According to Rule 6 of Central Excise Valuation (determination of price of excisable goods) Rules, 2000 the value of goods manufactured shall be deemed to be the aggregate of production value and the amount of money value of any additional consideration flowing directly or indirectly from the buyer -
Value of materials, components, parts and similar items relatable to such goods;
Value of tools, dies, moulds, drawings, blue prints, technical maps and charts and similar items used in the production of such goods;
Value of material consumed, including packaging materials, in the production of such goods;
Value of engineering, development, art work, design work and plans and sketches undertaken elsewhere than in the factory of production and necessary for the production of such goods.
are apportioned to the goods manufactured to calculate the Excise Duty.
Example: A car manufacturer gave an order to Component Manufacturer to produce components as per the design & specification given by it. Car manufacturer supplied tools, dies & moulds free of cost to enable the manufacture of automobile components. Tools, dies, moulds etc. have their own life span and will be used for estimated production during their useful life. Consequently, depending upon the expected useful life and/or expected number of units likely to be produced, value of tools, dies, moulds etc. supplied by the car manufacturer free of charge is appropriately apportioned per unit of production to calculate the Excise Duty.
Tally.ERP 9 supports recording of amortisation sales by apportioning the cost of any additional consideration flowing from buyer.
Example: Universal Distributors supplied specially designed stickers - 2000 nos with clear instruction that all the mineral water bottles manufactured and supplied by ABC Company should have the Stickers supplied by them.
The cost of stickers supplied are Rs.2000(Rs. 1per sticker).
On 22-10-2010 ABC Company sold 1,500 liters of AquaSure - 1Ltr (with specially designed stickers supplied by the customer) @ 20 per Liter and considered the cost of stickers supplied by the customer to calculate the Excise Duty.
To record Amortisation sales transaction follow the given steps
To apportion the cost of the tools, dies, moulds, packing materials etc supplied by the Customer which are used in the manufacture of Finished goods create a ledger under Indirect Expenses
To create the Ledger
Go to Gateway of Tally > Accounts Info. > Ledgers > Create
In Name field enter the name of the expenses ledger - Stickers (Amortisation Exp.)
In Under field select Indirect Expenses
Set the option Inventory values are affected to No
In Type of Ledger field select Not Applicable
Set the option Use for Assessable Value Calculation to Yes
In Apportion for field select Excise from the list of Duty/Tax Type
In Method of Apportion select Based on Quantity from Method of Apportion list
Note: You can select the Method of Apportion - Based on Quantity or Based on Value which ever is appropriate.
In this case ABC Company has selected Based on Quantity, as cost of stickers are appropriated to the quantity of item sold.
Press Enter to save
To create a Sales Voucher
Go to Gateway of Tally > Accounting Vouchers > F8: Sales
In Voucher Type sub form select Excise – Sales as the voucher type.
Ensure that the Sales Voucher is in Item Invoice Mode.
Enter the Date as 22-10-2010.
Enter the Ref details as ABC/1152.
In Excise Unit field Tally.ERP 9 displays ABC Company as selected during voucher type creation.
Excise Book Name field displays the name of the excise invoice book (ABC/Rule11/Book1/10-11) created for the Excise Unit.
Serial No. field displays the Rule 11 invoice Number e.g. ABC\1\10-11.
In Party A/c Name field select Universal Distributors from the List of Ledger Accounts.
In Party Details sub form enter the Despatch Details & Sl. No. in PLA/RG 23 Number
In Nature of Removal field select the option Domestic from the list of Types of Removals.
Skip Notification Number and Notification Serial Number fields.
In Sales Ledger field select the ledger Sales @ 12.5% from the List of Ledger Accounts.
VAT/Tax Class field automatically gets updated with the VAT/Tax class as selected in the sales ledger, which can be changed.
In Name of Item field select the Stock Item i.e. AquaSure – 1 Ltr.
In Quantity field enter the quantity as 1,500.
In Rate field enter the rate as Rs. 20. Amount will be calculated and displayed automatically.
Press enter Twice and select Stickers (Amortisation Exp.) ledger to amortise the stickers cost to the goods manufactured & sold to the customer. In Amount field mention Rs. 1,500 (Rs. 1 per sticker- 1500 mineral water bottles are manufactured with specially designed stickers)
Note: Cost of stickers will be considered only to calculate the Excise Duty.
Select Duty Ledger i.e. Basic Excise Duty @ 16%. Amount will be calculated and displayed automatically.
Note: Excise Duty is calculated on Assessable Value which is inclusive of amortisation expenses (30000 + 1500).
Select Education Cess @ 2% and Secondary Education Cess @ 1% ledgers. Amount will be calculated and displayed automatically.
Select Output VAT @ 4% as the VAT duty ledger. Amount will be displayed automatically.
Note:To calculate VAT Tally.ERP 9 will not consider the sticker cost.
Set the option Show Statutory Details to Yes to view the Statutory Details screen.
The completed Excise Sales Voucher is displayed as shown
Press Enter to save.
The Rule 11 Invoice printed for amortisation sales appears as shown
