In some industries, businesses are only allowed to set off a portion of their input excise duty against output duty. In this case, the remainder of the duty is added to the material value.

If any of your excise registrations are only entitled to claim partial CENVAT credit, set the indicator in Customizing for Logistics – General, by choosing Taxes on Goods Movements → India → Basic Settings → Maintain Excise Registrations.

Configure separate tax codes that split the excise and post some as tax and add the rest to the material price.

The portion of the excise duty that is added to the material value is displayed in the excise invoice, along with the CENVAT credit. This amount is added to the inventory value when you post the goods receipt.