country version india cin 4[1].0a

Country Version India

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SAP online help 7/31/2001

India 470 2

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Icons

Icon Meaning

Caution

Example

Note

Recommendation

Syntax

Tip


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India ......................................................................................................................................................... 9

Customizing........................................................................................................................................ 10

Roles............................................................................................................................................... 11

India Localization ........................................................................................................................ 12

CIN Customizing and Master Data Maintenance........................................................................ 13

Excise Manager (Materials Management) .................................................................................. 14

Excise Supervisor (Materials Management) ............................................................................... 15

Excise Clerk (Materials Management) ........................................................................................ 16

Excise Manager (Sales and Distribution).................................................................................... 17

Excise Supervisor (Sales and Distribution)................................................................................. 18

Excise Clerk (Sales and Distribution)..........................................................................................19

Subcontracting Clerk................................................................................................................... 20

TDS Manager.............................................................................................................................. 21

TDS Supervisor........................................................................................................................... 22

TDS Clerk.................................................................................................................................... 23

Register Maintenance Clerk........................................................................................................ 24

Financial Accounting (FI).................................................................................................................... 25

Excise Duty..................................................................................................................................... 26

Determination of Excise Duty...................................................................................................... 28

Excise Duty for Small-Scale Industries ................................................................................... 30

Partial CENVAT Credit ............................................................................................................ 32

Capital Goods.......................................................................................................................... 33

Remittance of Excise Duty Fortnightly ........................................................................................ 34

Tax Deducted at Source................................................................................................................. 36

Extended Withholding Tax .......................................................................................................... 37

Business Place ........................................................................................................................ 39

Posting Vendor Invoices.......................................................................................................... 40

Calculation of Basic Withholding Tax .................................................................................. 41

Calculation of Surcharges.................................................................................................... 42

Determination of Tax Due Date ........................................................................................... 43

Clearing of Invoices Against Down Payments..................................................................... 44

Calculation of Withholding Tax on Clearing Accounts ............................................................ 46

Clearing of Withholding Tax on Clearing Accounts................................................................. 48

Adjusting Withholding Tax Items............................................................................................. 49

Withholding Tax on Interest Payments to Customers ............................................................. 51

Creation of Withholding Tax Certificates ................................................................................. 52

Reprint of Withholding Tax Certificates ............................................................................... 54

Cancellation of Withholding Tax Certificates ....................................................................... 55

Withholding Tax Certificates from Customers......................................................................... 56


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Selecting Which Line Items to Clear.................................................................................... 57

Remittance of Withholding Tax ............................................................................................... 58

Creation of Remittance Challans ......................................................................................... 59

Selecting Tax Items for Remittance ................................................................................. 61

Reversal of Remittance Challans ........................................................................................ 62

Receipt of Bank Challans .................................................................................................... 63

Annual Returns........................................................................................................................ 64

Withholding Tax Information System....................................................................................... 65

Classic Tax Deducted at Source.................................................................................................66

Making Down Payments to Vendors ....................................................................................... 67

Handling of Credit Memos....................................................................................................... 69

Making Down Payments on Invoices Where TDS Has Been Calculated ............................... 70

Reversing TDS Postings .........................................................................................................71

Update of Challans .................................................................................................................. 72

Printing Certificates ................................................................................................................. 73

Reprinting Certificates ............................................................................................................. 75

Canceling Certificates ............................................................................................................. 76

Annual Returns........................................................................................................................ 77

Archiving of TDS Documents .................................................................................................. 78

Archiving TDS Documents................................................................................................... 79

Creating an Archive Report Variant ................................................................................. 80

Deleting TDS Documents .................................................................................................... 81

Reloading TDS Documents ................................................................................................. 82

Archive Overview................................................................................................................. 83

Migration from Classic TDS to Extended Withholding Tax......................................................... 84

Implementing Logistics Invoice Verification (MM-LIV) ............................................................ 86

Archiving Cleared Items .......................................................................................................... 87

Customizing Extended Withholding Tax.................................................................................. 89

Defining Official Withholding Tax Keys................................................................................ 90

Defining Withholding Tax Types and Withholding Tax Codes ............................................ 91

Defining Minimum and Maximum Amounts ......................................................................... 92

Making Additional Settings .................................................................................................. 93

Setting Up Authorizations for Migration................................................................................... 94

Blocking Users......................................................................................................................... 95

Withholding Tax Migration Health Check ................................................................................ 96

Mapping Withholding Tax Types and Withholding Tax Codes ............................................... 98

Maintaining Vendor Master Records ....................................................................................... 99

Activating Extended Withholding Tax.................................................................................... 100

Withholding Tax Data Migration Tool .................................................................................... 101

Checking the Documents................................................................................................... 103

Migrating the Documents................................................................................................... 104


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Cleaning Up........................................................................................................................... 105

Sales Tax...................................................................................................................................... 106

Sales Tax Register.................................................................................................................... 107

Calculation Procedure .................................................................................................................. 108

Condition Type .......................................................................................................................... 109

Asset Accounting (FI-AA) ................................................................................................................. 110

Materials Management (MM) ........................................................................................................... 111

Excise Invoice (Incoming)............................................................................................................. 112

Material Master (Excise Data) ...................................................................................................... 113

Vendor Master (Excise Data) ....................................................................................................... 115

Plant Master (Excise Data) ........................................................................................................... 116

External Procurement (Domestic) ................................................................................................117

Creating Purchase Orders ........................................................................................................ 118

Entering Goods Receipts .......................................................................................................... 119

Entering and Verifying Invoices ................................................................................................121

External Procurement (Imports) ................................................................................................... 122

Creating Purchase Orders ........................................................................................................ 123

Entering Invoices for Bills of Entry ............................................................................................ 124

Capturing Excise Invoices for Bills of Entry .............................................................................. 125

Entering Goods Receipts .......................................................................................................... 126

Posting Excise Invoices ............................................................................................................ 127

Subcontracting.............................................................................................................................. 128

Subcontracting Without Payment of Excise Duty ..................................................................... 129

Subcontracting Challan .........................................................................................................131

Processing Subcontracting Challans................................................................................. 132

Creating Subcontracting Challans.................................................................................. 133

Calculation of Excise Duty on Materials for Subcontractors ...................................... 134

Selecting Excise Invoices ........................................................................................... 135

Printing Subcontracting Challans ................................................................................... 136

Reconciling Quantities ................................................................................................... 137

Deleting Assignments .................................................................................................... 138

Completion, Reversal, and Recredit .............................................................................. 139

Completing Subcontracting Challans ......................................................................... 140

Reversing Excise Duty Credit..................................................................................... 141

Recrediting the CENVAT Account.............................................................................. 142

Making Transfer Postings...................................................................................................... 143

Posting Goods Receipts from Subcontractors ...................................................................... 144

List of Subcontracting Challans............................................................................................. 145

Subcontracting Under Full Payment of Duty............................................................................. 146

Creating Subcontract Orders................................................................................................. 147

Making Transfer Postings...................................................................................................... 148


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Creating Excise Invoices for Subcontractors ........................................................................ 149

Stock Transfer .............................................................................................................................. 150

Incoming Excise Invoices ............................................................................................................. 151

Reference Documents .............................................................................................................. 153

Capturing Excise Invoices Using Reference Documents ......................................................... 154

Specifying Reference Documents ......................................................................................... 155

Editing Header Data .............................................................................................................. 156

Removing Items from the Item Overview .............................................................................. 157

Editing Line Items.................................................................................................................. 158

Capturing Excise Invoices Without Reference Documents ...................................................... 159

Entering Header Data............................................................................................................ 160

Entering Line Items................................................................................................................ 161

Posting Excise Invoices ............................................................................................................ 162

Long Texts ................................................................................................................................ 163

Rejection of Excise Invoices ..................................................................................................... 164

Rejecting Excise Invoices......................................................................................................165

Rejecting Excise Invoices with CENVAT on Hold ................................................................. 166

Posting CENVAT on Rejected Excise Invoices..................................................................... 167

Reversal of CENVAT Postings ................................................................................................. 168

Reversing Goods Receipts.................................................................................................... 169

Reversing CENVAT Postings................................................................................................ 170

Canceling Excise Invoices..................................................................................................... 171

Multiple Goods Receipts for a Single Excise Invoice ................................................................... 172

Transfer of CENVAT Credit on Capital Goods ............................................................................. 174

Excise Registers ........................................................................................................................... 175

Creation of Excise Registers..................................................................................................... 177

Update of RG 1 and Part I Registers..................................................................................... 178

Data Extraction ...................................................................................................................... 181

Register Printout.................................................................................................................... 183

Download Register Data ........................................................................................................... 184

Data Structure of Part I.......................................................................................................... 186

Data Structure of Part II......................................................................................................... 187

Data Structure of RG 23D ..................................................................................................... 190

Data Structure of Plant Master Data ..................................................................................... 191

Data Structure of RG 1.......................................................................................................... 192

Monthly Return.......................................................................................................................... 194

Sales and Distribution (SD) .............................................................................................................. 195

Excise Invoice (Outgoing)............................................................................................................. 196

Customer Master (Excise Data) ................................................................................................... 197

Plant Master (Excise Data) ........................................................................................................... 198

Sales from Factories..................................................................................................................... 199


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Automatic Creation of Excise Invoices...................................................................................... 201

Exemption Forms...................................................................................................................... 202

Export-Oriented Units................................................................................................................ 203

Exports ...................................................................................................................................... 204

Creation of Excise Invoices in Batches..................................................................................... 205

Printout of Excise Invoices........................................................................................................ 206

Creating Pro Forma Excise Invoices......................................................................................... 207

Creating Excise Invoices........................................................................................................... 208

Excise Duty Utilization ........................................................................................................... 209

Excise Invoice Type........................................................................................................... 210

Excise on Intercompany Billing Documents ...................................................................... 211

Canceling Excise Invoices ........................................................................................................ 212

Sales from Depots ........................................................................................................................ 213

Creating Excise Invoices for Stock Transfers ........................................................................... 214

Creating Excise Invoices for Direct Purchases......................................................................... 215

Creating Additional Excise Entries at Depots ........................................................................... 216

Assigning Excise Invoices to a Delivery.................................................................................... 217

Verifying and Posting Excise Invoices Assigned to Delivery .................................................... 219

Other Outward Movements .......................................................................................................... 220

Creating Excise Invoices........................................................................................................... 221

Verifying and Posting Excise Invoices ...................................................................................... 222


Creating Excise Invoices for Stock Transfers ........................................................................... 224

Making a Transfer Posting ........................................................................................................ 225

Form Tracking............................................................................................................................... 226

CENVAT Adjustment Postings .....................................................................................................227

Making Adjustment Postings for Scrap..................................................................................... 228

Making Adjustment Postings for Materials Not Used in Production ......................................... 229

Making Adjustment Postings for Additional Excise Paid by Vendors ....................................... 230

Making Adjustment Postings for Money Transferred to PLA.................................................... 231


Making Adjustment Postings for Other Transactions................................................................ 233

Assigning Excise Invoices to Line Items................................................................................... 234

Specifying Which CENVAT Accounts to Adjust........................................................................ 236

Displaying CENVAT Account Balances .................................................................................... 237

Transaction Codes for India ............................................................................................................. 238


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India Purpose This country version [Ext.] is designed for use by businesses with operations in India. As well as the generic SAP System functions, it comprises functions designed specifically for India, and a country template to help you customize the system according to local requirements.

This documentation explains how the country-specific functions work and what Customizing settings are made by the country template. It does not cover the generic functions, which are described in the rest of the SAP Library.

Features Country-Specific Functions 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)

• Tax deducted at source (TDS)

• Sales tax

All of the menu paths given in this document are based on the India Localization [Page 12] role.

