CIN Manual

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COUNTRY INDIA VERSION (CIN) - MATERIAL MANAGEMENT

Contents

1.1 EXCISE REGISTRATION ..................................................................................................... 3

1.2 EXCISE GROUP .................................................................................................................... 3

1.3 SERIES GROUP .................................................................................................................... 3

2 ESSENTIAL MASTER DATA FOR EXCISE .............................................................................. 4

2.1 Chapter – Id ........................................................................................................................... 4

2.2 Material Chapter ID combination ...................................................................................... 4

2.3 Material Assessable value .................................................................................................. 5

2.4 CENVAT Determination ....................................................................................................... 5

2.5 Vendor Excise details .......................................................................................................... 5

3 TAX CONDITION RECORDS ...................................................................................................... 6

3.1 Cenvatable Excise Duties Conditions (%ge) .................................................................. 6

3.2 Cenvatable Excise Duties Conditions (Qty) .................................................................... 6

3.3 Non- Cenvatable Excise Duties Conditions(%g e) .......................................................... 7

3.4 Non- Cenvatable Excise Duties Conditions(Qt y) ........................................................... 7

3.5 VAT Conditions .................................................................................................................... 7

3.6 CST Conditions ................................................................................................................... 7

3.7 Service Tax Conditions: Non-Inventoried ....................................................................... 8

3.8 Service Tax Conditions: Inventoried ................................................................................ 8

3.9 Tax Conditions to be Maintained ...................................................................................... 8

4.1 Create the Purchase Order ................................................................................................. 9

4.2.1 Option I: Capture Excise Invoice @ Goods Receipt ............................................... 9

4.2.2 Option II: Capture Excise Invoice separat ely ........................................................ 10

4.3 To check the status of all the excise invoi ces captured ............................................ 11

4.4 Post Excise Invoice ........................................................................................................... 11

5 Procedure for Claiming CENVAT for Capital Goo ds .......................................................... 13

6 Procedure for Claiming Duties for Imported Go ods .......................................................... 14

9 Procedure for Inventorizing Custom Duties Pur chased for a Depot .............................. 18

10.1 Return Delivery (MvT : 122) ............................................................................................ 19

10.2 Cancellation of Material Documents ............................................................................ 20

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10.3 Purchase Order Returns ................................................................................................. 22

10.4 CENVAT Adjustment Postings (J1IH – Excise JV) .................................................... 22

10.4.1 Making Adjustment Postings for Scrap ................................................................ 22

10.4.2 Making Adjustment Postings for Materials Not Used in Production .............. 22

10.4.3 Making Adjustment Postings for Additiona l Excise Paid to Vendors ............ 23

10.4.4 Making Adjustment Postings for Money Tra nsferred to PLA ........................... 24

10.4.5 Canceling Excise Invoices ...................................................................................... 24

10.4.6 Making Adjustment Postings for Other Tra nsactions ....................................... 25

11 Subcontract Challan ............................................................................................................... 27

11.3 Subcontract Process: Return Delivery To Ve ndor .................................................... 30

11.4 Subcontract Process: Cancellation of Goods Receipt ............................................. 31

11.5 Subcontracting over consumption or under c onsumption ..................................... 32

11.6 Challan completed 180 days reverse and rec redit the challan ............................... 33

12 Frequently Asked Question .................................................................................................. 33

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1 THE COUNTRY INDIA VERSION (CIN)

CIN facilitates handling of tax implications during the Purchase and Sales cycles. This country version is designed for use by businesses with operations in India as well as the generic SAP System functions. It comprises functions designed for laws and business practices particular to India, and a country template to help customize the system according to local requirements. Most of the country-specific functions for India relate to Financials and Logistics. The main areas are as follows:

• Excise duty and the central value-added tax system (CENVAT) • Withholding tax (also known as tax deducted at source) • Sales tax • Maintenance and printing of statutory excise registers

1.1 EXCISE REGISTRATION

Each entity is assigned its own excise registration number. Every factory that manufactures excisable goods is required to register separately.

1.2 EXCISE GROUP

This is a unit within an excise registration, in India, which keeps its own set of excise records.

Whereas the excise registration reports to the excise authorities, the excise group is a purely internal organizational unit. Each excise group keeps records of all transactions that have to be reported to the excise authorities. When the time comes to present these records to the authorities, the excise registration compiles the information from all of its excise groups.

Excise Group determines Excise Register number range

All excise Reports (RT-12, PLA, RG23A Part I & II , RG23C Part I & II) will be generated based on this Excise Group.

1.3 SERIES GROUP

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Series Group determines number range for outgoing excise invoice / challan (e.g. 57AC challan etc.)

2 ESSENTIAL MASTER DATA FOR EXCISE

Transaction Code: J1ID

- Excise Master.

- Material Chapter Id Combination.

- Material Assessable Value.

- CENVAT Determination

- Vendor Excise Details.

2.1 Chapter – Id

Select Chapter Id Go to New Entries and Enter Chapter Id and Description.

2.2 Material Chapter ID combination

Select material chapter ID combination box and then press icon.

Select Material & Chapter Id

Enter material, plant and chapter ID combination in the respective tabs.

Go to New Entries and Enter the details

If the material can be sent outside for subcontracting purpose then put a tick in the check box

In the material type tab select appropriate material type.

