Cash. Cash account should always be Credit while using cash payment voucher. Cash Payment Voucher can also be entered from the payables Section. A user can enter multiple vouchers in Cash Payment Voucher with different posting dates. A user can also view the error texts from Test report before posting the voucher. A user can post any type of Cash Payment transaction through the Cash Payment Voucher.

Bank Receipt Voucher


NAVIGATION: FINANCIAL MANAGEMENT CASH MANAGEMENT BANK RECEIPT VOUCHER

Select the batch in which the voucher has to be posted. Select the Batch to post the transaction. In the above screen, see that batch as BANK is attached with the Location Blue.

To make the transactions in bank Receipt Voucher as receiving payment from the Customer by Cheque, fill the fields in bank receipt Voucher as follows:

First Line
Posting Date: Document Type: Document No.: Account Type: Account No.: Description: Cheque No.: Cheque Date: Debit Amount: 01/04/06 Payment UBR/0001 Bank Account GIRO Giro Bank 88888 01/04/06 20000

Second Line
Posting Date: Document Type: Document No.: Account Type: Account No.: Description: Cheque No.: Cheque Date: Credit Amount: 01/04/06 Payment UBR/0001 Customer 10000 The Cannon Group PLC. 88888 01/04/06 20000

Narration

Click the Narration menu button to enter the Line Narration or Voucher Narration. Click the Line Narration option to enter the narration for particular line. A new window will open.

On the header part, the program will show the Document No. On Line level enter the narration for the selected line. A user can also select the Standard text from lookup list available on the line level

Click Voucher Narration option to enter the narration for Voucher. A new window will open.

On the header part, the program system will show the Document No. for which the narration can be entered. On line level enter the narration for particular voucher. A user can also select the Standard text from lookup list available on the line level.

Post the Journal.

Viewing the Ledger Entries


NAVIGATION: FINANCIAL MANAGEMENT GENERAL LEDGER HISTORY REGISTERS
A user can view the posted transaction G/L Entry.

The program will create the following entries: For the document number: BANKRCPT002 Particulars Bank To, Customer Type DR CR Amount(Rs) 20000 20000

A user can view the Line Narration and Voucher Narration entered at the time of posting Bank receipt voucher.

Click the Entry menu button and select the Narration option to view the voucher narration.

Click the Entry menu button and select the Line Narration option to view the Line narration.

A user can also view the Narration for Customer ledger entry. User can take the print of the poster voucher by clicking Print voucher option in Entry menu button.

In Options tab user can view the voucher with line narration by clicking the option Print Line narration

Program will by default show the filter options. Click Preview menu button to view the voucher or click Print menu button to print the voucher.

User can also print the voucher by click Post and Print option in posting menu button at the time of posting the voucher.

Note 1: The program will allow posting the Bank Receipt Voucher if the Debit amount contains those Bank accounts which are mapped with Location or Company Information master. Note 2: The program will not allow posting the voucher if user has selected Cash Account either in Debit side or in Credit side. A user can post the transaction when he/she receives amount in terms of Cheque. Bank account should always be Debit while using bank receipt voucher. Bank Receipt Voucher can also be entered from receivables Section. A user can enter multiple vouchers in Bank Receipt Voucher with different posting dates. A user can also view the error texts from Test report before posting the voucher. A user can post any kind of Bank Receipt transaction through Bank Receipt Voucher. Cheque number and date will flow in Bank ledger entry after posting the voucher if Activate Cheque No. field is true in General Ledger Setup.

Bank Payment Voucher


NAVIGATION: FINANCIAL MANAGEMENT CASH MANAGEMENT BANK PAYMENT VOUCHER

Select the batch in which the voucher has to be posted. Select the Batch to post the transaction. In the above screen, see that batch as BANK is attached with Location Blue.

To make the transactions in Bank Payment Voucher as making payment to the Vendor by Cheque, fill the fields in bank payment Voucher as follows:

First Line
Posting Date: Document Type: Document No.: Account Type: Account No.: Description: Cheque No.: Cheque Date: Debit Amount: 01/04/06 Payment UBP/0001 Vendor 10000 Delhi post Master 55555 01/04/06 25000

Second Line
Posting Date: Document Type: Document No.: Account Type: Account No.: Description: Cheque No.: Cheque Date: Credit Amount: 01/04/06 Payment UBP/0001 Bank Account GIRO Giro Bank 55555 01/04/06 25000

Narration

Click the Narration menu button to enter the Line Narration or Voucher Narration. Click the Line Narration option to enter the narration for particular line. A new window will open.

On the header part, the program will show the Document No. On Line level enter the narration for the selected line. A user can also select the Standard text from lookup list available on the line level

Click the Voucher Narration option to enter the narration for Voucher. A new window will open.

On the header part, the program will show the Document No. for which the narration can be entered. On line level enter the narration for the particular voucher. A user can also select the Standard text from lookup list available on the line level.

Post the Journal.

Viewing the Ledger Entries


NAVIGATION: FINANCIAL MANAGEMENT GENERAL LEDGER HISTORY REGISTERS
User can view the posted transaction- G/L Entry

The program will create the following entries: For the document number: BANKPYMT001 Particulars Vendor To, Bank Type Amount(Rs) DR 25000 CR 25000

User can view the Line Narration and Voucher Narration entered at the time of posting Bank Payment Voucher.

Click Entry menu button and select Narration menu item to view the voucher narration.

Click Entry menu button and select Line Narration menu item to view the line narration.

User can also view the narration for the Vendor Ledger entry. User can take the print of the poster voucher by clicking Print voucher option in Entry menu button.

In Options tab user can view the voucher with line narration by clicking the option Print Line narration

Program will by default show the filter options. Click Preview menu button to view the voucher or click Print menu button to print the voucher.

User can also print the voucher by click Post and Print option in posting menu button at the time of posting the voucher.

Note 1: The program allows the posting of the Bank Payment Voucher if the Credit amount contains those Bank accounts which are mapped with Location or Company Information master. Note 2: The program allows the posting of the voucher if user selects Cash Account either in debit side or in credit side. User can post the transaction if the user pays amount in terms of cheque. Bank account is always Credit while using bank payment voucher. Bank Payment Voucher can also be entered from Payables section. User can enter multiple vouchers with different posting dates in Bank Payment Voucher. User can also view the error texts from Test report before posting the voucher. User can post any type of bank payment transaction through Bank Payment Voucher.

Cheque number and date will flow in Bank ledger entry after posting the voucher if Activate Cheque No. field is true in General Ledger Setup and Bank Payment Type filed in Bank Payment Voucher should be Blank. In case Bank Payment type is Manual Check and Computer check then user is advised to post the transaction in one line while taking Bal. Account as it helps in voiding the check ledger entry. If the Activate Cheque No. is true in General Ledger Setup then while making payment through Bank Payment voucher system will flow the Cheque number and date in Bank Ledger entry and Check Ledger entry respectively.

Contra Voucher
NAVIGATION: FINANCIAL MANAGEMENT CASH MANAGEMENT CONTRA VOUCHER

Select the batch in which you want to post the voucher. In the above screen batch as CONTRA is selected to post the transaction. You can see that batch is attached with location Blue.

To make the transactions in Contra Voucher as Withdrawing cash from bank, fill the fields in Contra Voucher as follows:

First Line
Posting Date: Document Type: Document No.: Account Type: Account No.: Description: Cheque No.: Cheque Date: Debit Amount: 01/04/06 Payment UC/0001 G/L Account 2910 Cash 03333 01/04/06 10000

Second Line
Posting Date: Document Type: Document No.: Account Type: Account No.: Description: Cheque No.: Cheque Date: Credit Amount: 01/04/06 Payment UC/0001 Bank Account GIRO Giro Bank 03333 01/04/06 10000

Narration

Click Narration menu button to select either the Line Narration or Voucher Narration menu item. Click Line Narration menu item to enter narration for the particular line. Now Line Narration window opens.

On the header part, the program shows the document number On line level user can enter the narration for the selected line. User can also select the standard text from the lookup list.

Click Voucher Narration menu item to enter the narration for voucher. Now Voucher Narration window opens.

On the header part, the program shows the document number for which user can enter the narration.

On line level, user can enter narration for the particular voucher. User can also select the standard text from the lookup list.

Post the Journal

Viewing the Ledger Entries


NAVIGATION: FINANCIAL MANAGEMENT GENERAL LEDGER HISTORY REGISTERS
User can view the posted transaction- G/L Entry

The program creates the following entries for the document number: CT000155 Particulars Cash To, Bank Type Amount(Rs) DR 10000 CR 10000

User can view the Line Narration and Voucher Narration entered at the time of posting Bank Payment Voucher.

Click Entry menu button and select Narration menu item to view the voucher narration.

Click Entry menu button and select Line Narration menu item to view the line narration.

User can also view the narration for the Bank Ledger Entry. User can take the print of the poster voucher by clicking Print voucher option in Entry menu button.

In Options tab user can view the voucher with line narration by clicking the option Print Line narration

Program will by default show the filter options. Click Preview menu button to view the voucher or click Print menu button to print the voucher.

User can also print the voucher by click Post and Print option in posting menu button at the time of posting the voucher.

Note 1: The program allows the posting of Contra Voucher if the credit amount and debit amount contain those Bank /Cash accounts which are mapped with Location / Company Information Master against Cash Book or Bank Book. Note 2: The program does not allows the posting of the voucher if user selects any other account apart from Cash or Bank Account either in Debit side or in Credit side. User can post the transaction when the user wants to withdraw cash from bank, deposit cash in bank, transfer amount from one cash account to another cash account within the location, transfer amount from one bank account to another bank account within the location. The program posts the contra voucher only if the cash and bank accounts are mapped with Cash Receipt, Cash Payment, Bank Receipt, Bank Payment Voucher. User can enter multiple vouchers with different posting dates in Contra Voucher. User can also view the error texts from Test report before posting the voucher. Cheque number and date will flow in Bank ledger entry after posting the voucher if Activate Cheque No. field is true in General Ledger Setup and Bank Payment Type filed in Contra Voucher should be Blank. In case Bank Payment type is Manual Check and Computer check then user is advised to post the transaction in one line while taking Bal. Account as it helps in voiding the check ledger entry. If the Activate Cheque No. is true in General Ledger Setup then while making payment through Contra voucher system will flow the Cheque number and date in Bank Ledger entry and Check Ledger entry respectively. Note: If user wants to transfer Cash from one location to another location then he/she should have creates two different Cash receipt/payment voucher in the following way: Suppose from Location Blue you want to transfer Rs. 10000 cash to location Green Cash Payment Voucher (Blue Location) Particulars Location Green To, Cash Type Amount(Rs) DR 10000 CR 10000

Cash Receipt Voucher (Green Location)

Particulars Cash To, Location Blue

Type Amount(Rs) DR 10000 CR 10000

Journal Voucher
NAVIGATION: FINANCIAL MANAGEMENT GENERAL LEDGER JOURNAL VOUCHER

Select the batch in which you want to post the voucher. In the above screen batch as: JOURNAL is selected to post the transaction. In the above screen you can see that batch is attached with location Blue.

To make the transactions in Journal Voucher as booking expense and crediting vendor, fill the fields in Journal Voucher as follows:

First Line
Posting Date: Document Type: Document No.: Account Type: Account No.: Description: Debit Amount: 01/04/06 Invoice UJ/0001 G/L Account 8410 Advertisement 50000

Second Line
Posting Date: Document Type: Document No.: Account Type: Account No.: Description: Credit Amount: 01/04/06 Invoice UJ/0001 Vendor 10000 Delhi Postmaster 50000

Narration

Click Narration menu button to select either the Line Narration or Voucher Narration. Click Line Narration menu item to enter the narration for particular line. Now the Line Narration window opens.

On the header part, the program shows the document number On Line level user can enter the narration for the selected line. User can also select the standard text from the lookup list.

User can click Voucher Narration menu item to enter the narration for voucher. After that Voucher Narration window opens.

On the header part, the program will show the document number for which user can enter the narration. On line level, user can enter the narration for particular voucher. User can also select the standard text from the lookup list.

Post the Journal

Viewing the Ledger Entries


NAVIGATION: FINANCIAL MANAGEMENT GENERAL LEDGER HISTORY REGISTERS
User can view the posted transaction- G/L Entry

The program creates the following entries for the document number: JOURNAL0006 Particulars Advertisement To, Vendor Type Amount(Rs) DR 50000 CR 50000

User can view the Line Narration and Voucher Narration entered at the time of posting Bank Payment Voucher.

Click Entry menu button and select Narration menu item to view the voucher narration.

Click Entry menu button and select Line Narration menu item to view the line narration.

User can also view the narration for the Customer / Vendor Ledger Entry. User can take the print of the poster voucher by clicking Print voucher option in Entry menu button.

In Options tab user can view the voucher with line narration by clicking the option Print Line narration

Program will by default show the filter options. Click Preview menu button to view the voucher or click Print menu button to print the voucher.

User can also print the voucher by click Post and Print option in posting menu button at the time of posting the voucher.

Note 1: The program allows the posting of the Journal Voucher if the credit amount and debit amount do not contain those Bank /Cash accounts which are mapped with Location or Company Information Master against Cash Book or Bank Book. Note 2: The program does not allow the posting of the voucher if user has selected Cash or Bank either in debit side or in credit side. User can post the transactions in Journal Voucher when the user wants to make invoice for vendor/customer, any provisional entry, booking expense, calculating TDS/TCS/Service Tax, and so on. User can enter multiple vouchers in Journal Voucher with different posting dates. User can also view the error texts from Test report before posting the voucher. User can post any type of journal transaction through Journal Voucher.