Country Template To allow you to customize your Indian company codes more quickly, you can use the Indian country template [Ext.] in the Country Installation Program [Ext.].


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Customizing Purpose This is the procedure that you follow in order to customize the SAP System for use in conjunction with Country Version India (CIN).

Prerequisites You have installed the SAP System, Release 4.6C, and CIN, Release 4.0A.

Process Flow 1. You work through the preparatory activities in the CIN Implementation Guide (IMG), by choosing

Customizing → India Localization → Preparatory Activities.

As part of these activities, you must run the Country Installation Program [Ext.] for India, which activates various organizational units and other objects for use in Indian company codes.

2. You set up your users (see Users and Authorizations [Ext.]).

For more information about the roles that are supplied with CIN, see Roles [Page 11]

In addition, CIN also offers an authorization profile with authorization for all CIN transactions, J_1I_PROF.

3. If you have not already done so, you run the period closing program for Materials Management (MM).

4. You work through the standard IMG.

5. You work through the rest of the CIN IMG.


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Roles The following documents describe the roles delivered with Country Version India (CIN). For more information about roles in general, see Creating Activity Groups [Ext.] ("activity group" is the old term for "role").


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India Localization Technical name: SAP_CIN

Tasks This role covers all of the tasks associated with Country Version India (CIN), including Customizing, day-to-day operations, and reporting.

This is the role that all the menu paths given in this documentation are based on.


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CIN Customizing and Master Data Maintenance Technical name: SAP_CIN_SUPER_USER

Tasks This role covers all the Customizing activities relating to Country Version India (CIN), in all applications. It also covers the maintenance of excise master data.


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Excise Manager (Materials Management) Technical name: SAP_CIN_MM_MANAGER

Tasks This role covers all administrative tasks in Country Version India (CIN) that relate to excise duty in the areas of procurement and subcontracting. It includes Customizing activities; all day-to-day operations; and reporting.

Activities in Materials Management (MM) In Customizing and master data, the Excise Manager is authorized to:

• Work with the CIN Implementation Guide (IMG)

• Use the health check tool

• Define number ranges for excise invoices

• Maintain excise master data

• Make retrospective price amendments

In your day-to-day operations, this role allows you to:

• Capture, change, display, post, and cancel incoming excise invoices

• Capture excise invoices at depots

• Complete subcontracting challans and perform quantity reconciliation

• Post excise invoice journal vouchers

• Track forms

Activities in Financial Accounting (FI) The Excise Manager can:

• Create the excise registers

• Transfer outstanding CENVAT credit on capital goods to the appropriate CENVAT accounts


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Excise Supervisor (Materials Management) Technical name: SAP_CIN_MM_SUPERVISOR

Tasks This role covers most of the tasks in Country Version India (CIN) that relate to excise duty in the areas of procurement and subcontracting. It includes all day-to-day operations and reporting, but only one Customizing activity.

Activities in Materials Management (MM) In Customizing and master data, the Excise Supervisor is authorized to:

• Define number ranges for excise invoices




• Capture, change, display, post, and cancel incoming excise invoices

• Capture excise invoices at depots

• Execute all activities relating to subcontracting challans

• Post excise invoice journal vouchers

• Track forms

Activities in Financial Accounting (FI) The Excise Supervisor can:

• Create the excise registers

• Transfer outstanding CENVAT credit on capital goods to the appropriate CENVAT accounts


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Excise Clerk (Materials Management) Technical name: SAP_CIN_MM_CLERK

Tasks This role covers the tasks relating to capturing incoming excise invoices.

Activities in Materials Management (MM) The Excise Clerk can:

• Capture excise invoices (of all types)

• Track forms


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Excise Manager (Sales and Distribution) Technical name: SAP_CIN_SD_MANAGER

Tasks This role covers the administrative tasks in Country Version India (CIN) that relate to excise duty in the area of sales. It includes all Customizing activities; day-to-day operations; and reporting.

Activities in Sales and Distribution (SD) In Customizing and master data, the Excise Manager is authorized to:






• Create and verify outgoing excise invoices for other movements

• Create excise invoices in batches

• Post excise journal vouchers

• Print excise invoices

• Track forms

In reporting, this role also allows you to:

• Remit excise duty using the fortnightly utilization program

• Print 57AE returns


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Excise Supervisor (Sales and Distribution) Technical name: SAP_CIN_SD_SUPERVISOR

Tasks This role covers the tasks in Country Version India (CIN) that relate to excise duty in the sales area. It includes the maintenance of master data; day-to-day operations; and reporting. It does not, however, include Customizing.

Activities in Sales and Distribution (SD) In master data, the Excise Supervisor is authorized to:




• Create and verify outgoing excise invoices for other movements

• Create excise invoices in batches

• Post excise journal vouchers


• Track forms

In reporting, this role also allows you to:

• Remit excise duty using the fortnightly utilization program

• Print 57AE returns


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Excise Clerk (Sales and Distribution) Technical name: SAP_CIN_SD_CLERK

Tasks This role covers the tasks relating to the creation of excise invoices.

Activities in Sales and Distribution (SD) The Excise Clerk can:

• Create excise invoices for other movements


• Track forms


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Subcontracting Clerk Technical name: SAP_CIN_SUBCONTRACTING_CLERK

Tasks The Subcontracting Clerk is authorized to create, change, and display subcontracting challans.


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TDS Manager Technical name: SAP_CIN_TDS_MANAGER

Tasks This role covers all the activities in Country Version India (CIN) that relate to tax deducted at source (TDS). It includes all Customizing activities, day-to-day operations, and reporting.

Activities in Financial Accounting (FI) In Customizing, the TDS Manager is authorized to:



In day-to-day operations, you can:

• Carry out all the activities relating to the remittance of tax withholdings

• Make adjustment postings

• Print and cancel TDS certificates for vendors

• Post and clear withholding tax on clearing accounts (Extended Withholding Tax only)

• Print TDS certificates for customers

In reporting, the TDS Manager can:

• Prepare annual returns for TDS (Classic TDS and Extended Withholding Tax)

• Prepare MIS report (Extended Withholding Tax)


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TDS Supervisor Technical name: SAP_CIN_TDS_SUPERVISOR

Tasks This role covers the administrative activities in Country Version India (CIN) that relate to tax deducted at source (TDS). It includes all day-to-day operations and reporting, but not Customizing.

Activities in Financial Accounting (FI) In day-to-day operations, the TDS Supervisor can:

• Carry out all the activities relating to the remittance of tax withholdings

• Make adjustment postings

• Print and cancel TDS certificates for vendors

• Post and clear withholding tax on clearing accounts (extended withholding tax only)

• Print TDS certificates for customers

In reporting, you can:

• Prepare annual returns for TDS (Classic TDS and Extended Withholding Tax)

• Prepare MIS report (Extended Withholding Tax)

• Archive TDS documents


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TDS Clerk Technical name: SAP_CIN_TDS_CLERK

Tasks This role covers the day-to-day operations relating to tax deducted at source (TDS).

Activities in Financial Accounting (FI) The TDS Clerk can:

• Carry out all the activities relating to the remittance of tax withholdings (Classic TDS and extended withholding tax)

• Post and clear withholding tax on clearing accounts (extended withholding tax only)


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Register Maintenance Clerk Technical name: SAP_CIN_REGISTER_CLERK

Tasks This role covers all the activities relating to the preparation of excise and sales tax registers.


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Financial Accounting (FI) Purpose This component handles excise duty, sales tax, central value-added tax (CENVAT), tax deducted at source (TDS), and works contract tax.


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Excise Duty Use In India, excise duty is a tax on the manufacture of goods that is levied when goods leave the place of manufacture. Manufacturers can set off the duty paid on input materials against their output duty, a procedure known as central value-added tax (CENVAT).

Features The system automatically calculates the excise duty on all transactions that are subject to it and records the duty to the appropriate G/L accounts. It allows for all types of excise duty, all of which need to be calculated and reported separately:

• Basic excise duty [Ext.] (BED)

• Special excise duty [Ext.] (SED)

• Additional excise duty [Ext.] (AED)

• Cess, a form of luxury tax that is levied over and above the other forms of excise duty

For the most part, you can offset the excise duty that you have paid on your purchases. However, one exception is cess: Cess on inputs cannot be claimed back.

Activities Customizing In order for the system to be able to calculate and report excise duty, you must make the Customizing settings in the CIN Implementation Guide (IMG) under Global Settings.

In the CIN IMG under Accounting, you must have specified which G/L accounts you use for recording excise duty.

Master Data You must make the master data settings described under Determination of Excise Duty [Page 28].

Day-to-Day Activities Here is an outline of what features relating to excise duty the SAP System offers in Financial Accounting (FI). For more information about how excise duty is involved in the logistics processes, see Sales and Distribution (SD) [Page 195] and Materials Management (MM) [Page 111]:

See ……………

Reporting Once levied, the excise duty has to be remitted to the central excise authorities. The law requires you to remit excise duty twice monthly: for the first half of any given month (1–15 inclusive) and from 16 to month-end. In each case, you are allowed five days to remit the excise duty. CIN offers a report to help you do just that (see Remittance of Excise Duty Fortnightly [Page 34]).


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There is a small number of transactions that have to be remitted on the same day (see Excise Invoices (Outgoing) for Other Movements [Page 220]).

In addition, the system allows you to prepare printouts of the various excise registers [Page 175] for the tax authorities.


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Determination of Excise Duty Use When you execute a business transaction involving materials that are subject to excise duty, the system automatically calculates the duty for you.

Prerequisites 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 access from the SAP Easy Access screen by choosing Indirect Taxes → Master Data → Excise Rate Maintenance.

You maintain the following types of data:

• Plant master data [Page 198]

You assign each of your plants an excise duty indicator. You can use the same indicator for 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 [Page 32]).

• Vendor master data [Page 115]

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 if the vendor qualifies as a small-scale industry [Page 30].

For each permutation of plant indicator and vendor indicator, you then create a final excise duty indicator.

• Customer master data [Page 197]

Similarly, 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 a final excise duty indicator.

• Material master data [Page 113]

Each material is assigned a chapter ID.

• Excise tax rate

For every chapter ID and final excise duty indicator, you maintain the rate of excise duty.

If your business only qualifies for partial CENVAT credit [Page 32], you must customize your system accordingly.

Activities Let us consider an example to illustrate how the system determines which rate of excise duty to apply to a material. Assume you are posting a sale of ball bearings to a customer. The system automatically determines the rate of excise duty as follows:

1. Looks up the customer master data to see what status you have assigned the customer.

Let's assume you've assigned the customer status 3.

2. Looks up the plant master data to see what status you have assigned the plant.

Similarly, your plant has status 2.

3. The system looks up the table under Excise Indicator for Plant and Customer to see what the final excise duty indictor is for customer status 3 and plant status 2: It is 7.

4. The system determines the chapter ID of the ball bearing for the plant.


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Let’s assume the chapter ID at plant for the ball bearings is 1000.01.

5. Finally, the system looks up the table under Excise Tax Rate to see what rate of duty applies to chapter ID 1000.01 under status 7.


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Excise Duty for Small-Scale Industries Use Businesses that qualify as small-scale industries (SSIs – those with, for example, no more than two premises and with a sales volume not exceeding an amount specified by the government) need to pay only reduced rates of excise duty on their goods movements. The exact rate depends on the business's annual sales volume (see below).

That means that when you make a purchase from an SSI, the system calculates a different rate of excise duty. Note that SSIs are not required to pay additional excise duty or special excise duty.

Prerequisites In order for the system to be able to calculate the correct rate of excise duty, you must have:

1. Defined the SSI statuses.

You define a separate SSI status for each of the various "slabs" (sales volume) (see Vendor Master (Excise Data) [Page 115].

2. In the vendor master:

− Assigned the vendor the SSI status that you have just defined.

