India Localization Basic Tax Structure

­­­India Localization

Tax: Tax is basically of two types.

1.     Direct  Tax

2.     Indirect Tax

1. Direct Tax – We pay directly to the government. For e.g. Income Tax

2. Indirect Tax - We don’t pay directly to the government but we have to pay indirectly like Excise, VAT, TDS, WCT, and Service Tax, Cess, Shecess.

Indirect Tax is also divided into two parts:

1.     Claimable

2.     Non Claimable

Service Tax:

LST (Local Sale Tax) – Not Claimable

VAT (Value Added Tax) – Claimable

Claim Process – Paid/Receive

Capital Item – Not consume

The two types of Industries are:

1.     Goods Industry

a.     Manufacturing -- Excise

b.     Trading – VAT(Value Added Tax),LST(Local Sales Tax),CST(Central Sales Tax)

2.     Service industry

In oracle we maintain several excise registers:

RG 23 A	Part 1(Quantity)	Raw Material
	Part 2  (Value)
RG 23 C	Part 1(Quantity)	Capital Items
	Part 2  (Value)
RG 1	Quantity	Finish Goods
RG 23 D		Only for Trading
PLA(Personal Ledger Account)		Negative value is fill in PLA

Slab of Excise Duty

1.     Basic Excise   : -  10% (Total Value)

2.     Cess                :-    2% (On Basic Excise)

3.     Edu. Cess       :-    1% (On Basic Excise)

            Total               : - 10.30%

Suppose: Purchase or Sale of Rs. 100

Slab of Excise as follows:

Basic Excise Duty     = 10 (10% of Rs.100)

Cess                              =   2 (2% of Rs. 10)

Edu. Cess                    =   1 (1% of Rs. 10)

Total Tax                     = 10.30