Reports

Day Book
NAVIGATION: FINANCIAL MANAGEMENT GENERAL LEDGER REPORTS ENTRIES DAY BOOK

User can generate the Day Book for all types of vouchers for a specific date.

G/L Entry tab Fields Description: Fields


Posting Date Document No. Global Dimension 1 Code

Description
Enter the posting date for which Day Book to be printed. Enter the document number for which Day Book to be printed. Enter the Global Dimension 1 Code for which transactions have been posted and Day Book to be generated. Enter the Global Dimension 2 Code for which transactions have been posted and Day Book to be generated.

Global Dimension 2 Code

Options tab Fields Description: Fields


Line Narration Voucher Narration

Description
Place a check mark in this field if Line Narration is to be printed. Place a check mark in this field if Voucher Narration is to be printed.

Click Preview button if user wants to view the Day Book. User can click Print button if user wants to take printout.

Cash Book
NAVIGATION: FINANCIAL MANAGEMENT CASH MANAGEMENT REPORTS CASH BOOK
User can generate the Cash Book according to the locations for all types of cash transactions.

G/L Account tab Fields Description: Fields


No.

Description
Enter the cash account number. The program generates the Cash Book only for those cash accounts which are mapped with Cash Receipt/Payment Book in the Location Card /Company Information. Enter the date for which Cash Book to be generated. Enter the Global Dimension 1 Code for which transactions have been posted and Cash Book to be generated.

Date Filter Global Dimension 1 Code

Fields
Global Dimension 2 Code

Description
Enter the Global Dimension 2 Code for which transactions have been posted and Cash Book to be generated.

Option Tab Fields Description: Fields


Print Details

Description
Place a check mark in this field if details of cash voucher in Cash Book are to be printed. Place a check mark in this field if Line Narration is to be printed Place a check mark in this field if Voucher Narration is to be printed. Select the location code from the lookup list for which Cash Book is to be generated.

Print Line Narration Print Voucher Narration Location Code

User has to click Preview button if user wants to view the Cash Book. User has to click Print button if user wants to take the printout.

Bank Book
NAVIGATION: FINANCIAL MANAGEMENT CASH MANAGEMENT REPORTS BANK BOOK

Bank Account Tab Fields Description: Fields


No.

Description
Enter the bank account number. The program generates the Bank Book only for those bank accounts which are mapped with Bank Receipt/Payment book in the Location Card/ Company Information. Enter the date for which Bank Book is to be generated. Enter the Global Dimension 1 Code for which transactions have been posted and Bank Book is to be generated. Enter the Global Dimension 2 Code for which transactions have been posted and Bank Book is to be generated.

Date Filter Global Dimension 1 Code

Global Dimension 2 Code

Option tab Fields Description: Fields


Print Details

Description
Place a check mark in this field if details of bank vouchers in Bank Book are to be printed. Place a check mark in this field if Line Narration is to be printed. Place a check mark in this field if Voucher Narration is to be printed. Select the location code from the lookup list for which Bank Book is to be generated.

Print Line Narration Print Voucher Narration Location Code

User has to click Preview button if user wants to view the Bank Book. User has to click Print button if user wants to take the printout.

Ledgers
NAVIGATION: FINANCIAL MANAGEMENT GENERAL LEDGER REPORTS ENTREIS LEDGERS
User can generate the Control accounts with sub-ledger details.

G/L Account Tab Fields Description: Fields


No. Date Filter Global Dimension 1 Code

Description
Enter the G/L account number for which you want to print the report Enter the Date for which you want to generate Ledgers. Enter the Global Dimension 1 Code for which you have posted the transactions and want to generate Ledgers. Enter the Global Dimension 1 Code for which you have posted the transactions and want to generate Ledgers.

Global Dimension 2 Code

Options Tab Fields Description: Fields


Print Details Print Line Narration Print Voucher Narration Location Code

Description
Place a check mark if you want to print details of vouchers in Ledgers Place a check mark if you want to print Line Narration. Place a check mark if you want to print Voucher Narration. Select the Location Code from Lookup list for which you want to generate Ledgers

Click Preview button if you want to view the Ledger or Click Print button if you want to take printout.

Voucher Register
NAVIGATION:

FINANCIAL MANAGEMENT GENERAL LEDGER REPORTS ENTREIS VOUCHER


REGISTER

User can generate the Vouchers for Complete register.

G/L Register Tab Fields Description: Fields


No.

Description
Enter the Register number from lookup list for which you want to print the vouchers.

Options Tab Fields Description: Fields


Print Line Narration.

Description
Place a check mark if you want to print the voucher with line narration.

Click Preview button if you want to view the Voucher Register or Click Print button if you want to take printout.

Appendix
Cash Receipt Voucher
Rs. 10000 in cash is received from customer Lotus Powers Ltd. Post the transaction in Cash Receipt Voucher.

Solution:
Cash account should be debited and Customer account should be credited in the following way: Particulars Type Amount(Rs) Cash DR 10000 To, Lotus Powers Ltd CR 10000

Cash Payment Voucher


Rs. 5000 paid to vendor Shire Enterprises in cash. Post the transaction in Cash Payment Voucher.

Solution:
Cash account should be credited and vendor account should be debited in the following way: Particulars Shire Enterprises To, Cash Type Amount(Rs) DR 5000 CR 5000

Bank Receipt Voucher


A cheque of Rs. 50000 is received from customer Lotus Powers Ltd.. Post the transaction in Bank Receipt Voucher.

Solution:
Bank account should be debited and customer account should be credited in the following way:

Particulars Type Amount(Rs) Bank DR 50000 To, Lotus Powers Ltd CR 50000

Bank Payment Voucher


Cheque for Rs. 50000 issued to vendor Shire Enterprises. Post the transaction in Bank Payment Voucher.

Solution:
Vendor account should be debited and bank account should be credited in the following way: Particulars Shire Enterprises To, Bank Type Amount(Rs) DR 50000 CR 50000

Contra Voucher
Rs. 50000 in cash is deposited in bank account City Bank. Post the transaction in Contra Voucher.

Solution:
Bank account should be debited and cash account should be credited in the following way: Particulars City Bank To, Cash Type Amount(Rs) DR 50000 CR 50000

Journal Voucher
A bill has been received from vendor Tours and Travels Ltd against traveling expenses for Rs. 15000. Post the transaction in Journal Voucher.

Solution:
Traveling charges should be debited and vendor account should be credited in the following way: Particulars Type Amount(Rs) Traveling charges DR 15000 To, Tours and Travels Ltd. CR 15000

Microsoft Business Solutions Navision 4.0 Workflow Mail Administrator

Table of Contents
Workflow Mail Administrator .................................................................................3 Company Information............................................................................................3 Mail Administrator: ................................................................................................4

Workflow Mail Administrator


Workflow Mail Administrator (Workflow Manager) can monitor the user tasks which have been popped up for authorization. Workflow Manager can also view tasks which have been approved or rejected or are in the process of authorization. Workflow Manager has to be defined in Company information card.

Company Information
Navigation: Administration Application Setup General Company Information

Choose the Workflow Manager and Check the Mail Required Field in Workflow Tab. You have to Login into the System using this User Name defined as Workflow Manager.

Mail Administrator:
Navigation: Administration IT Administration Workflow Mail Administrator

This form shows the User tasks. The Workflow Manager needs to Start the Service for the Workflow and Monitor the Tasks. The Notification for the Pending Tasks would be sent to the relevant Level defined in the Workflow Template Setup through mail or user tasks.

Microsoft Business Solutions Navision 4.0 Unrealized Profit

Table of Contents
Inventory Setup.....................................................................................................3 Item Card: .............................................................................................................3 Transaction ...........................................................................................................4 Transfer Order...................................................................................................4 Viewing the Posted Transaction (Transfer Shipments)..................................5 Viewing the Posted Transaction (Transfer Receipts).....................................8

Inventory Setup
Navigation: Financial Management Setup Posting Setup Inventory Setup

Filed Description Field


Unrealized Profit Account

Description
Choose the GL account which gets debited or credited if the transfer price in the transfer order line is different from unit cost of the item to be transferred.

Item Card:
Navigation: Purchase Planning Items

In the Item card of item no 1100, the unit cost is 129.671. If the transfer price is more or less than the unit cost then the amount will be debited or credited to Unrealized Profit Account.

Transaction
Transfer Order
Navigation: Purchase Order Processing Transfer Orders

In the above window press F3 to insert new document and enter the following information in Transfer Order header:

No. Transfer-from Code Transfer-to Code Posting Date In-Transit Code

1149
BLUE

GREEN 28/06/07 OUT. LOG.

Enter the following details in the transfer order line: Item No. Quantity Transfer Price Amount 1100 10 1000 (In the Item card of item no. 1100 Unit cost is 129.671) 10000

Post the document as Ship and Receive.

Viewing the Posted Transaction (Transfer Shipments)

Navigation: Warehouse History Posted Transfer Shipments

Click Navigate to view the details of the entry that have been posted.

G/L Entry

The above window displays the affected G/L Accounts as below: Description Finished Goods Inventory Adjmt., Retail Finished Goods Inventory Adjmt., Retail Finished Goods Unrealized Profit Account Dr/Cr Dr Cr Cr Dr Dr Cr Amount 1296.71 1296.71 1296.71 1296.71 8703.29 8703.29

Program has credited Unrealized Profit account for amount 8703.29. In the item card Unit Cost is 129.671 and on transfer order line we have defined 1000 in transfer price field. Quantity was 10 and Amount was 10000. Difference of 8703.29 (10000-1296.71) has been credited to Unrealized Profit Account.

Viewing the Posted Transaction (Transfer Receipts)


Navigation: Warehouse History Posted Transfer Receipts

Click Navigate to view the details of the entry that have been posted.

G/L Entry

The above window displays the affected G/L Accounts as below: Description Finished Goods Inventory Adjmt., Retail Finished Goods Inventory Adjmt., Retail Finished Goods Unrealized Profit Account Dr/Cr Dr Cr Cr Dr Cr Dr Amount 1296.71 1296.71 1296.71 1296.71 8703.29 8703.29

Program has debited Unrealized Profit account for amount 8703.29. Note: Similarly if in the transfer order, transfer price is less than the unit cost then program will debit the unrealized profit account with the difference amount in the shipping location and credit the unrealized profit account with the difference amount in the receiving location.

Microsoft Business Solutions Navision 4.0- Excise Loading on Inventory

Table of Contents
Overview...............................................................................................................3 Detailed Setup...................................................................................................3 Comprehensive Functionality ............................................................................3 Setup Required .....................................................................................................3 Excise Setup: ....................................................................................................3 E.C.C. Nos. .......................................................................................................4 Excise No. Series: .............................................................................................4 Claim Setoff:......................................................................................................6 Structure:...........................................................................................................7 Transactions .........................................................................................................7 Excise Amount Loading on Inventory in case Item is Non CENVATABLE. .......7 Viewing the Posted Transaction ....................................................................9 Excise Amount Loading on Inventory in case Duties Paid on Goods are not available for the CENVAT Credit. ....................................................................11 Viewing the Posted Transaction ..................................................................13 Excise Amount Loading on Inventory where Item is CENVATABLE ...............18 Viewing the Posted Transaction ..................................................................20 Updating of RG register in case of Excise Exempted Goods ..........................22 Viewing the Posted Transaction ..................................................................23 Excise Loading on Inventory when Transferring Goods from CENVATABLE Location to Non CENVATABLE Location ........................................................26 Viewing the Posted Transaction (Transfer Shipments)................................27 Viewing the Posted Transaction (Transfer Receipts)...................................30 Excise Loading on Inventory when Transferring Goods from CENVATABLE Location to CENVATABLE Location................................................................32 Viewing the Posted Transaction (Transfer Shipments)................................33 Viewing the Posted Transaction (Transfer Receipts)...................................36 Transfer of Exempted Goods from CENVATABLE Location to CENVATABLE Location...........................................................................................................37 Viewing the Posted Transaction (Transfer Shipments)................................39 Viewing the Posted Transaction (Transfer Receipts)...................................42 Excise, VAT and Charges loading on inventory using Expected Cost through Purchase Order. ..............................................................................................45 Appendix.............................................................................................................45

Overview
The Excise Loading on Inventory functionality enables you to load excise duties on the inventory. The excise duties are not allowed as credit under CENVAT Credit Rules.

Detailed Setup
Following setup is required to enable the Excise Loading on Inventory functionality.

Setup Area Excise Setup Structure

Description You should setup the excise posting setup and other excise setup. Define structure to calculate the excise amount.

Comprehensive Functionality
Following comprehensive functionalities are covered under Excise Loading on Inventory: Identify at the time of purchase that the CENVAT credit is not available and load the same on the purchases. Identify at the time of transfer from manufacturing location to manufacturing location that the CENVAT credit is not available and load the same on the inventory. Update the RG 23 A/C Part I registers in case of excise exempted goods.

Setup Required
Following setups are required for Excise Loading on Inventory functionality: Excise Setup E.C.C Nos. Excise No. Series Claim Setoff Structure

Excise Setup:
Navigation:

Financial Management Setup Excise Posting Setup

In combination of Excise Business Posting Group and Excise Product Posting Group enter the percentages and formula for the calculation of excise amount and provide the G/L Account code to affect the financial part.

