SAP-CIN Central excise &Service Tax challans CIN: General clarifications for RG1 goods

Configure Tax on Sales and Purchases

Country India Version (CIN) Overview Training

Display Tax Information

Excise Transaction types

Procedures in Central Excise and Returns to be filed

Register RG 23A and 23C

SAP CIN Registers

Tax Calculation in TAXINN procedure

Tax Procedures – TAXINJ

User exit for RG23A/C and RG1 registers during J1I5

CIN Accounting Entries by Jayanth on January 7, 2013

Accounting entry in procurement ~ For Domestic Procurement of Raw Material

  During GR

            Material Stock            Dr.

           GR/IR clearing            Cr.

 During Excise Invoice Credit            

            Cenvat Account          Dr.

            Cenvat Clearing                     Cr.

  During Invoice Verification

             Cenvat Clearing         Dr.

            GR/IR Clearing           Dr.

            Vendor Payable                      Cr. 

For Domestic proceurement of Capital Goods

  During GR

             Material Stock            Dr.

            GR/IR clearing                        Cr.

  During Excise Invoice Credit            

              Cenvat Account          Dr.       (50%)

              Cenvat On-hold          Dr.       (50%)

              Cenvat Clearing                     Cr.

During Invoice Verification

               Cenvat Clearing         Dr.

                GR/IR Clearing           Dr.

                Vendor Payable                      Cr

Subsequent of Capital Goods

                 Cenvat Account          Dr.       (50%)

                Cenvat On-hold                      Cr.       (50%) 

For Import Procurement of Raw Material                       

   During Customs Duty Clearing invoice

              Custom Clearing         Dr.

              Custom Payable                      Cr.

   During GR

                Material Stock            Dr.

                 GR/IR clearing                        Cr.

   During Excise Invoice Credit            

                Cenvat Account          Dr.      

                Custom Clearing                   

During Invoice Verification

                GR/IR Clearing           Dr.

                Vendor Payable                      Cr.

 For Excise Duty Credit of Raw Material without PO                       

               Cenvat Account          Dr.      

              Cenvat Clearing                     Cr. 

 For Excise Duty Reversal through Excise JV                       

              Cenvat Clearing         Dr.      

              Cenvat Account                      Cr.

Accounting entry when the goods are issued through MM and Excise invoice is Credited(J1IS &J1IV)

During Excise Invoice Creation

             Cenvat Suspense Account       Dr.

             Cenvat payable                                   Cr.

 For TR6C Challan

PLA Account               Dr.

PLA on hold Account              Cr.

 During Fortnightly  Utilization

Cenvat payable           Dr.

Cenvat Account                       Cr.

PLA Account                           Cr. Note: Cenvat Suspense Account should be cleared apprpiately using FI JV’s.

Accounting Entry in subcontracting reversal/Recredit

For Subcontracting Challan Reversal     Cenvat Reversal          Dr.

     Cenvat Account                      Cr.

For Subcontracting Challan Recredit

      Cenvat Account          Dr.

      Cenvat Reversal                      Cr.

Accounting Entry in SD

For  Factory Sale During Billing Document

      Customer Account                  Dr.

      Sales Account                                      Cr.

       Cenvat Suspense Account                   Cr.

 During Excise Invoice Creation

       Cenvat Suspense Account       Dr.

       Cenvat payable                                   Cr.

 For TR6C Challan

PLA Account               Dr.

PLA on hold Account              Cr.

 During Fortnightly  Utilization

Cenvat payable           Dr.

Cenvat Account                       Cr.

PLA Account                           Cr. 

For  Stock Transfer through SD

No Accounting entries for Performa Billing Document During Excise Invoice Creation

    Cenvat Suspense Account       Dr.

    Cenvat payable                                   Cr.

 For TR6C Challan

PLA Account               Dr.

PLA on hold Account              Cr.

 During Fortnightly  Utilization

Cenvat payable           Dr.

Cenvat Account                       Cr.

PLA Account                           Cr. Note: Cenvat Suspense Account should be cleared appropriately using FI JV’s.

