in_indian_taxing_procedure

8/8/2019 In_Indian_Taxing_procedure

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In Indian Taxing procedure, Excise Duty plays a vital role in manufacturing cenarios.

Excise related configuration is known as CIN configuration. CIN Configuration is a topic

in itself.

Some info on CIN Configuration (it may not appear as understandable below, but if you

check on screen, it will be understood better)

Country Version India comes with four pricing procedures as follows:

- JINFAC (Sales from manufacturing plants)- JINEXP (Export sales)

- JINDEP (Sales from depots)

- JINSTK (Stock transfers

CIN: IMG > Logistics - General > Tax on Goods Movement > India > Basic Settings

> Maintain Excise Registrations

In this IMG activity, you maintain the data relating to your excise registrations.- Enter each of your excise registrations, specifying a four-character code for each Excise

Registration Ids

In this activity, you maintain excise registration IDs. You create one ID for each of yourbusiness's excise registrations.

- For each excise registration in your business create a registration ID, and state:

- Which taxes the registration covers (additional excise duty, special excise duty, andcess) Fields for any taxes that are not covered will be hidden in transactions involving

excise duty.

- The maximum number of items to be printed on each excise invoice

- Whether you are allowed partial CENVAT credits

Maintain Registration ID NUMBER, Excise code number, excise registration number

ECC Number: Specifies the organization's ECC number.

Excise Registration Number: A number assigned to each premises or location that has

registered as a manufacturer with the excise authorities.Every entity with an excise registration number is required to keep its own excise books.

Excise range: Specifies the excise range in whose area the excise registration is located.

Excise Division: Specifies the excise division in whose area the excise registration islocated.

Excise Collectorate: The code of the excise collectorate in whose area the exciseregistration is located.

Indicator for confirming, AED usage Additional Excise duty Percentage.These are livable under the additional duties of excise act. These duties are in addition to

basic excise duty and special excise duty. Example - Additional Excise duty is livable in

case of textile products, tobacco and sugar.


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Similarly for SED CESS Number of Items in Excise Invoice Shows the maximum

number of line items that the authorities allow per excise invoice.

Dependencies - This information is used when you create an excise invoice in Sales andDistribution (SD) for factory sales and for other movements. This information is used to

split the transfer postings' items into multiple subcontracting challans.

Excise register set description: Description of the excise registers set.

Partial CENVAT Credit: Indicates that the excise registration ID is allowed to credit only

a portion of its input excise duty to its CENVAT account

Dependencies - When you post a goods receipt, the system splits the input excise duty on

the material into its deductible and nondeductible amounts. It posts the deductible duty to

the appropriate CENVAT account, and adds the nondeductible duty to the material value.

This information is also shown when you post the vendor's excise invoice.

Maintain Company Code Settings.In this IMG activity, you maintain the data relating to your company codes.

Document Type for CENVAT Postings.

It controls, which document type the system uses when making CENVAT postings in

Financial Accounting (FI). Here ED is document type for cenvat posting.

Indicator for providing debit account overwriting

Debit Account Overwrite Indicator. X - Indicates debit accounts can be overwritten. Use

In excise journal voucher transaction. It provides the flexibility to the user to enter thedebit account of his choice depending on the nature of transaction.

Automatic balance Indicator - Excise year start month. The calendar month marking the

beginning of the excise year. This start month represents the month for the start of the

excise invoice number range. The month 04 is entered here indicating April of thecalendar year as the start month for excise invoices. Any change by the Excise authorities

regarding start month should be taken care of by an entry in this field and initialization.

Excise invoice selection procedure :Excise invoice selection type. To indicate the method

opted by the company for selecting the excise invoice. It can be either earliest or latest

invoices that were received. Number of excise invoices to be selected Indicates thenumber of excise invoices that needs to be selected in the excise invoice selection.

Days to be considered for excise invoice selection Number of days from document date

for excise invoice selection.Example - If the value of this field is 20 and today is 28-03-97. The excise invoice

selection will show the related invoices only for the period 08-03-97 to 28-03-97.


