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Guidance Note on Excise

Guidance Note on Excise. Index. S. No. Contents Page No. Objective 5-6 Claim of Cenvat on Input 7-11 Payment of Excise Duty 12-15 On Dispatches Personal Ledger Account

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Guidance Note on Excise

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  1. Guidance Note on Excise

  2. Index • S. No. Contents Page No. • Objective 5-6 • Claim of Cenvat on Input 7-11 • Payment of Excise Duty 12-15 • On Dispatches • Personal Ledger Account • 4. Maintenance of Records 16-21 • Daily Stock Register (R.G.-1) • Sample Issued

  3. Index • S. No. Contents Page No. • Goods Received as Sales Return • 5. Job Work 22-26 • Goods Sent for job work • Goods received for Job Work

  4. Index S. No. Contents Page No. 6. Reconciliation between Accounts 27-27 & Excise 7. Export & Deemed Export Sales 28-28 8. Statutory Requirements 29-41 9. Flow Charts 42-44

  5. Objective • 1.1 Ensure that • Proper records are maintained and • systems & procedures are being followed in • accordance with the provisions of The • Excise Act, 1944 & Rules there under. • Funds are not blocked in the Personal • Ledger Account and proper claim has been • made for CENVAT.

  6. 1.2 Identify the bottlenecks in the above procedure & analyze the reasons there of.

  7. Claim of CENVAT on Input • 2.1 Ensure that • All the Excisable materials received in the factory premises have been entered in the CENVAT register. • Proper CENVAT have been claimed on the same day of preparation of Goods Inward Note. • CENVAT is claimed for correct value. • CENVAT is claimed on the Original CENVAT • Document.

  8. Credit is not taken twice on same invoice. • Credit is not taken without receipt of material. • Credit is not taken on forged and fake documents. • 2.2 Verify • CENVAT documents i.e. transporter copy of invoice, Bill of Entry etc. with RG 23A and C Part-II. • 2.3 Ensure that • CENVAT credit has been reversed for Rejection/shortage of raw material received.

  9. CENVAT credit on capital goods has • been taken upto 50% in current financial year in • which Capital goods are received and balance • 50% in any subsequent financial year. • Upto 100% CENVAT credit has been • availed on capital goods purchased & sold in the • same year of receipt . • 100% CENVAT credit on the additional • duty leviable under Section 3(5) of the Customs • Tariff Act in respect of Capital Goods has been • availed on receipt of such Capital Goods in the • factory,

  10. Credit of CENVAT has been claimed by the assessee properly on input directly obtained by the job worker instead of assessee. • There is proper control over pending 50 % CENVAT credit on capital goods. • Credit of CENVAT has been claimed correctly on input received as captive consumption. • CENVAT credit has been taken on all inputs • including samples / free of cost material received.

  11. 2.4 Credit on Service Tax • Ensure that • After utilizing credit of Service tax for payment of Service tax liability, unutilized credit of Service tax should be utilized for payment of Excise Duty on monthly basis. • A proper detail of Service tax payable, paid & credit utilized thereof has been prepared to keep control over service tax credit • Payment of education cess is made by utilization of education cess only.

  12. Payment of Excise Duty • 3.1 On dispatches • 3.1.1 Two types of excise duty is liable on the material to be dispatched- • Basic duty. • Special Excise Duty.

  13. 3.1.2Ensure that • Amount payable for duty have been adjusted • against available CENVAT credit and not • debited to Personal Ledger Account if • CENVAT credit is available. • Valuation of material dispatched for captive • consumption has been done at current • market price or price for which material is • being sold to other customers .(As per • Notification 64/95 C.E. dated 16.03.1995)

  14. 3.2 Personal Ledger Account • 3.2.1 Verify the • Details of payment made in Personal Ledger Account from Accounts Departments. • Justification for depositing amount in Personal Ledger Account. • 3.2.2Ensure that • Amount has been deposited in Personal Ledger Account on or before due dates, if required.