CIN -SAP T CODESby Jayanth on December 20, 2012

Transaction Action

J1I2 Prepare a sales tax register

J1I3 Create outgoing excise invoices in batches

J1I5 Update the RG 1 and Part I registers

J1IEX Incoming Excise Invoices (central transaction)

J1IEX_C Capture an incoming excise invoice (excise clerk)

J1IEX_P Post an incoming excise invoice (excise supervisor)

J1IF01 Create a subcontracting challan

J1IF11 Change a subcontracting challan

J1IF12 Display a subcontracting challan

J1IF13 Complete, reverse, or recredit a subcontracting challan

J1IFQ Reconcile quantities for subcontracting challans

J1IFR List subcontracting challans

J1IH Make a CENVAT adjustment posting

J1IIN Create an outgoing excise invoice

J1IJ Assign excise invoices to a delivery for sales from depots

J1INJV Adjust withholding tax Item

J1INREP Reprint a withholding tax certificate for a vendor

J1IQ Year-End Income Tax Depreciation Report

J1IR Download register data

J1IS Process an excise invoice (outgoing) for other movements

J1IU Process exemption forms

J1IW Verify and post an incoming excise invoice

J1IX Create an incoming excise invoice (without reference to purchase order)

J2I8 Transfer excise duty to CENVAT account

J2IU Remit excise duty fortnightly

J2I9 Monthly CENVAT return

J1IG Excise invoice entry at depot

J1IGA Create additional excise entry at depot

J2I5 Extract data for excise registers

J2I6 Print excise registers

SAP Country India Version (CIN) Overview Training Presentationby Jayanth on September 15, 2012

In this presentation, you will find well noted instructions related to India localization, which is knowns as CIN, in SAP. After reading this document, you will get fair knowledge about:

India Legal Requirements Overview: CENVAT (Excise), VAT (Central Sales Tax), Service Tax, Cenvat Credit

Lets start Step by step 

India Localization

◘ India Legal Requirements overview

CENVAT (Excise) VAT / LST / CST

Service Tax

Cenvat Credit

☼ Cenvat (Central Value Added Tax):

What  is Cenvat?

  Tax on manufacturing or production of goods in India Goods having 4M Characteristics are covered under this

– Movable (No duty on Immovable Goods)

– Marketable (Bought and Sold)

– Manufactured (Come up out of a process)

– Mentioned (Central Excise Tariff)

Every legal entity that manufactures or produces excisable goods shall pay the duty leviable on such goods

Materials are classified under various tariff headings (Chapter Ids).This will be subject to change in every financial budget.

Goods consumed in-house also liable for payment of duty.

What  is the basis of charge?

  Tax Rates Provided by GOI and are subject to change after eachyear based on the budget Exemption to pay duty on intermediate products in thefollowing cases

                  – used for manufacturing capital goods

                  -used for manufacturing final goods which are eligible forCenvat credit

Duty shall be paid when the goods are removed from the place of production or place of storage

Excise duty not payable on goods manufactured forexports or deemed exports

Goods manufactured in factory for use within the factoryfor repairs of machinery installed within the factory are exempt from excise.

Types of Excise Duty

  ◘  Basic Excise Duty (BED)

  ◘  Additional Excise Duty (AED)

◘  Special Excise Duty (SED)

  ◘  Education Cess on Excise

  ◘  Secondary and Higher education Cess 

Duty Calculation

 Specific duty – It is calculated on the basis of certain unit, length, weight etc. Eg. cigarette Ad valorem duty – It is based on the value of the goods

Duty based on tariff value – The Govt. may fix tariff value from time to time. The duty will be calculated as percentage of tariff value fixed by the Govt. and not on assessable value.

Duty Calculation Considerations

 Transaction value is the price actually paid or payable for the goods and includes any other amount that the buyer is liable to pay in connection with such sale

Any additional consideration flowing directly or indirectly tothe seller from the buyer should be added to the transaction value.

Cost of production is not relevant for the purpose of determining assessable value.

Assessable value may be lower than the cost price of the goods.

Goods should be assessed in the form in which they areremoved.

CENVAT PAYMENT : 

☼  Duty to be paid by 5th of the following month.

☼ Duty deposited in bank using TR 6 challan and credited to PLA.

☼ Duty is paid by debiting PLA.

 Excise Registers:

Statutory Excise Reporting 

                •  Excise Registers(RG23A & C Part I & Part II,RG1, PLA, RG23D) 

                •  Excise Monthly Returns 

                •  Bond Registers 

                •  License Registers 

                •  Running Bond Registers////////////////////////////////////////////////////////////

——————————————————————————————————————————————————————————————–

◘ India Legal Requirements overview

CENVAT (Excise) VAT / LST / CST

Service Tax

Cenvat Credit

☼  VAT / LST / CST

How is Sales tax treated in India ?