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Document type for TDS FI posting: Financial accounting document type for TDS

posting.

Document type for FI posting on Utilization Financial accounting document type for TDSposting.

Indicator for item level excise duty round off - This indicator is to be used for deciding

whether Item level excise

duty amount rounding off is required during procurement cycle. If marked 'X' then theexcise duty amount will be rounded off to the nearest rupee at the Purchase order level.

This will not round off the CENVAT credit to be taken. If the duty amount is less than

one rupee then no rounding is done

Rounding off of Excise duty for outgoing excise invoice - You can round off the Exciseamount to be paid during an outgoing

Excise invoice by marking this indicator as 'X'. The rounding is done at the item level for

each item where the amount is greater than 1 Rupee.

Immediate Credit on Capital Goods - Instructs the system, when you verify a goodsreceipt for capital goods, to immediately post half of the input excise duty to the

appropriate CENVAT accounts. The rest is posted the CENVAT on hold account, for

use in the following year.

CVD Clearing Account - Specifies which G/L account the system credits when you takea CENVAT credit on countervailing duty in the Incoming Excise Invoices transaction.

Exchange rate type - Key representing a type of exchange rate in the system.

- You enter the exchange rate type to store different exchange rates. Example - You canuse the exchange rate type to define a buying rate, selling rate, or average rate fortranslating foreign currency amounts. You can use the average rate for the currency

translation, and the bank buying and selling rates for valuation of foreign currency

amounts.

Exchange rate type to be used for Export excise duty converts - When you are creating anExcise invoice for export sales then the exchange rate for duty calculation will be picked

up using this Exchange rate type.

Maintain Plant Settings - In this IMG activity, you maintain excise information relating

to your plants.Plant Settings - In this activity, you maintain excise information relating to your plants.

For each plant:

- Specify whether it is a manufacturing site or a depot.- Assign it an excise registration ID. - You can assign the same ID to more than one plant,

if required.


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Depot - Indicates that the plant in question is a depot. - Depots are required to prepare

register RG 23D, and follow different procedures for goods receipt and invoice

generation.- Number of goods receipt per excise invoice.

- Multiple GR for one excise invoice, Single credit

- Multiple GR for one excise invoice, multiple credit

Maintain Excise Groups - In this IMG activity, you define your excise groups. For eachexcise group, you can also control how various excise invoice transactions will work.

Excise Groups - In this activity, you define excise groups. An excise group allows you to

maintain a separate set of excise registers and excise accounts. The RG 23A, RG 23C and

PLA serial numbers are created for an excise group.

Recommendation - Under normal circumstances, excise authorities require every

business to maintain only one set of excise registers and one set of accounts. But through

exemption from the authorities, multiple books can be maintained.

If your company has only one set of excise registers, then you need to maintain only oneexcise group.

1. Create one excise group for each set of registers that you need to keep.

2. Assign the excise groups to plants.3. Maintain whether this Excise group is for a depot or not.

If you receive only one consignment for an Excise challan then you can leave GR's per EI

as blank. If you receive multiple GR's for a given Excise challan and would like to avail

multiple credit mark the GRs per EI as 'Multiple GR's for one excise invoice, multiplecredit'. Alternatively if you want to availa the credit only after all the goods receipts

have been made mark it as ' Multiple GR for one excise invoice, single credit'.4. If you want to automatically create Excise invoice during Sales cycle at the time ofbilling the tick the indicator 'Create EI'

5. During depot sales if you do not want to do RG23D selection and posting separately

and would like to complete RG23D selection in one step mark the indicator 'RG23DAuto post'. This will post the selected records into RG23D automatically. You cannot

cancel the selection later.

6. If the indicator 'Default GR qty' is marked system will default the Excise challanquantity on to the Goods receipt if the Excise invoice number is given in the pop-up.

7. If the indicator 'Folio no create' is marked system will generate Folio numbers for

RG23D during receipt of excise invoice into depot.