− If the vendor participates in the CENVAT scheme (see below), entered X (Vendor participating in CENVAT scheme).

Features As far as SSIs are concerned, there are two schemes. Under the first, an SSI can opt out of the CENVAT scheme. In this case, they apply basic excise duty at certain flat rates on all transactions. These rates vary according to their total annual sales.

An SSI with sales of less than INR 100,000 would not apply any excise duty; those earning up to INR 400,000 would levy basic excise duty on all materials at 2%, and so on.

Under the second scheme, whereby an SSI participates in the CENVAT scheme, the SSI pays excise duty at a percentage of the normal basic excise duty for the material in question. Again, this percentage depends on the SSI's total annual sales.

Turnover (INR) Excise (%) SSI rate (% of excise) Effective SSI excise (%)

0–100,000 15 60 9

100,000–400,000 15 80 12


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Partial CENVAT Credit Use In some industries, businesses are only allowed to set off a portion of their input excise duty against output duty. In this case, the remainder of the duty is added to the material value.

Prerequisites If this applies to your operations, you:

• Specify this in the CIN Implementation Guide (IMG), by choosing Global Settings → Excise Registration IDs.

• Configure separate tax codes that split the excise and post some as tax and add the rest to the material price

Features The portion of the excise duty that is added to the material value is displayed in the excise invoice, along with the CENVAT credit. This amount is added to the inventory value when you post the goods receipt.


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Capital Goods Use Businesses are allowed to set off excise duty on purchases of capital goods against excise duty on outputs. However, unlike with raw materials, you 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 [Page 113], you have classified the capital goods as such.

Because duty on capital goods is handled using excise transaction type CAPE, you must also have specified that you want this transaction to credit the excise duty to the CENVAT on hold account. You make this setting in the CIN Implementation Guide (IMG), by choosing Accounting → Maintain Transaction Accounts.

You must then have specified which G/L account is the CENVAT on hold account, again in the CIN IMG, by choosing Accounting → Assign G/L Accounts to Transaction Types and Excise Groups.

Features When you post an excise invoice that contains capital goods, the system posts half of the excise duty to your CENVAT account and posts the rest to a G/L account for CENVAT on hold.

In following years, you 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 [Page 174]).

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

• Capturing vendor excise invoices [Page 154]

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

• Posting excise invoices [Page 162]

When you come to post the excise invoice, the system posts only half of the excise duty to the CENVAT account. The system does not round the amount off.


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Remittance of Excise Duty Fortnightly Use You use this report to calculate how much excise duty you must remit to the authorities. Legislation requires you to remit excise duty twice monthly: for all the goods issues in the first half of any given month (1–15 inclusive) and from 16 to month-end. In each case, you are allowed five days to remit the excise duty.

Once the report has determined how much you have to pay, it allows you to specify where the money should be paid from – whether it should be deducted from the CENVAT credits that you have accumulated, or whether it should be deducted from the personal ledger account (PLA).

Irrespective of which date you execute the report on, you can only utilize CENVAT credits posted up until the 15th or the last day of the month as the case may be.

Prerequisites You must have:

• Customized the system so that when you create an excise invoice for a sale, the system automatically debits the excise to a CENVAT clearing account

• Defined which CENVAT accounts are to be debited by default, in the CIN Implementation Guide (IMG), by choosing Sales and Distribution → Utilization Determination.

• Defined the minimum balances of your CENVAT accounts, in the CIN IMG, by choosing Accounting → Maintain Minimum Balances for Excise Accounts

Features To access the report, from the SAP Easy Access screen, choose Indirect Taxes → Sales/Outbound Movements → Fortnightly Payment.

Selection On the selection screen, enter data as required:

• Organizational data (in the General data group box)

• Posting date for the CENVAT payment, if it is different from the run date

• The period to be covered by the report (for example, 1–15 January)

If, for any reason, you want to select an excise invoice individually, you can do so. Any entry in the Period field will be disregarded.


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To display a list of all the excise invoices whose excise duty you have not yet remitted, choose Display pend. invoices.

To display a list of only the excise invoices for a given period, enter the period in the Period fields, select Select pending inv. for period, and choose Display pend. invoices. You can also print the list of pending invoices.

To display the last date when tax was remitted, choose Display last util. date (Display last utilization date).

Output For each sort of excise duty, the system shows you:

• How much you have to remit (Amounts payable group box)

• How much credit you have at your disposal on the appropriate CENVAT account (Available balances)

This figure is equal to the credits on the CENVAT account less the minimum balance.

• How much credit you have on the CENVAT accounts (G/L account balances)

You now have to specify which accounts can be used to utilize the duty amount. In the Balance Utilization group box, the system proposes how much money should be taken from which accounts. You can overwrite these fields if you want, and choose to refresh the display.

For a list of excise invoices that are considered for the CENVAT payment, choose Display excise invoices. You can print the list and use it as an annexure.

When you have finished, save your entries. The system then:

• Creates an accounting document that:

− Credits the CENVAT clearing account to remove the excise duty owed

− Debits the accounts from which the excise duty is to be paid

• Updates the Part II register [Page 175]


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Tax Deducted at Source Use Country Version India (CIN) offers you two solutions for handling tax deducted at source (TDS), also known as withholding tax. You can either use the Classic TDS [Page 66] solution, which was available in previous releases of CIN, or you can use the CIN solution that is based on the Extended Withholding Tax [Page 37] functions from the standard system.

If you are installing the SAP System for the first time, we recommend that you use the CIN solution based Extended Withholding Tax, as the Classic TDS solution may be discontinued in the future.

Before you decide one way or the other, however, you must give careful consideration as to whether Extended Withholding Tax covers your requirements. If you start working with this solution and it transpires that it does not cover your needs, SAP does not offer a strategy for migrating to Classic TDS.

Features CIN allows you to:

• Withhold tax at the time of invoicing, but also, in the case of goods receipts and down payments, prior to invoicing

• Withhold tax on interest payments to customers

• Set off any taxes that you have withheld prior to invoicing (for example, on down payments) when you create invoices

• Remit taxes using challans

• Generate withholding tax certificates for your vendors and customers

• Prepare annual returns (Classic TDS and Extended Withholding Tax)


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Extended Withholding Tax Use One of the ways of handling withholding tax in Country Version India (CIN) is to use the generic Extended Withholding Tax solution.

This documentation describes only the aspects of the Extended Withholding Tax solution that are particular to India. For the generic documentation, see Extended Withholding Tax [Ext.].

Prerequisites In order to work with Extended Withholding Tax, you must make the appropriate settings:

• In the standard Implementation Guide (IMG), by choosing Financial Accounting → Financial Accounting Global Settings → Withholding Tax → Extended Withholding Tax

• In the CIN IMG, by choosing Extended Withholding Tax

Features Day-to-Day Activities CIN complements the Extended Withholding Tax solution with special functions for:

• Automatically calculating surcharges [Page 42] and tax due dates [Page 43] when you post vendor invoices

• Clearing invoices against down payments [Page 44] so that any tax withheld on the down payment is set off against the tax required to be withheld on the invoice

• Clearing the tax withheld on invoices against the tax withheld on transactions in clearing accounts

• Recording withholding tax certificates [Page 56] that your customers have submitted as proof of tax that they have withheld on payments to you

• Correcting errors that you might make while posting a vendor invoice – or down payment or credit memo – by making a journal voucher [Page 49] (JV) entry

Periodic Processing As far as periodic processing is concerned, CIN offers a number of reports to cope with such local features as:


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• Withholding tax on interest payments [Page 51] made to customers for deposits that they have made

• Usage of remittance challans when you remit withholding tax (both for when you deposit [Page 59] the tax at a bank and for confirmations of receipt [Page 63] of such deposits, as sent to you by your bank)

• Printout of withholding tax certificates [Page 52] with multiple line items for your vendors

• Printout of withholding tax certificates for interest payments for your customers

• Calculation of taxes on clearing accounts [Page 46], that is, on business transactions that your vendors have performed but have not yet submitted an invoice for

• Identifying customers that have not yet sent you a withholding tax certificate for tax that they have withheld from you

CIN also offers a Withholding Tax Information System [Page 65] for reporting purposes.

Finally, one of the most important features of CIN is that it allows you to define a withholding tax entity at a level below the company code, which in other countries is the legal entity for reporting withholding tax. Under the Companies Act, however, a single legal entity may comprise several tax withholding entities, each of which is identified by a separate tax deduction account number (TAN). This of course has implications for the capture and reporting of withholding tax data. This reporting entity is represented in the SAP System using the business place [Page 39] object.


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Business Place Definition In India, the business place represents a tax withholding entity as identified by a tax deduction account number (TAN).

Use In India, the business place is the level at which income taxes are collected and reported. In all SAP System transactions that involve income taxes, therefore, you must specify a business place. This ensures that your business reports the income tax to the right tax office.

You can define business places in the Country Version India (CIN) Implementation Guide (IMG), by choosing Tax Deducted at Source → Extended Withholding Tax → Maintain Business Places. In this activity, you also maintain the tax deduction account number (TAN) assigned by the local tax office to your business’s operations in the area. This number has to be quoted in all correspondence, certificates, and returns relating to income tax – whether with vendors or the tax office.

Integration When you post any vendor document with withholding tax items (for example, an invoice or a credit memo) you must enter the business place in order to make sure that the transaction is assigned to the correct withholding tax entity.

If you fail to enter a business place in a line item that is relevant to withholding tax, CIN will not process the transaction further. You must therefore create the appropriate validations for the business place field when you implement CIN.

Whenever you post such a document, you can enter the business place in the vendor line: It will be copied to the withholding tax items automatically.


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Posting Vendor Invoices Procedure When you post a vendor invoice – or any other vendor document involving withholding tax – follow the usual procedure (see Invoice/Credit Memo Entry - Enjoy Transaction [Ext.]), but on the Basic data tab, fill out the Bus. place (Business place) field with the tax office that you report to (see Business Place [Page 39]). Do not, however, fill out the Sectn field (Section code).

Result The system posts the invoice and creates an accounting document. Assuming withholding tax is applicable, the accounting document contains either one or more line items for withholding tax (see Calculation of Basic Withholding Tax [Page 41] and Calculation of Surcharges [Page 42]. The withholding tax line items also show the tax due date (see Determination of Tax Due Date [Page 43]).

If you post the wrong amount of tax or you have posted the tax using the wrong official withholding tax key, you can post a journal voucher [Page 49] to reverse the posting.


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Calculation of Basic Withholding Tax Use When you post a vendor invoice – which does not show withholding tax – the system automatically calculates how much basic income tax you have to withhold from the payment.

Prerequisites In order for this function to work, you must have:

• Maintained the standard settings in Customizing for Financial Accounting (FI), by choosing Financial Accounting Global Settings → Withholding Tax → Extended Withholding Tax → Calculation

When you configure your tax types, define an extra tax type for one-time vendors in which accumulation is not selected.

• Maintained the appropriate information in the vendor master records

Features There are several factors that influence whether or not basic withholding tax has to be levied and if so, at what rate:

• Vendor status

Some vendors are entitles to exemption from income tax, or to a lower rate of tax. In such cases, vendors are required to produce a certificate from the authorities that specifies the rate of withholding tax that they are subject to. Businesses claiming relief under double tax treaties are also entitled to deduction of income tax at reduced rates.

• Vendor’s legal status

Whether the vendor is a corporation, firm, Hindu united family, or a sole proprietorship, and, in each case, whether it is resident in India or abroad.

• Type of services provided

Different types of services – for example, salaries, transportation, technical consulting, and rentals – are liable to different rates of tax. These types of services are covered in separate sections of India’s Income Tax Act.

