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FAQ-16 ( Excise for Manufacturers):

How to configure Stock Item when there is change in the Valuation Method? 

As per the Union Budget 2012-13 there has been a change for the manufacturers of Precious Metals and Jewellery and the details are as follows:-

·         For precious metal and jewellery manufactured or sold under a Brand Name, Excise duty of 1% was applicable on Ad Valorem basis.


·         Now Excise duty rate has been retained as 1%, but the Valuation Method has been changed from Ad Valorem to Tariff Value.   

In the same notification, Tariff Value has been defined that it is equal to 30% (i.e. 70% of transaction value is Abatement) of Transaction Value declared on the invoice.


How this change in Valuation Type can be handled in Tally.ERP 9?

Step 1: Display of existing Duty Details

For a Stock Item, in Duty Details screen, the valuation type - Ad Valorem and rate of duty would have been configured as shown:


Tally.Erp 9 : Excise for Manufacturers


Step 2: Alter/change the Valuation Method as per Budget 2012-13

To alter the Valuation Method,

Go to Gateway of Tally > Inventory Info. > Stock Items > select the appropriate item and press Enter to view the Item in Alteration mode.

·         Tab down to Set/Alter Excise Details and set the option to Yes to view Excise Details screen

·         In Excise Details screen, tab down to Set/Alter Duty Details to Yes to view Excise Duty Details screen

·         In Excise Duty Details screen,


o   Change the Valuation Method as MRP Based and press Enter to view Excise MRP Rate Details.

o   In Excise MRP Rate Details screen,

o   Enter  1-4-2010 or an appropriate date in Applicable From field

o   Enter the sale price at which the product was sold until now in MRP Rate column

o   Specify 0% in Abatement column


Tally.Erp 9 : Excise for Manufacturers


Note: Based on the earlier Valuation Method transactions would have been recorded. To keep those transactions intact, the old sales price details have to be entered as shown above.

As per the Budget (2012-13) the value which will be considered for calculating Excise Duty is 30% of Transaction Value. By this, it is clear that 70% is abatement. Hence in the above screen specify the Applicable Date as 17-3-2012 and the current sale price under MRP Rate column and 70% under Abatement column.


Tally.Erp 9 : Excise for Manufacturers



Tally.Erp 9 : Excise for Manufacturers


With the above change if an excise sale entry is recorded on or after 17th march 2012, the excise duty will calculate on the Current Sale Price - 70% abatement.

Tally.Erp 9 : Excise for Manufacturers


What do I do, if the Sale Price is required to be changed for each invoice or there is a frequent change in the sales price?

Suppose, the sale price is required to be changed for each invoice or if the sale price changes frequently then in F12: Configuration (Sales Invoice Configuration) enable the option -Allow modification of Excise MRP Rate & Abatement. This configuration will allow you to modify the MRP rate and abatement in each transaction.


Tally.Erp 9 : Excise for Manufacturers


Tally.Erp 9 : Excise for Manufacturers


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