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Cin India Localizationsd Workshop 110316092929 Phpapp02
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Transcript of Cin India Localizationsd Workshop 110316092929 Phpapp02
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Copyright 2003 Bristlecone, Inc. | Dec 18 th 2004
www.bcone.com
India Localization
with respect to SD
T.Muthyalappa
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Modus Operandi
Session - I
Introduction to Indian Taxes
Different Sales processes.
CENVAT Concept
CENVAT Rules and Terminologies
CENVAT and Sales Process.
Base for the CENVAT Credit.
Tax Procedures.
Registers.
India Localization Configurations in SD.
Master Data.
SAP Easy Access settings Relevant For India Localization.
Q&A.
Conclusion.
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Introduction
Hi Let us Discuss, What are Indian Taxes and how they are differentiated.
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Indian tax structure
It is of Two Types.
1.Direct Tax.
2.Indirect Tax.
Direct TaxIt consists of the Capital tax and Personnel income tax.
Indirect TaxIndirect tax constitutes Excise duties, Sales Taxes and Service taxes.
Excise duties :
It must be a duty on the goods;
The goods must be excisable;
The goods must be manufactured or produced;
The manufacture or production has to be within India.
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Excise Duties is Mainly based on 4 Ms1.It Must be Mentioned in Excise laws.
2.It Must be Movable.
3.It must be Manufactured.
4.It is valuable to Money.
Excise duty is a duty on production or manufacture of goods. It is a tax
levied on manufacture of goods and the liability to pay excise duty arises
immediately on manufacture or production of goods
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Once manufacture of goods is complete, excise duty is payable, whether
the goods are sold or self-consumed. Excise duty does not depend on the
end use of the goods.
Excise Duty is a tax on manufacture of goods but for the sake of
administrative convenience, it is collected only on removable of goods from
the factory.
Sales Tax :
Sales Tax is a tax on Sales and can be imposed only when there is a Sale.
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Difference between Excise duty and Sales Tax.Central Excise Duty has to be distinguished from Sales Tax. Sales Tax is a
tax on Sales and can be imposed only when there is a Sale. On the other
hand, Excise Duty is a duty on the manufacture of the goods. So, duty can
be imposed immediately after goods are manufactured. Whether these
goods are sold are not is immaterial.
For example: If a Company manufactures soap within the factory for its
own use, there will be no sales tax on the soap. However, the soap will be
liable to pay excise duty as it has been manufactured.
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Types of excise dutiesUnder the excise laws, the following are the various types of duties, which
are levied:
Basic Excise duty : Excise duty that is levied at the time of the Goods
removal, either it is for sales or for own consumption.
Additional Excise Duty : Excise duty that is Levied to protect the local
industries. This is varies depending on the products.
Special Excise duties :Excise duty that is levied in order control the
competition between the states, for example, one state may give more
subsidies in order to attract the investments or to encourage the industries
of that state.
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Additional Duty on specified items under the Act :If the TariffCommission set up by law recommends that in order to protect the
interests of industry, the Central Government may levy additional duties at
the rate recommended on specified goods.
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Different Sales Process
1.Sales From Factory.Stock transfers.
2.Sales From Depot.
Scrap Sales.
Auction Sales especially for Scrap.
Job works.
Exports.
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Sales From Factories.
In the Process of Manufacturing the Factory uses two kinds of materials.
Input Material:
Is defined as the one which loses its own identity in the finished product.
Capital Goods:
Is defined as the one which does NOTlose its own identity in the finished goods.
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Sales from Factory
Supplying Plant DispatchExcise Invoice
J1IIN
Add up to Excise Duty Payable A/c
J1IEX
Capture EI
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Stock transfers.
In Stock transfers we will transfer the Materials from Plant to plant andPlant to Stock yards.
Usually in the stock transfers we create the excise invoice while the goods
is moving from plant to Stock yard.
From stockyard to customer usually we are not going to create the Excise
invoice, because stock which is coming in to the Stock is not an input, it is
just a transfer from one place to other.
There is no price escalations here.
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Depot process
Depot is also almost same as Stock yards, and here also we are transferringgoods from Plant to Depot, but the difference is in Depots, are Price
escalations. In Depots goods is coming as input.
Transactions can happen through two scenarios:
Scenario1: Depot receives goods from the companys factory through stock
transfer.
Scenario 2: Depot procures goods directly from external sources.