• Whether the vendor is domiciled in India or abroad for income tax purposes


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Calculation of Surcharges Use When you post a vendor invoice, the system automatically calculates any surcharge that may be required. The surcharge is an additional tax over and above basic withholding tax. The tax authorities require you to show surcharges separately from the basic tax. Surcharges are remitted at the same time as the tax that they apply to.

Surcharges are presently levied on resident vendors at 10% of the tax in question.

Prerequisites In order for this function to work, you must maintain the settings in the CIN Implementation Guide (IMG), by choosing Tax Deducted at Source → Extended Withholding Tax → Calculation of Surcharges.

Features Some tax offices require you to show surcharges separately from the basic withholding tax; others prefer you to combine the two. When you post a vendor invoice, the system either creates one line item or two, depending on your Customizing settings.


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Determination of Tax Due Date Use When you post a vendor invoice, the SAP System automatically determines what date the withholding tax is due on and records it in the tax line item.

Integration The tax due date is used when you create a remittance challan [Page 59] in order to remit the withholding tax.

Prerequisites In order for this function to work, you must have made the Customizing settings in the CIN Implementation Guide (IMG), by choosing Tax Deducted at Source → Extended Withholding Tax → Determination of Tax Due Dates.

Features There are several factors that influence the tax due date, all of which you can customize:

• Which section of the Income Tax Act the tax is from (represented in the SAP System by the official withholding tax code)

• The vendor’s status (in the system, the recipient type): taxes withheld from government bodies have to be remitted on the same day

• In the event of the tax being due on a public holiday, whether the tax office requires you to remit the tax a day earlier or a day later


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Clearing of Invoices Against Down Payments Use If you withhold tax on a down payment that you make to a vendor, and the vendor then send you an invoice, you have to clear the withholding tax when you post the invoice (not when you pay the invoice, as is customary in other countries).

This function has been incorporated into the standard function for clearing down payments (see Clearing [Ext.]). When you clear an invoice against a down payment for an Indian company code, the system clears the withholding tax automatically, if the company code is located in India.

A vendor provides you with some services, for which it promises to send you an invoice in a few days' time. However, you make a down payment on the services for a total of INR 10,000, presenting the vendor with a check for INR 9,000 and withholding the remaining INR 1,000 as tax.

A week later, the vendor sends you the invoice, for a total of INR 20,000 – on which you have to withhold a total of INR 2,000. You post the invoice as normal and then clear it against the down payment. The system takes into account the INR 1,000 of tax that you have already withheld, and so makes the appropriate clearing posting to balance the withholding tax account and the vendor account.

Prerequisites Tax Types and Tax Codes In order for the tax to be cleared correctly, you must post the down payments using:

• A tax type that is marked as Central inv. prop. (Central invoice proportionate)

• A tax code that uses the posting indicator 1 (Standard posting: bank/vendor/customer line item reduced)

If you either of the other two methods, the adjustment will be made against the offsetting account instead of the vendor account.

You can make these settings in Customizing for Financial Accounting (FI), by choosing Financial Accounting Global Settings → Withholding Tax → Extended Withholding Tax → Calculation → Withholding Tax Type and → Withholding Tax Codes.

Posting You can only clear the tax if:


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• The tax withheld from the invoice and the down payment is from the same section

• You have not remitted the tax from the down payment or invoice to the tax office

• You have entered the same business place (tax office) in the invoice and the down payment

Activities To access the function, from the SAP Easy Access screen, choose Accounting → Financial Accounting → Accounts Payable → Document Entry → Down Payment → Clearing.


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Calculation of Withholding Tax on Clearing Accounts Use You use this report to calculate provisions – in other words, withholding tax on clearing accounts.

India’s Income Tax Act requires you to withhold tax not just when you credit a vendor's account, but also when you post goods receipts – even if the vendor has not submitted an invoice. Any down payments that you have made can be deducted accordingly.

Run this report at period-end, after you have posted all the invoices.

Prerequisites In the CIN Implementation Guide (IMG), you have made the settings under Tax Deducted at Source → Extended Withholding Tax → Withholding Tax on Clearing Accounts and Adjustment of Tax Items.

Features This report is only intended to be run online and is not designed to run in the background. Furthermore, it can only be run by one user in any company code at a time.

To access the report, from the SAP Easy Access screen, choose Tax Deduction at Source → Extended Withholding Tax → Provision → Post.

Selection On the selection screen, you enter the following information:

• Organizational data, such as company code and financial year

• The G/L accounts that you want to calculate withholding tax on

If you leave this field blank, the system will adjust all of the accounts that you have entered in Customizing.

• Other information relating to the items that you want to adjust (for example, vendors or purchase orders)

• Information relating to the posting document that the system will make the tax postings with

Output When you run the report, the system displays a list that shows you per purchase order how much is on a clearing account. For each purchase order, it shows:


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Column Information

Open amount The total amount of all goods receipts that have yet to be invoiced, irrespective of whether you have already calculated tax on them

Open provision The amount from goods receipts that you have already calculated tax on

LC bas.amt (Base amount in local currency) The amount on which tax still has to be calculated

You now have to specify how much tax has to be withheld, as follows:

2. For each purchase order:

a. Enter the tax type and tax code of the tax that has to be applied

Use invoice tax types only.

b. Enter the business place

c. Enter the business area, if required

d. If you have made a down payment on the purchase order, reduce the tax base amount by this amount

3. When you have entered all the data, save it.

The system posts an accounting document that:

• Debits the withholding tax on provisions accounts (as defined in Customizing)

• Credits the withholding tax payable account

Activities When, after you have adjusted a purchase order using this report, the vendor sends you an invoice for it, you have to clear the tax that you have already calculated. For these purposes, use the Clearing of Withholding Tax on Clearing Accounts [Page 48] report.


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Clearing of Withholding Tax on Clearing Accounts Use You use this report to reverse any tax withheld (provisions) on any items currently in a goods receipt account.

The procedure is as follows: When you post an invoice for an item that you have withheld tax on, you post it following the standard procedure. This report, which we recommend you run every night in the background, automatically identifies all such invoices and reverses the tax withheld.

This report can only be run by one user in any one company code at a time.

Integration This report effectively reverses the postings made using the Calculation of Withholding Tax on Clearing Accounts [Page 46] report.

Features To access the report, from the SAP Easy Access screen, choose Tax Deduction at Source → Extended Withholding Tax → Provision → Utilize.

Selection On the selection screen, enter:

• Organizational data, such as the company code

• The posting date of the invoices

• The posting period

Output The system reverses the tax postings by creating an accounting document that:

• Debits the withholding tax payables account

• Credits the withholding tax on provisions account


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Adjusting Withholding Tax Items Use If, after you have posted and cleared a vendor invoice and you have discovered that you have posted the wrong amount of tax or that you have posted the tax using the wrong official tax key, you have to adjust the posting (the equivalent of a journal voucher (JV) in Indian accounting practice).

You only need to use this function to adjust withholding tax items and vendor items that you have already cleared. Otherwise, you can reverse the original document using the standard SAP System functions.

You do not need to adjust a tax item if you have already issued a withholding tax certificate for it and the vendor has accepted it, since, in this case, the vendor can use this certificate to claim a refund from the tax authorities.

Prerequisites In order for this function to work, you must have maintained the Customizing settings in the CIN Implementation Guide (IMG), by choosing Tax Deducted at Source → Extended Withholding Tax → Withholding Tax on Clearing Accounts and Adjustment of Tax Items.

Procedure 1. From the SAP Easy Access screen, choose Tax Deduction at Source → Extended Withholding

Tax → Adjust → Post Vendor JV.

2. In the Document number field, enter the invoice number.

3. Enter other data as required and choose Check.

4. Depending on what you want to change, choose Amount correction or Tax code correction.

5. Change the tax amount to the correct amount, or change the tax code.

To check what adjustment posting will be made, select the line item that you have changed and choose Simulate.

6. Save the posting.

Result The system posts an accounting document as follows:

Type of change Debit Credit

Tax refund (tax already remitted) Loss account Vendor account

Tax refund (tax not yet remitted) Tax payable account Vendor account

Tax increase Vendor account Tax payable


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If you have already remitted the tax to the government and you change the tax code so that it uses a different official withholding tax key, the system makes a second posting to correct the tax under the right tax key. This posting debits the loss account and credits the tax expense account.


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Withholding Tax on Interest Payments to Customers Use India’s income tax laws require you to withhold tax on interest payments made to customers on any deposits that you have presented to you.

To do so, use the Balance Interest Calculation [Ext.] program, which calculates the interest and the amount of tax to be withheld.

Prerequisites You have made the Customizing settings for interest calculation in the standard Implementation Guide (IMG), by choosing Financial Accounting → Accounts Receivable and Accounts Payable → Business Transactions → Interest Calculation.

Features Output There are two types of output. The system either creates a batch input session, which you can process, or it displays the details of the interest to be posted, which you can post manually. In both cases, you must ensure that each customer line item contains a business place.

The system creates the accounting documents with the following line items:

• Dr. Interest expenses

• Cr. Customer account

• Cr. Withholding tax payable

It copies the business place from the customer line item to the tax item, and calculates the due date according to the settings for the business place.


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Creation of Withholding Tax Certificates Use In India, you must present your vendor or customer with a withholding tax certificate within 60 days of the business transaction, unless you have agreed that once annually is sufficient.

The SAP System offers two programs that you can use to create withholding tax certificates: one for vendors and one for customers. These programs:

• Itemize multiple line items on one certificate

• List the line items according to their bank challan [Page 63] number, as required by law

They also allow you to use different SAPscript forms for every tax office and section, if required.

Integration Separate programs are available for reprinting [Page 54] and canceling [Page 55] vendor certificates.

Prerequisites In the CIN Implementation Guide (IMG), you have maintained:

• The certificate information, by choosing Tax Deducted at Source → Extended Withholding Tax → Withholding Tax Certificates

• The information about the tax offices, which will be printed on the certificates, by choosing Tax Deducted at Source → Extended Withholding Tax → Define Business Places.

In the standard IMG, you must have marked the withholding tax types as No certificate numbering.

You can ignore the standard IMG activities for withholding tax certificates.

You have maintained your own personal account number (PAN) and those of your vendors and customers.

You have posted all the withholding tax line items with a business place, and you have remitted the tax in question and posted the bank challans [Page 63]. Any other tax items will not be included in the certificates.

Features To access the programs, from the SAP Easy Access screen, choose Tax Deduction at Source → Extended Withholding Tax → Vendor Certificate or Customer Certificate → Print.


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Selection On the selection screen, enter the following information:

• Organizational information, for example, your company code

• The tax office (business place) and section (official withholding tax key) that you want to create forms for

• Details of the bank challans that you want to cover

• Information that is to appear on the certificates

Output The system prints the certificates that you have specified, as follows:

• A separate certificate is printed for each vendor and customer. If you have had dealings with the same vendor or customer in more than one tax jurisdiction (tax office), the system prints a separate certificate for each tax office.

• The system deducts credit memos and down payments against the invoices that they belong to, if such information is available. Otherwise, they are printed as negative amounts.

• For one-time vendors or customers, only one business transaction is printed. The address details are taken from the appropriate document for the one-time vendor or customer.

In addition, the system displays two summaries of all the certificates printed, grouped by certificate, challan, and tax office.

The certificate numbers are only issued if you print the certificates, but not in the print preview.


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Reprint of Withholding Tax Certificates Use You use this report to reprint vendor withholding tax certificates. You can only reprint one certificate at a time.

Integration The certificates are originally created using the Printout of Vendor Withholding Tax Certificates [Page 52] report.

Features To access the report, from the SAP Easy Access screen, choose Tax Deduction at Source → Extended Withholding Tax → Vendor Certificate → Reprint.

You cannot reprint withholding tax certificates for customers.

