Lesson 4 of 26

Huda registers a new drink for excise

For: Tax managerAbout 7 min

What you will be able to do

This lesson is for the tax manager. Sweetened drinks are excise goods: the tax depends on the sugar content and is due when the goods leave the designated zone. Huda, the AI agent for excise, works out the category and rate from a product sheet, registers the product and records its movements. You will paste the product sheet of a new iced tea into the chat, approve Huda's go-aheads and check the product and the release in Excise.

Before you start

  • You are signed in as the tax manager, with access to Meridian Souq Manufacturing FZE in the Jebel Ali Free Zone.
  • The plant is set up as a designated zone, and the company's other drinks are already registered for excise.

Steps

  1. 1

    Give Huda the product sheet

    Make sure the entity at the top is Meridian Souq Manufacturing FZE. In the AI team's Chat, type @ and pick Huda, the excise agent, and type: we're launching a new drink. Here is the product sheet. Please register the product and record the first release from the zone to our stores. Then paste the product sheet under it: the product code, the sugar content from the lab report, the price, the first production run and the first release from the zone.

    • Type Message to the AI team: @Hud
    • Choose HHudaAIExcise preparer
    • Type Message to the AI team: @Huda we're launching a new drink. Here is the product sheet. Please r…
  2. 2

    Select Send

    Select Send. Your message and the product sheet appear on the right, and Huda's card under it is marked Working.

    • Select Send
  3. 3

    Follow Huda's to-do list

    Huda writes its to-do list: check the new iced tea against the excise rates and the products already registered, register it, record the production run and the release, and update October's draft return. Under the first item Huda already notes its finding: a sweetened drink with 6.2 grams of sugar per 100 millilitres falls in the moderate sugar band, at 0.79 dirhams per litre.

  4. 4

    Approve Huda's go-aheads

    Registering a product and recording a movement are changes, so Huda asks first, one go-ahead at a time. The first registers the product: under What changes it lists the code, the category Sweetened drinks, the sugar content and tier, the rate of 0.79 dirhams per litre, the price and the lab report. Check it against the sheet and select Approve. The next two record the movements: the production run of 30,000 bottles inside the zone on 19 October, and the release of 12,000 bottles to the stores on 21 October. Approve each one.

    • Select Approve
    • Select Approve
    • Select Approve
    The screen at step 4: Approve Huda's go-aheads
  5. 5

    Read Huda's answer

    Huda's green Answer says the product is registered as a sweetened drink in the moderate sugar band. The production run carries no excise, because tax is due only when bottles leave the zone; Huda says it recorded the run, which you didn't ask for, so the zone shows the stock the release comes from. The release of 12,000 bottles carries 4,740 dirhams of excise and is in October's draft return, which stays open until the month ends. Huda asks you for the lab report and the registration approval as documents.

  6. 6

    See what Huda did

    On Huda's card, select the line that says how long it worked. Each step is listed: the reads, each change with the go-ahead you gave, and their results.

    • Select Worked for 3 min · 35 step(s) · 4 change(s)
  7. 7

    Check the product in Excise Tax

    In the left menu, open Excise Tax. Under Products, Souq Iced Tea Peach 500ml is listed in the category Sweetened Drinks, with the volumetric rate of 0.79 dirhams per litre and the price of 3.50. The amount due shows October's draft so far. The movements are under Stock Movements; all of it is yours to review.

How to check it worked

Excise Tax lists the new product Souq Iced Tea Peach 500ml as a sweetened drink at 0.79 dirhams per litre, and the release of 12,000 bottles on 21 October is among the stock movements. Huda's answer says what it registered and recorded, and the excise on the release.

Common mistakes

  • Sending a product sheet without the sugar content. The excise rate for sweetened drinks depends on it; Huda will ask for it.
  • Approving a go-ahead whose figures differ from the sheet. Check the quantity, date and price before you approve.
  • Expecting production inside the zone to be taxed. Excise is due when the goods are released from the designated zone.

Check your understanding

  1. 1. What decides the excise rate on a sweetened drink?

    1. A.Its colour
    2. B.Its sugar content per 100 ml
    3. C.The store it is sold in
    4. D.The day of the week
    Show answer

    Answer: B. Its sugar content per 100 ml

    Sweetened drinks are taxed in tiers by sugar content, so the lab figure on the product sheet matters.

  2. 2. When is excise due on drinks made in a designated zone?

    1. A.When they are made
    2. B.When they are released from the zone
    3. C.When the bottle is designed
    4. D.Never
    Show answer

    Answer: B. When they are released from the zone

    Inside the designated zone excise is suspended; the release to the stores is the taxable event.