CIN MM Induction Manual

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CIN MM Induction Manual

Text of CIN MM Induction Manual

Induction Manual

Materials ManagementCIN Agro

Version 1.0Date: 28/03/2008

Organization Structure

Materials Management Org. structure

ContentsBusiness Process in AGRO4Handling of Excisable and Raw materials:-4Handling of Asset/Capital goods:-4Handling of Return to Vendor:-5Handling of Sub-Contracting Process:-5Handling of Molasses as per the Notification 67/95 (Applicable to Agro sector):-6Summary of process -6Organization Consideration for Excise -7Important point to be considered for Cenvat7Types of Taxes and Duties in GMR Group:-8Domestic Duties8Import Duties8Standard Definitions8Excise Registration:-8Excise Group:-9Series Group:-9Master Data:-9Material Master9Vendor Master9Excise Master10Procurement Scenarios of GMR Agro -10Subcontracting without payment of excise duty14Subcontracting under full payment of duty16Posting Subsequent Adjustment :-16Rejection of Excise Invoices:-17Posting CENVAT on rejected excise invoices:-17Handling of Services:-18Handling of Stock Transfer between Plant to Plant:-19Handling of Molasses as per the Notification 67/95:-19Excise Periodic Activities:-20Condition Types for Excise/VAT and Service Tax21Procedural Steps for Marinating Master Data22Procedural Steps for Domestic Purchase241.1.Access transaction by:241.2.On screen Create Purchase Order, select the document type GDOM Domestic Purchase Order.24Procedural Steps for Domestic Procurement for Cost Center341.3.Prerequisite341.4.Access transaction by:34Procedural Steps for Assets471.5.Prerequisite471.6.Access transaction by:47On screen Create Purchase Order, select the document type GDOM Domestic Purchase Order.47Procedural steps for Excise Imports591.7.Prerequisite591.8.Access transaction by:62On screen Create Purchase Order, select the document type GIMP Import Purchase Order.63Procedural Steps for Sub-contracting Purchase Order Cycle771.9.Prerequisite77Maintain Material V/S Chapter ID T.Code-J1ID771.10.Maintain Bill of Material(BOM) for end Product (S30SUGAR)781.11.Access transaction by:79On screen Create Sub-Contracting Purchase Order, select the document type GDOM Domestic Purchase Order.79Overview of RG1 Register Update941.1.Access transaction by:941.2.On screen Update of Registers RG1 and RG 23(Part1) : Initial Screen, enter the below information:95Overview Excise JVs100Access transaction by:1001. Material Write off1001.1 On screen Excise JV- Main Menu, Select Matl Write off1002. Additional excise1032.1 On screen Excise JV- Main Menu, Select Additional excise1033.1 On screen Excise JV- Main Menu, Select Other adj.1074. Cancel Excise Invoice1124.1 On screen Excise JV- Main Menu, Select Cancel Exc.Inv.112Overview Extract Excise Registers1151.1.Access transaction by:1151.2.On screen Excise register extraction: Initial Screen, enter the below information:116Monthly utilization with ADC (test cases on X47/994)121Special Cases 127Dealer Purchase Cycle 127Gunny Bags (JMDC)137Manual Excise142Yokogawa Process151

Business Process in AGROMM module covers AGRO sector of GMR which consist SUGAR Plant, DISTILLERY and CO-gen.GMR Agro sector is very different from other sectors since Excise Duty is applicable and stored in different registers in order to take the setoff.]

Handling of Excisable and Raw materials:-Purchase Order is released on the supplier with all terms and conditions. On Goods receipt, the Stores person will physically verify the goods for quantity, GRN is prepared and excise documents are sent to respective department. The material is then sent to Quality for approval. If it is accepted, it is treated as unrestricted stock. Accounts department updates the respective excise registers and take the MODVAT Credit. Presently RG23A Register is generated in the system. Following are the examples of Excisable materials Chemical, Gunny Baggs like Sulphur etc Molasses

For non-excisable sectors like Energy, Property, Roads, they will raise the Purchase Order on supplier with all terms and conditions. On Goods receipt, the Stores person will physically verify the goods for quantity, GRN is prepared and the duty subject to excise will be loaded on the inventory value. Material is then sent to Quality for approval. Intimation is given to the user about material receipt.Incase of import Purchase Orders, all terms and conditions like CIF, LC payment etc will be maintained. Accordingly supplier will dispatch the goods and send the hard copy or soft copy of document for customs clearance. Based on the receipt of the documents, Customs clearance will be done and the goods will be sent to plant.Handling of Asset/Capital goods:-For procurement of asset item, a Capital Appropriation Request Form is filled and given for approval. On approval, an asset code is generated which is used for purchase of asset item. On receipt of asset/capital materials GRN is prepared and user will be intimated for inspection. Once the material is accepted, entry is made in Excise Register RG23C instead of RG23A and it is capitalized on the asset.