If it is a input material then select the tab Raw material

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If it is capital item then select Assets.

If it is a in-house produced material then select RG1.

Select GR --X ref to specify whether credit is allowed only for single goods receipt or multiple goods receipt with single credit or multiple goods receipt with multiple credits.

In the declared column enter X if the material is declared to excise

Also enter the date of declaration.

2.3 Material Assessable value

In this section we enter the assessable value of material which is used for the purpose to determine how much excise can be credited to CENVAT account when creating a subcontracting challan and vendor returns.

Enter the combination plant, material number, valid from, currency, Assessable value.

Select Material Assessable Value Go to New Entries and Enter the details

2.4 CENVAT Determination

In this section enter the input and output relationship of the material with combination of plant, default indicator for Modvat.

Companies are required to file with the Excise authorities, a list containing the excisable finished products manufactured and the excisable input materials required for such production, to avail Modvat.

It is possible that an input material may be used in the production of more than one finished product. However, if such a material is mainly used for the manufacture of a particular finished product then the input material is identified to be the default material. The default indicator is marked for such material.

Select Cenvat Determination Go to New Entries and Enter the details

2.5 Vendor Excise details

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In this section the vendor excise details are maintained.

The vendor number, his excise registration details, ECC no, Excise Range, Excise Division, Excise Commissionerate, CST no, LST no, Permanent account number, Excise indicator for vendor, SSI status (if he is a SSI vendor), Type of vendor and CENVAT (This is applicable for SSI vendor only who has participated in the CENVAT scheme).

Select Vendor Excise Details

Go to New Entries and Enter the details

NOTE : If the Vendor details are not maintained, th en at the time of Vendor Excise Invoice Capturing, the system will ask for the Vend or Excise Details, which needs to be provided in the Miscellaneous Tab of Excise s ub Icon.

3 TAX CONDITION RECORDS

Tax Conditions to be used:

3.1 Cenvatable Excise Duties Conditions (%ge)

Condition Type Description Setoff Condition Type Setoff Condi tion Desc JMOP IN: BED setoff % JMX1 IN: A/P BED setoff JECS IN ECS inventory % JEX1 IN: A/P ECS setoff JSEC IN S&HECS invtry % JHX1 IN: A/P S&HEC setoff JAOP IN: AED setoff % JAX1 IN: A/P AED setoff

3.2 Cenvatable Excise Duties Conditions (Qty)

Condition Type Description Setoff Condition Type Setoff Condition Desc JMOQ IN: BED setoff Qty JMX1 IN: A/P BED setoff JEOQ IN: ECS setoff Qty JEX1 IN: A/P ECS setoff JSHO IN S&HECS setoff Qty JHX1 IN: A/P S&HEC setoff JAOQ IN: AED setoff Qty JAX1 IN: A/P AED setoff

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3.3 Non- Cenvatable Excise Duties Conditions (% ge)

Condition Type Description Setoff Condition Type Setoff Condition Desc JMIP IN: BED inventory % JMX2 N: A/P BED inventor JECO IN A/P ECes setoff % JEX2 IN: A/P ECS inventry JSEO IN A/P S&H setoff % JHX2 IN: A/P S&HEC invtry JAIP IN AED inventory % JAX2 IN: A/P AED inventor

3.4 Non- Cenvatable Excise Duties Conditions (Q ty)

Condition Type

Description Setoff Condition Type

Setoff Condition Desc

JMIQ IN: BED inventory Qt JMX2 N: A/P BED inventor JECQ IN ECS inventory Qty JEX2 IN: A/P ECS inventry

JSHQ IN S&HECS invent Qty JHX2 IN: A/P S&HEC invtry

JAIQ IN AED inventory Qty JAX2 IN: A/P AED inventor

3.5 VAT Conditions

Deductable Condition Type Description Non – Deductable

Condition Type Description

JVRD A/P VAT RM Deductible JVRN A/P VAT RM Non

Deduc.

JVCD A/P VAT CG Deductible JVCN A/P VAT CG Non

Deduc.

3.6 CST Conditions

Conditio n Type Description JVCS A/P CST Non Deductible.

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3.7 Service Tax Conditions: Non-Inventoried

Condition Type Description JSRT A/P SERVICE TAX JEC3 A/P ECS for ST JES3 A/P SECess for ST

3.8 Service Tax Conditions: Inventoried

Condition Type Description JSRI A/P SERVICE TAX_INV JEC4 A/P ECS for ST_INV JES4 A/P SECS for ST_INV

3.9 Tax Conditions to be maintained

Transaction Code: FV11

Specify the Condition Type & select Key Combination As per the Key combination ( Plant/Vendor / Material), maintain the Values & Save

For E.Duty, the key combination will be as shown below. Select one combination and maintain values For VAT, the key combination will be as shown below. Select one combination and maintain values For service Tax, the key combination will be only tax classification

4 Procedure for Claiming CENVAT for Raw Materi als

Step Description Inputs T.Code Role

1 Maintain Excise Rate Maintenance details

Material, chapter Id, Assessable Value

J1ID Purchaser / Buyer / Excise Personnel

2 Maintain Tax Conditions Plant / Material / Vendor / Tax Classification

FV11 Purchaser / Buyer

3 Create Purchase Order Vendor / Material / Qty / Plant / Price / Tax Code ME21N Purchaser / Buyer

4 Goods Receipt (Capture Excise Invoice)

PO No. / Qty / Excise Inv # / Ex. Invoice Dt MIGO Stores

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5 List of Excise Invoice, where it is captured but not Posted