Selection On the selection screen, enter the following data:

• Organizational data (company code and fiscal year)

• The number of the original certificate

• Withholding tax section

Output The report prints the certificate.


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Cancellation of Withholding Tax Certificates Use You use this report to cancel withholding tax certificates for vendors only. You cannot cancel withholding tax certificates for customers.

Integration The certificates are originally created using the Printout of Vendor Withholding Tax Certificates [Page 52] report.

Features To access the report, from the SAP Easy Access screen, choose Tax Deduction at Source → Extended Withholding Tax → Vendor Certificate → Cancel.


• Organizational data (company code and fiscal year)

• The number of the original certificate

• Withholding tax section

Output The report cancels the certificate.


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Withholding Tax Certificates from Customers Use You use this report to record the withholding tax certificates sent to you by your customers. In doing so, the system clears the withholding tax to a G/L account that records how much tax your customers have withheld on your behalf, known as the customer tax creditable account. You can offset this tax against your income tax payable at year-end.

You run the report immediately you receive a certificate from a customer.

Prerequisites You must have maintained the settings in the CIN Implementation Guide (IMG), by choosing Tax Deducted at Source → Extended Withholding Tax → Posting of Withholding Tax Certificates from Customers.

Features To access the report, from the SAP Easy Access screen, choose Tax Deduction at Source → Extended Withholding Tax → Customer Tax → Clear.

Selection On the selection screen, you enter the following information:

• Your company details

In the Section field, enter the official withholding tax key that you use for the section of the Income Tax Law in question.

• The numbers or posting dates of the documents that you want to clear

The certificate date serves as the posting date and the document date.

• The information from the certificate

When you execute the report, the system takes you to the standard clearing report [Ext.]. You then select which withholding tax line items are to be cleared [Page 57].

Output The system creates an accounting document to transfer the withholding tax from the G/L account for the withholding tax deducted by your customers to the customer tax creditable account.

Activities If you need to reverse the clearing document, you can do so using the standard reversal program.


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Selecting Which Line Items to Clear 1. On the Post with Clearing: Process Open Items screen, choose .

2. Double-click the line item.

3. In the Amount field, enter the amount of withholding tax as specified on the tax certificate.

4. Save the change.

The system automatically goes back to the Post with Clearing: Process Open Items screen.

5. Double-click the amounts that you want to clear.

6. Save your entries.


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Remittance of Withholding Tax Purpose In India, you are required to remit withholding tax to the local tax office at regular intervals. Different types of tax have to be remitted on different days. Some taxes have to be remitted on a particular day of each month, others have to be remitted within a certain number of days after you have withheld them.

Prerequisites Before you remit your withholding tax, you must have calculated any withholding tax on any clearing accounts [Page 46] affected.

Process Flow 1. When the time comes to remit a given sort of tax, you present your bank with a check for the

appropriate amount, accompanied by a separate remittance challan (pay-in slip) for each tax. You create these challans, and make the appropriate accounting postings, using the Creation of Remittance Challans [Page 59] program.

If you make an error while posting the remittance challan, you can reverse the posting [Page 62] and start again.

2. After a few days, the bank sends you written confirmation that it has received your check.

This confirmation letter is known as a bank challan and serves as proof that you have remitted the tax.

3. You post the bank challan [Page 63] in the SAP System, which stores the challan number in every tax item remitted. This information may be required in order to substantiate your accounts.


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Creation of Remittance Challans Use You use these programs to clear the tax line items of your vendors or customers that are ready to be remitted (for more background information, see Determination of Tax Due Date [Page 43]).

Prerequisites You have made the Customizing settings in the CIN Implementation Guide (IMG) under Tax Deducted at Source → Extended Withholding Tax → Creation of Remittance Challans.

Because the programs select the open tax items by document number, you must also have set the document number field (BELNR) as one of the first five selection criteria for processing open items. You do so in the standard IMG, in Customizing for Financial Accounting (FI), by choosing General Ledger Accounting → Business Transactions → Open Item Clearing → Check Settings for Processing Open Items → Choose Selection Fields.

If you have posted withholding tax items using tax codes other than posting indicator 1 (Standard posting: bank/vendor/customer line item reduced), the programs only read the first tax line. You can make these settings in Customizing for Financial Accounting (FI), by choosing Financial Accounting Global Settings → Withholding Tax → Extended Withholding Tax → Calculation → Withholding Tax Codes.

Before you remit your withholding tax, you must also have:

• Calculated any withholding tax on any clearing accounts [Page 46] affected

• Cleared this tax [Page 48] for any invoices that the vendor has since submitted

Features To access the programs, from the SAP Easy Access screen, choose Tax Deduction at Source → Extended Withholding Tax → Vendor Challan or Customer Challan → Post.


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The programs does not cover partial payments of tax items or residual payments, nor can you clear withholding taxes from different sections of the Income Tax Law (official withholding tax keys). However, you can make clearing postings between business places.

Selection See Selecting Tax Items for Remittance [Page 61].

Output The system:

• Clears the withholding tax items from the G/L account for withholding tax payable to the bank account

• Generates separate challan numbers for each permutation of section and tax office (official withholding tax key and business place)

• Records the challan number used in the line items

The number is recorded only for the system’s future reference. You cannot display it directly from any of the transactions.

• Displays a list with the details of the challan numbers generated and the tax remitted

Basic withholding tax and surcharges are listed separately.

Activities If you need to reverse the posting, you can do so using the Reversal of Remittance Challans [Page 62] report.

Once you have presented a check to your bank for the tax, the bank sends you another challan to confirm receipt of the check. You record this challan number using the Receipt of Bank Challans [Page 63] report.


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Selecting Tax Items for Remittance 1. On the selection screen, enter data as required:

− Organizational data, such as company code and business place (tax office)

− Which withholding tax line items you want to remit

We recommend that in order to get the most accurate selection, you enter a payment due date.

If you need to restrict the selection to a specific vendor or customer, for example, if you want to remit the tax for government bodies only, you can do so.

− Tax remittance information, including any charges made by your bank for accepting the check

2. Choose .

The system calls the standard outgoing payment program, which presents you with a selection of tax line items for clearing.

To make it easier for you to select the open items, we recommend that you create a line layout that includes the following fields:

• Value date (tax due date)

• Business place (tax office)

• Reference key 3 (tax code and recipient type information)

• Text (information on down payment clearing tax transfer) 3. Activate the items that you want to remit and make a note of the total in the Assigned field.

4. Choose .

The system displays an overview of the line items created so far, including any bank charges that you have entered, and an offsetting posting to deduct your bank account.

5. Double-click the credit entry for your bank account.

6. Change the amount so that it matches the total line items (from step 3) plus the bank charges.

7. Choose Document → Simulate.

The system goes back to the line item overview.

8. To update the overview, choose Document → Simulate.

9. Save the document.


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Reversal of Remittance Challans Use If for any reason an error has occurred while creating a remittance challan (see Creation of Remittance Challans [Page 59]), you use this function to reverse the posting.

This function does not work, however, if you have already posted the bank challan (see Receipt of Bank Challans [Page 63]).

Features To access the report, from the SAP Easy Access screen, choose Tax Deduction at Source → Extended Withholding Tax → Vendor Challan or Customer Challan → Reverse.

Selection 1. Specify which document you want to reverse. This is the clearing document created when you

posted the remittance challan.

2. Choose .

The system prompts you to specify what sort of reversal you want to make.

3. Choose Resetting and reverse.

4. Enter a reversal reason and choose .

Output The system displays two dialog boxes, one with the number of the document posted. After you have closed the dialog box, you go back one screen to display a list of the documents that you have reversed.

Activities Once you have reversed the challans, you can create a new one in the usual way.


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Receipt of Bank Challans Use You use this report to post the challans sent to you by a bank in order to confirm that your withholding tax remittance has been received (see Remittance of Withholding Tax [Page 59]). The system records the bank challan number in all remitted withholding tax items by way of proof that you have remitted the tax.

Prerequisites You must not have issued any withholding tax certificates for any of the tax items.

Furthermore, you must not have reversed the clearing document that you created when you remitted the challans.

Features To access the report, from the SAP Easy Access screen, choose Tax Deduction at Source → Extended Withholding Tax → Vendor Challan or Customer Challan → Update Bank Challan Number.

Selection On the selection screen, you specify:

• Organizational data, such as your company code

• Challan clearing number

• The numbers of the remittance challans generated when you remitted the withholding tax

• The bank challan details

Output The system:

• Enters the bank challan data in the remitted tax items

This information is then included in the vendor withholding tax certificates.

• Displays a list of the updated items


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Annual Returns Use You use this report to prepare annual tax returns for the following income tax sections:

• 194 C (payments to contractors)

• 194 D (insurance commissions)

• 194 I (income from rent)

• 194 J (income from professional or technical services).

The report prepares the output in the prescribed format, depending upon the income tax section and business place.

Use this report if you use Extended Withholding Tax. If you use Extended Withholding Tax, but have migrated from Classic TDS, you can still use it to report on transactions that you posted under that solution.

Features To access the report, from the SAP Easy Access screen, choose Tax Deduction at Source → Extended Withholding Tax → Annual Returns → Annual Return.

Selection On the selection screen, enter data in the following group boxes:

• Selection Criteria

• Extended Withholding Tax

Fill out these fields if you use Extended Withholding Tax.

• Withholding Tax (Classic)

If you migrated from Classic TDS to Extended Withholding Tax during the course of the fiscal year, fill out these fields as well as those under Extended Withholding Tax. This way, the report covers documents posted with Classic TDS.

• Tax Deduction Account Number

Enter the TAN no. of the company that the return is for.

• Address Details, Signing Details

This information will be printed on the return.


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Withholding Tax Information System Use You use this report to gather information relating to the withholding tax transactions that you have carried out. You can also use it for carrying out pending transactions like challan updates, bank challan updates, and certificate printing. You can display the individual documents (invoices, down payments, challan clearing documents) pertaining to withholding tax transactions. You can run this report at any stage in the withholding tax cycle in order to obtain the necessary information.

Features To access the report, from the SAP Easy Access screen, choose Tax Deduction at Source → Extended Withholding Tax → Information System → Withholding Tax.

Selection On the selection screen, enter the selection criteria as required and specify which report you want:

• Challan Update Status

Displays a list of all documents involving withholding tax. For each document, it shows the tax amounts and whether or not the tax has been remitted.

• Bank Challan Status

Displays the bank challan update status (whether carried out or not) of all transactions for which challan updates have been carried out.

• Certificate Status

Displays the transaction details for which bank challans have been updated. It shows whether or not a certificate has been issued for the transaction.

• Consolidated Report

Lists all documents involving withholding tax.

Activities Each report contains functions for processing the documents in the list, as follows:

In the Challan Update Status report, you can create a remittance challan for various documents: Select the documents that you want to remit the tax on and choose Challan Update. The system takes you to the Creation of Remittance Challans [Page 59] program, which you then execute. However, you can only process documents for one withholding tax section at a time.

In the Bank Challan Status report, you can post the receipt of a bank challan: Select the documents (in this case identified by the internal challan numbers) that you have been sent a bank challan for and choose Bank Challan Update. The system takes you to the Receipt of Bank Challans [Page 63] program, which you then execute. However, you can only a single internal challan at a time.

In the Certificate Status report, you can print withholding tax certificates: Select the documents that you want to print a certificate for and choose Certificate Printing. The system takes you to the Creation of Withholding Tax Certificates [Page 52] program. However, you can only process documents for one withholding tax section at a time.


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Classic Tax Deducted at Source Use As per Indian law, you are required to calculate withholding tax (tax deducted at source, or TDS) when you post a vendor invoice. The standard SAP System calculates withholding tax at the time of payment. To handle this difference in the calculation of the tax and to incorporate additional requirements, such as withholding tax certificate printing and annual returns, additional functions are provided.