E.C.C. Nos.
Navigation: General Ledger Setup Excise E.C.C. Nos.

In case more than one location exist, then you can define location-wise ECC number, otherwise one ECC number can be defined and mapped with company in the Company Information setup.

Excise No. Series:


Navigation:

Financial Management Setup Excise Excise No. Series

Fill in the fields according to these guidelines: Field Type E.C.C. No. Description No. Series Description Select the RG register type from the dropdown list. Select the relevant ECC number from the list. Enter a description for the reference. Select the number series that you have created.

Claim Setoff:
Navigation: Financial Management Setup Excise Claim Setoff

The Claim Setoff window allows you to define the eligibility criteria between excise duty components to setoff the liability against the available excise credit as per excise duty components. The column headings are denoting the excise credit components and rows are denoting excise liability components. The available credit of a particular duty component can be used when the excise duty component are defined in the rows under a particular column heading.

Structure:
Navigation: Financial Management Setup Structure Structure

Define a structure that shows the excise.

Transactions
Excise Amount Loading on Inventory in case Item is Non CENVATABLE.
Purchase Order

Navigation: Purchase Order Processing Orders

To calculate excise, fill the fields in the Purchase Order form as follows: On the Header: Buy from Vendor No: Structure: On the Line: Type: No.: Description: Quantity: Direct Unit Cost: Line Amount: Calculate Structure Press F9 to view the excise amount Post the Order. Item 70000 (In the Item Card, Excise Accounting Type should be Without CENVAT) Side Panel 10 1000 10000 10000 New Excise

Viewing the Posted Transaction


Navigation: Purchases History Posted Invoice

G/L Entry

The program creates the following entry: Particulars Purchase Vendor Raw Material Direct Cost Applied, Raw mat. Type DR CR DR CR Amount(Rs) 11630 11630 11630 11630

The program will load the excise amount on inventory and will not create any excise entry. The program will calculate the excise amount according to the posting setup, but after posting the purchase order, the program will load the excise amount on inventory and will not create any RG 23 A/C Part I and II entry. Note 1: You can also post the transaction from the Purchase Invoice. Note 2: You can post the same transaction for the capital Item.

Excise Amount Loading on Inventory in case Duties Paid on Goods are not available for the CENVAT Credit.
Handel led through Charge (Item) Purchase Order

Navigation: Purchase Order Processing Orders

To calculate excise, fill the fields in the Purchase Order form as follows: On the Header: Buy from Vendor No: Structure: 10000 New Excise

On the First Line: Type: No.: Description: Quantity: Direct Unit Cost: Line Amount: On the Second Line: Type: No.: Description: Quantity: Direct Unit Cost: Line Amount: Calculate Structure Press F9 to view the excise amount Suggest item Charge Assignment for Charge (Item) with receipt line in Item charge Assignment window. Post the Order. Charge (Item) Other Duty (Excise Product posting group should be nil) Other Duty 1 100 100 Item 1000 (In the Item Card, Excise Accounting Type should be With CENVAT) Bicycle 10 1000 10000

Viewing the Posted Transaction


Navigation:
Purchases History Posted Invoice

G/L Entry

The program creates the following entry: Particulars Purchase Purchase Type DR DR Amount(Rs) 100 10000 1630 11730 10000 10000 100 100

CENVAT Cr. DR Receivable Vendor CR Finished Goods Direct Cost Applied, Retail Finished Goods Direct Cost Applied, Retail DR CR DR CR

In this case, the program will load the charge (item) amount on inventory. On the purchase line we have mentioned Rs. 100 as direct cost and the quantity was 1, and there was no excise product posting group attached with charge (item). After posting the program has load the amount on inventory. The program will debit the CENVAT Cr Receivable account for cenvatable item (first line in the Purchase Order) and will create the RG 23 A Part I and II entries.

RG 23 A Part I Entry

RG 23 Part II Entry

Note 1: You can also post the transaction from the Purchase Invoice. Note 2: You can post the same transaction for the capital Item. Note 3: This case can also be handled though structure charges. You need to select charges in the Structure, place a check mark in the Loading on Inventory field, and mention the account number; where charges amount has to be debited.

Excise Amount CENVATABLE


Purchase Order

Loading

on

Inventory

where

Item

is

Navigation: Purchase Order Processing Orders

Field Description Field Excise Loading on Inventory Description Place a check mark in this field if you want to load the excise amount on inventory. The program will not crate any RG 23 A/C Part I and II entries if a check mark has been placed in this field on the purchase line.

To calculate excise, fill the fields in the Purchase Order form as follows: On the Header: Buy from Vendor No: Structure: On the First Line: Type: No.: Item 1000 (In the Item Card, Excise Accounting Type should be With CENVAT) Description: Bicycle Quantity: 10 Direct Unit Cost: 1000 Line Amount: 10000 Excise Loading on Inventory True Calculate Structure Press F9 to view the excise amount Post the Order. 10000 New Excise

Viewing the Posted Transaction


Navigation: Purchases History Posted Invoice

G/L Entry

The program creates the following entry: Particulars Purchase Vendor Finished Goods Direct Cost Applied, Retail Type DR CR DR CR Amount(Rs) 11630 11630 11630 11630

The program will load the excise amount on inventory and will not create any excise entry. The program will calculate the excise amount according to the posting setup. The program will load the excise amount on inventory after posting the purchase order and will not create any RG 23 A/C Part I and II entry. Note 1: You can also post the transaction from the Purchase Invoice. Note 2: You can post the same transaction for the capital Item. Note 3: The Excise Accounting Type should be With CENVAT for Type item. Note 4: The Excise Loading on Inventory field can also be used while posting the Purchase Return Order/Credit Memo.

Updating of RG register in case of Excise Exempted Goods


In this case, the program will not create any RG 23 A/C Part II entry, but will create RG 23 A/C Part I entry. Purchase Order

Navigation: Purchase Order Processing Orders

To calculate excise, fill the fields in the Purchase Order form as follows: On the Header: Buy from Vendor No: Structure: On the First Line: Type: No.: Description: Quantity: Direct Unit Cost: Item 1100 (In the Item Card, Excise Accounting Type should be With CENVAT) Bicycle 10 1000 10000 New Excise

Line Amount: Calculate Structure

10000

Press F9 to view the excise amount The program will calculate the excise amount as zero, because in the posting setup; percentages of excise duty components are defined as Zero. Post the Order.

Viewing the Posted Transaction


Navigation: Purchases History Posted Invoice

G/L Entry

The program creates the following entry: Particulars Purchase Vendor Type DR CR Amount(Rs) 10000 10000

In this case program will not create any excise entry. But program will create RG 23 A/C Part I entry.

RG 23 A Part I

Note 1: You can also post the transaction from the Purchase Invoice/Return Order/Credit Memo. Note 2: You can post the same transaction for the capital Item. Note 3: The Excise Accounting Type should be With CENVAT for Type item. Note 4: The Excise Duty Components percentages should be zero in the Posting setup.

Excise Loading on Inventory when Transferring Goods from CENVATABLE Location to Non CENVATABLE Location
Transfer Order

Navigation: Purchase Order Processing Transfer Orders

To calculate excise, fill the fields in the Transfer Order window as follows: On the Header: No: Transfer from Code: Transfer to Code: In-transit Code: Structure: On the Line: Item No.: Description: Quantity: Transfer Price: Amount: Calculate Structure 1057 Blue (Cenvatable location) Red (Non Cenvatable location) dont mention ECC No. in the Location card. Out. Log New Excise

1000 Bicycle 10 1000 10000

Post the Transfer Order as Ship and Receive.

Viewing the Posted Transaction (Transfer Shipments)


Navigation: Warehouse History Posted Transfer Shipments

G/L Entry

The program will credit the Excise Payable account with the excise amount.

RG 23 A Part I

The program will create RG 23 A Part I entry with value in the Quantity Sold field.

Viewing the Posted Transaction (Transfer Receipts)


Navigation: Warehouse History Posted Transfer Receipts

G/L Entry

The program will load the excise amount on inventory in receiving location. In receiving location the program will not create any RG 23 A/C Part I and II entries. Note: Please do not mention the ECC number in the receiving location if you want to transfer the goods from CENVATABLE location to Non CENVATABLE location.

Excise Loading on Inventory when Transferring Goods from CENVATABLE Location to CENVATABLE Location
Navigation: Purchase Order Processing Transfer Orders

Fill in the fields according to these guidelines: Field Excise Loading on Inventory Description Place a check mark in this field if you want to load the excise amount on inventory in the receiving location. The program will not crate any RG 23 A/C Part I and II entries in the receiving location if a check mark has been placed in this field on the transfer order line.

To calculate excise, fill the fields in the Transfer Order window as follows: On the Header: No: Transfer from Code: 1058 Blue (CENVATABLE location)

Transfer to Code: In-transit Code: Structure: On the Line: Item No.: Description: Quantity: Transfer Price: Amount: Excise Loading on Inventory Calculate Structure

Green (CENVATABLE location) Out. Log New Excise

1000 Bicycle 10 1000 10000 True

Post the Transfer order as Ship and Receive.

Viewing the Posted Transaction (Transfer Shipments)


Navigation: Warehouse History Posted Transfer Shipments

G/L Entry

The program will credit the Excise Payable account with excise amount.

RG 23 A Part I

The program will create RG 23 A Part I entry with the value in the Quantity Sold field.

Viewing the Posted Transaction (Transfer Receipts)


Navigation: Warehouse History Posted Transfer Receipts

G/L Entry

The Program will load the excise amount on inventory in receiving location. In receiving location the program will not create any RG 23 A/C part I and II entries.

Transfer of Exempted Goods from CENVATABLE Location to CENVATABLE Location


Navigation: Purchase Order Processing Transfer Orders

To calculate excise, fill the fields in the Transfer Order window as follows:

On the Header:
No: Transfer from Code: Transfer to Code: In-transit Code: Structure: On the Line: Item No.: Description: Quantity: Transfer Price: Amount: Calculate Structure The program will calculate the excise amount as zero, because in the posting setup; percentages of excise duty components are defined as Zero. Post the Transfer order Ship and Receive. 1059 Blue (CENVATABLE location) Green (CENVATABLE location) Out. Log New Excise

1100 Front Wheel 10 1000 10000

Viewing the Posted Transaction (Transfer Shipments)


Navigation: Warehouse History Posted Transfer Shipments

G/L Entry

The program will not create any G/L entry related to the excise amount.

RG 23 A Part I

The program will create RG 23 A Part I entry with value in the Quantity Sold field.

Viewing the Posted Transaction (Transfer Receipts)


Navigation: Warehouse History Posted Transfer Receipts

G/L Entry

The program will not create entry related to the excise amount.

RG 23 A Part I

Note: You can post the same transaction for the capital Item.

Excise, VAT and Charges loading on inventory using Expected Cost through Purchase Order
Purchase Order

Navigation: Purchase Order Processing Orders

To calculate excise, VAT and Charges, fill the fields in the Purchase Order form as follows: On the Header: Buy from Vendor No: Structure: 10000 Structure (In Structure, excise will be calculated on base value, VAT will be calculated on Base value + Excise Amount and charges Amount is 100 fixed value with loading on inventory field true and Account number is 8246 (Freight A/C)

On the Line: Type: No.: Item 70001 (In the Item Card, Excise Accounting Type should be With CENVAT and Costing method should be FIFO in item card.) Base 10 1000 10000 True

Description: Quantity: Direct Unit Cost: Line Amount: Excise Loading on Inventory:

Non ITC Claimable Usage %: Calculate Structure

50

Excise % is 16.30, VAT % is 12.50 and Charges are 100 (fixed value). In this case program will calculate Excise Amount as 1630, VAT Amount as 1454 and Charges Amount as 100. Press F9 to view the Statistics Post the Order as Receive. View the Posted receipt document from Order menu button.

Click Navigate button in the Posted purchase Receipts window.

G/L Entry

The program creates the following G/L entry: Particulars Type Amount(Rs) 12457 12457

Raw materials DR (Interim) Inventory CR Adjustment Interim.

In this case the program will load the Excise Amount (1630), Charges Amount (100) and VAT Amount (727) on inventory. Item ledger Entry

In the Item Ledger Entry window, the program will update the value in the Cost Amount (Expected) field.

Value Entry

In the Value Entries window, the program will update the value in the Cost Amount (Expected) field. Now post the same order as Invoice.

Viewing the Posted Transaction


Navigation: Purchases History Posted Invoice

G/L Entry

The program creates the following G/L entries: Particulars Raw materials (Interim) Inventory Adjustment Interim. Raw Material Direct Cost Applied Purchase Purchase Tax Freight Vendor Type CR DR DR CR DR DR DR CR Amount(Rs) 12457 12457 12457 12457 12357 727 100 13184

Value Entry

The program will update the value in the Cost Amount (Actual) field.

Item ledger Entry

In the original Item ledger entry, the program will transfer the value from the Cost Amount (Expected) field to the Cost Amount (Actual) field. Note 1: You can also load the excise amount on inventory if the Excise Accounting Type in the Item card is Without CENVAT. Note 2: You can post the same transaction through the Purchase Invoice. Note 3: You can post the same transaction for the capital item.

Appendix
Case 1:
Goods where duties paid but not allowed as CENVAT credit. Following goods are used in manufacturing and producing of dutiable goods or providing the taxable services but CENVAT credit [0]is not allowed under CENVAT Credit Rules for these goods Light Diesel Oil High Speed Diesel oil Motor Spirit The duties paid on these goods have to be loaded on the inventory Example: The manufacturer has purchased light diesel oil incurring the following: Purchase price Rs 10,000 Excise duty Rs 2,000 The following entry shows the loading of excise duty on the goods at the purchase time:

Purchases Vendor

Debit Rs 12000

Credit Rs 12000

Note: The RG registers will not be updated.

