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Import

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Scenario - Importing from a Third Country

Purpose

This scenario describes the processes involved in importing goods into your country

from a third country. In this sense, a "third country" is defined as the country of export

when no trade agreement exists between your country and the exporter. In this case,

you are responsible for compliance with the import laws of your own country.

Reasons for Importing Goods

There are three primary reasons for importing goods.

Trade

Production

Transit

TradeThere are three main reasons why you may want to import for trade purposes:

Comparative advantage Some foreign manufacturers can make products more

cheaply.

Availability Some products are only available in foreign markets.

Marketability A product may be new and you want to market it in your entire country

or in a region of your country.

Production

It is sometimes advantageous to import raw or semi-finished materials to be used in amanufacturing process.

Transit

Foreign merchandise with the status "in transit" is exactly that passing through your

country on the way to another. At the plant level in the SAP System, this refers to a

goods receipt that immediately becomes a goods issue to a country other than the

location of your plant. A carnet TIR (document which allows passage of foreign

merchandise through a customs territory) may be required for the transfer of goods

under bond in your country.

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Data Description CommentsFT/Customs

data

# Mode of transport

The technical customs term describingthe type of transport (for example, see

The system determines this

data from the vendormaster and uses it as a

Foreign Trade Data in Purchasing Documents

Data that describes the import or arrival characteristics of a purchasing transaction.

Structure

Foreign trade data appears at the header and in the items themselves in purchase

orders and shipping notifications (inbound deliveries).

The vendor master records, material master records and purchasing info recordspropose this data.

Foreign Trade Data in Purchase Order, Shipping Notification and Goods Receipt

Headers

or air transport) used to take the goods

across a national border

#Office of entry

The key for the border customs office

where the goods are unloaded from the

mode of transport used for crossing

the border

e au va ue n e

purchase order, shipping

notification and goods

receipt.

Partner data Vendor The vendor key

Delivery vendor

Country key

The vendor country key

The system copies this data

from the purchase order to

the shipping notification

and goods receipt.

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Foreign Trade Data in Purchase Order, Advance Shipping Notification and Goods

Receipt Items

Data Description Comments

Material data Material The material keyfor the item Description

A description of the item

Commodity/Import code

Weight and volume

The system copies thisdata from the material

master record.

Origin The goods country of

origin

The goods countryand region of

The system copies the

country of origin from the

purchasing info record as a

destination

.

country and region of

destination from the

ordering plant.

Transaction Import procedure The

procedure by which the

goods being imported are

declared to customs. This

is copied from the

purchasing info record.

Transaction type

The classification of the

type of transaction contractIn co terms

With the appropriate

settings in Customizing,

the system determines thetransaction type

automatically based on

criteria like the importing

country or the item

category. The system then

copies the data to the

purchase order

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Value Statistical value The untaxed value of

the goods, including transportation and

insurance costs that arise in the

importers country

The system calculates the

statistical values in pricing

in the purchase orders.

Other customs

data

Customs quota

CAS number

Manufacturer number

The system uses this data

to calculate import duties

to be levied.

-

Preference rates

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Maintenance of FT Data in Purchasing Documents

This function describes the maintenance of foreign trade data required for importing

merchandise in purchase orders and shipping notifications (inbound deliveries).

Activities

To change or display a purchase order from the SAP standard menu, choose Logistics

Materials ManagementPurchasingPurchase OrderChange orDisplay.

To change or display an inbound delivery (advanced shipping notification) from the SAP

standard menu, choose Logistics Materials ManagementPurchasingPurchase

Order Inbound DeliveryChange orDisplay.

To change or display a goods receipt from the SAP standard menu, choose Logistics

Materials Management Inventory ManagementMaterial DocumentChange or

Display.

You can retrieve and check a list of existing purchase orders for completeness from the

Importsection of the Operative Cockpit. For this procedure, see Scenario - Daily Import

Operations.