Features The withholding tax for an invoice or a down payment is calculated at header level. That is, only one withholding tax code can be used for a down payment or invoice. This implies that an invoice cannot contain items with different withholding tax rates. It can, however, contain one or more items with the same withholding tax rate and one or more items with no withholding tax. This can be handled by specifying the base amount on which withholding tax is to be calculated. On account of calculation at header level, companies have to instruct their suppliers not to include items with different withholding tax rates in a single invoice, but issue separate invoices for different tax rates.

The SAP System also allows you to print TDS certificates for vendors [Page 73], and to reprint [Page 75] or cancel [Page 76] them if necessary. In addition, you can also prepare annual returns [Page 77] for different sections of TDS.


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Making Down Payments to Vendors Use When you make a down payment to a vendor, the system calculates how much TDS is to be withheld. When the vendor subsequently sends you the invoice, the TDS needs to be adjusted or cleared against the tax that has already been withheld.

Procedure 1. From the SAP Easy Access screen, choose Tax Deducted at Source → Classic → Post.

2. Enter the following data:

− Run program in test mode

We recommend that you first run the program in test mode, then once you are satisfied with the results, in update mode.

− TDS date

This is the date that the system uses for the posting the TDS document (update mode only).

3. Choose .

4. Position the cursor on the invoice that you want to clear the down payment against and choose .

5. Select the down payment that you want to clear.

6. Save the down payment.

7. To refresh the invoice, choose .

The system clears the invoice amount and recalculates the withholding tax base amount and the withholding tax amount, based on the amount of the down payment against which the invoice was cleared.

You can also clear invoices against down payment by first taking a list of all the invoices listed above by choosing . You can then clear them by choosing Financial Accounting → Accounts Payable → Document Entry → Down Payment → Clearing, and then clear each invoice one by one.

By clicking on the document numbers, you can display the document of the TDS posting.


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You will have to make a manual FI posting to transfer the amounts from the respective withholding tax accounts (as defined in the withholding tax line items) to the TDS government payable vendor account. To make the payment to the TDS government payable vendor account, from the SAP Easy Access screen, choose Accounting → Financial Accounting → Accounts Payable → Document Entry → Outgoing Payment → Post.


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Handling of Credit Memos Use This procedure shows you what happens if you post a credit memo against a vendor invoice. If you have already remitted the TDS from the invoice, the credit memo against that invoice is not considered at all for processing. Otherwise, the system calculates TDS for the amount stated on the credit memo and debits it from the TDS payable account.

Procedure 1. You post a credit memo, entering with the invoice number as the reference number.

2. You post the TDS in test mode.

The system displays a message, telling you to run the program in update mode.

3. You post the TDS in update mode.

The system makes the appropriate posting and displays the number of the credit memo along with the TDS posting document.


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Making Down Payments on Invoices Where TDS Has Been Calculated Use If you have withheld TDS on an invoice but not yet remitted it to the government, and the invoice needs to be cleared against a down payment, you have to adjust the tax amount accordingly.

Prerequisites You have posted the invoice and the TDS document has been created.

Procedure 1. Clear the down payment against the invoice using the standard clearing transaction.

2. The next time you run the TDS posting program in update mode, the system makes a posting to correct the TDS, by debiting the G/L account associated with the entered tax code. It also displays the numbers of the down payment clearing document and the TDS document.


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Reversing TDS Postings Use If you reverse an invoice or down payment that you have already calculated TDS on, you also have to reverse the TDS postings.

Procedure When you reverse a down payment in the standard, the system automatically reverses the TDS posting. When you reverse an invoice, the system reverses the TDS posting the next time you run the TDS report in update mode.


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Update of Challans Use When you have remitted the deducted TDS to the government, you are sent a challan confirming that payment has been received. The system allows you to record the number of the challan in the invoices from which the TDS had been deducted and paid.

You can also use this function to change the challan number or date later on, if necessary.

Features To access this report, from the SAP Easy Access screen, choose Tax Deducted at Source → Challan Update.

Selection The system displays the transactions on which you have withheld TDS. You select the transactions for which you have remitted the TDS, enter the challan details. The system then records the challan number in each of the transactions.

If you need to change a challan number or date, enter the challan number and date that is to be changed.

The actual TDS amount and the surcharge on this TDS amount are shown separately. To handle cases where the company needs to have many TAN numbers, you can enter the TAN number when you update the challan number. This number will be used subsequently for the certificates.


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Printing Certificates Use You use this program to print TDS certificates for your vendors (individually or in batches). It covers the TDS in all the invoices and down payments that you have posted over a specified period. Generally speaking, certificates are printed on the seventh of each month.

There is a separate print program for one-time vendors, which you can access from the SAP Easy Access screen, by choosing Tax Deduction at Source → Classic → Certificate → Print → One-Time Vendors.

Prerequisites You have already remitted the TDS to the government and recorded the challan number in the transactions concerned (see Update of Challans [Page 72]). Only transactions with a challan number can be included in certificates.

The certificate printing program uses layout set J_1ITDSCERT. If there are some changes in the certificate format this layout set can be changed accordingly.

If the certificates are to be divided by business area, with a unique number range per business area, you must have maintained the sections as a combination of section and business area, so for business area 0001 and section 194C, you could maintain the section as 194C0001, for example.

Procedure 1. From the SAP Easy Access screen, choose Tax Deduction at Source → Classic → Certificate →

Print → Regular Vendors.

2. Enter data as required, including:

− The dates of the transactions that are to be covered in the certificate

− Withholding tax section


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If you enter the business area in combination with the section, it must also be used in all other transactions involving this certificate, including annual returns.

3. Choose .

If you select the preview option, the system displays a certificate without any certificate number. The number will be assigned only when the certificate is actually printed.

A summary of all the certificates is printed at the end, summarized by certificate and challan number.


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Reprinting Certificates 1. From the SAP Easy Access screen, choose Tax Deduction at Source → Classic → Certificate →

Reprint.

2. Enter data as required, including the numbers of the certificates that you want to reprint.

3. Choose .

The system prints the certificates. Each certificate is marked as a duplicate.


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Canceling Certificates 1. From the SAP Easy Access screen, choose Tax Deduction at Source → Classic → Certificate →

Cancel.

2. Enter data as required, including the number of the certificate that you want to cancel.

3. Choose .


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Annual Returns Use You are required to submit annual returns, statements of the tax that you have withheld, to the tax authorities. SAP System includes a number of sample programs that illustrate how you can prepare annual returns. There are different programs for different sections of the Income Tax Law:

• 194C

• 194D

• 194I

• 194J

Activities To access the reports, from the SAP Easy Access screen, choose Tax Deduction at Source → Classic → Annual Return → …


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Archiving of TDS Documents Use You use these functions to archive documents for tax deducted at source (TDS). For more information about archiving, see Introduction to Data Archiving [Ext.].

Prerequisites Before you can archive this data, you must have archived the related data form Financial Accounting (FI) and Material Management (MM).

Features The TDS documents are archived using archiving object J_1ITDS, which is supplied with Country Version India (CIN). It is used for archiving the data in tables J_1ITDS and J_1ICERTIF.

Once you have archived the TDS documents [Page 79], you must delete the originals [Page 81] from the database. Once you have deleted the originals, you can reload [Page 82] them from the archive file. Finally, you can also analyze them.


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Archiving TDS Documents 1. From the SAP Easy Access screen, choose Tax Deducted at Source → Classic → Utilities →

Archive Documents.

In the Object name field, the system displays the name of the archiving object, J_1ITDS.

2. Choose Archive.

3. Enter data as follows:

− Variant

Enter the report variant that you want to use. You can create a variant [Page 80] if you need to.

− User name

Enter the name of user who will archive the data.

4. To specify when to start the report, choose Start date.

5. To enter the print parameters, choose Spool params.

6. Choose .


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Creating an Archive Report Variant 4. Choose Maintain.

5. Enter a variant name of your choice.

6. Choose Create.

7. Specify which certificates you want to archive and enter other data as required:

− Create

Specifies that the program will run in update mode.

− Delete in test mode

Select this for test runs.

− Package

Enter the optimum package size.

− Comments

Enter any comments for your own reference.

5. Choose Attributes.

6. Enter data as required.

7. Save the variant.

8. Go back to the Archive Management: Create Archive Files screen.


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Deleting TDS Documents 8. From the SAP Easy Access screen, choose Tax Deducted at Source → Classic → Utilities →

Archive Documents.


9. Choose Delete.

10. In the User name field, enter the name of user who will delete the documents.

11. Select Test run if you do not want to run the report in update mode.

This will report any inconsistencies between the table data and the archive file that can be fixed.

12. To specify what archive file you want to delete the documents for, choose Archive selection.



15. Choose .


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Reloading TDS Documents 16. From the SAP Easy Access screen, choose Tax Deducted at Source → Classic → Utilities →

Archive Documents.


17. Choose Reload.

18. Enter data as follows:

− Variant

Enter the report variant that you want to use. You can create a variant if you need to.

− User name

Enter the name of user who will reload the data.

4. To specify what archive file you want to reload the documents from, choose Archive selection.



7. Choose .


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Archive Overview Use You use this report to find out where you have archived a tax deducted at source (TDS) document.

Features Selection On the selection screen, you specify which TDS documents you want to view. You can make your selection by vendor, business area, and TDS certificate number.

Activities To access the report, from the SAP Easy Access screen, choose Tax Deducted at Source → Classic → Utilities → View Archived Documents.


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Migration from Classic TDS to Extended Withholding Tax Purpose This procedure shows you how to migrate from Classic TDS to its successor, Extended Withholding Tax.

In order for the existing documents involving Classic TDS to be compatible with Extended Withholding Tax, you have to migrate the data. But before you can do so, you have make the appropriate Customizing settings, archive old documents, and so on. Follow the instructions given below.

Ensure that no one can post any documents in the company codes during the withholding tax changeover. We recommend that you block your system for all end users and carry out the conversion runs at the weekend.

You must also carry out the migration in a test system before you start work on your production system.

Prerequisites You have upgraded the SAP System from Release 4.6B to 4.6C.

Process Flow Preparations 1. You implement Logistics Invoice Verification [Page 86].

2. You archive all of the cleared items [Page 87].

3. You make the Customizing settings for Extended Withholding Tax [Page 89].

4. You set up the authorizations for the Migration Program [Page 94].

5. Just before you start the migration, you block the users from working in the system [Page 95].

Migrating the Existing Transaction Data and Activating Extended Withholding Tax 1. Execute the Health Check Program [Page 96]

2. You map the Classic TDS tax codes to the Extended Withholding Tax types and codes [Page 98].

3. You maintain your vendor master records [Page 99].

4. You activate Extended Withholding Tax [Page 100].


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5. You migrate the documents [Page 101].

Cleaning Up You clean up [Page 105] the system.


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Implementing Logistics Invoice Verification (MM-LIV) Use The customer carries out this step.

Classic TDS supports conventional invoice verification and Logistics Invoice Verification (MM-LIV) while Extended Withholding Tax supports only Logistics Invoice Verification. After you have migrated, you cannot use conventional invoice verification anymore.

If you do not use invoice verification of any kind, you do not need to take any action.

Procedure Make the Customizing settings for Logistics Invoice Verification in the Implementation Guide (IMG) for Materials Management, by choosing Invoice Verification → Logistics Invoice Verification.


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Archiving Cleared Items The customer carries out this step.

Archive as many cleared items as you can. Documents that have already been archived are not converted, so you can considerably reduce the time required for the conversion run by doing so.

The number of cleared items managed in a system is usually much greater than the number of open items. If, for example, a system contains a hundred times more cleared items than open items, it will take a hundred times longer to convert the cleared items than to convert the open items.

