Implementing Excise Duty Abatement on MRP In Odoo / OpenERP

Here is more information on Implementing Excise duty Abatement on MRP In Odoo

Problem Definition
As companies manufacture and sell products in small packages, they get Excise abatement on certain products. Government has fixed the percentages for various products in an Excise book. Our problem scenario – How do we define this in Odoo ERP?

Let discuss this considering an example.

Lets say, I have a product – “Product X” with MRP – 2000/- per/ltr. I sell this to the distributors at a selling price of, say, 1000/-. As per the Excise Book definition, abatement is a percentage of the selling price but if the packing is smaller than 30 ltr, the Excise of 12.36% should be applied on MRP and not on Selling Price. In such scenarios, government provides us  abatement in the taxes. Abatement is typically in %. So, in this example if we consider that we get 30% abatement in excise, then the excise is calculated on the rest of the 70% of the MRP and not on the entire MRP.

Calculation for this:

1. If we consider excise on the entire MRP
2000 * 0.1236 (In other words this is 12.36% excise) = 247.20

2) With tax abatement in place this same calculation becomes
(2000 * 0.7) * 0.1236 = 173.04
The 0.7 above is 70% (Since it is 30% abatement)

How to bring this calculation to Odoo:

1) Create New Tax  – Input Excise Duty @ 12.36% – 30% Excise abatement


2) After applying the tax in Sale Order below is our desired output


One response to “Implementing Excise Duty Abatement on MRP In Odoo / OpenERP”

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