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Depot Process:
For Doing Goods Receipt:
Scenario 1: Stock Transfer
Step1: Do GR (Transaction code:MB01)
Step 2: Excise Invoice Capture at Depot (Transaction Code: J1IG)
Scenario 2:
Step 1: Do GR (Transaction Code: MIGO)Step 2: Excise Invoice Capture at Depot (Transaction Code: J1IG)
At the time of Sale:
Sales Order Delivery J1IJ (always requires a deliverynumber) PGI Billing
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Sales From Depot
Depot DispatchExcise Invoice
Add up to the Excise Duty Payable A/c
Reduce the Quantity
MIGO
J1IG
J1IJ
Plant
ME21N
J1IIN
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Export Process
In the process of Exports duty under bond is not payable and thegoods move out from the factory against an ARE1.
However, goods not under bond move out of the factory by paying the
duty and refund is separately claimed on showing proof of export I.e.
shipping bill.
In case of Deemed Exports, the same procedure is followed as in
exports, However, the form used is ARE3.
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What is CENVAT!?
Commonly used word, when ever discussing on Indian Tax.
CENVAT : Amount that is paid on the value that is added at that time of
sale to the government.
For Ex.
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CENVAT Credit
RM-A
RM-B
FG-C
Rs.100 ED: Rs.10
Rs.50 ED: Rs.5 Input Tax credit availed: Rs.15
Rs.500 ED:Rs.50
Tax liability: OTL CENVAT credit
Rs.35: Rs.50 Rs 15
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CENVAT
Rule 1. Short title, extent and commencement.-
Rule 2. Definitions.-
Act capital goods Customs Tariff Act exempted goods final products first stage
dealer an importer input manufacturer or producer
Rule 3. CENVAT credit.-
Rule 4. Conditions for allowing CENVAT credit.-
Rule 5. Refund of CENVAT credit.-Rule 6. Obligation of manufacturer of dutiable and exempted goods.-
Rule 7. Documents and accounts.-
Rule 8. Transfer of CENVAT credit.-
Rule 9. Transitional provision
Rule 10.Special dispensation in respect of inputs manufactured in factories located in
specified areas of North East region and Kutch district of Gujarat.-
Rule 11.Power of Central Government to notify goods for deemed CENVAT credit.-
Rule 12. Recovery of CENVAT credit wrongly taken.-
Rule 13. Confiscation and penalty.-
Rule 14. Supplementary provision
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CENVAT
So far
Overview of Indian Tax Structure.
What is Excise Duty and Types of Excise duties?
What are CENVAT Rules?
What is CENVAT credit?
How and when CENVAT is availed?
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Tax procedures and Registers.
How we are going for the CENVAT credit in SAP and What is the Base for IT.
Answer is Tax procedures and Excise registers.
What are these.
Now we will going to discuss on Tax Procedures.
SAP provides following std. tax procedure for country IndiaFormula based tax procedure TAXINJ
Condition based tax procedure TAXINN
Currently From 4.7 we are using TAXINN.
Settings needed in SAP for TAXINN
First we need to Maintain TAXINN procedure as shown in the slide.
http://localhost/var/www/DOCUME~1/KUMAR~1.ARM/Desktop/CIN-Settings/taxinj.HTMhttp://localhost/var/www/DOCUME~1/KUMAR~1.ARM/Desktop/CIN-Settings/TAXINN.HTMhttp://localhost/var/www/DOCUME~1/KUMAR~1.ARM/Desktop/CIN-Settings/TAXINN.HTMhttp://localhost/var/www/DOCUME~1/KUMAR~1.ARM/Desktop/CIN-Settings/taxinj.HTM -
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Menu path SPRO Logistic General Tax on goods on movement India Basic Settings Determination of Excise duty Maintain Excise defaults.
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Then we need to assign the Tax procedure TAXINN to county India As shownbelow.
Menu path SPRO Logistic General Tax on goods on movement India
Basic Settings Determination of Excise duty Select Tax Calculation
Procedure.
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What is Excise register and how many are they.
How the Excise registers are using at Different Business Scenarios and How hese are
updating.
Excise register.
Excise Laws require you to maintain a number of registers in a specified format
relating to excise duty. They have to be printed out monthly and shown to the
authorities in the event of an audit. The SAP captures this requirement.Type of Registers:
RG23A PART I
RG23A PART II
RG23C PART I
RG23C PART IIRG I
RG23D
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Excise registers.
