Saturday, November 11, 2006

Complete chaos!!

I hereby warn that the below article is purely not fictional and did happen very effortlessly in my life…any resemblance to any character or incidents is not purely a coincidence!!...and if the below test paper reaches any professor teaching indirect tax…..I pity your plight of reading the paper!!

So what exactly was the chaos?? was my mock test in my CWA course……I already had omitted half the portions from being read due to the following reasons:

• my college semester just got over
• I was not in a mood to study anything hard
• I LUV the indirect tax subject… do not know the limits of my love to this subject… is so much that I never attend the classes!!
• I do not have the indirect tax material, as I have lost the due slip paper of the institute, and not in a mood to get the duplicate and get my book….and my friends say the book isn’t worth buying!!
• I did not or was not in the mood to get the suggested books from outside..
• I do not attend classes….which means I do not have running notes…and I literally begged this ashish guy in my class and got his note book completely Xeroxed!!

So I had kinda prepared half the portions for the test…the test was on ‘Central Excise Act, 1944’...and I had prepared to write the test for the satisfaction of my professor in the institute….because he is suddenly nice to me and Christina saying that we both are very regular to class and stuff, when the truth is we never properly attend classes!! I took the courage to write the test…I received the test paper…..praying that I shud get what I had studied!!...that is just the first few chapters of the Act! I took the question paper….blinked twice!!.....couldn’t make head or tail of what was asked…the paper was concentrated more on the area that I had not studied!!

The following is the specimen of the test paper that I submitted!!

R.R.Academy (Unit Test Series)
ICWA – II Indirect Taxes – Excise act

1. Distinguish between self- assessment and provisional- assessment under excise act?

Ans: self assessment: it is the assessment by self of the manufacturer; he assesses the assessable value and excise duty on his goods. He is able to decide the rate of duty
Provisional assessment: it is not self assessment, it is provisionally assessed. The manufacturer cannot assess the value of the goods due to non-availability of certain documents; he is not able to assess the rate of duty. This is done periodically
(I wrote with the assumption of the meaning of self and assessment, and kinda rounded the answer with the same words in the question!!)

2. Write a note on:
a. Special audit can be ordered under section 14-A of excise act
b. Deemed manufacture
c. Taxable event in the central excise act
d. Distinction between levy and collection

a. If an auditor finds any defect in the documents, or finds that any information relating to the product has not been disclosed, then he can order special audit to be done in the factory, the special audit is done by auditors mostly appointed by the government. (I pray that this answer should be correct, as I agree that I have not seen these words in any material, and used my own creativity to write the answer)
b. Manufacture means when by adding inputs together we get a completely new output different from the input and it is accepted as a product by customers, whereas deemed manufacture is when the manufacture of a product does not fully result in new product, but it is accepted by customers as a new product (now does that make sense!!)
c. Taxable event means the production or manufacture of excisable goods in India. When goods are manufactured in India then they are capable of being levied an excise duty (whew, I know this answer!!!...yippeeee)
d. Levy means the imposition of tax on goods, while collection is collecting the levied tax (now what is supposed to be the distinction between levy and collection I wonder??!!!)

3. State the procedure to be followed in appointing an auditor leading to the submission of audit report under section 14 A under central excise act?

Ans: (who knows???....I never touched this chapter!!)

4. Explain the provisions relating to valuation of goods to be sold through depots or godowns under excise act??

Ans: The following valuation rules are applicable:

Rule 4: The prices of excisable goods are the price of such goods subject to any adjustment at the time of removal
Rule 5: The transaction value is determined at the place of removal, if the place of delivery is different from the place of removal than the actual cost of transportation is deductable.
Rule 6: If price is not the sole consideration, then any other consideration like cash and kind is includable.
Rule 7: If the goods are removed from some other place of removal, the excise duty is calculated at the price prevailing at that place of removal.
(Instruction supposed to be known by the examiner….do not blink where depots and godowns come in this answer….they are very much connected to the above rules….It is your brilliance to include the words godowns and depots wherever appropriate!! cannot expect the student to write everything!!)

5. What is personal ledger account and discuss its accounting treatment?

Ans: (well… it about my personal account and treatment. I do not have a personal account…even if I have, it will definitely be overdrawn!!)

6. Discuss whether the following expenses form a part of assessable value under excise act and why:
a. advertisement expenses incurred by the buyer or dealer
b. depot or godown expenses
c. after sales services during warranty period
d. interest in security deposit advance

a. It is not includable because it is not incurred by the manufacturer.
b. It is includable, because it is the place of removal, and incurred by the manufacturer
c. It is not includable, because the excise duty is already calculated at the time of sale
d. It is includable, because….. (So says my fellow classmates…..I still do not know why…I thought it was includable!!!)

With that the paper was over….I neatly folded it, wrote my name in BLOCK letters and submitted it and rushed back home!!

A note to readers: the statements mentioned in the brackets were not a part of my test paper!!...those were my random thoughts at the time of my exam!! people do bless me that I will do amazingly well in my main exams this December, and be more serious than this, and actually study hard to at least pass the paper…I do not know where I am still standing in this long road up my career!!

Driving people insane as always

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