 This is a tax on sale VAT / LST is charged on sales within the state

Central Sales Tax (CST) is charged on inter-state sales

Any sale would be charged to either VAT or CST but only to one of them

Every person carrying on any business is required to charge VAT / CST, on all sales made by him, and pay it to the Government

VAT / CST shall be charged at the rate in force as on the date of sale

Tax Impact under VAT System

Rs

STAGES

I– Manufacturer II – Wholesaler III – Retailer

Selling price (excl. tax) 100.00 Cost price 100.00 Cost price 120.00

VAT @ 14% 14.00 Overheads & profit @ 20% 20.00 Overheads & profit @ 20% 24.00

Sale price 114.00 Sale price(excl. tax) 120.00 Sale price(excl. tax) 144.00

Tax paid 14.00 VAT @ 14% 16.80 VAT @ 14% 20.16

Sale price(incl. Tax) 136.80 Sale price(incl. Tax) 164.16

Tax paid(16.80-14.00) 2.80 Tax paid(20-16.14) 6.16

 CENVAT vs VAT

Cenvat VAT

Central – Value Added Tax State – Value Added Tax

Revenue to Central Government Revenue to State Government

Tax on Manufactured Goods Tax on Sale of goods

Single point tax – paid at the first point of goods movement

Multi Point Tax – payable at each stage of value chain

Credit can be availed Credit can be availed except in case of LST

General CENVAT rate @ 10% with exceptions

General VAT rate @ 5% or 14% with exceptions

Centrally administered –Cenvat Chain cannot be broken on interstate boundaries

State administered – Chain broken on interstate transactions

Cenvat credit can be availed on Services Cenvat credit cannot be availed on Services

—————————————————————————————————————————————————————————————–

◘ India Legal Requirements overview

CENVAT (Excise)

VAT / LST / CST

Service Tax

Cenvat Credit

☼ Service Tax

Tax on services rendered Applicable only on those services which have been notified by the Government

Service Tax is payable @ 12 % plus education cess @0.24% & Higher and Secondary education cess @ 0.12%

Exemptions to persons rendering taxable service below 10Lakhs INR

Tax to be paid by 5th of the next month

Service tax is payable on advances

Half Yearly return for form ST-3 : April to Sep – Oct 25th, Oct to Mar- Apr25th

Revision of Form ST-3: ST-3 form can be revised and submitted again within 90days from the date of filling original return

Service Tax Considerations

 Service tax is payable on value of services Value of service is the gross amount charged by the service provider for the taxable service

provided

Any discount/rebate given to customer before accepting the payment would be deducted from the gross amount

In most of the cases person providing the taxable service is liable to pay tax

Reimbursement of expenses incurred on behalf of customer is not taxable

No tax on services which are exported or used for providing services which are being exported

Export of Service

Should be at least partly performed outside India It is delivered outside India and used outside India

Payment for such services is received in foreign exchange

No tax on services which are exported

Import of Service

Should be provided from outside India to a person in India Service provider does not have a place of business in India

Person receiving such service has a place of business in India

Person receiving such services is liable to pay service tax

Cenvat credit can be utilized for tax payment

Tax paid can be used for availing credit

CENVAT Credit on Input Services

Service provider is entitled to take credit of service tax paid on input services Credit can be taken only when full payment has been made for the service

Credit may be taken for service tax and also for education Cess , Secondary and Higher Education Cess paid

In case the service provider is engaged in exporting services, he shall be granted refund of CENVAT on input services

In many cases, various input services will be consumed in theheadquarters/administrative offices of manufacturers and OSPs. In such cases, the invoices indicating the payment of service tax will be in the name of such headquarters/ administrative offices. Provision can be made for availing credit of such service tax, in the premises where manufacturing activity is undertaken or the premises where the output services are rendered.

Reporting

Half yearly return in form ST-3 to be filed within 25 days from the end of the half year Return needs to be accompanied by TR -6 challan evidencing duty payment

 Excise Transaction typesby Jayanth on June 21, 2013

Excise Transaction types:

So Many people asks what is the excise invoice document types in SAP there is no document types for Excise & we have on ly Excise Transaction Types as below.