8. 'Automatic posting' when ticked will post the Excise invoice other movementsautomatically along with creation in single step.

9. 'Create Part1 for Block Stock' when marked will create a Part1 during the receipt of

material into Blocked stock .10. 'Create Part1 for STO' when marked will create a Part1 during the receipt of material

through inter plant transfers.

11. 'Create Part1 for consumption stock' when marked will create a Part1 during the


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receipt of material into consumption stock. Excise Group Governs which set of excise

registers a business transaction will be included in.

Following is the relation between excise group, plant and registration. - In define excisegroups in Customizing.

Then, in transactions involving excise duty, for example, when you post a vendor's exciseinvoice, you specify which excise group you are using. This information tells the system

which G/L accounts to post the excise to. At the end of the period, when you come toprepare your excise registers, you create different sets for each excise group.

Indicates that the plant in question is a depot. - Depots are required to prepare register RG

23D, and follow different procedures for goods receipt and invoice generation.

- GR Per Excise Invoice- Multiple GR for one excise invoice , Multiple credit

- Multiple GR for one excise invoice , Single Credit

Create Excise Invoice Automatically - Instructs the system to automatically create a Salesand Distribution (SD) excise invoice immediately you create a commercial invoice or a

pro forma invoice.

The excise invoice is created in the background. - If you want to make use of this

function, you must also define thedefault plant, excise group, and series groups in Customizing for Sales and Distribution

(SD), by choosing Excise Group - Series Group Determination.

RG23D Sales Creation and posting option - RG23D Automatic Option if selected will

create Depot excise invoice by posting the selection of excise invoices in single step. Ifthis is not selected then you need to separately do RG23D selection

followed by PGI and then RG23D verification and posting. If you need automaticposting of RG23D selection then the Post Goods Issue should have been completedbefore running RG23D selection.

Default excise qty in GR - If this indicator is ticked then while doing Goods Receipt

using 'MB01' system will default the excise invoice quantity on to the Goods receipt

document.

Folio number for depo Posting - If this indicator is marked then while creating Excise

invoice for other movements system automatically does the Verify and Post. You need

not separately Post the excise invoice

Also we can set indicator for creation of part 1 for:- Blocked stock

- Stock transport order

- Consignment stock

Maintain Series Group - In this IMG activity, you define the different excise seriesgroups within your company. Series groups allow you to maintain multiple number


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ranges for the outgoing excise documents. Based on excise regulations and exemptions

from the authorities you can maintain multiple number series for outgoing documents.

But each of these series has to be declared to the excise authorities.

- Define excise series groups based on type of outgoing document

- Assign series group to excise registration ID- If no financial postings are required for an Excise invoice in this seris group then you

tick the 'No utilization' indicator.- If the CENVAT has to be paid immediately and you need not wait for the Fort nightly

payment then mark the 'Immediate Utilization' Iindicator. Example - You could define

two series groups, group 001 for excise invoices, and group 002 for 57 F4 documents.- No account postings for CENVAT in sales cycle

- No utilization Flag

If you do not need any CENVAT utilization for an excise invoice but would like to justgenerate an excise invoice then you need to mark this indicator.

If the flag is checked then system will create an Excise invoice in the given Series group

but there will not be any account postings or Part2 postings.

Immediate Utilization of CENVAT - Specifies that when you create an excise invoice,the system immediately pays the amount from CENVAT and creates the Part II entry.

Such invoices will not be listed for fortnightly utilization.

If you have both fortnightly and immediate utilization for the same excise group, the

account determination within CIN IMG should point to the ED interim account.

Account determination for immediate payment will be done exactly the same as beingdone for fortnightly utilization program.

Maintain Excise Duty Indicators - In this IMG activity, you maintain the excise duty

indicators.

IMG > Logistics - General > Tax On Goods Movement > India > Basic Settings >

Determination of Excise Duty > Select Tax Calculation Procedure

In this IMG activity, you specify which tax procedure you want to use for determining

excise duties and sales taxes on input materials in India.- If you use condition-based excise determination, use a copy of the tax procedure

TAXINN.

