Excise Duty

Use
The SAP system automatically calculates excise duties in Materials Management (MM) and in
Sales and Distribution (SD), and posts them in Financial Accounting (FI).
The system covers all types of excise duty, all of which need to be calculated and reported
separately:
 Basic excise duty (BED)
 Special excise duty (SED)
 Additional excise duty (AED)
 National calamity contingency duty (NCCD)
 Cess
 Education cess
 Countervailing duty
 Additional duty of customs

Features
The system of excise duties is complex, and differs from the generic functions for taxes on sales
and purchases in a number of ways:
 The rate of duty on a single material can vary according to which chapter ID it is listed
under.
 You cannot offset all excise duty on inputs against outputs.
Depots cannot offset any input duties at all. Manufacturing plants can only offset input
duties if they can show that the input materials are used to produce output materials.
 You have to record all excise duty (inputs and outputs) in excise registers.
 Your company may only be entitled to offset a portion of the duty on inputs against duty on
outputs.
 Companies that qualify as small-scale industries can levy excise duty on outputs at
reduced rates, so if you purchase materials from these companies, you must calculate a
different rate of excise duty.
Excise Determination
MM comes with two ways of determining excise duties (and sales taxes) on input materials:
formula-based excise determination and condition-based excise determination. The system
calculates excise duties using a tax procedure.
SD also supports formula-based and condition-based excise determination, but in SD, the system
calculates the taxes using a pricing procedure, not the tax procedure (see Pricing).
Reporting
You have to remit the excise duty that you have collected to the central excise authorities. The
law requires you to remit excise duty twice monthly: for the first half of any given month (1–15
inclusive) and from 16 to month-end. In each case, you are allowed five days to remit the excise
duty. Country Version India offers a report to help you do just that (see Remittance of Excise Duty
Fortnightly).
A small number of transactions have to be remitted on the same day (see Other Outward
Movements).
In addition, the system allows you to prepare printouts of the various excise registers for the tax
authorities.