Excise Group J1I7 Excise Personnel

6 Change Excise Invoice ( if Required) Vendor Ex. Inv / Date J1IEX Excise Personnel

7 Post Excise Invoice Vendor Ex. Inv / Date J1IEX Excise Personnel

8 Updating of Registers Excise Group / Start Dt / End Dt J2I5 Excise Personnel

9 Print of Registers Excise Group / Start Dt / End Dt ZJ2I6 Excise Personnel

4.1 Create the Purchase Order

Purchase Order is created, with Tax code @ line item – Invoice Tab. By selecting the Tax code, in the Purchase Order, the duty amount is calculated in the Tax Procedure, as per the Tax Conditions maintained.

The main inputs to create Purchase Order would be Vendor / Material / Quantity / Plant / Requestor / Price / Tax code / Delivery Date.

4.2 Goods Receipt

4.2.1 Option I: Capture Excise Invoice @ Goods Receipt

The transaction code is MIGO for goods receipt. If the item is cenvatable and all the excise master data are already updated, the excise tab will come automatically (after making the item OK).

Enter the PO Number, Vendors Delivery Challan Number. Press Enter – at this point of time system will copy all the relevant information from PO. Enter received Quantity in the Quantity Tab – quantity in Unit of Entry Field. Enter receiving storage location in Where Tab. If some text needs to be added regarding goods receipt for the line item, then enter the text in the Text Field. Once these are entered, Check the line item as Ok, and Enter, and a Excise Invoice tab will appear in the Header screen. The following options are available in Excise Tab

(1) Only capture excise invoice : It will capture the excise details & post Part I only

(2) Capture & Post Excise Invoice: This will update Part1 and Part 2.

(2) Only refer excise invoice : It will not capture excise invoice, no part I posting

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(3) Only Part 1 : This will update the Part 1 only

(4) No Excise Entry : There will be no excise entry

Select “Only Capture Excise Invoice “on this tab and check the Excise group.

Check the excise details related to the line item received material in Excise Tab in Detail Data Screen as shown below: The Goods Receiver can change the following at the time of GR

(1) Chapter ID

(2) Excise invoice quantity

(3) Base Value / Excise Rates / Amount

(4) Description of the material as per Excise Invoice

Automatically system will recalculate the excise duty based on this excise Base value and excise rate.

Once all the data is captured correctly, check Check button in tool bar.

Press Post button to save the Goods receipt, system will generate the Goods receipt Document. System will automatically update the Part I register as soon as the GR is made.

4.2.2 Option II: Capture Excise Invoice separat ely

Transaction code J1IEX_C

Capture the Vendor’s Excise Invoice

Select Capture Excise Invoice and Purchase Order in windows above the Header if the Excise Invoice is being captured prior to Goods Receipt.

Select Capture Excise Invoice and Goods Receipt in windows above the Header if the Excise Invoice is being captured after Goods Receipt.

Press Enter, following screen will appear

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The following can be changed at the time of Capturing

(1) Chapter ID

(2) Excise invoice quantity

(3) Base Value

(4) Excise Rates / Amount.

The Goods Receiver will make one GR for each excise invoice. The Supplier can later on submit a separate Commercial invoice for all the supplies & excise Invoices. Invoice verification will be based on Purchase Order against which several line items will appear based on GR document number.

At the end of the day, the Goods receiver will generate a list of cases where items are cenvatable & excise invoices are `Captured’. This report will show the internally generated excise serial numbers. The goods receiver will send this report attaching all the cenvat documents received during the day.

4.3 To check the status of all the excise invoi ces captured

Transaction code J1I7

Selection criteria can be mainly Excise Group.

select further the following

(1) No posting done

(2) Part I & Part II posted

(3) Part 1 posted, part II not posted.

4.4 Post Excise Invoice

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At the end of the day, the Excise Personnel will receive a list from Stores attaching all the cenvat documents during the day. Then based on this list, he will enter transaction code J1IEX / J1IEX_P Select `POST’ if no change is required. `POST CENVAT’

System will post the cenvat amount in RG23 Part II based on material type (inputs / Capital Goods).

However if excise details are changed go to the Change mode...

can change the following:

1. Chapter Id

2. Description of material

3. Invoice No.

4. Document date

5. Ship from (under miscellaneous tab)

6. Base price

7. Excise duty (both higher side as well as lower side, then that present)

System will show the RG23 Part 1 serial no., GR no. PO number. Can change the excise vendor also.

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5 Procedure for Claiming CENVAT for Capital Goo ds



Material, chapter Id, Assessable Value, declare material as Asset / Consumable

J1ID Purchaser / Buyer / Excise Personnel

2 Maintain Tax Conditions

Plant / Material / Vendor / Tax Classification FV11 Purchaser /

Buyer

3 Create Purchase Order

Vendor / Material / Qty / Plant / Price / Tax Code ME21N

Purchaser / Buyer


PO No. / Qty / Excise Inv # / Ex. Invoice Dt.

