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Please tell me how to audit the payment of excise…

Please tell me how to audit the payment of excise Duty.

Please tell me how to audit the payment of excise Duty.

Chiranjibi Mar. 09, 2018

Excise Duty:

An excise or excise tax is any duty on manufactured goods which is levied at the moment of manufacture, rather than at sale.

The point of time at which duty is collected may be determined by consideration of administrative convenience. Normally excise duty is paid before the issue of excisable goods from the factory.

For this, the auditor should take into consideration-

(i) Ensure that excise duty is paid at the time of issue of excisable goods from the godown at factory of the producer. The duplicate copy of the challan as issued by the bank is forwarded for the purpose of issue of the excisable goods.

(ii) Verify the amount of duty paid with the corresponding value of the goods issued from the inventory register of the producer by applying test check. In case where the client maintains an advance deposit with Excise Department, the auditor should see amount actually paid does not exceed the amount thus calculated.

(iv) Ascertain that in case of dispute about the amount of duty payable, a provisional amount may be paid in lieu of final amount. In such cases, the final amount determined as payable should be verified. If the provisional payment was more than the actual amount, the refund of such excess amount should be vouched.

(v) The auditor may also physically verify requisite registers maintained with actual and see reconciliation of financial records with sales tax records.