- If you use formula-based excise determination, use a copy of the tax procedure

TAXINJ.This tax procedure also supports condition-based excise determination, so that you can

work with both concurrently.

We strongly recommend that new customers use condition-based excise determination.Note that once you have started using a tax procedure, you cannot switch to another one,

otherwise you will not be able to display old documents.


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Maintain Excise Defaults - In this IMG activity, you define which tax procedure and

pricing condition types are used in calculating excise taxes using formula-based excise

determination.

If you use condition-based excise determination, fill out the CVD cond. field and leave

all the others blank.If you use formula-based excise determination, fill out all of the fields as follows:

- Enter the tax procedure and the pricing conditions that are relevant for excise taxprocessing.

- Specify the purchasing and sales conditions types used for basic excise duty, additional

excise duty, special excise duty, and cess.- Specify the conditions in the sales order that are used for excise rates.

- Specify the countervailing duty condition type used for import purchase orders.

See also : SAP Library -> Logistics -> Country Versions -> Asia-Pacific -> India ->

Materials Management (MM) -> Condition-Based Excise Determination and -> Formula-

Based Excise Determination.

IMG > Logistics - General > Tax On Goods Movement > India > Basic Settings >

Determination of Excise Duty >

Condition-Based Excise Determination

When you enter a purchasing document, for example, a purchase order, the R/3 System

automatically calculates the applicable excise duties using the condition technique.

Features : The standard system comes with two tax calculation procedures. TAXINN is

only supports condition-based excise determination, whereas TAXINJ supports

condition-based excise determination and formula-based excise determination. Both taxprocedures contain condition types that cover all of the excise duties and sales taxes

applicable.Since the exact rates of excise duty can vary on a large number of factors, such as which

vendor you purchase a material from, or which chapter ID the vendor stocks the material

under, you create condition records for every sort of excise duty.

When you come to enter a purchasing document, the system applies the excise duty at therates you have entered in the condition records.

Customizing : Make the settings in Customizing Basic -> India -> for Logistics

General, by choosing Taxes on Goods Movements Account -> Excise Duties Using

Condition Technique and -> Settings Determination.

These activities include one activity where you define a tax code for condition-based

excise determination.

Master Data - Create condition records for all excise duties that apply, and enter the tax

code for condition-based excise determination in each.


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Day-to-Day Activities - When you enter a purchase order or other purchasing document,

enter the tax code for condition-based excise determination in each line item. The system

then calculates the excise duties using the condition records you have created.

When the ordered materials arrive, you post the goods receipt and the excise invoice. The

system posts the excise duty to the appropriate accounts for deductible input taxes whenyou enter the excise invoice.

Creating Condition Records for Excise Duty1. In the command field, enter FV11 and choose .

2. Enter the condition type that you want to create a condition record for and choose .

The Key Combination dialog box appears.

3. Select the combination of objects that you want to create the condition record for. Onthe dialog box, Control Code means "chapter ID." So, for example, to create a condition

record for a tax that applies to a combination of country, plant, and chapter ID, select

Country/Plant/Control Code.

4. Choose .5. Enter data as required. - In the Tax Code field, enter the dummy tax code that you

have defined.6. Save the condition record.

Formula-Based Excise Determination - When you execute a business transaction

involving materials that are subject to excise duty, the system automatically calculates theduty for you.

In order for the system to be able to determine which rate of excise duty to apply, you

must have maintained all the data on the Excise Rate Maintenance screen, which you can

Master Dataaccess from the SAP Easy Access screen by choosing Indirect Taxes

Excise Rate Maintenance.