Case 2:
Duties paid on goods; on which CENVAT credit is not available The duties other than the duties mentioned in the CENVAT Credit rules or amendments made there under shall not be allowed, as CENVAT Credit should be loaded on the inventory. Example: The manufacturer has purchased 10 units of goods incurring the following: Purchase price Duty specified under First Schedule to the Excise Tariff Act Duty leviable under the X Act Rs 10,000 Rs 2,000 Rs 1,000

Duty leviable under the X act is not specified under CENVAT Credit rules or amendments made there under. The following entry shows the loading of duty on the goods and CENVAT credit at the purchase time: Purchases CENVAT credit Vendor Debit Rs 11000 2000 Credit Rs

13000

Note: The RG registers will be updated as under: RG 23 A Part I with 10 RG 23 A Part II with 2000

Case 3:
Goods used in Production / Manufacture of Exempted Goods or Exempted Services The duties paid goods which are used in producing or manufacturing of exempted goods; and the goods which are used in providing the exempted services are not allowed as CENVAT credit. The paid duties shall be loaded on the inventory.

Example: The manufacturer has purchased goods, which are to be used directly or indirectly in manufacturing the final goods. The final goods are exempted from the excise duty. Purchase price Rs 10,000 Excise duty Rs 2,000 The following entry will be used to load the excise duty on the goods (CENVAT not available) at the purchase time: Debit Rs 12000 Credit Rs 12000

Purchases Vendor

Note: The RG registers will not be updated.

Case 4:
Excise Exemption Take the example of Company ABC, which has multiple manufacturing locations. One of the manufacturing locations has excise duty benefit as 100% exemption. In this scenario Company ABC needs to maintain the RG 23 A Part I register for this location as maintained in the other locations. Location XYZ Raw Material @ Quantity Excise@ 0% = Rs. 1000 = 10 = Rs. 0

The entry will be as follows: Debit Rs 10000 Credit Rs 10000

Purchase A/C Vendor A/C

After Posting Purchase Order/Invoice, the program will update RG23A/C Part I with Quantity =10. Also the program will not create any entry in RG23A/C Part II.

Microsoft Business Solutions Navision 4.0 Excise Duty Computation on Stock Transfer and Captive Consumption of Manufactured Material

Table of Contents
Overview............................................................................................................................ 3 Detailed Setup .............................................................................................................. 3 Comprehensive Functionality ..................................................................................... 4 Reports........................................................................................................................... 4 Setup Required................................................................................................................. 5 Excise Setup for MRP ................................................................................................. 5 Inventory Setup: ........................................................................................................... 6 Location Setup.............................................................................................................. 8 Item Card:.................................................................................................................... 10 Transactions.................................................................................................................... 13 Computation of Excise on Stock Transfer (Manufacturing to Trading Location) in case of MRP ........................................................................................................... 13 Viewing the Posted Transaction (Transfer Shipments) ...............................15 Viewing the Posted Transaction (Transfer Receipts) ..................................18 Computation of Excise on Stock Transfer (Manufacturing to Manufacturing Location) in case of MRP.......................................................................................... 21 Viewing the Posted Transaction (Transfer Shipments) ...............................23 Viewing the Posted Transaction (Transfer Receipts) ..................................26 Computation of Excise on Stock Transfer (Trading to Trading Location) ......... 29 Viewing the Posted Transaction (Transfer Shipments) ...............................31 Viewing the Posted Transaction (Transfer Receipts) ..................................35 Computation of Excise on Stock Transfer (Trading to Manufacturing Location) ....................................................................................................................................... 38 Viewing the Posted Transaction (Transfer Shipments) ...............................39 Viewing the Posted Transaction (Transfer Receipts) ..................................43 Computation of Excise on Stock Transfer (Trading to Manufacturing Location in case of Capital Item).............................................................................................. 46 Viewing the Posted Transaction (Transfer Shipments) ...............................47 Viewing the Posted Transaction (Transfer Receipts) ..................................49 Computation of Excise on Stock Transfer (Manufacturing to Trading Location) ....................................................................................................................................... 52 Viewing the Posted Transaction (Transfer Shipments) ...............................53 Viewing the Posted Transaction (Transfer Receipts) ..................................57 Captive Consumption..................................................................................60 Viewing the Posted Transaction (Transfer Shipments) ...............................62 Item Journal ................................................................................................................ 67 Viewing the Posted Transaction .................................................................70 Report............................................................................................................................... 72 Appendix.......................................................................................................................... 74

Overview
The material transfer from one location to another location is very normal in any business scenario. Excise computation on excisable goods and /or excisable capital goods and / or with MRP in the transfer order document in case of transfer from manufacturing to trading location, manufacturing to manufacturing location, trading to manufacturing location, and trading to trading location needs to be tracked and recorded into the respective excise books. The excisable materials, manufactured within the company premises or factory for the sales and distributions are also used in factory or office according to the requirement. This activity is referred as Captive Consumption and needs to be recorded in the excise books. In captive consumption, the calculation of the excise liability will be done on unit cost or cost of production. The calculated excise liability needs to be created and for the consumption location; excise will be loaded on the inventory ledger in the Chart of Accounts.

Detailed Setup
Setup for excise computation on transfer order and the captive consumption functionalities are as below: Setup Area Excise Setup Structure Item Card Description You should setup the excise posting setup and other excise setup. Define structure to calculate the excise amount. The ECC No./ Item Categories form needs to be filled up for the excise computation on MRP. Unit cost of the product needs to be provided for the captive consumption as user can also change the unit cost on the transfer line Location Setup The Trading Location field should be checked to specify as trading location. ECC number should be attached for excisable location. Use number series in the Location card to track locationwise captive consumption shipment details. Inventory Setup Define the Captive Consumption percentage. Use number series for easy consumption order and shipment. tracking of captive

Setup Area

Description External document number is mandatory.

Comprehensive Functionality
Computation of excise on MRP in case of stock transfer and Captive Consumption of produced material are explained as below. Computation of excise on MRP in the Stock Transfer document. Excise computation for both excisable normal goods and excisable capital goods. The stock transfer means transfer between manufacturing to trading location, manufacturing to manufacturing location, trading to manufacturing location, and trading to trading location. Stock transfer will update the RG register including RG 23 A Part I and Part II, RG 23 C Part I and Part II, and RG 23 D. The captive consumption of manufactured item will update the RG register.

Reports
Quarterly Return for Traders report is being updated with stock transfer with excise computation made on MRP. The Captive Consumption report display all record of material consumed for captive consumption. It also specifies the cost of production including the administration cost and the excise amount on daily basis.

Setup Required
Excise Setup for MRP
Navigation: Financial Management Setup Excise Posting Setup

In the excise components calculation type new option has been introduced as % of MRP. While calculating Excise on MRP you should select the calculation type as % of MRP in the relevant excise components. If you want to select calculation formula for any of the component then you need to use Excise % as option. Create the Excise posting setup in case of MRP on the following basis: Excise Posting Group: Excise Prod. Group: Excise Payable Account: CENVAT Cr. Receivable Account: CENVAT Cr. Deferred Account: BED Calculation Type: BED %: BED Calculation formula: SED Calculation Type: SED %: SED Calculation Formula: AED (GSI) Calculation Type: AED (GSI) %: AED (GSI/TTA) Calculation Formula: SAED Calculation Type: SAED %: SAED Calculation Formula: ECESS Calculation Type: ECESS %: GEN 84.15 2994 2993 2996 % of MRP 10 Blank % of MRP 2 Blank % of MRP 2 Blank % of MRP 2 Blank Excise % 2

ECESS Calculation Formula: SHE CESS Calculation Type: SHE CESS %: SHE CESS Calculation Formula:

BED Amount Excise % 1 BED Amount

Inventory Setup:
Navigation: Warehouse Setup Inventory Setup

Fields Description On the General tab Fields Captive Consumption % Description Define the captive consumption % to be loaded on the cost of production in this field for calculating the excise duty in case of material has been used for captive consumption. Place a check mark in this field to update the RG 23 D register with vendor invoice

External Doc. No. Mandatory

Fields

Description number.

Also define the number series on the Numbering tab:

Fields Description On the Numbering tab Fields Transfer Order Nos. (Captive) Description Attach a number series to allow the program to assign the number for captive consumption header You need to attach another number series for the posted shipment of captive consumption in this field. The number series attached in the Posted Shpt. Nos. (Captive) field will be used for all captive consumption posted shipment irrespective of location.

Posted Shpt. Nos. (Captive)

Location Setup
Navigation: Warehouse Setup Locations
Create the location where the material are being produced and specify the location ECC number.

The above BLUE location is the manufacturing location with ECC number. For example the excisable material will be transferred from BLUE location for captive consumption. Also define the number series in the Sales Shpt. Nos. (Captive) field for the BLUE location to record the posted captive consumption shipment with location specific number series. Create a location where the produced material will be used as captive consumption and keep the Location ECC number blank.

In the above window the RED location is created and no ECC number has been attached with it. RED location will be the receiving location where the materials are used as captive consumption. (In case of captive consumption, the receiving location must not have the ECC number attached with.)

Place a check mark in the Trading Location field to specify the location as trading location incase of stock transfer as per the above example. (Note: In Stock Transfer you need to specify the ECC number for each location.)

Item Card:
Navigation: Purchase Planning Items
Define the unit cost (cost of production) of the produced material which is used for sales and distribution. It will also be used in captive consumption.

In the above window you enter the unit cost for the FORKLIFT item in the Unit Cost field, which is defined as finished product. Also specify the following information: Unit Cost Gen. Prod. Posting Group VAT Prod. Posting Group Excise Prod. Posting Group Inventory Posting Group 1,000.00 RETAIL VAT12.5 94.03 FINISHED

Create a material with following information for the example of MRP stock transfer as below.

Enter the following information: Unit Cost Gen. Prod. Posting Group VAT Prod. Posting Group Excise Prod. Posting Group Inventory Posting Group 1,500.00 RAW MAT VAT12.5 84.15 RAW MAT

On the Item menu button select the ECC No. /Item Categories menu item. Setup the Maximum Retail Price and Abatement % for the computation of excise on the stock transfer.

Fields Description Fields MRP Description Place a check mark in the MRP field if the item lies under MRP provision of the Excise Act and excise duty is to be calculated on the basis of MRP. By placing a check mark in this field the program will put the check mark in MRP field in transfer order line for the particular item. Maximum Retail Price Define MRP in the Maximum Retail Price field. This price will be applicable for assigned E.C.C No in the location at the time of transferring from one location to another location and the item is falling under the MRP Provision of Excise Act. Define the abatement % in this field. The program will pick the abatement % for the calculation of excise duty in the Transfer Order if the item lies under the MRP Provision of the Excise Act.

Abatement %

Transactions
Computation of Excise on Stock Transfer (Manufacturing to Trading Location) in case of MRP
Navigation: Purchase Order Processing Transfer Orders

Fields Description Fields MRP Description The program populates the value in this field either from the ECC No. or from the Item Category window. This field is non editable. Maximum Retail Price The program populates the value in this field either from the ECC No. or from the Item Category window. This field is editable. Abatement % The program populates the value in this field either from the ECC No. or from the Item Category window.

This field is editable. In the above window press F3 to insert new document and enter the following information in Transfer Order header:

No. Transfer-from Code Transfer-to Code Posting Date In-Transit Code Structure Vendor Invoice No.

1157
BLUE (Manufacturing Location) GREEN (Trading Location)

01/04/07 OUT. LOG. EXCISE 1212

(Note: Vendor Invoice number is mandatory if the External Doc. No. Mandatory field is checked in the Inventory Setup while receiving the material) Enter the following details in the transfer order line: Item No. Quantity MRP MRP Price: Abatement %: Calculate Structure Value Post the document as Ship and Receive. 70072 10 Check Mark (The program will by default populate this value from ECC No. /Item Category window.) 1000(Program will by default populate this value from ECC No. /Item Category window.) 20(The program will by default populate this value from ECC No. /Item Category window.)

Viewing the Posted Transaction (Transfer Shipments)


Navigation: Warehouse History Posted Transfer Shipments

Click Navigate to view the details of the entry that have been posted.

Select G/L Entry in the Navigate window and click Show.

The above window displays the affected G/L Accounts as below: Description Raw Materials Inventory Adjmt., Raw Mat. Raw Materials Inventory Adjmt., Raw Mat. Raw Materials Excise Payable Account Calculation of Excise on the following basis: MRP Price is 2000 per unit, Quantity is 10. Total MRP price is 20000 (2000*10) On 20000 Abatement % is 50. 20000*50% = 10000. 20000-10000 = 10000 On 10000, the program will calculate excise @ 16.30%. 10000*16.30% = 1630. Excise Amount is 1630 and Excise base amount is 10000. Dr/Cr Dr Cr Cr Dr Dr Cr Amount 15,000.00 15,000.00 15,000.00 15,000.00 1,630.00 1,630.00

The program will also create Excise entry with excise base amount as 10000. Select Excise Entry in the Navigate window and click Show.

Select RG 23 A Part I in the Navigate window and click Show.

Viewing the Posted Transaction (Transfer Receipts)


Navigation: Warehouse History Posted Transfer Receipts

Click Navigate to view the details of the entry that have been posted.