As per the Excise regulation, GMR is taking 50% of MODVAT Credit in the year of purchase and balance in the Next financial year. Presently the RG23C Register is taken through system.Handling of Return to Vendor:-Any rejections from Quality / Shop floor rejection, the stores person will prepare Non-Returnable Gate Pass (NRGP) and send the materials to Vendor. In case of excisable sector, the Accounts department will reverse the Excise duty captured at the time of Goods receipt. This will update the RG23A/RG23C depends on the type of Material.In case of non-excisable sectors, plant will identify rejected parts or unused parts to be sent back to supplier by means of non-returnable gate pass.

In case of return of imported item, packing list will be prepared and sent to respective department. They will prepare Commercial / Export invoice and send signed copy to plant for movement of goods from plant to respective supplier destination or Airport for further export.

Handling of Sub-Contracting Process:-Purchase Order with different document type will be prepared for this kind of scenarios. When a material is sent to the Vendor for repair/rework etc, it is through Purchase Order/ delivery Challan. And, on completion of job user will certify that work completed and return with delivery Challan. Service orders are raised for any services like Civil work, excavating, construction etc. All specifications of work to be done and Taxes like Service tax etc, will be incorporated in the service orders. Based on the Work progress, the service provider will provide the bill to the user department. After the approval the Stores department will send the bill to accounts department for payment. Then accounts department takes the Credit of Service tax as applicable.

Handling of Molasses as per the Notification 67/95 (Applicable to Agro sector):-As per the notification to produce any Excisable product using this molasses there is no need to pay excise duty. Transfer of Molasses from Sugar unit to the Distillery is done by making an entry in the RG1 register without paying excise duty as per Notification 67/95. Using this Molasses the Distillery will produce two products, one is Excisable and other one is Non-Excisable.Excise duty has to be paid to the Government for the portion of Non-Excisable product produced as per the Notification act. Kindly note the current excise duty for Molasses is Rs. 750/- per Ton and for this we are using manual excise in pricing procedure, this is a custom development done in order to capture the Cenvat for Molasses.Summary of process -Excise process during procurement Process:-

Receipt of Excisable Material eligible for CENVAT credit. Receipt of Capital Goods eligible for taking CENVAT credit.

Excise Periodic Activities:- Update RG1/RG23A Register with Movement types and classification (3 digit code to identify the excise goods movement). First with Receipt and then with Issues for proper updation of Register. Extraction and Printing of Excise invoices as and when required.

Excise Debit/Credit Entries:- Excise JVs passed as and when required.

Return to Vendor Process:-

Rejection of Material during in process & receipt inspection

Sub-Contracting Process:-

Issue of excisable components for subcontracting.

Organization Consideration for Excise - Company Code Plant Excise Registration Excise Group Series Group

Important point to be considered for Cenvat

Material and Vendor Excise details should be maintained in Material Master RecordMaterial and Chapter ID combination should be maintained J1IDVendor Excise details should be maintained - J1IDPlant should be maintained as Excise - J1IDTax Code to be maintained from T. Code FV11Taxes and Duties will flow from Tax Procedure and Pricing procedure instead of Manual EntryThe Excise invoice will be captured for excisable stock materials with respect to the Purchase orderAll excise accounts will get updated based on the Goods movementExcise Registers will be updated w.r.t to goods movement & values of the excise invoice. An Outgoing Excise Invoice will be created at the time of returning the Material to Vendor.Excise JVs like Debit entries, Credit entries,TR6C, Challan, Cancellation of Excise Invoice will be created in the system and can be passed by carrying transaction Excise Registers will be maintained in the system.

Types of Taxes and Duties in GMR Group:-

Domestic Duties Basic Excise Duty(BED) Special Excise Duty(SED) Education cess on BED Secondary & Higher Education cess on BED (As per Budget 2007-08)

Import Duties Basic Customs Duty (BCD) Counter Vailing duty (CVD) Education Cess on CVD Secondary Education cess on CVD (As per Budget 2007-08) Education cess on all duties Secondary & Higher Education cess on all duties (As per Budge