You maintain the following types of data:

- Plant master data

You assign each of your plants an excise duty indicator. You can use the same indicatorfor all the plants with the same excise status from a legal point of view, such as all those

that are in an exempt zone. See also the information about manufacturers that are only

entitled to deduct a certain portion of the duty (see Partial CENVAT Credit).- Vendor master data

For each of your vendors with the same excise status from a legal perspective, you define

an excise duty indicator. You must also specify the vendor type for example, whether

the vendor is a manufacturer, a depot, or a first-stage dealer. You must also stipulate ifthe vendor qualifies as a small-scale industry. For each permutation of plant indicator

and vendor indicator, you then create a final excise duty indicator.

- Customer master dataSimilarly, you assign the same excise duty indicator to each of your customers that share

the same legal excise status.

Again, for each permutation of plant indicator and customer indicator, you then create afinal excise duty indicator.


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The standard system comes with sample settings for the tax calculation procedures and

pricing procedures.

Use these settings as a basis for your own.IMG > Logistics - General > Tax On Goods Movement > India > Account Determination

Define G/L Accounts for Taxes - In this IMG activity, you specify which G/L accountsyou will use to record which taxes.

Requirements - You have set up G/L accounts for each of the processing keys listedbelow.

- Assign an account to each of the following posting keys. The accounts for VS1, VS2,

and VS3 are used as clearing accounts during excise invoice verification.- VS1 (basic excise duty)

- VS2 (additional excise duty)

- VS3 (special excise duty)- VS5 (sales tax setoff)

- MWS (central sales tax)

- MW3 (local sales tax)- ESA (service tax)- ESE (service tax expense)

Specify Excise Accounts per Excise Transaction - In this IMG activity, you specify

which excise accounts (for exciseduty and CENVAT) are to be posted to for the various transaction types. Enter all the

accounts that are affected by each transaction type. If you use sub transaction types,

enter the accounts for each sub transaction type as well.

Transaction type UTLZ is used for determining accounts only while posting excise JVs

and also if the payment of excise duty has to be done fortnightly. The fortnightlyCENVAT payment utility picks up the credit side accounts from the transaction types of

GRPO, EWPO, and TR6C for determining the CENVAT and PLA accounts. There is no

separate transaction type for fortnightly payment.Example:

- Excise TT DC ind Account name

- GRPO CR CENVAT clearing account- GRPO CR RG 23 BED account

- GRPO DR CENVAT on hld account

Specify G/L Accounts per Excise Transaction - In this IMG activity, you assign the

excise and CENVAT accounts to G/Laccounts. When you come to execute the various transactions, the system determines

which G/L accounts to post to by looking at the:

- Excise group- Company code

- Chart of accounts


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Furthermore, if you want separate account determination settings within an excise group,

you can also use sub transaction types.

RequirementsYou have already:

- Defined the G/L accounts

- Defined the excise groups- Maintained the transaction accounts

Activities - For each excise group, assign the excise and CENVAT accounts to G/L

accounts. For most businesses, one set of accounts will suffice for all transactions.Note : you need not remit the CENVAT to the excise department immediately, so

maintain the credit account for transaction type DLFC as an excise duty interim account.

This will be set off when you remit the duty. Config setting needed to be done in order to

get the Excise Details Screen in Material Master.

Even though this functionality is available in enterprise version, a small configuration

step has to be made in Screen Sequences for Material Master.

Following document helps you to do this configuration.

- Material Master Logistics General1. Go to IMG Define Structure of Data Screen for each Configuring the Material master

Screen Sequence.

2. Select your screen sequence. Usually it would be 21. Select the same and click on DataScreen in the left frame.

3. Once the data screens are exhibited, select data screen no. 15, ie. SSq. 21and Scrn 15,

which is Foreign Trade: Import Data. Select the same and click on Sub screens in the

left frame.4. Go to the last sub screen i.e. 21-15-6 - SAPLMGD1- 0001 and select the same. Click

on tab view sub screen and ensure that the sub screen is blank.5. Now in the last sub screen i.e. no.6 you delete SAPLMGD1 0001 and instead addSAPLJ1I_MATERIAL_MASTER and in the screen no. 2205.

6. Save the setting.

7. Create a Material Master and check whether in Screen Foreign Trade Import, Excise related sub screen appears.

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