To check a single purchase order for completeness choose the Individual Maintenance

tab in the General Foreign Trade Processing Cockpit. From this cockpit, in the Item

Overviewsection of a purchase order, you can simulate an import to check and

maintain foreign trade data completeness by choosing Import Simulation.To maintain data in

Menu path in document

You should know

The purchase order header

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In the purchase order header, choose theAddress and Importtabs

You can display all foreign trade data in the purchase order header easily from the

General Foreign Trade Processing Cockpitunder Individual Maintenance. To display the

incompletion log for FT data in the header, choose Log of Incomplete Items.

A purchase order item

In the purchase order, select the item in the Item Overviewsection. In the Item section at

the bottom of the screen, choose the Quantities/Weights, Delivery, Delivery address and

Importtabs

You can display a log of all incomplete FT data in the purchase order item easily from

the General Foreign Trade Processing Cockpitby choosing Log of Incomplete Items.

The inbound delivery (shipping notification) header

In the inbound deliver , choose Go to HeaderForei n Trade / Customs

To check whether the foreign trade data in the header is complete, choose

Incompleteness analysis.

An inbound delivery item

In the inbound delivery, select an item and choose Go to Item Foreign Trade /

Customs

Choose Incompleteness analysis to determine whether all foreign trade data is

complete in an inbound delivery item.

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Foreign Trade Data in Master Records

Definition

Master data relevant to foreign trade that is used throughout the entire logistics chain in

Materials Management (MM) and Sales and Distribution (SD) documents.

The systems automated foreign trade processing depends on complete master data. Toensure efficient import and export processing, you need to maintain the master data

thoroughly.

Structure

This section provides a detailed list of the data relevant for using SAP's Foreign Trade

(FT) application component in the following master records:

Vendor master record

Purchasing info record

Material master record

Customer master record

Cockpit Access: In addition to checking this data from the SAP standard menu paths

described below, you can check whether foreign trade data is complete in master

records in one step from the General Foreign Trade Processing Cockpit. From the

Master data section of this cockpit, you can create, view and modify each of these

master records.

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Vendor Master Record

To go to a vendor master record from the SAP standard menu, choose Logistics

Materials ManagementPurchasingMaster dataVendorPurchasing

You can maintain data relevant to foreign trade on the following screens of the vendor

master:

Address Vendors city

Postal code

Country

Region

The vendors country helps indicate import transactions in MM documents. You need

the vendors region for declarations to the authorities.

Control

This screen contains accounting data including the vendors VAT registration number.

The system copies the vendors VAT registration number from the vendor masterrecord to the urchase order as a default value.

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Purchasing data

Order currency

Terms of payment

In co terms and Schema Group vendor for import pricing procedure

The mode of transport indicates how the imported goods cross the border.

Office of entry (at the border)

The border customs office code specifies the office through which goods usually arrive

in the country. The vendor master record supports only one Office of entry.

Purchasing group

To display or maintain data for preference processing from this screen, choose Extras

Tariff preference.

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Purchasing Info Record

The purchasing info record represents the link between the vendor and the material

delivered and overrides the vendor master record. Communication between the vendor

and your plant can be made easier using purchasing info records.

To go to a purchasing info record from the SAP standard menu, choose Logistics

Materials Management

Purchasing

Master data

Info record.You can maintain data relevant to foreign trade on the following screens:

General data

Country of origin

Region of origin

Certificate category (the type of certificatefor example, a

certificate of originissued by the vendor)

Certificate number

Date until which the certificate of origin is valid

Confirmation control keyEx ort/im ort rocedure

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Material Master Record

To go to a material master record from the SAP standard menu, choose Logistics

Materials ManagementMaterial MasterMaterial.

You can display or enter data relevant to foreign trade in the following views of the

material master record:

Foreign Trade: Import data

Import code number (or commodity code)

Export/import group (a grouping of similar materials for export or

import transactions)

Country of origin

Region of origin

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Create Purchase Order (ME21N)

A purchase order is a legal document used to record an individual purchase with the

vendor. It also provides the vendor with a reference document to link to goods receipt

and invoice verification processes. The purchase order is a commitment to a vendor

for a given material, in a specified quantity at a predetermined price and delivery date.Enter import vendor, Purchase Organization, Purchasing Group, Company code,Material Number, PO qty, and Delivery date

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Enter Office entry in geography tab

Condition tab

Enter commodity code and import code number

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In Purchase Order of main imported vendorGR-based invoice verification tick should

not be there on invoice tab.