  15. Payment through PLA for one calendar • month is 5th of the following month, if • payment is made by electronic mode then • 6th of the following month. For month of • March duty is payable by 31st March. • 3.2.3Verify the • Date of deposit of cheque on Treasury – 6 challan. • If the Excise Duty is not paid by the due date, interest is payable along with the outstanding amount at the rate of 13% p.a. till the date of actual payment.

  16. Maintenance of • Records • 4.1 R.G.I- Daily stock register for finished goods • 4.1.1 Ensure that • All finished goods have been entered in Daily Stock Register on daily basis,with quantity mentioned in column 3 of Daily Stock Register with daily production report.

  17. All material dispatched have been entered • in Daily Stock Register. Verify the total of • quantity and value for a day with the • concern column of Daily Stock Register. • A separate Daily Stock Statement is • maintained for each item. • Goods should leave the factory after Tax • invoice is prepared. • Tax Invoice should be prepare accordance to Rule 11of Central Excise Rules 2002. • Finished Goods dispatched as per Daily • Stock Register reconcile with the Gate • Records.

  18. 4.2 R.G.23 A & C Part II – Cenvat Register 4.2.1 Ensure that • All the excisable Material received in the factory premises has been entered in the CENVAT register. • CENVAT credit on inputs is recorded in R.G.23A Part II on the same day of preparation of Goods Inward Note. • CENVAT credit on capital goods is recorded in R.G. 23C Part II

  19. 4.3 Preparation of INVOICES: • All columns with respect to sale tax particulars, • destination, mode of transport etc. should be • clearly mentioned on invoices. • Any alteration should be duly authorized. • Matching of time of removal as per invoice with • actual time as per gate records. • Vehicle number should be same on invoice & • gate.

  20. 4.4 Audit of Sample Issued • 4.4.1 Verify the • Record of accounts department with records of Excise department. • 4.4.2 Ensure that • Material sent as sample is duly approved. • Excise duty on sample sales has been paid.

  21. 4.5 Goods Received as Sales Return/ Rejection. • 4.5.1 Verify • Goods Inward Note summary for receipt of material for rectification . • Goods Inward Notes summary with CENVAT register maintained by Excise Department.

  22. 5. Job work • 5.1 Goods Sent for Job Work • 5.1.1 Ensure that • Proper records have been maintained i.e. challans under rule 4(5) (a) of The Cenvat Credit rules, 2004 for goods sent for job work. • 5.1.2 Verify • Excise records with store records and gate records on sample basis. • 5.1.3 Ensure that • CENVAT credit has been the reversed if goods are

  23. 5.1.4 Verify the • Quantity produced after Job work with • Returnable Gatepass Register • not received back within 180 days. • CENVAT credit has been availed when • above said goods are received after 180 • days. • All challans for sending material have • been entered into control register.

  24. Quantity and description of material to • be send for job work has been • mentioned properly on challans • /registers • List of material not yet received after • job work and check for delay. • Store records for excisable material • send for job work with excise records • on sample basis.

  25. 5.2 Material Received for Job Work • 5.2.1 Ensure • There is proper control over material received for job work. • 5.2.2 Verify the • Excise records with store records/ gate records on sample basis. • 5.2.3 Ensure that • Entries for job charges receivable/ received have been passed in accounts.

  26. 5.2.4 Verify the • Job work done as per Excise Department with • Accounts department. • 5.2.5 Ensure that • Amount has been debited / recovered for own • material used in job work done. • CENVAT credit has been availed at the time of • receipt of material. • Excise duty is paid for material removed after job work same as final product is removed.

  27. 6 Reconciliation between Accounts and Excise Department. • 6.1 Verify that • Monthly amount of CENVAT as per Accounts Department with Excise Department . • Monthly reconciliation and check pending entries.

  28. 7. Export & Deemed Export Sales 7.1 Ensure that • Export sale is being made either under rebate of duty or under bond. • Form CT – 3 certificate has been collected from the exporter for the deemed Export sale. • Timely submission of ARE – 1 return as evidence of export dispatch for each consignment.

  29. Statutory Requirements

  30. Penal Provisions

  31. Flow Charts

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