MIGO Stores



6 Change Excise Invoice ( if Required) Vendor Ex. Inv / Date J1IEX Excise

Personnel


8 Capital Goods Transfer of Credit ( post 50% credit)

Company code / Excise Grp. / Plant / J2I8 Excise

Personnel

9 Updating of Registers Excise Group / Start Dt. / End Dt. J2I5

Excise Personnel

10 Print of Registers Excise Group / Start Dt./ End Dt. ZJ2I6RG23C

Excise Personnel

Businesses are allowed to set off excise duty on purchases of capital goods against excise duty on outputs. However, unlike with raw materials, can only set off half of the duty in the first year, and the rest in any year after that.

Prerequisites: In the material master (J1ID), have classified the capital goods as such.

Features: When post an excise invoice that contains capital goods, the system posts half of the excise duty to CENVAT account and post the rest to a G/L account for CENVAT on hold. In following years, can use a report to identify the capital goods with excise duty on hold and transfer the duty to the CENVAT account (see Transfer of CENVAT Credit on Capital Goods).

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Steps: When working with excise invoices that include capital goods, note the following:

• Capturing vendor excise invoices

When create an excise invoice with capital goods, have to set the material type to A (assets), C (consumables), or T (tools).

• Posting excise invoices

When to post the excise invoice, the system posts only half of the excise duty to the CENVAT account.

Transfer of CENVAT Credit on Capital Goods (Transac tion code: J2I8)

* *Use this report to display a list of the vendor excise invoices where the vendor has levied excise duty but have not posted it (in full) to CENVAT account. This is particularly useful in the case of capital goods, in order to find out how much credit remains from previous years. Output

The system displays a list of excise invoices with excise duty outstanding. It shows :

• The total amounts of the various types of excise duties levied on the excise invoice

• How much duty has still to be posted to the CENVAT account

Select the excise invoices that want and choose Transfer credit. If want to transfer only a portion

of the remaining amount, enter this amount as the amount to be credited.

The system creates an accounting document to post the duty to the CENVAT account and creates an entry in the Part II register.

can select all or select items and then press `Transfer Credit’

6 Procedure for Claiming Duties for Imported Go ods

Step Description Inputs T.Code Role 1 Maintain Excise Rate Material, chapter Id, J1ID Purchaser /

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Maintenance details Assessable Value Buyer / Excise Personnel

2 Create Purchase Order Vendor / Material / Qty / Plant / Price / Zero Tax Code(VI)

ME21N Purchaser / Buyer

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Amend Purchase Order with the Customs Duties conditions (for domestic custom vendor)

Custom duty Conditions: JCDB - IN Basic Customs JCV1 - IN CVD - Foreign Vend. JECV - IN ECS-CVD: For Vend J1CV- IN HECS-CVD: For Vend. JEDB- IN ECS on Cust. Duty JSDB - IN SH ECS on BCD JADC - IN Ad Duty Cus:For V


4 Post Invoice for Custom Vendor and Foreign Vendor.

PO / Vendor code : Planned Delivery Costs

MIRO Accounts


PO No. / Qty / Excise Inv # / Ex. Invoice Dt.

MIGO Stores

6 List of Excise Invoice, where it is captured but not Posted Excise Group J1I7

Excise Personnel

7 Change Excise Invoice ( if Required)

Vendor Ex. Inv / Date J1IEX

Excise Personnel

8 Post Excise Invoice Vendor Ex. Inv / Date J1IEX Excise

Personnel

9 Updating of Registers Excise Group / Start Dt. / End Dt. J2I5 Excise

Personnel

10 Print of Registers Excise Group / Start Dt. / End Dt.

ZJ2I6 / ZJ2I6RG23C

Excise Personnel

7 Procedure for Claiming CENVAT for Raw Materia ls without Material ID

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1 Maintain Excise Rate Maintenance details the Chapter Id.

Chapter Id J1ID Purchaser / Buyer / Excise Personnel

2 Maintain Tax Conditions

Maintain tax conditions for Plant/Material Group combination. FV11 Purchaser /

Buyer


Vendor / Material / Qty / Plant / Price / Tax Code



PO No. / Qty / Excise Inv # / Ex. Invoice Dt. Also in the line item of Excise Tab, specify the Chapter Id & Matrl. Type.

MIGO Stores



6 Change Excise Invoice ( if Required) Vendor Ex. Inv / Date J1IEX Excise

Personnel


8 Updating of Registers Excise Group / Start Dt. / End Dt. J2I5 Excise Personnel

9 Print of Registers Excise Group / Start Dt. / End Dt. ZJ2I6 Excise Personnel

8 Claiming Custom Duties Purchased from Dealer (who has imported the Matrl.)

Use : The materials are procured from a domestic vendor who imports the material. This domestic Vendor passes on the CVD and SAD duties, which have to be captured as BED and AED.



Material, chapter Id, Assessable Value J1ID

Purchaser / Buyer / Excise Personnel

2 Maintain Tax conditions

Maintain tax conditions with BED / AED conditions as 0%, as this is going to be replaced by CVD and SAD values from the pricing

FV11


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procedure.


Vendor / Material / Qty / Plant / Price / Tax Code ME21N Purchaser /

Buyer

NOTE

Maintain CVD and SAD values in the pricing procedure – PO Condition Tab.

PO – Line Item Condition tab – specifies CVD Amt for the cond’n type “JEXC” and SAD for cond’n type “ZADC”.