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Since the purchase order vendor is 300103 who is imported vendor and he is nothing to

do with the customs duty, special customs duty and countervailing duty. These three

duties are paid to the local Commissioner of Customs, vendor code 300104 in our case.

The Customs Agent Charge is paid to the Customs Agent, Vendor Code 300104

Normally the Freight is also paid to the Customs Agent who in turn would have had paid

to the respective Transport Operator (if different. Normally the CFA owns a transport

company) and the Port Authorities.

It is recommended to change the vendor code 300104 for this three-condition types viz.,

JCDB, JCV1, JECV, and JEBC.

To change the vendor for condition type select JCDB condition type and choose on

Condition detail icon located at left bottom side of your screen.

System will take to new Item Conditions Detail: screen. In this screen at right

bottom of screen you can find the vendor code 300103 the main imported vendor is

defaulted here. You have to replace this vendor code with commissioner of customs

code 300104 and choose enter and green arrow to come back to condition tab ofurchase order.

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To change the vendor for

condition type select

FRB1 condition type

and choose on

Condition detail icon

located at left bottom

side of your screen.

System will take to new

Item Conditions

Detail: screen. In this

screen at right bottom

of screen you can find

the vendor code

300103 the main

imported vendor isdefaulted here. You

have to replace this

vendor code with

Freight vendor code

300105and choose

enter and green arrow

to come back to

condition tab ofpurchase order.

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Change the currency at header level because the custom have to pay to Indian custom

office that should in INR and gross price should be in USD

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Invoice Verification for CVD, Customs Duty, Educational Cess on CVD, Customs

Educational Cess

Use

Subsequent to the purchase order placed on imported vendor, the goods arrive in

India, they go through customs formalities. The customs officers issue a bill of entry

for the goods, after payment of necessary duties like basic customs duty, specialcustoms duty and countervailing duty. This is like invoice for the CVD on the goods.This process is dealt with logistics invoice verification.

Select Custom vendor

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Enter Qty and Amount of Basic Customs, CVD, Ecess on Basic Customs

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Create Invoice verification for Freight

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Goods Receipt With Reference to Purchase OrderGoods are received from the Vendor as a result of a Purchase Order at the receiving

plant. A goods movement is entered into the system referencing this PO and a goods

receipt material document is posted. Appropriate general ledger accounts are also

posted and stocks are updated.

You will get Excise Invoice tab at Header Data for capturing bill of lading details and for

posting Part I and Part II.

On the Excise Invoice tab at Header Data make the following entries.

Capture & Post Excise invoice, Excise, Excise invoice, Excise Invoice Date, BED, AED,

SED, Close Header Detail data to enlarge the Detail data. Select Excise Item tab at

Detailed Data (at the last).Chapter ID, EI Quantit, Please cross check the BED, ECS (CVD

in this case) amount of item, as per the bill of lading, legally you cannot avail more than

what mentioned in Vendor Excise Invoice. In case of imported purchase order in normal

case system will default CVD and ECess (invoice verification made on commissioner of

customs) amount as BED and ECS i.e. CENVAT amount. It is observed some times

system is not doing this operation. In this case please input CVD and ECess amount in

place of BED and ECS amount so that you can avail CVD and ECS as CENVAT amount.

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Invoice Verification

In this process of Logistics Invoice Verification all the Incoming Invoices are verified in

terms of their content, prices and arithmetic. When the invoice is posted, the invoice

data is saved in the system. The system updates the data saved in the invoice

documents in Materials Management and Financial Accounting.

Select indicator:Goods/Service items

Enter Purchase Order number.

Base line date.

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Purchase Order History (ME23N)

Delivery Cost Logistic Invoice-Customs

Delivery Cost Logistic Invoice-Freight

Logistic Invoice Receipt-imported item

Goods Receipt of imported item