Select G/L Entry in the Navigate window and click Show.

The above window displays the detail GL entry as below: Description Raw Materials Inventory Adjmt., Raw Mat. Raw Materials Inventory Adjmt., Raw Mat. Raw Materials Cenvat Cr. Receivable(Trading) Select Excise Entry and click Show. Dr/Cr Dr Cr Cr Dr Cr Dr Amount 15,000.00 15,000.00 15,000.00 15,000.00 1,630.00 1,630.00

Select RG 23 D in the Navigate window and click Show.

Note 1: You can also post the same transaction for capital Item while keeping a check mark in the Claim Deferred Excise field. Note 2: If MRP field is checked on the transfer order line then Calculation Type in the Excise Posting setup should have % of MRP with the combination of blank calculation formula. In case of calculating the ECESS and SHE CESS, Calculation type should be Excise %. Note 3: In case of MRP, the program will not allow the user to post the transfer transaction if the Shipping location is a trading location.

Note 4: In case of MRP, the program will not allow the user to post the transfer transaction if a check mark is placed in the CVD field in the Structure. Note 5: If Abatement % is zero, then the program will not consider any Abatement % in the excise calculation. Note 6: If value in the MRP Price field is zero, then the program will not calculate any excise amount.

Computation of Excise on Stock Transfer (Manufacturing to Manufacturing Location) in case of MRP


Create a location named YELLOW, which will be a manufacturing location. For example:

Navigation: Warehouse Setup Locations

Create a Transfer Order for Manufacturing to Manufacturing Location transfer as per the example given below:

Navigation: Purchase Order Processing Transfer Orders

In the above window press F3 to insert new document and enter the following information in Transfer Order header: No. Transfer-from Code Transfer-to Code Posting Date In-Transit Code Structure 1158 BLUE (Manufacturing Location) YELLOW (Manufacturing Location) 01/04/07 OUT. LOG. EXCISE

Enter the following details on the transfer order line: Item No. Quantity MRP MRP Price: Abatement %: Calculate Structure Value Post the document as Ship and Receive. 70072 10 Check Mark (The program will by default populate this value from ECC No. /Item Category window.) 1000(The program will by default populate this value from ECC No. /Item Category window.) 20(The program will by default populate this value from ECC No. /Item Category window.)

Viewing the Posted Transaction (Transfer Shipments)


Navigation: Warehouse History Posted Transfer Shipments

Click Navigate to view the details of the entry that have been posted.

Select G/L Entry in the Navigate window and click Show.

The above window displays the affected G/L Accounts as below: Description Raw Materials Inventory Adjmt., Raw Mat. Raw Materials Inventory Adjmt., Raw Mat. Raw Materials Excise Payable Account Calculation of Excise on the following basis: MRP Price is 2000 per unit, Quantity is 10. Total MRP price is 20000 (2000*10) On 20000 Abatement % is 50. 20000*50% = 10000. 20000-10000 = 10000 On 10000, the program will calculate excise @ 16.30%. 10000*16.30% = 1630. Excise Amount is 1630 and Excise base amount is 10000. Dr/Cr Dr Cr Cr Dr Dr Cr Amount 15,000.00 15,000.00 15,000.00 15,000.00 1,630.00 1,630.00

The program will also create Excise entry with excise base amount as 10000. Select Excise Entry in the Navigate window and click Show.

Select RG 23 A Part I in the Navigate window and click Show.

Viewing the Posted Transaction (Transfer Receipts)


Navigation: Warehouse History Posted Transfer Receipts

Click Navigate to view the details of the entry that have been posted.

Select G/L Entry in the Navigate window and click Show.

The above window displays the detail GL entry as below: Description Raw Materials Inventory Adjmt., Raw Mat. Raw Materials Inventory Adjmt., Raw Mat. Raw Materials Cenvat Cr. Receivable Account Dr/Cr Dr Cr Cr Dr Cr Dr Amount 15,000.00 15,000.00 15,000.00 15,000.00 1,630.00 1,630.00

Select Excise Entry in the Navigate window and click Show.

(Note: In case Capital Item is received in the manufacturing location, then the program will create two excise entries. Fifty percent of excise amount will be available as excise credit for the current year and fifty percent will transferred to next year as deferred excise credit) Select RG 23 A Part I in the Navigate window and click Show.

Select RG 23 A Part II in the Navigate window and click Show.

Computation of Excise on Stock Transfer (Trading to Trading Location)


Create a location named SILVER, which will be a trading location. For example:

Navigation: Warehouse Setup Locations

Create a Transfer Order for Trading to Trading Location transfer as per the example given below:

Navigation: Purchase Order Processing Transfer Orders

Field Description Field Applies-to Entry (RG 23 D) Description Choose the RG 23 D entry that has to be transferred to other location. The program will calculate the excise amount based on the selected RG 23 D entry. (Note: If the excisable material is transferred from trading to other location, program will calculate excise on the base of applied document to RG 23 D.) In the above window press F3 to insert new document and enter the following information in Transfer Order header:

No. Transfer-from Code Transfer-to Code Posting Date In-Transit Code Structure Vendor Invoice No.

1159 GREEN (Trading Location) SILVER (Trading Location) 01/04/07 OUT. LOG. EXCISE 1216

(Note: Vendor invoice number is mandatory if the External Doc. No. Mandatory field is checked in Inventory Setup while receiving the material) Enter the following details in the transfer order line: Item No. Quantity Applies-to Entry (RG 23 D) Calculate Structure Value Post the document as Ship and Receive. 70074 10 Select the entry from the list

Viewing the Posted Transaction (Transfer Shipments)


Navigation: Warehouse History Posted Transfer Shipments

Click Navigate to view the details of the entry that have been posted.

Select G/L Entry in the Navigate window and click Show.

The above window displays the affected G/L Accounts as below: Description Raw Materials Inventory Adjmt., Raw Mat. Raw Materials Inventory Adjmt., Raw Mat. Raw Materials Cenvat Transferred (Trading) Dr/Cr Dr Cr Cr Dr Dr Cr Amount 15,000.00 15,000.00 15,000.00 15,000.00 1,630.00 1,630.00

Select Excise Entry in the Navigate window and click Show.

To see the affect on RG 23D after posting the document with the application, you need to Navigate from Purchase History. Capture the source document number of RG 23 D, which has been applied with transfer order document.

Navigation: Purchase History Navigate

Select RG 23D in the Navigate window and click Show

The program has reversed the source RG 23 D entry in the original document.

Viewing the Posted Transaction (Transfer Receipts)


Navigation: Warehouse History Posted Transfer Receipts

Click Navigate to view the details of the entry that have been posted.

Select G/L Entry in the Navigate window and click Show.

The above window is displaying the detail GL entry as below: Description Raw Materials Inventory Adjmt., Raw Mat. Raw Materials Inventory Adjmt., Raw Mat. Raw Materials Cenvat Cr. Receivable(Trading) Dr/Cr Dr Cr Cr Dr Cr Dr Amount 10,000.00 10,000.00 10,000.00 10,000.00 1,630.00 1,630.00

Select Excise Entry in the Navigate window and click Show.

Select RG 23 D in the Navigate window and click Show.

Computation of Excise Manufacturing Location)

on

Stock

Transfer

(Trading

to

Create a Transfer Order for Trading to Manufacturing Location transfer as per the example given below:

Navigation: Purchase Order Processing Transfer Orders

(Note: If the excisable material is transferred from trading location to other location, the program will calculate excise on the base of applied document to RG 23 D) In the above window press F3 to insert new document and enter the following information in Transfer Order header: No. Transfer-from Code Transfer-to Code Posting Date In-Transit Code Structure 1160 GREEN (Trading Location) BLUE (Manufacturing Location) 01/04/07 OUT. LOG. EXCISE

Enter the following details in the transfer order line: Item No. Quantity 70074 10

Applies-to Entry (RG 23 D) Calculate Structure Value

Select the entry from the list

Post the document as Ship and Receive.

Viewing the Posted Transaction (Transfer Shipments)


Navigation: Warehouse History Posted Transfer Shipments

Click Navigate to view the details of the entry that have been posted.

Select G/L Entry in the Navigate window and click Show.

The above window displays the affected G/L Accounts as below: Description Raw Materials Inventory Adjmt., Raw Mat. Raw Materials Inventory Adjmt., Raw Mat. Raw Materials Cenvat Transferred (Trading) Select Excise Entry in the Navigate window and click Show. Dr/Cr Dr Cr Cr Dr Dr Cr Amount 10,000.00 10,000.00 10,000.00 10,000.00 1,630.00 1,630.00

To see the affect on RG 23D after posting the document with application, you need to Navigate from Purchase History. Capture the source document number of RG 23 D, which has been applied with transfer order document.

Navigation: Purchase History Navigate

Select RG 23D in the Navigate window and click Show

The program has reversed the source RG 23 D entry in the original document.

Viewing the Posted Transaction (Transfer Receipts)


Navigation: Warehouse History Posted Transfer Receipts

Click Navigate to view the details of the entry that have been posted.

Select G/L Entry in the Navigate window and click Show.

The above window displays the detail GL entry as below: Description Raw Materials Inventory Adjmt., Raw Mat. Raw Materials Inventory Adjmt., Raw Mat. Raw Materials Cenvat Cr. Receivable Account Dr/Cr Dr Cr Cr Dr Cr Dr Amount 10,000.00 10,000.00 10,000.00 10,000.00 1,630.00 1,630.00

Select Excise Entry in the Navigate window and click Show.

(Note: In case Capital Item is received in manufacturing location, then the program will create two excise entries. Fifty percent of excise amount will be available as excise credit for the current year and fifty percent will transferred to next year as deferred excise credit) Select RG 23 A Part I in the Navigate window and click Show.

Select RG 23 A Part II in the Navigate window and click Show.

Computation of Excise on Stock Transfer Manufacturing Location in case of Capital Item)


Navigation: Purchase Order Processing Transfer Orders

(Trading

to

In the above window press F3 to insert new document and enter the following information in Transfer Order header: No. Transfer-from Code Transfer-to Code Posting Date In-Transit Code Structure 1146 GREEN (Trading Location) BLUE (manufacturing Location) 01/04/07
OUT. LOG. EXCISE

Enter the following details in the transfer order line: Item No. Quantity Applies- to Entry (RG 23 D) Calculate Structure Value Post the document as Ship and Receive. 70073 10 73

Viewing the Posted Transaction (Transfer Shipments)


Navigation: Warehouse History Posted Transfer Shipments

Click Navigate to view the details of the entry that have been posted.

Select G/L Entry in the Navigate window and click Show.

The above window displays the affected G/L Accounts as below:

Description Raw Materials Inventory Adjmt., Raw Mat. Raw Materials Inventory Adjmt., Raw Mat. Raw Materials CENVAT Transfer trading Select Excise Entry in the Navigate window and click Show.

Dr/Cr Dr Cr Cr Dr Dr Cr

Amount 10000 10000 10000 10000 1630 1630

Viewing the Posted Transaction (Transfer Receipts)


Navigation: Warehouse History Posted Transfer Receipts

Click Navigate to view the details of the entry that have been posted.

Select G/L Entry in the Navigate window and click Show.

The above window displays the detail GL entry as below: Description Raw Materials Inventory Adjmt., Raw Mat. Raw Materials Inventory Adjmt., Raw Mat. Raw Materials Cenvat Cr. Receivable Account Cenvat Cr. Deferred Account Dr/Cr Dr Cr Cr Dr Cr Dr Dr Amount 10000 10000 10000 10000 1630 815 815

Select Excise Entry in the Navigate window and click Show.

The program has created two entries as the item is received in manufacturing location and is a capital Item. Fifty percent of the excise amount will be available as excise credit for current year and rest of the fifty percent of excise amount will be transferred to next year as deferred excise. Select RG 23 C Part I in the Navigate window and click Show.

Select RG 23 C Part II in the Navigate window and click Show.

Computation of Excise on Stock Transfer (Manufacturing to Trading Location)


Navigation: Purchase Order Processing Transfer Orders

In the above window press F3 to insert new document and enter the following information in Transfer Order header:

No. Transfer-from Code Transfer-to Code Posting Date In-Transit Code Structure Vendor Invoice No.

1147 BLUE (Manufacturing Location) GREEN (Trading Location)

01/04/07 OUT. LOG. EXCISE 1217

(Note: Vendor invoice number is mandatory if the External Doc. No. Mandatory field is checked in the Inventory Setup while receiving the material) Enter the following details in the transfer order line: Item No. Quantity Calculate Structure Value Post the document as Ship and Receive. 1100 10

Viewing the Posted Transaction (Transfer Shipments)


Navigation:

Warehouse History Posted Transfer Shipments

Click Navigate to view the details of the entry that have been posted.

Select G/L Entry in the Navigate window and click Show.

The above window displays the affected G/L Accounts as below: Description Finished goods Inventory Adjmt., Retail. Finished goods Inventory Adjmt., Retail Finished goods Unrealized Profit A/C Excise payable A/C Select Excise Entry in the Navigate window and click Show. Dr/Cr Dr Cr Cr Dr Dr Cr Cr Amount 1296.71 1296.71 1296.71 1296.71 10333.29 8703.29 1630

Select RG 23 A Part I and click Show.

Viewing the Posted Transaction (Transfer Receipts)


Navigation: Warehouse History Posted Transfer Receipts

Click Navigate to view the details of the entry that have been posted.

Select G/L Entry in the Navigate window and click Show.