3 Post Invoice for Custom Vendor and Foreign Vendor.

PO / Vendor code : Planned Delivery Costs MIRO Accounts


PO No. / Qty / Excise Inv # / Ex. Invoice Dt. MIGO Stores

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List of Excise Invoice, where it is captured but not Posted


6 Change Excise Invoice ( if Required) Vendor Ex. Inv / Date J1IEX

Excise Personnel


8 Updating of Registers

Excise Group / Start Dt./ End Dt. J1I5 Excise

Personnel

9 Print of Registers Excise Group / Start Dt. / End Dt.

ZJ2I6 / ZJ2I6RG23C

Excise Personnel

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9 Procedure for Inventorying Custom Duties Purc hased for a Depot

Use: The materials are procured for a depot, where, the Custom Duties get inventoried, captured in transaction J1IG and then the same duties are picked in sales invoice for passing on to Customer.

Process:



Material, chapter Id, Assessable Value J1ID


2 Maintain Zero Tax conditions Maintain Zero Tax conditions FV11


3 Create Purchase Order Vendor / Material / Qty / Plant / Price / Zero Tax Code


NOTE

Maintain all the Custom Duties in PO – Line item – condition tab For External Vendors and also Inter Company purchases

The following Condition types needs to be selected for inventorying the Custom Duties: JCDB - IN Basic Customs JCV3- IN CVD – Inventory JECI- IN ECS-CVD:Inventory J1CI- IN HECS-CVD: Inventory JEDB- IN ECS on Custs.Duty JSDB- IN SH ECS on BCD JADI- IN Ad Duty Cus:Inven


4 Goods Receipt (Do not capture Excise Invoice) PO No. / Qty MIGO Stores

5 Capture Excise Invoice for Depot

Material Doc # (GR), Excise Group, Excise Inv # / Dt.

J1IG Excise Personnel

10 Procedure for CENVAT Reversals

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Cenvat reversals due to:

1. Return delivery. 2. Cancellation of Material Document. 3. Purchase Order Returns. 4. CENVAT Adjustments.

10.1 Return Delivery (mvt type: 122)


1 Goods Receipt (Return Delivery / Material Document)

GR Material Doc No. / Qty / Reason for mvt. Typ. MIGO Stores

2 Create Excise Invoice Ref Doc Type: MATD / Rej Mat Doc No. / Series Grp. / Excise Grp

J1IS Excise Personnel

3 Print Excise Invoice Ex Inv # / Year J1IV Excise Personnel

On rejection of material (Return Delivery: using 122 movement type), the user will use the transaction J1IS to generate an outgoing Excise Invoice which will reverse the cenvat credit.

Steps involved:

(a) Enter MIGO

(b) Select Return Delivery & Material Document

(c) Enter the Original material document no. (GR No.)

(d) Enter reason for movement

(e) Check & Post. System will generate a document number. For Excise Invoice creation ( to send back the material)

(a) Transaction Code: J1IS

(b) Reference Doc. Type MATD

(c) Document No. is the rejected GR No.

(d) Enter Document year, Series Group and Excise Group.

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(g) Sub transaction type will be blank. Then press

h) System will display cenvat amount, chapter ID, quantity etc. If everything is OK

(i) Please remember, if the RG23 part II is not posted for this GR, system will not fetch automatically the Value and excise duty.

(j) Save. System will generate an Excise Invoice Number. Note down this number.

(k) Enter J1IV (Print excise invoice). Note: for those material without Material ID, a dummy material ID needs to be created and assigned during Excise Invoice Creation in J1IS. The Description of the Material can then be changed to the original material description that is being sent out.

10.2 Cancellation of Material Documents

Purpose: Assume having posted a goods receipt and then posted the CENVAT on the excise invoice accordingly. Then it transpires there is a problem with the goods and the goods receipt has to be reversed. Under excise laws are no longer entitled to the CENVAT credit.

In the SAP System, therefore, have to reverse CENVAT posting correspondingly.

Process Flow:


1 Cancellation / Material Document

GR Material Doc No. / Qty / mvt type: 102 MIGO Stores

2 Post Excise Invoice Vendor Excise Invoice J1IEX Excise Personnel

3 Cancel Excise Invoice (if required)

Vendor Excise Invoice J1IEX Excise Personnel

1. Reverse the goods receipt:

1. Go to Transaction Code - MIGO and select: Cancellation and Material Document 2. Enter the number of the goods receipt that is to be cancelled 3. Choose the line item and Flag the line items as OK 4. Save the reversal document 5. The system:

- Creates a reversal document to cancel the goods receipt.

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- Creates additional entries in Part I of the appropriate excise register to reverse the original entries.

- Changes the excise invoice document status to In process.

2. Reverse the CENVAT posting on the excise invoice :

1. 6. Go to Transaction Code - J1IEX. 2. Select : Post CENVAT and Vendor Excise Invoice 3. Enter the Vendors Excise Invoice Number. 4. Choose Simulate. 5. A dialog box appears, showing which postings the system will make to reverse

the CENVAT. 6. Choose Post CENVAT.

- The System :

- Creates an accounting document to reverse the CENVAT postings

- Creates a corresponding entry in Part II of the appropriate excise register

3. If plant does not allow multiple goods receipts per excise invoice, must also cancel the excise invoice:

The system changes the excise invoice status to Canceled.