RG23A: Raw Material
The entries pertaining to quantity will go into RG 23 Part I and that of duty will go into Part II
in the appropriate duty column. i.e. Basic Excise, SED, Additional duty, etc
RG23C: Capital Goods
RG23CI-Part I entry: Excise stock entry at the time of GR (only quantity)
RG23CII-Part II entry: Credit entry of Capital goods (only value)
RG-I : Finished Goods (only Quantity)
The finished goods (manufactured, sub-contracted or gained) and sales or stock transfer are
entered in the RG I Register
Register RG I is updated after creation of an excise invoice while dispatching the goods from
the factory premises with reference a commercial invoice or a pro-forma invoice
RG23D: Depot (this indicates both the Quantity and the amount)
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Factory Process- Registers
RG23 A Part I & Part II
Material is received in the factory as forQuality
inspectionor forDirect Input.
Material after QualityInspectionor when used as
DirectInputwill go into the RG 23 A Registers.
The entries pertaining to quantity will go into RG 23
Part I and that of duty will go into Part II in the
appropriate duty column. i.e. Basic Excise, SED,
Additional duty, etc.
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Depot Process:
The RG 23 D register is used to update the excise entries in case of
Exciseable Depots.
The Excise duty is payable when the goods are sent from the factory.
However, it is not levied again when the goods are sent from the
DEPOT.
However, while taking sale from the DEPOT and if price escalationshappen, then the extra excise is paid using a A certificate. These
details are entered in the RG23 D register and excise recovered from
the customer.
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Depot Process
Transactions can happen through two scenarios:
Scenario1: Depot receives goods from the companys factory
through stock transfer.
Scenario 2: Depot procures goods directly from external sources.
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Transaction Codes relevant For Registers.
Activity SAP Transactions
Register Updates J1I5
RG23 A (Part I & II and RG I)
Register Extraction J2I5
Register Printing J2I6
Utilization J2IU
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So Far We discussed on
Tax Procedures
Pricing Procedure Relevant to SD.
CENAVT registers
Transaction Codes.
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Tax/Excise Duty set up for MM & SD
Basic Settings
Master Data
Account Determination
Business Transactions
Tools
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Basic Settings
Excise Registration IDs
Company Code Settings
Plant Settings
Excise Groups
Series Groups
Excise Duty Indicators
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Excise Registration IDs
A number assigned to each premises orlocation that has registered as a manufacturer
with the excise authorities.
Mention whether AED, SED, CESSapplicable. If blank will not be available for
inputs
Max no. of lineitems in outgoing EI
Permits deductible /
non deductible ED
at GR
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Company Code Settings
User can edit
Dr account
during JV Utilizes from
PLA in JVFirst month for
excise year
Excise invoice
selection
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Plant Settings
Plant defined as Depot
or not
Multiple plants to one
Excise Registration ID
GRs per EI can be set as
below
Multi GR Multi Credit
Multi GR Single credit
Single GR
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Excise Groups
Excise Reg ID linkedto Excise group &
Plant
Depot definition at
Excise Grp & Plant
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Series Groups
E i T I di
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Excise Tax Indicators
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D i t ti t d t i hi h G/L t t t t b
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During transactions system determines which G/L accounts to post to by
looking at the:
Excise group, Company code & Chart of accounts
SD tti R l t t I di L li ti
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SD settings Relevant to India Localization.
Assigning Billing types to Delivery Types.
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Maintain Excise Defaults.
Maintain the Excise Defaults in order determine Excise group and Series
Group Automatically at the time of Excise invoice creation.
M i t i Utili ti D t i ti
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Maintain Utilization Determination.
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Maintain Scripts for Registers.
Maintain the Excise registers Form along with company code to get the
Print out put for Excise Registers.
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CIN Master - J1ID
Maintain Chapter IDs
Excise Duty Indicators
Determination of Excise Duty
Material and Chapter ID Combination
Customer Excise Details
Excise Indicator for plant.
Excise Indicator for Plant and Customer.
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Excise rate Determination
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Excise rate Determination
Is the
Customer
SSI?
Get SSI
duty
Rates.
Yes
No
Excp rates
Maintained?
Yes
No
Get
Excep
duty
rates
Get Ch ID
Of the
material
Get Customer
Excise
indicator
Get plant
Exciseindicator
Get final
Excise
indicator
Get rate
Based on
Ex Ind & CH ID
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Let us Discuss on Sap Easy Access relevant to India Localization.