The above window displays the detail GL entry as below: Description Finished goods Inventory Adjmt., Retail. Finished goods Inventory Adjmt., Retail Finished goods Unrealized Profit A/C Excise payable A/C Select Excise Entry in the Navigate window and click Show. Dr/Cr Dr Cr Cr Dr Cr Dr Dr Amount 1296.71 1296.71 1296.71 1296.71 10333.29 8703.29 1630

Select RG 23 D in the Navigate window and click Show.

Note 1: The program will not create the excise deferred entry for excisable capital goods if the receiving location is a trading location. Note 2: External document number is mandatory to update the RG 23 D register. If the External Doc. No. Mandatory field is unchecked in Inventory Setup then the program will skip the External Document No.

Captive Consumption
For recording the captive consumption you use the captive consumption form.

Navigation: Purchase Order Processing Captive Consumption

Fields Description Fields Cost of Production Description The program will capture the value from Unit Cost of Item Card as Cost of Production. This field is editable. Admin. Cost % Mention the administration cost involved in the cost element of the product that is being produced. This field is editable. Cost of Prod. Incl. Admin Cost The Cost of Prod. Incl. Admin Cost shows the sum of Cost of Production and Admin. Cost %. This field is non editable. Captive Consumption % The percentage of captive consumption will be captured from the inventory setup. This field is non editable.

In the above window press F3 to insert new document and enter the following information in Captive Consumption header:

No. Transfer-from Code Transfer-to Code Posting Date In-Transit Code Structure

TCAP00025 BLUE RED (ECC No. is Blank in location card) 01/04/07 OUT. LOG. EXCISE

Enter the following details on the Captive Consumption line: Item No. Quantity Cost of Production Admin. Cost % Cost of Prod. Incl. Admin Cost Captive Consumption % 70068 10 1000 10 1100 (The program populate the value which is sum of Cost of production and Admin. Cost %) 10 (The program will flow the value in this field from Inventory setup)

Transfer price and Amount fields are non editable on transfer order line. Click Functions Calculate Structure Values

The excise amount calculation will be done in the following way: Excise Base Amount = [Unit Cost + (Unit Cost * Admin. %) + (Cost Of Prod. Incl. Admin Cost * Captive Consumption %)] * Quantity Excise Base Amount = (1,000 + 100 + 110) * 10 Excise Base Amount = 12,100 In the above table the excise has been calculated on 12,100. On 12100, the program will calculate Excise as 16.30% i.e. 1972. Post the document as Ship. (Note: The program will create the shipment and mark the document as Released. You can modify the transaction once you re-open the document.) To receive the produced material for captive consumption in the RED location you need to post the document as received. (Note: The program will create the receipt and remove the captive consumption document from the Captive Consumption form.)

Viewing the Posted Transaction (Transfer Shipments)


Navigation: Warehouse History Posted Transfer Shipments

Click Navigate to view the details of the entry that have been posted.

Select G/L Entry in the Navigate window and click Show.

The above window displays the affect in G/L Accounts as below: Description Finished Goods Inventory Adjmt., Retail Finished Goods Inventory Adjmt., Retail Finished Goods Unrealized Profit Account Excise Payable Account Select Excise Entry in the Navigate window and click Show. Dr/Cr Dr Cr Cr Dr Dr Cr Cr Amount 10,000.00 10,000.00 10,000.00 10,000.00 2,972.00 1,000.00 1,972.00

Select RG 23 A Part I in the Navigate window and click Show.

Viewing the Posted Transaction (Transfer Receipts)


Navigation: Warehouse History Posted Transfer Receipts

Click Navigate to view the details of the entry that have been posted.

Select G/L Entry in the Navigate window and click Show.

The above window displays the detail GL entry as below: Description Finished Goods Inventory Adjmt., Retail Finished Goods Inventory Adjmt., Retail Finished Goods Inventory Adjmt., Retail Finished Goods Unrealized Profit Account Inventory Adjmt., Retail Dr/Cr Dr Cr Cr Dr Dr Cr Cr Dr Dr Amount 10,000.00 10,000.00 10,000.00 10,000.00 1,972.00 1,972.00 2,972.00 1,000.00 1,972.00

In the Red location, the program has load the excise amount on inventory and also not created any excise entry. Note 1: The captive consumption form will display only the captive consumption transfer order. Note 2: The Captive Consumption % is applied on of the component that requires calculating the excise in case of captive consumption. The program does not allow to post the document if the Captive Consumption % is not provided in Inventory Setup. Note 3: The Admin. Cost % is applied on the component that requires calculating the excise in case of captive consumption. The program does not allow to post the document if the Admin. Cost % is not provided on the captive consumption line. Note 4: The Cost of Production and Admin. Cost % fields are editable on the captive consumption line. Note 5: The receiving location where the produced items are received for captive consumption; should not have the location ECC number attached. Note 6: Use Item Journal to adjust the inventory in the receiving location for the produced item in case of captive consumption.

Item Journal
The materials; received for the captive consumption in the RED location need to be needs to be consumed adjusted. The following setup is required to affect the appropriate inventory adjustment account. You create a separate General Business Posting Group for the captive consumption.

Attach the Captive Consumption Account in the General Posting Setup in combination of CAPTIVE and Gen. Bus. Posting Group, and RETIAL and Gen. Prod. Posting Group.

You use the Item Journal to adjust the inventory and affect the inventory ledger according to the setup.

Navigation: Purchase Inventory & Costing Item Journals

You select the Captive in Gen. Bus. Posting Group field to allow the Navision to create the appropriate GL Entry: Posting Date Document No. Entry Type Item No. Description Location Code Quantity Gen. Bus. Posting Group Gen. Prod. Posting Group Post the Item Ledger Entry. 01/04/07 T00009 Negative Adjmt. 70068 FORKLIFT RED 10 CAPTIVE RETAIL

Viewing the Posted Transaction


Navigation: Purchase History Navigate

Select G/L Entry in the Navigate window and click Show.

The above window displays the following affected G/L Accounts: Description Captive Consumption Finished Goods Dr/Cr Dr Cr Amount 10,000.00 10,000.00

Report
Navigation: Financial Management General Ledger Report Excise Reporting Captive Consumption

Field Description: Fields Start Date End Date E.C.C. No. Description Enter start date, from which you want to generate the report. Enter end date, till which you want to generate the report. Choose the E.C.C. No. for which you want to generate the captive consumption report.

The program will display the captive consumption report as below:

In the above report, the program is displaying the calculated Cost of Production including the Admin. Cost %, Captive Consumption %, Calculated Excise Amount for each document, Daily Balances of Excise Amount, and so on. .

Appendix
Excise Duty Computation on Stock Transfer
In the following scenario, the program will compute the excise duty on stock transfer: Stock transfer from manufacturing location to the trading location for the MRP items Stock transfer from manufacturing location to the trading location for the regular items

Stock transfer from manufacturing location to the trading location for item which is coming under MRP provision of Excise Act In case stock has transferred from manufacturing location to trading location for the item which is coming under MRP provision, the excise will be computed by taking the abatement % as defined by the government. In shipping location, entry will be created in the RG23 part1 if it is a raw material and will be created in the Daily Stock account if it is a finished stock. In the receiving location (Trading location), entry will be created in the RG23D register. Example: Company X is transferring material X with fixed MRP. The government has allowed deduction by 50% on the excise duty computation. If the item price is Rs. 100 and company is making the stock transfer of Quantity 1 from Unit A (manufacturing location) to Unit B (Trading location) then the stock transfer value would be assessable value based on the 50% deduction means Rs. 50 will be the stock transfer price. The financial entries would be (Assuming Excise @10%): In the books of unit A (Manufacturing location) Particulars Unit B A/C Inventory A/C (Unit A) Excise Payable Debit Rs 55 Credit Rs 50 5

The program should update the RG 23 A Part I at Unit A with Quantity 1 and the program should create the Excise entry for Rs. 5. In the books of unit B (Trading location) Particulars Inventory A/C (Unit A) Cenvat receivable A/C Unit A A/C Debit Rs 50 5 Credit Rs 55

The program should update the RG 23 D with Rs. 5 and Quantity 1.

Stock transfer from manufacturing location to the trading location for item which is not coming under MRP provision of Excise Act In case stock has transferred from manufacturing location to trading location for the item which is not coming under MRP provision of Excise Act, excise will be computed on the transaction value. In shipping location entry will be created in RG23 part1 if it is raw material and will be created in the Daily Stock account if it is finished stock. In the receiving location (Trading location) entry will be created in the RG23D register. Example Company X is transferring material X from Unit A as factory location to the branch office. If the price of the item is Rs. 100, then company will compute the excise of the sales price and will make the transfer entry. The financial entries would be as follows (Assuming Excise @10%): In the books of unit A (Manufacturing location) Particulars Unit B A/C Inventory A/C (Unit A) Excise Payable Debit Rs 110 Credit Rs 100 10

The program should update the RG 23 A Part I at Unit A with Quantity 1 and the program should create the excise entry for Rs. 10 In the books of unit B (Trading location) Particulars Inventory A/C (Unit A) Cenvat receivable A/C Unit A A/C Debit Rs 100 10 Credit Rs 110

The program should update the RG 23 D with Rs. 10 and Quantity 1.

Captive Consumption
Computation of Excise duty on Captive consumption: Captive consumption means goods are not sold but are consumed within the same factory or another factory of the same manufacturer (Inter unit transfer). Levy of excise duty on captive consumption: Excise duty is applied on the manufactured goods and duty is liable to pay as soon as goods are manufactured within the factory. The use of manufactured goods within the factory is termed as captive consumption.

Captive consumption may be Used as fixed asset Used as personal consumption/ factory use

Used as fixed asset If excisable goods are manufactured and are used as fixed assets then the excise duty is leviable, but as per notification 67/1995 dated 16.03.1995, capital goods (as defined in the Cenvat Credit Rules) manufactured in a factory and used within the factory of production are exempted from excise duty. Further, as per explanation 2 to Rule 2(g) of Cenvat Credit Rules, inputs include goods used in manufacture of capital goods which are further used in the factory of manufacturer .Thus, if capital goods are manufactured and used within the factory, Cenvat Credit can be availed of goods which are used to manufacture such capital goods. Moreover no duty will be payable on such capital goods. Example: Steel trolleys manufactured and used within the factory for storage /carrying of parts is used in relation to manufacture of final product and hence the trolleys will be exempted from duty. Used as Personal consumption/Factory use: If the excisable manufactured goods are used either for personal consumption or for office use then excise duty will be leviable on the goods if the goods are marketable in the above said conditions. Example: Suppose the cost of the item is RS 1000 and excise amount is 100 then the following accounting entry will pass in the book of account. Particulars Expenses A/C Dr To, Inventory A/C Cr To, Excise Payable Amount(Rs) 1100 1000 100

Note: If the excisable goods are transferred from one excisable location to another Non Excisable location for captive consumption then compute the excise duty liability for shipping location and excise duty amount to be loaded on the inventory for the receiving location Example If the cost of production is based on general principles of costing of a commodity and is Rs. 10,000 per unit, then the assessable value of the goods will be Rs. 11,500 per unit. Considering Rs. 11,500 as assessable value, material needs to be transferred to the

other unit for captive consumption. The financial entries will be as follows (Assuming Excise % applicable at 10%): In the books of Factory-1 Particulars Inventory Adjustment A/c To, Inventory A/C To, Excise Payable A/C In the books of Factory -2 Particulars Debit Rs Inventory A/C (Factory 10115 2)(Receiving location To, Inventory Adjustment A/c Credit Rs 10115 Debit Rs 10115 Credit Rs 10000 115

Factory locations -2 update the RG 23 A Part I at Factory Unit 1 with Quantity 1 and the program should create the excise entry for Rs. 115. For Factory Unit 2, the program should update the inventory account. No excise entry will be created for the Factory 2. Relevant date when goods cleared for captive consumption If excisable goods are used within the factory (captive consumption), then the date of removal is the date on which goods are issued for such use within the factory. As per Excise Rule, one Invoice should be prepared per day. Valuation in case of Captive Consumption In case of captive consumption, valuation shall be done on the basis of cost of production plus 10% (percentage was 15% up to 05.08.2003). Cost of production is required to be calculated as per Cost Accounting Standard 4(CAS). CAS is issued by the Institute of Cost and works Accountants of India (ICWAI). Cost of production as per CAS-4 Prime Cost = Direct material cost + Direct labour cost + Direct expenses Cost of production = Prime cost + Production overhead + Administration overhead + R&D Cost (Apportioned) + Packing cost Example: Item A has captive use in the factory. The cost of production of Item A is Rs 1000 and excise rate is 10% then the excise payable for the item A is RS 110 (10% on the value of (1000+10% of Rs 1000)).