If, however, do allow multiple goods receipts per excise invoice, d o not have to cancel it.

can leave the excise invoice as it stands. Then, if another delivery of goods is received for this excise invoice, enter the excise invoice number when goods receipt is posted .

1. Go to Transaction Code - J1IEX. 2. Select : CANCEL and Vendor Excise Invoice 3. Enter Vendor Excise Invoice. 4. Save the Excise Invoice.

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10.3 Purchase Order Returns

Process Flow :


1 Create Purchase Order with Returns Indicator.

Doc Type: ZRTN / Vendor / Material / Qty / Plant / Price / Tax Code


2 Create Outbound Delivery w.r.t Purchase Order

Purchase Order #, Select the proper variant. VL10B Stores

3 Post goods Issues Do PGI with proper Reason for MvT VL02N Stores

4 Create Excise Invoice Goods Issue Mat Doc # J1IS Excise Personnel

5 Print Excise Invoice Excise Invoice #, Output Type : JREC J1IV Excise

Personnel

10.4 CENVAT Adjustment Postings (J1IH – Excise JV)

Use: - use these functions to make an adjustment posting to any of CENVAT accounts.

10.4.1 Making Adjustment Postings for Scrap

Use: - follow this procedure if scrapped a material and want to reverse the excise duty debited to CENVAT account.

10.4.2 Making Adjustment Postings for Materials Not Used in Production

Use: - follow this procedure if have not used a material in the production process and want to reverse the excise duty debited to CENVAT account.

Procedure: -

1. J1IH - Excise JV / Create / Matl write-off.

2. Enter data as required, including:

• Document number (This Document is of Movement Type – 551 i.e. GI for Scrap)

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• CENVAT account selection group box. Specify which account is affected by the adjustment posting is for. If the posting does not have to be remitted immediately, select Fortnightly payment.

3. Click on “Enter” button. The system displays the information from the material document.

4. Adjust the posting date as necessary.

5. Adjust the excise duty for each line item either: • Manually or • By assigning the line item to an excise invoice

6. Specify which G/L accounts are to be posted to. Here can change Debit A/c as per requirement.

7. Save the adjustment posting. System will post Excise JV Document, Accounting Document Part2 Serial No.

10.4.3 Making Adjustment Postings for Additiona l Excise Paid to Vendors

Use: - follow this procedure if a vendor has increased the amount of excise duty that it originally charged want to debit the difference to CENVAT account.

Procedure: -

1. J1IH / Excise JV / Additional excise.

2. Enter data as required. In the Document number field, enter then number of the document sent by the vendor. Click on “Enter” button.

3. Adjust the posting date as necessary and Enter Vendor Name.

4. Enter the amount of excise duty in either of the following ways:

• To enter line items for different materials and the excise duty accordingly, choose “Details” button and enter the line items in the table. Here Enter Material code, quantity as per excise invoice, reference document (i.e. GRN Document), batch no., BED and Ed Cess Amount to be posted.

• To enter the excise duty only, choose “Header” button and enter the excise duty in the totals fields at the foot of the screen.

5. If the duty qualifies as countervailing duty (CVD): a. Select CVD applicable. b. Enter the CVD amount in the BED amount field.

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6. Specify which G/L accounts are to be posted to and Save the adjustment posting. System will post Excise JV Document; Accounting Document with Part 2 Serial No.

10.4.4 Making Adjustment Postings for Money Tra nsferred to PLA

Use: - follow this procedure to make an adjustment posting when transfer money to personal ledger account (PLA).

Prerequisites: - have already transferred the money to PLA at the bank, using a TR6 challan, and have posted the corresponding accounting document.

Procedure: -

1. J1IH / Excise JV / TR6 challan.

2. Enter data as required, including the document number.Can enter either the challan number OR the number of the accounting document (This document is to be first created through T. Code – FB50. In this Document Debit PLA on Hold A/c and Credit Bank A/c with the Amount to be transferred in PLA CENVAT Accounts)

3. Click on “Enter” button. If entered the accounting document number, the system displays the information from it.

4. Enter the amounts against the accounts that is required.

5. Save the adjustment posting.

6. System will post Excise JV Document; Accounting Document with Part2 Serial No.

10.4.5 Canceling Excise Invoices

Use: - follow this procedure in order to cancel an outgoing excise invoice. It reverses any excise duty accounted for.

Procedure: -

1. J1IH / Excise JV / Cancel exc. inv.

2. Enter the number, year, and series group of the excise invoice that is to be cancelled. A dialog box appears.Choose Yes.

3. Before posting the document check the Accounting document going to be generated. Here click on “Determine G/L Accounts” button.

4. Save the adjustment posting. System will post Excise JV Document; Accounting Document with Part2 Serial No.

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10.4.6 Making Adjustment Postings for Other Tra nsactions

Use: - follow this procedure if want to make an adjustment posting that does not fall into any of the other categories of adjustment offered by this function. External document can be used as reference document.

Procedure: -

1. J1IH / Excise JV / Other adj.

2. Enter data as required, including: • Document number Enter the number of the external document that is to reffered to. • CENVAT account selection group box Specify which account is affected by the adjustment posting is for. If the posting does not have to be remitted immediately, select Fortnightly payment.

