Excise On MRP and PIT

rajpro007

Dear All,

I have an issue related Calculating Excise on MRP, The product also include PIT,

Please find the following scenario.

Item (A) have a MRP price = 100 & abatement 30%
Item also include Excise 12% and Vat 13.5 %

PIT calculation as follows:

unit price including VAT - 100
VAT 13.5% on 100, 100-(100*13.5/113.5)= 88
Excise -70% on MRP (70*12%) = 8.5
Unit price ex-vat- 79.5

As per Base NAV Abatement amount doesn't create any G/L account or not less with unit price.

But client want that Abatement amount 30 less with unit price i.e (79.5-30) =49.5, and also post into G/L account.
Actually client want this abatement amount as there Income.

So, I try with structure, and insert abatement amount as charge it's doesn't work.

How do i do that? pls suggest.

ssingla

Abatement is not income. Abatement is only used for calculating the assessable value for excise. Govt. of India fixes abatement based on the nature of trade, expenses for moving goods from manufacturer location to end customer, profit margin of various parties involved in the transfer.

Therefore abatement is not income of manufacturer and should not be booked anywhere.

rajpro007

Thanks sir,