Microsoft Business Solutions Navision 4.0 Assessable Value Computation

Table of Contents
Overview...............................................................................................................3 Detailed Setup...................................................................................................3 Comprehensive Functionality ............................................................................3 Setup Required .....................................................................................................4 Excise Setup for MRP .......................................................................................4 Item Card ..........................................................................................................5 Structure............................................................................................................9 Customer Posting Group...................................................................................9 Calculation of Excise Duty in case of MRP through Sales Order ....................10 Viewing the Posted Transaction .................................................................12 Calculation of Excise, VAT and Charges in case of Price Inclusive of tax through Sales Order ........................................................................................17 Viewing the Posted Transaction .................................................................21 Calculation of Excise, VAT and Charges in case of MRP and Price Inclusive of tax through Sales Order ..................................................................................25 Viewing the Posted Transaction .................................................................29 Calculation of Excise, VAT and Charges with Line and Invoice Discount in case of MRP and Price Inclusive of tax through Sales Order ..........................31 Viewing the Posted Transaction .................................................................35 Calculation of Excise, VAT and Charges with one Line of MRP and Price Inclusive of tax and other line is without MRP and Price Inclusive of Tax through Sales Order. .......................................................................................42 Calculation of Excise Duty in case of MRP through Sales Return Order.........48 Viewing the Posted Transaction .................................................................50 Calculation of Excise, VAT and Charges in case of Price Inclusive of tax through Sales Return Order ............................................................................57 Calculation of Excise, VAT and Charges in case of MRP and Price Inclusive of tax through Sales Return Order.......................................................................65 Viewing the Posted Transaction .................................................................69 Calculation of Excise, VAT and Charges with Line and Invoice Discount in case of MRP and Price Inclusive of tax through Sales Return Order ..............72 Calculation of Excise, VAT and Charges with one Line of MRP and Price Inclusive of tax and other line is without MRP and Price Inclusive of Tax through Sales Return Order ............................................................................84 Viewing the Posted Transaction .................................................................87 Modifications in Line Structure in case of Price Inclusive of Tax through Sales Order ...............................................................................................................90 Viewing the Posted Transaction .................................................................95 Appendix.............................................................................................................98

Overview
The Assessable Value Computation functionality enables you to compute the excise duty under the MRP Provision of Excise Act. This functionality helps in the computation of excise duty in case selling price includes all taxes and charges.

Detailed Setup
You should prepare the following setups to enable the Assessable Value Computation functionality: Setup Area Excise Setup Structure Description You should setup the excise posting setup and other excise setup. Define structure to calculate the excise, sales tax and charges amount in case of MRP and Price Inclusive of tax. Define MRP Price, Abatement %, and PIT Structure. Also place a check mark in the MRP and Price Inclusive of Tax fields. Define MRP Price, Abatement %, and PIT Structure. Also place a check mark in the MRP and Price Inclusive of tax fields. Define PIT Difference Account No.

Item Card

Sales Price

Customer Posting Group

Comprehensive Functionality
Following comprehensive Computation: functionalities are covered under Assessable value

Provision to calculate Excise Duty on MRP with Abatement % through the Sales Order / Invoice / Return Order / Credit Memo. Provision to calculate Excise, Sales Tax / VAT / CST, and Charges through Sales Order / Invoice / Return Order / Credit Memo if selling price is inclusive of all taxes. Provision of calculate Excise, Sales Tax / VAT / CST, and charges if Discounts are there in case of MRP and Price Inclusive of Tax through Sales Order / Invoice / Return Order / Credit Memo.

Setup Required
Excise Setup for MRP
Navigation: Financial Management Setup Excise Posting Setup

In Excise components calculation type a new option as % of MRP has been introduced. While calculating Excise on MRP you should select calculation type as % of MRP in the relevant excise components. If you want to select the calculation formula for any of the component then you need to use Excise % as option. Create the Excise posting setup in case of MRP on the following basis: Excise Posting Group: Excise Prod. Group: Excise Payable Account: CENVAT Cr. Receivable Account: CENVAT Cr. Deferred Account: BED Calculation Type: BED %: BED Calculation formula: SED Calculation Type: SED %: SED Calculation Formula: AED (GSI) Calculation Type: AED (GSI) %: AED (GSI/TTA) Calculation Formula: SAED Calculation Type: SAED %: SAED Calculation Formula: ECESS Calculation Type: ECESS %: GEN 84.15 2994 2993 2996 % of MRP 10 Blank % of MRP 2 Blank % of MRP 2 Blank % of MRP 2 Blank Excise % 2

ECESS Calculation Formula: SHE CESS Calculation Type: SHE CESS %: SHE CESS Calculation Formula:

BED Amount Excise % 1 BED Amount

Item Card
Navigation: Purchase Planning Item Item Card

Fields Description: MRP tab: Fields MRP Description Place a check mark in the MRP field if the item lies under MRP provision of the Excise Act and excise duty is to be calculated on the basis of MRP. By placing a check mark in this field the program will put a check mark in the MRP field on the sales line for the particular item. MRP Price Mention the MRP price program will calculate the excise amount. This field contains the value for per unit of item. By entering the value in this field the program will put the same value in the MRP Price field on the sales line for the

particular item. Abatement% Mention Abatement % in this field, based on which excise duty base amount is to be considered. By entering the value in this field the program will put the same value in the Abatement % field on the sales line for the particular item. Price Inclusive of Tax Place a check mark in the Price Inclusive of Tax field in case the selling price is inclusive of all taxes. Note: when the Price Inclusive of Tax field is checked then the program will assume that the price defined in the Unit Price field is the price inclusive of all taxes, and value of the Unit Price field will get populated in the Unit Price Incl. of Tax field on the Sales line. PIT Structure Choose the structure from the look up list for which price inclusive of taxes is applicable. You have to define all tax components which are included in the price, in this structure. The program will calculate the excise duty and other components of taxes by making back ward calculation. This structure will get populated on the sales line in case the Price Inclusive of Tax field is checked. If any charge is defined in the structure for a line then the charge amount is applicable for that line only and it will not be divided among the lines. Unit Price Mention the unit price of the item which is also the unit price inclusive of tax.

Sales Price
Navigation: Purchase Planning Item Item Card Sales Prices

Fields Description Fields MRP Description Place a check mark in the MRP field if the item lies under MRP provision of the Excise Act and excise duty is to be calculated on the basis of MRP By placing a check mark in this field the program will put a check mark in MRP field in sales line for the particular item. MRP Price Mention the MRP price in this field, based on which the will calculate the excise amount. This field contains the value for per unit of item. By entering the value in this field the program will put the same value in the MRP Price field on the sales line for the particular item. Abatement% Mention Abatement % in this field, based on which excise duty base amount is to be considered. By entering the value in this field the program will put the same value in the Abatement % field on the sales line for the particular item.

Price Inclusive of Tax

Place a check mark in the Price Inclusive of Tax field in case the selling price is inclusive of all taxes. Note: when the Price Inclusive of Tax field is checked then the program will assume that the price defined in the Unit Price field is the price inclusive of all taxes, and value of the Unit Price field will get populated in the Unit Price Incl. of Tax field on the Sales line.

PIT Structure

Choose the structure from the look up list for which price inclusive of taxes is applicable. You have to define all tax components which are included in the price, in this structure. The program will calculate the excise duty and other components of taxes by making back ward calculation. This structure will get populated on the sales line in case the Price Inclusive of Tax field is checked. If any charge is defined in the structure for a line then the charge amount is applicable for that line only and it will not be divided among the lines.

Unit Price

Mention the unit price of the item which is also the unit price inclusive of tax.

Note: The program will work according to the duration defined in the sales price line

Structure
Navigation: Financial Management Setup Structure Structure

Field Description: Field Include PIT Calculation Description Place a check mark in this field if you want to include the particular tax in PIT (price inclusive of tax) calculation. If the Price Inclusive of Tax field on the sales line is checked then in structure any one structure order detail should have include PIT calculation field true.

Customer Posting Group


Navigation: Financial Management Setup Posting Groups Customer

Field Description Field PIT Difference Acc. Description Choose the PIT Difference Account in this field from the lookup list. The program will debit or credit the values in this account which will arise while posting the sales transactions related to price inclusive of tax. Note: while calculating the backward calculation the program may find some difference in the total amount. The program will check the same and post this amount in to separate account.

Calculation of Excise Duty in case of MRP through Sales Order


Navigation: Sales & Marketing Order Processing Orders

Fields Description: Fields MRP Description The program populates the value in this field either from the Item Card or from the Sales Price Card.

Fields MRP Price

Description This field is non editable. The program populates the value in this field either from the Item Card or from the Sales Price Card. This field is editable.

Abatement%

This field will be populated by the program from item card or sales price card. This field is editable.

To calculate excise, fill the fields in the Sales Order form as follows: On the Header: Buy from Vendor No: Structure: On the Line: Type: No.: Description: Quantity: Unit of Measure code: Location: MRP: Item 1000 Bicycle 10 PCS blue Check Mark (The program will by default populate this value either from the Item Card or from the Sales Price Card) 1000 (The program will by default populate this value either from the Item Card or from the Sales Price Card) 20(The program will by default populate this value either from the Item Card or from the Sales Price Card) 1000 10000 10000 Excise

MRP Price:

Abatement %:

Unit Price Excl. VAT: Line Amount Excl. VAT: Calculate Structure Press F9 to view the excise amount Post the Order.

Viewing the Posted Transaction


Navigation: Sales & Marketing History Posted Invoice

G/L Entry

The program creates the following entry: Particulars Customer Excise Payable Sales Type DR CR CR Amount(Rs) 11304 1304 10000

Calculation of excise on the following basis: MRP Price is 1000 per unit, Quantity is 10. Total MRP price is 10000 (1000*10) On 10000 Abatement % is 20. 10000*20% = 2000. 10000-2000 = 8000 On the value of 8000, the program will calculate excise @ 16.30%. 8000*16.30% = 1304. Excise Amount is 1304 and Excise base amount is 8000.

The program will also create excise entry with excise base amount as 8000.

Excise Entry

In Posted Shipment the program will create RG 23 A Part I entry with the Quantity sold as 10. Note 1: You can post the transaction from the Sales Invoice Note 2: You can also post the same transaction for capital Item while keeping a check mark in the Claim Deferred Excise field. Note 3: If MRP field is checked on the sales line then Calculation Type in the Excise Posting setup should have % of MRP with the combination of blank calculation formula. In case of calculating the ECESS and SHE CESS, Calculation type should be Excise %.

Note 4: In case of MRP, you can also adjust the excise payable amount through the Direct Debit to PLA/RG functionality. Note 5: In case of MRP, the program will not allow the user to post the sales transaction if a check mark is placed in the Trading field on the sales header. Note 6: In case of MRP, the program will not allow the user to post the sales transaction if a check mark is placed in the CVD field in the Structure. Note 7: In case of MRP, the program will not allow the user to change the excise components on the sales line after calculating structure. Note 8: In case of MRP, you can also post the transaction related to Free Supply. Note 9: You can choose the different price with MRP and Abatement % on the sales line through Get Price option available in the Functions menu button of Sales Order/Invoice; in case of price difference based on the time duration. Note 10: If Abatement % is zero, then the program will not consider any Abatement % in the excise calculation. Note 11: If value in the MRP Price field is zero, then the program will not calculate any excise amount. Note 12: If the Structure includes excise, sales tax / VAT / CST, and charges, then the program will calculate excise on MRP and then will calculate sales tax/VAT/CST and charges based on the formula defined in the Structure. Note 13: Calculation on MRP can only be done for the Type Item in Sales Order/Invoice.

Calculation of Excise, VAT and Charges in case of Price Inclusive of tax through Sales Order
Navigation: Sales & Marketing Order Processing Orders

Fields Description: Fields PIT Structure Description The program populates the value in this field either from the Item Card or from the Sales Price Card. This field is editable. Price Inclusive of Tax The program populates the value in this field either from the Item Card or from the Sales Price Card. This field is editable. Unit Price Inclusive of Tax The program populates the value in this field either from the Item Card or from the Sales Price Card. This field is editable.

To calculate excise, VAT and charges, fill the fields in the Sales Order form as follows: On the Header: Buy from Vendor No: Location: On the Line: Type: No.: Description: Quantity: Unit of Measure code: Location: Price Inclusive of Tax: Item 1100 Front Wheel 10 PCS blue True (The program will by default populate this value either from the Item Card or from the Sales Price Card) PIT- EX/VAT (The program will by default populate this value either from the Item Card or from the Sales Price Card) 1000(The program will by default populate this value either from the Item Card or from the Sales Price Card) Blank Blank 10000 Blue

PIT Structure:

Unit Price Inclusive of Tax:

Unit Price Excl. VAT: Line Amount Excl. VAT:

The Unit Price Excl. VAT field and Line Amount Excl. VAT field will be blank before calculating structure. Calculate Structure

After calculating Structure, the program will populate the values in Unit Price Excl. VAT and Line Amount Excl. VAT fields. The program calculates the Unit Price Excl. VAT, multiply unit price with quantity, and then will populate the amount in the Line Amount Excl. VAT field. Sales Order line Unit Price Excl. VAT: Line Amount Excl. VAT: 694.791 6,947.91

Press F9 to view the Sales Order Statistics.

In the Sales Order Statistics window, the program will show the values in the Excise Amount, Tax (VAT) Amount and Charges Amount fields. Post the Order.