1.Creation Excise Invoice.
Updating the Registers.
Extracting Registers.
Print registers.
Utilization determination.
Pass JV by using J1IH.
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Creation Of Excise invoice
We will create the Excise invoice with reference to Commercial invoice it
may be Proforma or Normal invoice.
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Register Updation By using J1I5.
First We need to update the RG1 register by selecting the class RMA and
ROP.
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Once u complete the RG1 updation with RMA and
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Once u complete the RG1 updation with RMA and
ROP we need to do for IDH for ISSUES
Then continue the next step as shown in Slide 55
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Then continue the next step as shown in Slide 55.
it gives the following result.
Extract the Excise registers
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Extract the Excise registers.
We need select the RG1 in the initial screen and execute.
System give the following screen Click on
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System give the following screen.Click on
continue.
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Print the Excise register.
To do this First we need to maintain the Values in table J_2IRG1BAL as
follows.
Too print Excise registers use T C J2I6 System
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Too print Excise registers use T.C. J2I6, System
gives the all details of RG1 Register.
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CENVAT Utilization
Payment to be made toExcise Department for the Self Removals forthe last month.
Utilization to be done against the last months incoming excise duties
and CVD.
CENVAT utilization to be done before the 5thof next month.
C l d l
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CENVAT Availment and UtilizationOn-Line Transactions
Fortnightly Transactions
Excise Duty Utilization
Transaction
DespatchSales ExciseInvoice Process
Excise Duty
Payable Account
Goods
Receipt
Vendor Excise
Invoice Process
CENVAT on hold
for Capital goods
CENVAT Account
Select
Register
PLA Account
Deposit funds in PLA
Account
Credit CENVATon-hold A/c
Credit CENVAT A/c
Debit ED Payable A/C
Debit CENVAT A/c
Debit PLA A/c
Credit PLA A/c
Credit ED Payable A/C
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Do Fortnight Utilization of cenvat.
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Pass JV by using J1iH,
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Use of JV is to adjust amount in RG23A and RG23C
In JV we use other adjustments to Debit the amount from the Registers.
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Additional excise is used to Credit the Registers
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Additional excise is used to Credit the Registers
through J1IH.
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Important Things to Know
Determination of Excise Rate in Sales and Distribution
Information on Tax Procedure and Conditions
FI Entries related to Excise taking place in SD
D i i f ED R i S l d Di ib i
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Determination of ED Rate in Sales and Distribution
Settings for the same done through Transaction Code J1ID
Material: Material Chapter ID
Customer Excise Details: Excise Indicator for Customer
Plant Excise Details: Excise Indicator for Plant
Excise Indicator Customer + Excise Indicator Plant = Excise Indicator Final
Material Chapter ID + Excise Indicator Final = Excise Tax Rate
Refer Slide No.27
FI E t i l t d t E i i SD
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FI Entries related to Excise in SD
During the passing of Billing document to Accounting: (VF02, Release toAccounting)
Dr Customer Rs. 125/-
Cr Sale Rs. 100/-
Cr Excise Duty Recoverable Rs. 16/-
Cr Taxes Rs.9/-
During creation of Excise Invoice: (J1IIN)
Dr Excise Duty Recoverable Rs.16/-
Cr Excise Duty Payable Rs.16/-
During Monthly Utilization: (J2IU)
Dr Excise Duty Payable Rs. 16/-
Cr CENVAT Clearing Rs.16/-
Information on Tax Procedure and Conditions
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SPRO Financial Accounting Financial Accounting Global Settings Tax on
Sale and Purchase
Define ProcedureProcedure: TAXINJ
The various Condition types applicable in SD are:
Excise Conditions: JMOD, JSED, JAED , JCES, etc.
Tax Conditions:JIN1, JIN2,etc.Note:
Excise Conditions are statistical. Since, these are determined from SD pricing
procedure
Tax conditions are non-statistical. Since, these are determined from TAXINJ
While defining tax codes (using Transaction Code: FTXP), to maintain Excise
Duty (JMOD) as a changeable field, remove statistical check and maintain 100%
for JMOD. After the changes are made, onehas to again put the statistical checks
in procedure TAXINJ
Lets Clarify our Doubts
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8/13/2019 Cin India Localizationsd Workshop 110316092929 Phpapp02
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Lets Clarify our Doubts