For more information about archiving documents, see the SAP Library under Cross-Application Components ! Archiving Application Data (CA-ARC) ! Financial Accounting (FI) ! Archiving Financial Accounting Data (FI) ! Archiving FI Documents.

Procedure 1. From the SAP Easy Access screen, choose Accounting ! Financial accounting ! General ledger

(or Accounts receivable or Accounts payable) ! Periodic processing ! Archiving ! Documents.

2. Archive the required cleared documents.


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Customizing Extended Withholding Tax Use The customer carries out these steps.

Before you start the conversion of the withholding tax data, you must set up Extended Withholding Tax in the Implementation Guide for Financial Accounting. Make the system settings described below.

Do not activate Extended Withholding Tax yet.

If you activate Extended Withholding Tax before converting the withholding tax data, documents could be posted with Extended Withholding Tax. This could result in your system containing documents with both classic withholding tax and Extended Withholding Tax which, in turn, could lead to serious problems when you migrate the documents.

Procedure 1. Define the official withholding tax keys [Page 90].

2. Define the withholding tax types and withholding tax codes [Page 91].

3. Define the minimum and maximum amounts per type and code [Page 92].

4. Make any additional settings [Page 93].


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Defining Official Withholding Tax Keys 1. In the Implementation Guide for Financial Accounting, choose Financial Accounting Global

Settings → Withholding Tax → Extended Withholding Tax → Basic Settings → Define Official Withholding Tax Codes.

2. Define the official withholding tax keys (also known as official withholding tax codes) for reporting withholding tax. For example, define the keys for the various sections of the Income Tax Act, 1961.


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Defining Withholding Tax Types and Withholding Tax Codes Use Define all types and codes that you require for all countries that you want to implement Extended Withholding Tax in.

Procedure Defining Withholding Tax Types 1. In the Implementation Guide (IMG) for Financial Accounting (FI), choose Financial Accounting

Global Settings → Withholding Tax → Extended Withholding Tax → Calculation → Withholding Tax Type.

2. Make the necessary settings for the required withholding tax types in the following activities:

a. Define Withholding Tax Type for Payment Posting, and if necessary, Define Withholding Tax Type for Invoice Posting

b. Define Rounding Rule for Withholding Type

c. Assign Condition Type to Withholding Tax Type

Defining Withholding Tax Types 1. In the IMG for FI, choose Financial Accounting Global Settings → Withholding Tax → Extended

Withholding Tax → Calculation → Withholding Tax Codes → Define Withholding Tax Codes.

2. If any of the withholding tax codes use formulas to calculate withholding tax, you must also carry out the activity Define Formulas for Calculating Withholding Tax.


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Defining Minimum and Maximum Amounts Use Define, if necessary, the minimum and maximum amounts for the withholding tax codes and types that you have defined.

Procedure 3. In the Implementation Guide for Financial Accounting, choose Financial Accounting Global

Settings → Withholding Tax → Extended Withholding Tax → Calculation → Minimum and Maximum Amounts.

4. To define the minimum and maximum amounts for the withholding tax types, choose Define or Maintain Min/Max Amounts for Withholding Tax Types.

5. To define the minimum and maximum amounts for the withholding tax codes, choose Define or Maintain Min/Max Amounts for Withholding Tax Codes.


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Making Additional Settings Now that you have defined the withholding tax codes and types, make the remaining settings, including:

• Define the recipient types you need for your vendors and attach them to the appropriate vendor master records.

• Make the account determination settings.

• Specify for each company code which withholding tax types they are allowed to withhold tax for.

Do not activate Extended Withholding Tax yet.


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Setting Up Authorizations for Migration Use The customer carries out this step.

In this activity, you create authorization profiles for the people involved in the withholding tax migration. In order to execute the Migration Program, you require the role TDS Supervisor or the authorization object J_1IEWTJV, provided by SAP.

Once the withholding tax migration is completed, take the precaution of withdrawing the change authorization for all the users involved. This prevents the conversion being started while the system is being used for normal day-to-day activities, for example.

Procedure 1. In the Implementation Guide for Financial Accounting, choose Financial Accounting Global

Settings → Maintain Authorizations.

2. Make the required Customizing settings.

The authorization object J_1IEWTJV is in the India Version object class under the object name Authorization Check for JV.


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Blocking Users The customer carries out this step.

Use You must block the system for normal activities while the conversion is being prepared and carried out. Documents must not be posted or processed, and master data must not be changed, otherwise your accounting documents and system settings may contain serious discrepancies.

Procedure 1. Ensure that all users involved in the withholding tax changeover have the appropriate access

authorizations.

2. Block your SAP System for all other users.

If it is not possible to take measures to ensure that there are no users working in the system, you should block the users and the whole system throughout the organization.

Restart the SAP System so that all users are logged off.


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Withholding Tax Migration Health Check Use You must execute this report before you proceed with the Migration Program. It makes sure that all the Customizing settings have been made properly (for a list of the checks, see under Activities below), so that the Migration Program will migrate the data correctly. Additionally, the report also displays a list of the documents that you will not be able to process any more after the migration.

You must run the report for each company code that you want to carry out the migration for, and the health check status for each company code must be OK.

Prerequisites You have carried out all the activities described under Preparations in Migration from Classic TDS to Extended Withholding Tax [Page 84].

Features To access the report, in the Country Version India Installation Guide, choose Tax Deducted at Source → Extended Withholding Tax → Migration from Classic TDS to Extended Withholding Tax → Health Check.


• Selection criteria

− Specify which country and which company code you want to perform the health check for. You can only execute the report for one company code at a time.

− Specify whether you want to run all checks, or just the obligatory ones. We recommend that you perform all of the checks.

• Document details

In this group box, you specify which sorts of documents you want the report to cover, and from which dates.

• Other checks

Specify whether you want the vendor master records to be checked, and the tax code mapping from Classic TDS to Extended Withholding Tax.

Output The output list shows:

• The results of the Customizing checks

• The documents that cannot be processed after the migration

• The results of the vendor master checks

• The results of the checks on the tax code mapping

The key is as follows:

Indicator Meaning

One check has been run on an obligatory Customizing activity, and the settings are incorrect

One check has been run on an optional Customizing activity, and the settings are incorrect

One check has been run on an obligatory Customizing activity, and the settings are correct


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Multiple checks have been run on an obligatory Customizing activity, and some of the settings are incorrect

Multiple checks have been run on an obligatory Customizing activity, and all of the settings are correct

You must process all of the activities marked , , or , and execute the report again. Only when all activities are marked or will the report assign the company code the status OK.

Activities The report makes the following checks at country level:

• Withholding tax country

• Official withholding tax key

• Withholding tax types

• Withholding tax codes

• Recipient types

• Tax due dates

• Rounding rules

• Business transaction events

And these at company code level:

• Company code global parameters

• Extended Withholding Tax has been activated

• Withholding tax codes are assigned to company code

• Accounts for withholding tax to be paid over have been defined

• Accounts for posting withholding tax and losses to be paid

• Clearing accounts liable to withholding tax

• Business places have been defined

• Factory calendar has been assigned to business places

• Creation of remittance challan

• Vendor withholding tax certificates

• Vendor master data

• Surcharge calculation


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Mapping Withholding Tax Types and Withholding Tax Codes Use You map the Classic TDS withholding tax codes to the Extended Withholding Tax withholding tax types and codes.

Procedure 1. From any screen, choose System → Services → Table maintenance → Extended Table

Maintenance.

2. Enter table J_1IEWT_MIGRATE and choose Maintain.

3. Map the Classic TDS tax codes to the Extended Withholding Tax tax types and codes.

4. Save your entries.


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Maintaining Vendor Master Records Use Here, you specify which withholding tax types apply to each vendor.

Under Extended Withholding Tax, you can assign any number of withholding tax types to a vendor’s master record. When you come to make a posting involving withholding tax for this vendor, you can then enter withholding tax for each withholding tax type that you have assigned it.

Make sure the withholding tax types in the vendor master record match those in the mapping table [Page 98]: When, during migration, the system converts the various documents (for example, payments), it replaces any Classic TDS withholding tax types with the Extended Withholding Tax types and codes that entered in the mapping table. However, it does not cross-check the withholding tax type against the appropriate vendor master record. If, during migration, the Migration Program assigns a document a withholding tax type that you have not assigned to the vendor, you will not be able to process the document afterwards.

Prerequisites Just before you start maintaining the vendor master records, activate Extended Withholding Tax for the company code in question. Otherwise, the system will not display the appropriate fields. As soon as you have finished, deactivate it.

Procedure Make the changes in the vendor master records of all vendors that you have to withhold tax on. For each vendor:

• Enter the relevant withholding tax types

• Enter the relevant withholding tax codes and select Liable, in order to activate it

• Enter the recipient type

• Enter any exemption information


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Activating Extended Withholding Tax Use The customer carries out this step just before you migrate the data.

Procedure 6. In the Implementation Guide (IMG) for Financial Accounting (FI), choose Financial Accounting

Global Settings → Withholding Tax → Extended Withholding Tax → Company Code → Activate Extended Withholding Tax.

7. Activate Extended Withholding Tax for each company code whose data you want to migrate.


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Withholding Tax Data Migration Tool Use This program converts documents created under the Classic TDS solution so that they are suitable for use with Extended Withholding Tax. For example, after you have migrated to Extended Withholding Tax, neither the Payment Program nor the Clearing Program will be able to work with Classic TDS documents.

This program migrates all documents involving withholding tax, such as invoices, down payments, down payment clearing documents, and TDS documents. After the migration, the system will treat them as though they were created using Extended Withholding Tax.

Integration The program contains two user exits:

• Selecting the business place

The business place is mandatory in down payments that are to be migrated. You can either enter them by filling out the selection screen or using the user exit. The user exit provides the section code, business area, company code, and TAN number as input parameters. The appropriate business place can be derived from this information.

• Data selection and validation

There are two user exits available to choose and validate additional clearing documents and down payment documents.

Prerequisites You have carried out all the steps in Migration from Classic TDS to Extended Withholding Tax [Page 84] under Preparations and steps 1–4 under Migrating the Existing Transaction Data and Activating Extended Withholding Tax. You cannot go back and complete these steps after you have migrated the documents.

In order to execute the program, you must have the role TDS Supervisor.

Features To access the report, in the Country Version India Installation Guide, choose Tax Deducted at Source → Extended Withholding Tax → Migration from Classic TDS to Extended Withholding Tax → Migration Program.

First check the documents [Page 103] to see if they will be migrated properly, and edit any that result in problems. Then, when all the documents have been checked, migrate them [Page 104].


• Selection criteria

In this group box, specify which documents you want to migrate. If you enter invoice document numbers, the system picks up the associated clearing documents.

• Additional selection criteria

Use these fields to refine your selection. If you need to migrate a large number of documents, we recommend that you process one small quantity at a time in order to improve performance.

• Migration of down payments

If you want to migrate down payments, select this option. If you do, you must enter a business place or have it defaulted by means of a user exit.

• Posting run


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Select this indicator to execute the program in test mode.

Output In the result screen, verify the invoices and credit memos and check them. Down payments are only migrated after you have checked them from the screen.

If you want to migrate down payments, the list shows all the open down payments. You then have to select the down payments and save them for migrating the data.

You can migrate invoices, credit memos, clearing documents, and TDS documents on the above live or previewed.

Activities Migrate invoices, credit memos, clearing documents, and TDS documents if you have not yet paid the vendor or if the payment is likely to be reversed. You must decide before you start on the migration if this is likely or not. Do not migrate the documents if the vendor has been paid and it is unlikely that you will have to reverse the payment.

Migrate all open down payments so that tax adjustment on down payment clearing could happen along with clearing. Decide on the appropriate business place entity to which the down payments pertain and choose from the list displayed.