3. Click on “Enter” button. The system displays the information from the material document.

4. Adjust the posting date as necessary and enter Vendor code as per requirement.

5. Enter the amount of excise duty in either of the following ways: • To enter line items for different materials and the excise duty accordingly, choose “Details” button and enter the line items in the table. Here fill details like Material Code, Quantity as per Excise Invoice, Batch No, Reference (i.e. GRN Document), BED and Ed Cess Amount manually. If want system to propose the BED and Ed Cess Amount, Click on “Get Excise Invoice” button and select the proper Excise Invoice from which the proportionate amount is to be copied. Select the “Excise Invoice” and click on “Continue” button. It will copy BED and Ed Cess and SECess amount as per the quantity mentioned here. It will be proposed in proportion of selected Excise Invoice quantity and value. • To enter the excise duty only, choose “Header” button and enter the excise duty in the totals fields at the foot of the screen.

6. Specify which G/L accounts are to be posted to.

7. Save the adjustment posting. System will post Excise JV Document; Accounting Document with Part2 Serial No.

TIPS to simplify Excise JV transactions: - (J1IH)

1. Assigning Excise Invoices to Line Items

Use: -make an adjustment posting; follow this procedure if want to specify the original excise invoice associated with a line item.

Procedure: -

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1. Select the line item and choose Get excise invoice. The system displays a list of all the excise invoices that have to be posted for this vendor for this particular material.

2. Select the excise invoice and click on “Enter” button. The system: • Enters the excise invoice document number in the Ref. doc. field (Reference document). • Calculates how much of the excise duty from the excise invoice should be apportioned to the line item and enters it in the excise duty fields. Then overwrite these amounts, should also overwrite the reference document number with an explanatory text, since there is no point in maintaining the link to the reference document anymore.

2. Specifying Which CENVAT Accounts to Adjust

Use: - When make an adjustment posting, have to specify which CENVAT accounts are to be adjusted.

Procedure: -

1. Choose Determine G/L accounts. A dialog box appears that shows how much will be posted to which G/L accounts. The accounts that are displayed depend on the excise group and the CENVAT account that is entered on the selection screen.

2. Add another account, need to, and adjust the other postings so that the credits and debits match.

3. Enter a business area and cost center, if necessary.

4. To close the dialog box, click on “Enter” button. 3. Displaying CENVAT Account Balances To display the balances of CENVAT accounts, choose Balances. The system displays the balances only of the CENVAT accounts that are affected by G/L postings.

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11 Subcontract Challan

11.1 Normal Subcontract Process


1 Create Subcontract Purchase Order

Document type(NB) / Pur.org ./ Pur.group / Co.code / Material / Qty. / Price / Plant / Requister / Delivery date / Vendor no ./ Tax code / Item catgory(L) / Components


2

Create transfer Posting of materials sent out for sub-contracting with reference to Subcontractor PO.

Select the material, and do PGI or create Delivery.

ME2O Stores

3 Create Subcontracting challan Materail doc / Fiscal year / Excise group / Series group

J1IF01 Excise Personnel

4 Print Subcontract Challan Go to transaction of Challan Change – Take print and save. J1IF11 Excise

Personnel

5 Post goods receipt (MIGO)

PO NO./Delivery Note/Posting date/Excise Invioce Tab -Refer subcontracting challan /storage location

MIGO Stores

6 Reconcile Subcontracting challan

Material Document/Challan/Fiscal year J1IFQ Excise

Personnel

7 List of subcontracting challans List click on Anexure IV J1IFR Excise Personnel

8 Complete/Reverse/Recredit Subcontracting challan Complete the challan J1IF13 Excise

Personnel

9 Display Subcontracting challan Display Subcontracting challan J1IF12 Excise Personnel

Process:

1 Create Subcontract Purchase Order :

Header Material Sub-Component

2 Transfer Posting of Sub-components to Vendor: (ME2O ) Select the Line Item and Create Delivery or Post Goods Issue

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3 Create Subcontract Challan w.r.t the Transferred Ma terial Document: (J1IF01)

4 Print of Subcontract Challan (J1IF11)

5 Goods Receipt: (MIGO) Select – Refer Subcontracting Challan, and in the sub-window, specify the correct Challan No‘ If the Challan No‘ specified is that of different Vendor, then the following below message is shown. If the Challan No‘ specified is that of different PO, then the following below message is shown.

6 Post Goods Receipt.

7 Next Goods Receipt: (MIGO) If the Previous Material Document for the Challan is not reconcilled, system will issue a Warning Message.

If the Previous GR document is not reconcilled with the challan, the system will trigger a message as shown below: 8 Challan Reconcillation: (J1IFQ) If the Challan No‘ specified during GR, is wrong, then delete the challan Assignment, select the function here. Select this icon, to bring in the Qty from Material Doc, to Assigned Qty in Challan.

Save the Challan.

9 Completion of Challan: (J1IF13) Save the Challan. 10 List of Subcontracting Challans.

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11.2 Subcontract Process where Scrap is receive d from Vendor





2


Select the material, and do PGI or create Delivery. ME2O Stores

3 Create Subcontracting challan Materail doc / Fiscal year / Excise group / Series group J1IF01

Excise Personnel

4 Print Subcontract Challan Go to transaction of Challan Change – Take print and save.




MIGO Stores

6 Receive scrap material from Vendor.

Receipt of Scrap Material by MvT – 542.