57CM – 57F CHALLAN COMPLETION57FC – 57F CHALLAN CAPTURE/CHANGE57NR – 57F NON RECEIPTARE1 –  EXPORT PROCESSING UNDER ARE1ARE3 –  DEEMED EXPORTS UNDER ARE3CAGI – CAPITAL GOODS ISSUESCAPE – CAPITAL GOODSCEIV – CANCELLATION OF EXCISE INVOICEDIEX-  DIFFERENTIAL EXCISE THROUGH JVDLFC –  GOODS REMOVAL THROUGH SALESEWPO – EXCISE INVOICE WITHOUT POGRPO – EXCISE INVOICE FOR GOODS RECEIPT AGAINST POMRDY – REVERSAL WITHOUT REFERENCEMRRD –  REVERSAL INCASE OF COMSUMPTION OTHER THAN PRODUCTIMRWO –  CENVAT REVERSALS FOR WRITE OFFOTHR – INVOICE FOR OTHER MOVEMENTSTR6C  – PLA ACCOUNT ADJUSTMENT THROUGHUTLZ   – MONTH PAYMENTS

SUBTRANSACTION TYPES:

The importance of subtransaction is to post duties to separate GL accounts.

Normally for a plant which is having excise registration we will maintain one set of registers and GL accounts right ?

There are some situations where we hve to maintain more than one set of registers and respective transactions has to hit different GL accounts. In this case we will assign GL accounts with combination of Excise transaction and sub transaction type. Based on this configuration system will pick the respective GL accounts.

MAINTAIN SUBTRANSACTION TYPES:

IMG > LOGISTIC GENERAL > TAX ON GOODS MOVEMENT > INDIA > BASIC SETTINGS > MAINTAIN SUBTRANSACTION TYPES

So by default, the system records excise duties on the accounts that we have specified in the IMG activityspecify excise accounts per excise transaction.If we want to be able to record some excise duties on other accounts:Create a subtransaction type in this IMG activity.In the IMG activity specify Excise accounts per Excise Transaction, create a new entry with this subtransaction type and enter the accounts that we want to post to.

tep by Step Reference Guide to SAP (CIN) FI Excise Duty Proceduresby Jayanth on January 21, 2013

Excise duty in SAP is a special function designed for India according to local requirements under Country India Version (CIN) template. In this document you will read various processes related to Excise of following procedures with screenshots:

TR6 Challan Creation J1IHCENVAT Utilization J2IUNRegisters Updation (RG1, RG23) J1I5Registers Extraction J2I5CENVAT Register J2I9ER1 Report J2IER1

Tax Procedures – TAXINJ vs TAXINNby Jayanth on September 18, 2013

What is the difference between maintaining tax codes in TAXINJ and TAXINN

Both procedure TAXINJ and TAXINN has thin line difference where as TAXINN procedure is condition based &  TAXINJ is fomula based.If you drag down details of  TAXINJ is fomula based,where you can find Routine( selection with logic in line of condition type)  are play vital role in tax calculation.

If you selected TAXINN procedure , you can maintained tax rate with respective condition types  in FTXP during creation of tax code.But you should maintain condition record in FV11 t.code for condition types JMX1 & JMX2  are as 100%. Also you can maintain  tax rate for condition types Basic Excise Duty,Edu cess , H. Edu cess,VAT/CST in FV11 t.code in stead of maintaining tax rate in FTXP.

1.     TAXINJ is a tax calculation procedure for country version India and it supports formula-based excise determination. You need to configure this tax calculation procedure

Excise Conditions

⇒  JMOD   IN: A/R BED

⇒  JNED    IN: A/R NCCD

⇒  JAED    IN: A/R AED

⇒  JSED    IN: A/R SED

⇒  JCES    IN: A/R Cess

⇒  JECS    A/R Educational CESS

LST/CST/VAT Conditions

⇒  JIN1      IN: A/R CST

⇒  JIN2      IN: AR LST

⇒  JIN4      IN: A/R CST Surcharge

⇒   JIN5      IN: AR LST Surcharge

⇒   JIN6      A/R VAT Payable

⇒  JIN7      A/R CST Payable VAT

Service Tax Conditions

⇒  JSE4    Service Tax

⇒  JES4    ECS on Service Tax

2.      Set up the following Account Key

IMG ⇒Financial Accounting ⇒ Financial Accounting Global Settings ⇒ Tax on Sales/Purchases ⇒ Basic Settings ⇒ Check and Change Settings for Tax Processing.