Viewing the Posted Transaction


Navigation: Sales & Marketing History Posted Invoice

G/L Entry

The program creates the following entry: Particulars Customer Excise Payable Sales Tax Freight Sales Type DR CR CR CR CR Amount(Rs) 10000 1133 1010 909.09 6947.91

Calculation of excise, VAT and charges on the following basis: Excise % is 16.30, VAT % is 12.50, and Charges % is 10. In the Structure, excise will be calculated on base value, VAT will be calculated on base value plus excise amount, and charges will be calculated based on the sum of base value, excise amount, and VAT amount. Unit Price Excl. VAT: Line Amount Excl. VAT: 694.791 6,947.91

On 6947.91, the program has calculated 16.30% as excise. 6947.91*16.30% = 1133 Excise Amount (After rounding nearest to Rupee 1) On 8080.91 (6947.91+1133), the program has calculated 12.50 as VAT 8080.91*12.50% = 1010 VAT Amount (After rounding nearest to Rupee 1) On 9090.91 (8080.91+1010), the program has calculated 10% as Charges

9090.91*10% = 909.09 Charges Amount Now Excise Amount is 1133, VAT Amount is 1010 and Charges Amount is 909.09

The program will create excise entry with excise base amount as 6947.91 and will also create detailed tax entry for VAT amount. In Posted Shipment, the program will create RG 23 A Part I entry with Quantity sold as 10. Note 1: You can post the transaction from the Sales Invoice Note 2: You can post the same transaction for capital Item with a check mark in the Claim Deferred Excise field. Note 3: In case of Price Inclusive of Tax, you can also adjust the excise payable amount through the Direct Debit to PLA/RG functionality. Note 4: In case of price Inclusive of tax, the program will not allow you to post the sales transaction if a check mark is placed in the Trading field on the sales header. Note 5: In case of Price Inclusive of Tax in structure Include PIT Calculation field should be checked for at least one of the structure detail. If there are three calculation orders in the structure and you place a check mark in the third calculation order, then automatically above two will update this field with a check mark. And if you remove the check mark in first calculation order then the program will remove the check marks in second and third calculation orders. Note 6: In case of price Inclusive of tax, the program will not allow you to post the sales transaction if a check mark is placed in the CVD field in the structure. Note 7: The program will not allow the user to change the excise components on the sales line after calculating structure in case of Price Inclusive of tax. Note 8: In case of price Inclusive of tax, the program will not allow using the Free Supply functionality. Note 9: You can also choose the different price with PIT Structure on the sales line through Get Price option available in the Functions menu button of Sales Order / Invoice. Note 10: If a check mark is placed in the Price Inclusive of Tax field on the sales lines then it is mandatory to have PIT Structure and value in Unit Price Inclusive of Tax field on the sales line. Note 11: In case of price Inclusive of tax, you can not use Export or Deemed Export and VAT Exempted functionality. Note 12: The program will only include the particular tax in Price Inclusive of Tax against which Include PIT Calculation field is checked in the structure.

Note 13: You can calculate excise, sales tax / VAT / CST and charges in case of Price Inclusive of Tax. Note 14: In case charges are defined in structure and Structure is selected in PIT Structure field on the sales line. In this case the program will not divide the charges amount in multiple lines. Note 15: In case of Price Inclusive of Tax, you can view the Structure for that particular PIT line by clicking Line menu button and selecting the Structure menu item.

After clicking Structure menu item the program will open the Structure Order Details PIT window.

The same can be viewed from the posted invoice.

Note 16: In case of Price Inclusive of Tax, you can also calculate VAT with Standard Deduction % through Sales Order/Invoice. Note 17: Price Inclusive of Tax can only be done for Type Item on the Sales Order/Invoice. Note 18: If a check mark is placed in the Price Inclusive of Tax field on the sales line, then the program will not allow the user to enter value manually in Unit Price Excl. VAT and Line Amount Exc. VAT fields.

Calculation of Excise, VAT and Charges in case of MRP and Price Inclusive of tax through Sales Order
Navigation: Sales & Marketing Order Processing Orders

Fields Description: Fields PIT Structure Description The program populates the value in this field either from the Item Card or from the Sales Price Card. This field is editable. Price Inclusive of Tax The program populates the value in this field either from the Item Card or from the Sales Price Card. This field is editable.

Unit Price Inclusive of Tax

The program populates the value in this field either from the Item Card or from the Sales Price Card. This field is editable.

MRP

The program populates the value in this field either from the Item Card or from the Sales Price Card. This field is editable.

MRP Price

The program populates the value in this field either from the Item Card or from the Sales Price Card. This field is editable.

Abatement%

The program populates the value in this field either from the Item Card or from the Sales Price Card. This field is editable.

To calculate excise, VAT and Charges, fill the fields in the Sales Order form as follows: On the Header: Buy from Vendor No: Location: On the Line: Type: No.: Description: Quantity: Unit of Measure code: Location: Price Inclusive of Tax: Item 1000 Bicycle 10 PCS blue Check Mark (The program will by default populate this value either from the Item Card or from the Sales Price Card) PIT- EX/VAT (The program will by default populate this value either from the Item Card or from the Sales Price Card) 1000(The program will by default populate this value either from the Item Card or from the Sales Price Card) 10000 Blue

PIT Structure:

Unit Price Inclusive of Tax:

MRP:

MRP Price:

Abatement %:

Unit Price Excl. VAT: Line Amount Excl. VAT:

Check Mark (The program will by default populate this value either from the Item Card or from the Sales Price Card) 1000(The program will by default populate this value either from the Item Card or from the Sales Price Card) 20(The program will by default populate this value either from the Item Card or from the Sales Price Card) Blank Blank

The Unit Price Excl. VAT and Line Amount Excl. VAT fields will be blank before calculating structure. Calculate Structure

After calculating structure, the program will populate the values in Unit Price Excl. VAT and Line Amount Excl. VAT fields. The program will calculate Unit Price excl. VAT, multiply unit price with quantity, and then will populate the amount in the Line Amount Excl. VAT field. Sales Order line Unit Price Excl. VAT: Line Amount Excl. VAT: 677.691 6,776.91

Press F9 to view Sales Order Statistics

In the Sales Order Statistics window, the program will show the Excise Amount, Tax (VAT) Amount and Charges Amount. Post the Order.

Viewing the Posted Transaction


Navigation: Sales & Marketing History Posted Invoice

G/L Entry

The program creates the following entry: Particulars Customer Excise Payable Sales Tax Freight Sales Type DR CR CR CR CR Amount(Rs) 10000 1304 1010 909.09 6776.91

Calculation of Excise, VAT and Charges on the following basis: Excise % is 16.30, VAT % is 12.50 and Charges % is 10. In Structure, the excise will be calculated on base value, VAT will be calculated based on the sum of base value and excise amount, and charges will be calculated based on the sum of base value, excise amount and VAT amount. Sales Order line Unit Price Excl. VAT: Line Amount Excl. VAT: 677.691 6,776.91

In this case Excise will be calculated on MRP. MRP Price is 1000 per unit, Quantity is 10. Total MRP price is 10000 (1000*10) On 10000 Abatement % is 20.

10000*20% = 2000. 10000-2000 = 8000 On 8000, the program will calculate excise @ 16.30%. 8000*16.30% = 1304. Excise Amount is 1304 and Excise base amount is 8000. On 8080.91 (6,776.91+1304), the program has calculated 12.50 as VAT 8080.91*12.50% = 1010, VAT Amount (After rounding nearest to Rupee 1) On 9090.91 (8080.91+1010), the program has calculated 10% as Charges 9090.91*10% = 909.09 = Charges Amount Now Excise Amount is 1304, VAT Amount is 1010 and Charges Amount is 909.09

The program will also create excise entry with excise base amount as 8000 and will also create detailed tax entry for VAT amount. In Posted Shipment, the program will create RG 23 A Part I entry with Quantity sold as 10. Note 1: You can also post the transaction from the Sales Invoice. Note 2: You can post the same transaction for the capital Item.

Calculation of Excise, VAT and Charges with Line and Invoice Discount in case of MRP and Price Inclusive of tax through Sales Order
Navigation: Sales & Marketing Order Processing Orders

Field Description On the Sales Header Field Cal. Inv. Discount (%) Description Place a check mark in this field to calculate Invoice Discount in case of Price Inclusive of Tax. If this field is checked then you can not use Calculate Invoice Discount option available in functions menu button on sales order/invoice. To calculate excise, VAT and Charges, fill the fields in the Sales Order form as follows: On the Header: Buy from Vendor No: Location: Cal. Inv. Discount (%): 10000 Blue Check Mark (In the Customer Card 10% is defined as Invoice Discount)

On the Line: Type: No.: Description: Quantity: Unit of Measure code: Location: Item 1000 Bicycle 10 PCS blue

Price Inclusive of Tax:

PIT Structure:

Unit Price Inclusive of Tax:

MRP:

MRP Price:

Abatement %:

Unit Price Excl. VAT: Line Amount Excl. VAT: Line Discount %: Calculate Structure

Check Mark (The program will by default populate this value either from the Item Card or from the Sales Price Card) PIT- EX/VAT (The program will by default populate this value either from the Item Card or from the Sales Price Card) 1000(The program will by default populate this value either from the Item Card or from the Sales Price Card) Check Mark (The program will by default populate this value either from the Item Card or from the Sales Price Card) 1000(The program will by default populate this value either from the Item Card or from the Sales Price Card) 20(The program will by default populate this value either from the Item Card or from the Sales Price Card) Blank Blank (-1000) after entering the value in line Discount % field) 10

After calculating Structure, the program will populate the values in the Unit Price Excl. VAT and Line Amount Excl. VAT fields. The program will calculate Unit Price excl. VAT, multiply unit price with quantity, and populate the amount in the Line Amount Excl. VAT field. Sales Order line Unit Price Excl. VAT: 708.695

Line Amount Excl. VAT:

6,086.95

Press F9 to view Sales Order Statistics

In Sales Order Statistics, the program will show the Excise Amount, Tax (VAT) Amount and Charges Amount. Note: In sales order statistics Inv. Discount Amount field is non editable in case of Price Inclusive of tax. Post the Order.

Viewing the Posted Transaction


Navigation: Sales & Marketing History Posted Invoice

G/L Entry

The program creates the following entry: Particulars Type Customer DR Excise Payable CR Sales Tax CR Freight CR Sales CR Discount Granted DR Discount Granted DR PIT Difference A/C DR Invoice Rounding DR Amount(Rs) 8391 1304 848 763.03 7086.95 1000 608.70 1.98 0.30

In this case the program will debit the PIT Difference Account with the value 1.98. Calculation of excise, VAT and charges on the following basis: Excise % is 16.30, VAT % is 12.50 and Charges % is 10. In Structure, the excise will be calculated on base value, VAT will be calculated based on the sum of base value and excise amount, and charges will be calculated based on the sum of base value, excise amount and VAT amount. Sales Order line Unit Price Excl. VAT: 708.695

Line Amount Excl. VAT: 6,086.95 In this case line discount is 1000 and invoice discount is 608.70. In this case excise will be calculated on MRP. MRP Price is 1000 per unit, Quantity is 10. Total MRP price is 10000 (1000*10). On 10000 Abatement % is 20. 10000*20% = 2000. 10000-2000 = 8000. On 8000, the program will calculate excise @ 16.30%. 8000*16.30% = 1304. Excise Amount is 1304 and Excise base amount is 8000. On 6,782.25 (line amount invoice discount + excise amount) i.e. (6,086.95 608.70 + 1304), the program has calculated 12.50 as VAT. 6,782.25 *12.50% = 848 =VAT Amount (After rounding nearest to Rupee 1) On 7630.25 (6,782.25+848), the program has calculated 10% as Charges 7630.25 *10% = 763.03 = Charges Amount Now Excise Amount is 1304, VAT Amount is 848 and Charges Amount is 763.03

The program will create excise entry with excise base amount as 8000 and will also create Detailed Tax Entry for VAT Amount.

Excise Entry

Detailed Tax Entry

In Posted Shipment the program will create RG 23 A part I entry with Quantity sold as 10. Note 1: You can post the transaction from the Sales Invoice Note 2: You can post the same transaction for the capital Item. Note 3: In case of PIT, the program will calculate Invoice Discount if the Cal. Inv. Discount (%) field is checked on the sales header. In this case you can not use Calculate Invoice Discount functionality from the Functions menu button in Sales Order/Invoice.

Note 4: Incase PIT Invoice Discount Amount field in the Sales Order Statistics is non editable. Note 5: Take a case when any order/invoice has multiple lines, in which Price Inclusive of Tax field is checked for some lines and unchecked for some lines. In this case if you want to calculate invoice discount, then you can only calculate invoice discount by placing a check mark in Cal. Inv. Discount (%) field on the sales header.

Calculation of Excise, VAT and Charges with one Line of MRP and Price Inclusive of tax and other line is without MRP and Price Inclusive of Tax through Sales Order.
Navigation: Sales & Marketing Order Processing Orders

To calculate excise, VAT and Charges, fill the fields in the Sales Order form as follows: On the Header: Buy from Vendor No: Location: Structure: 10000 Blue PIT- EX/VAT (for calculation of Excise, VAT and Charges)

On the First Line: Type: No.: Description: Quantity: Unit of Measure code: Location: Item 1000 Bicycle 10 PCS blue

Price Inclusive of Tax:

PIT Structure:

Unit Price Inclusive of Tax:

MRP:

MRP Price:

Abatement %:

Unit Price Excl. VAT: Line Amount Excl. VAT: On the Second Line: Type: No.: Description: Quantity: Unit of Measure code: Location: Unit Price Excl. VAT: Line Amount Excl. VAT: Calculate Structure

Check Mark (The program will by default populate this value either from the Item Card or from the Sales Price Card) PIT- EX/VAT (The program will by default populate this value either from the Item Card or from the Sales Price Card) 1000((The program will by default populate this value either from the Item Card or from the Sales Price Card) Check Mark ((The program will by default populate this value either from the Item Card or from the Sales Price Card) 1000(The program will by default populate this value either from the Item Card or from the Sales Price Card) 20(The program will by default populate this value either from the Item Card or from the Sales Price Card) Blank Blank

Item 1110 Rim 10 PCS blue