MB1B / MIGO Stores

7 Reconcile Subcontracting challan Material Document (MvT – 101/542) / Challan / Fiscal year

J1IFQ Excise Personnel

8 List of subcontracting challans List click on Anexure IV J1IFR Excise Personnel

9 Complete/Reverse/Recredit Subcontracting challan Complete the challan J1IF13

Excise Personnel

10 Display Subcontracting challan Display Subcontracting challan J1IF12

Excise Personnel

11 Scrapping the Material

Whatever the material received from Vendor as scrap, is to be scrapped with MvT – 551 to a cost center.

MB1A / MIGO

Stores

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11.3 Subcontract Process: Return Delivery To Ve ndor





2 Transfer Posting of sub-component material to Vendor.


ME2O Stores







MIGO Stores

6 Do the reconcilation of material document

Material document /challan number/year J1IFQ

Excise Personnel

7 If the recived material fails in quality & need to send back to Vendor -return delivery

122 and 544 movement type /plant / material docuemt number /

MIGO Stores

8

Create new subcontracting challans for this outgoing materials, as this material had come against old challan, and that challan is already reconcilled.

Material documents number / excise group/ series group


9 Complete/Reverse/Recredit First Subcontracting challan Complete the challan J1IF13 Excise

Personnel

10 Recive back the return delivery materialsent by vendor

101 and 543 movement type/ challan number/ year

MIGO Stores

11 Again Reconcile & complete the return delivery challan.

Material document/ challan no./fiscal year J1IFQ Excise

personnel

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11.4 Subcontract Process: Cancellation of Goods Receipt


1 Create Subcontract Purchase Order PO with sub components.


2 Create transfer Posting of materials sent out for sub-contracting with reference to Subcontractor PO.


ME2O Stores






PO NO./Delivery Note/Posting date/Excise Invoice Tab -Refer subcontracting challan /storage location

MIGO Stores

6 Do the reconciliation of material document

Material document /challan number/year J1ifQ Excise

Personnel

7 If the received material is not with good quality & Goods Receipt needs to be cancelled.

Cancellation /material document/102 and 544 movement type /plant / material document number /

MIGO Stores

8

Create new subcontracting challans for this outgoing materials (as this is cancelled/rejected), as this material had come against old challan, and that challan is already reconciled.

Material documents number / excise group/ series group



Personnel

10 Receive back the cancelled delivery material sent by vendor against new challan.

101 and 543 movement type/ challan number/ year

MIGO Stores

11 Reconcile the challan Material document/ challan no./fiscal year J1IFQ Excise

personnel 12 Complete the cahllan Challan number/fiscal J1if13 Excise

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year personal

11.5 Subcontracting over consumption or under consumption


1 Create Subcontract Purchase Order PO with sub components. ME21N Purchaser

/ Buyer

2


Select the material, and do PGI or create Delivery. ME2O Stores

3 Create Subcontracting challan Material doc / Fiscal year / Excise group / Series group





PO NO./Delivery Note/Posting date/Excise Invoice Tab -Refer subcontracting challan /storage location

MIGO Stores

6 Do the reconciliation of material document

Material document /challan number/year


7 If the material is over consumption do subsequent adjustment

Subsequent adjustment / purchase order / 121and 543 movement type/ Qty

MIGO Stores

8 Do the reconciliation with this Doc #.

Material document/challan no.

J1IFQ Excise personnel


Personnel

10 If the material is under consumption do subsequent adjustment.

544 movement type will get triggered/purchase order number

MIGO Stores

11 Create new challan w.r.t the 544 MvT Document.

Create new challan w.r.t the 544 MvT Document. J1IF01 Excise

personnel 12 Post goods receipt (MIGO) MIGO – Goods Receipt MIGO 12 Reconcile the challan Material document/ challan

no./fiscal year J1IFQ Excise

personnel 13 Complete the challan Challan number/fiscal year J1IF13 Excise

personnel

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11.6 Challan completed 180 days reverse and rec redit the challan


1 Challan Reverse Challan No./Fiscal year J1IF13 Excise Personnel

2 Option I: Receive the material back.

542 movement type/ material/ vendor

MIGO Stores

3 Reconcile the challan with 542 Matrl. Doc.

Material doc / Fiscal year / challan no/Excise group / Series group


4 Complete & Recredit the challan.

Challan number /fiscal year J1IF13 Excise Personnel

5 Option II: Receive the Material after 180 days as finished goods as per PO.

MIGO – Goods Receipt MIGO

6 Reconcile the challan with above GR Doc.

Materail doc / Fiscal year / challan no/Excise group / Series group


7 Complete& recredit the challan. Challan number /fiscal year J1IF13 Excise Personnel

12 Frequently Asked Question

Question: For capital Goods, in normal posting the AED CENVAT posted for the present year is 50%, whereas it should be 100%.

Answer : Select Excise Subtransaction type “ IP“ at the time of Posting at Excise Header Tab, which will post AED as 100%, and BED, Ecess and SHEcess as 50% for this financial year.

Question: During Post of Excise Invoice, the system doesn’t allow to increase the Excise Duty Value.

Answer : The change in duty values needs to be done in Change Excise Invoice transaction @ J1IEX and not during Posting of Excise Invoice.

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Question : I have to specify BED manually and not through condition records.

Answer : The manual excise amount for BED can be specified in the Pricing Procedure ( PO – Condition tab), wherein it will update the Tax Procedure.