⇒  VS6    Input Tax

3.      Define the Tax Procedure according to the settings in the figures below.

You can do this in the IMG ⇒ Financial Accounting ⇒ Financial Accounting Global Settings ⇒ Tax on Sales/Purchases ⇒ Basic Settings ⇒ Check Calculation Procedure ⇒ Define Procedures. Tcode:OBBG

4.      Assign Tax Procedure to the country.

You can do this in the IMG ⇒ Financial Accounting ⇒ Financial Accounting Global Settings ⇒ Tax on Sales/Purchases ⇒ Basic Settings ⇒ Assign Country to Calculation Procedure. Tcode:OBYZ

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 tax procedures 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 the rates you have entered in the condition records.

Activities,

Customizing

Make the settings in Customizing for Logistics u2013 General, by choosing Taxes on Goods Movements ⇒ India ⇒ Basic Settings ⇒ Excise Duties Using Condition Technique and u2026 ⇒ Account 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.

TAXINN Vs TAXINJ:

Definition: condition-based excise determination

A method that the system uses of determining excise duty in India.

This method requires you to create condition records for each combination of vendor or customer and material (and possibly other conditions).When you create a purchasing document, the system calls the tax procedure assigned to India. The tax procedure finds all of the condition records that you have created for that combination of vendor and material.

When you create a sales document, the excise duties and sales taxes are determined by the pricing procedure (not the tax procedure).

Definition: formula-based excise determination

A method that the system uses of determining excise duty in India.

This method was used in the Country Version India Add-On and requires you to maintain additional data in the Excise Rate Maintenance transaction, J1ID.

When you create a purchasing document, the system calls the tax procedure assigned to India. Each of the excise duties in the tax procedure has its own condition types, and each condition type is assigned to a formula. This formula instructs the system to calculate the excise duty using the data that you have maintained in the Excise Rate Maintenance transaction.

When you create a sales document, the system determines the excise duties and sales taxes using the pricing procedure (not the tax procedure).

Pricing Procedures:  

The primary job of a pricing procedure is to define a group of condition types in a particular sequence. The pricing procedure also determines:

Which sub-totals appear during pricing To what extent pricing can be processed manually

Which method the system uses to calculate percentage discounts and surcharges

Which requirements for a particular condition type must be fulfilled before the system takes the condition into account

Example of a Pricing Procedure:

If a sales department processes sales orders for a variety of foreign customers, the department can group the customers by country or region. A pricing procedure can then be defined for each group of customers. Each procedure can include condition types that determine, for example, country-specific taxes. In sales order processing, you can specify pricing procedures for specific customers and for sales document types. The system automatically determines which procedure to use.

Choose Basic Functions Pricing Pricing control Define and assign pricing procedures.

Assign Pricing Procedure to Sales Area

T Code: OVKK and assign respective sales area for different kind of pricing procedure.

Pricing procedure follows below assignment.

Pricing procedure ⇒ condition types(1:N) ⇒ access sequence (1:N) ⇒ accesses(1:N) ⇒ condition tables(1:1) ⇒ condition fields.

During creation you can follow bottom-up sequence.

1. Create condition table with condition fields. CUSXXXXX

2. Create access sequence and maintain accesses assigned with condition table. ZAS ->CUSXXXXX

3. Create condition type and assign access sequence. ZCT->ZAS

4. Create pricing procedure and assign condition types. ZPP->ZCT

Determination part.

In order to determine pricing procedure 5 parameters needed.

Sales org + distribution channel + division + customer pricing procedure + document pricing procedure ,SO+DC+DIV+CP+DP = ZPP

and we assign pricing procedure against above 5 parameters in the configuration.

based on condition maintenance we restrict the application where you gonna maintain the condition record.

lets say you restricted it to product and successfully you maintained a condition record for testing.

now I am using this product in a transaction document(example ZAG). you called the transaction type(ZAG) and entered the customer ABC and entered some product XYZ with quantity. now the minute you enter the product and hit on enter.

System searches for relevant pricing procedure to determine. by formulating all 5 parameters from the sources based on org model it brings respective sales area data(SO+DC+DIV) and based on ABC’s customer pricing procedure(you can find it in sales area data a/block under billing area.

based on transaction type it will bring the value document pricing procedure ( ZAG’s transaction category header data).

after forumalting all 5 parameters it determines corresponding pricing procedure from the configuration.

again based on the maintained condition record it will apply the value on to the screen.

based on number of different condition types(diff calculation types) it will show different price element in the output. and all these calculation will be done by IPC.

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