If the status of a document changes, you execute the program again. For example, say that you have migrated an invoice. If you then post TDS later on, you must migrate the invoice again so that the TDS document is also migrated.

When you come to run the Automatic Payment Program and the error Inconsistent withholding tax information occurs for a line item, one of the reasons could be that the line item is not migrated.


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Checking the Documents Use In this step, you execute the report in test mode. The system:

• Shows you how many vendor items, open items, and cleared items it has found in the company code that match your selection criteria

• Shows you how many vendor items and so on there are per Extended Withholding Tax code

• Checks the assignment of the Classic TDS withholding tax codes to the Extended Withholding Tax types and codes to see whether the characteristics of each combination of type and code for extended withholding tax correspond

Procedure 1. Fill out the selection screen, making sure that you have selected Test run for invoice/credit memo,

and choose .

The output list appears, with a list of the documents selected and any warnings.

2. Check the documents for any discrepancies that could lead to problems later on, when you make postings for Extended Withholding Tax:

− Check whether any documents are missing withholding tax codes.

If so, check whether the codes have been deleted by mistake, in which case you have to make the relevant system settings again, or whether you intentionally wanted the tax code to be deleted.

− Check whether any withholding tax codes exist that have not been used, and delete them.

− Check down payments to see if the migrated base and tax are correct.

3. Correct any errors and execute the report again.


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Migrating the Documents Use In this step, you execute the report in update mode. The system migrates the documents from Classic TDS to Extended Withholding Tax. Note that this is the most time-consuming step.

Procedure 3. Fill out the selection screen, making sure that you have deselected Test run for invoice/credit

memo, and choose .

The output list appears, with a list of the documents selected and any warnings.

4. In the list, select the down payments that you want to migrate and save.

This procedure does not apply to any other types of documents.


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Cleaning Up Use Once you have migrated the documents, there is some cleaning up to do in the sytem:

Procedure 1. Check the Customizing settings for Extended Withholding Tax.

2. Check, edit, and save any of the following, which the Migration Program does not handle:

− Recurring entry documents

− Sample documents

− Noted items

3. Release the system

Once you have finished the migration and cleaning up activities, release the system for the users.


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Sales Tax Use This is a tax levied on the sale of a product. It is applied on the gross price of goods, inclusive of excise duty.

Prerequisites In addition to the standard Implementation Guide (IMG) settings for taxes on sales and purchases, you must also have maintained the tax registration numbers of your vendors [Page 115], customers [Page 197], and your own plants [Page 198].

Furthermore, if the state legislation allows you to offset input local sales tax (LST) against output LST, you must also have defined this (see Material Master (Excise Data) [Page 113]).

Features There are two types of sales tax. Interstate sales (for example, between Karntataka and Tamil Nadu) are subject to central sales tax (CST). The tax rate is the same throughout the country. Intrastate sales, on the other hand, are subject to local sales tax (LST), which differ from state to state. The SAP System handles these using tax jurisdiction codes.

A percentage of input LST can be deducted against output LST, depending on what percentage of goods you have purchased in the state in question.

The system calculates the sales taxes automatically, when you enter the tax codes. A report [Page 107] is also available that tells you how much sales tax you have paid and collected.


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Sales Tax Register Use You use this report to see how much tax has been accumulated under the various tax codes and tax jurisdiction codes for a combination of conditions.

You can also report how much input sales tax has been set off against the outputs. This report also can serve as the basis of determining your local sales volume and central sales volume.

Features To access the report, from the SAP Easy Access screen, choose Indirect Taxes → Registers → Sales Tax → Sales Tax Register.

Selection On the selection screen, fill out the following data:

• Organizational data

• General selections

Specify which documents you want the report to cover. If you need more selection criteria, use the dynamic selection fields.

• General selection

Specify which taxes you want the report to cover. You can report either central sales tax or local sales tax by choosing a combination of ship-from and ship-to locations.

If you want to restrict the selection to specific locations, fill out the Ship-from and Ship-to fields.


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Calculation Procedure Definition See Calculation Procedure [Ext.].

Use In India, you use calculation procedure TAXINJ. It allows for all the Indian tax codes supplied with the system, covering sales taxes and excise duties.


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Condition Type Definition See Condition Type [Ext.].

Use When you create a company code using the template for India, the system sets up the following condition types:

Condition type Tax

JAED A/R additional excise duty

JAO1 A/P additional excise duty for setoff

JAO2 A/P additional excise duty for inventory

JCES A/R cess

JIN1 A/R central sales tax

JIN2 A/R local sales tax

JIN4 A/R additional sales tax

JIP1 A/P central sales tax for inventory

JIP2 A/P local sales tax for inventory

JIP3 A/P sales tax setoff

JMO1 A/P excise duty for setoff

JMO2 A/P excise duty for inventory

JMOD A/R excise duty

JSED A/R special excise duty

JSO1 A/P special excise duty for setoff

JSO2 A/P special excise duty for inventory

JSER A/P service tax credit

JSVD A/P service tax credit


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Asset Accounting (FI-AA) Purpose You can use the Customizing settings delivered by SAP in order to configure Asset Accounting (FI-AA) with respect to the income tax depreciation area. For more information about what settings to make, see the Country Version India Implementation Guide (CIN IMG), under CIN 40A Release Notes → Release Notes – Financial Accounting → Asset Accounting.

Features The following are available for the country specific requirement for India:

• Chart of depreciation

• Depreciation keys as per the Indian income tax laws.

Using the documentation available under the release notes for CIN 40A, configure FI-AA for the income tax depreciation area.


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Materials Management (MM) Purpose Country Version India (CIN) contains a number of enhancements to standard Materials Management (MM) functions that allow you to handle local requirements, in particular excise duty.

Features The purchasing process has been enhanced to take into account all procedures relating to excise duty and excise invoices. The CIN enhancements include the following features:

Master Data The material master [Page 113] has been enhanced so that you can assign each material master record to the appropriate chapter ID (which controls the excise duty rates).

Similarly, the vendor master records [Page 115] and plant master records [Page 198] have also been enhanced. The system is therefore able to calculate the correct excise duty for each combination of vendor, plant, and material.

You have to maintain all of this master data before you can start working with the system.

Day-to-Day Activities You can enter incoming excise invoices in the SAP System, fully integrated in the following standard processes:

• External procurement from domestic vendors [Page 117]

• External procurement from foreign vendors [Page 122]

• Subcontracting [Page 128]

• Stock transfer [Page 150]

You enter most incoming excise invoices using the Incoming Excise Invoices [Page 151] transaction, but you use a different transaction for subcontracting purposes.

When you enter an excise invoice, the system automatically posts the excise duty to the appropriate CENVAT accounts if the duty is deductible. If not, the system automatically adds the duty to the material cost.

This transaction also handles entries in Parts I and II of excise registers RG 23A and RG 23C. When the storeperson posts a goods receipt associated with an excise invoice, the system creates an entry in Part I of the appropriate register. When the accounts supervisor approves the excise postings, the system creates an entry in Part II of the register.

The system also allows you to enter multiple goods receipts for a single excise invoice [Page 172], if necessary.

Reporting You can print out all excise registers [Page 175], including RG 23A and RG 23 C, for submission to the excise authorities.

Since you can only credit excise duty on capital goods [Page 174] to your CENVAT accounts over a period of two years, the system also offers you functions for tracking outstanding CENVAT credits and using these when they mature.


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Excise Invoice (Incoming) Definition A business document that is issued by your vendor to accompany any goods that it sends you. It stipulates how much excise duty has been paid on the goods.

Use In the external procurement process [Page 117], each delivery that your vendors make is accompanied by an excise invoice. You have to post these in the system. This document is required as proof of the excise duty that you have paid, so that you can then offset the duty against the excise duty that you levy on outputs.

Generally speaking, you have one excise invoice for each goods receipt, but see also Multiple Goods Receipts for a Single Excise Invoice [Page 172].

Structure In the SAP System, the excise invoice consists of header data and line items. The header data comprises:

• An internal number [Ext.]

• The excise invoice number [Ext.]

• The date of the excise invoice

• The details of the original vendor who generated the excise invoice, if your vendor purchased the goods from another vendor and was merely selling them on to you

At line item level, the excise invoice lists the materials on the excise invoice, showing the following information:

• Chapter ID

• Quantity of materials

• Excise duty base amount

• Rates of excise duty

• Amount of duty paid


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Material Master (Excise Data) Definition The part of the material master record that contains information relating to Indian excise duty.

Use In conjunction with other data, this data is used to calculate excise duty [Page 28] on various transactions.

To maintain the data, from the SAP Easy Access screen, choose Indirect Taxes → Master Data → Excise Rate Maintenance, and then select the following options described below.

Structure The excise part of the material master is divided into the following screens:

Chapter IDs On this screen, you define the chapter IDs and corresponding descriptions as described in the excise tariff structure. This information is used when you create excise invoices and is also shown in the various excise registers [Page 175].

Material and Chapter ID Combination On this screen, you maintain the excise data relating to your materials. For each material, specify:

• Chapter ID

• Whether the material can be sent to subcontractors (see Subcontracting [Page 129])

• The material type

This denotes, for example, whether the material is a raw material, a capital good [Page 33] – this affects the CENVAT process – or if it is a finished good on which excise has been paid, to be covered by the Update of RG 1 and Part I Registers [Page 178].

• Whether you accept more than one goods receipt per excise invoice, and if so, whether the excise duty should be credited to the CENVAT account immediately a goods receipt is posted (multiple credit) or not until all the goods receipts have arrived (single credit) (see Multiple Goods Receipts for a Single Excise Invoice [Page 172])

This information is valid for a given plant. If the information is valid for all of your plants, however, leave the Plant field blank.

Material Assessable Value On this screen, you maintain the net dealer price and the assessable value of all materials that you send to subcontractors or for any other issue. These values serve as the excise base value when the materials are issued, and tell the system how much excise duty to reverse from your CENVAT account.

CENVAT Determination On this screen, you specify which raw materials are used to produce which finished (or semifinished) goods. The system uses this information to determine whether it you can claim a CENVAT credit for a material.

Excise Tax Rate On this screen, you specify for each chapter ID every possible rate of excise duty that might apply, so you must take into consideration each permutation of plant and customer; and each combination of plant and vendor.

You can maintain the basic excise rates in the following forms:


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• Ad valorem [Ext.]

• Specific [Ext.]

• As a combination of both

For each rate, specify until which date it applies.

You can also maintain the additional excise duty and special excise duty in ad valorem form, should any apply. If you need to give these rates as a fixed sum, use the Quantity Based AED and SED screen.

Additional Excise Rate On this screen, maintain any cess applicable.

Exceptional Material Excise Rate On this screen, maintain any exceptions that apply to the excise rates that you have defined. Exceptions can apply to a single material from all vendors, of to a single material from one vendor only. If you have an exceptional rate for a customer–material combination, you can maintain it here as well.

Sales Tax Setoff Percentages On this screen, maintain the percentage of local sales tax [Page 106] on inputs that you can deduct against LST on outputs. The setoff amount is deducted from the inventory valuation of the material. Currently very few states, for example, Maharashtra and Gujarat, participate in this scheme.


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Vendor Master (Excise Data) Definition The part of the vendor master record that contains information relating to excise duty.



Structure The excise part of the vendor master is divided into the following screens:

Vendor Excise Details On this screen, you enter your vendors' tax numbers, which are used for various forms of correspondence and reports:

• Excise registration number (and the range, division, and collectorate in which this is located)

• Central sales tax (CST) number

• Local sales tax (LST) registration number

• Permanent account number (PAN)

In order for the system to be able to calculate which rate of excise duty [Page 28] to apply on purchases from the vendor, you must also:

• Assign it a vendor excise duty status (for more information about how this works, see Determination of Excise Duty Rates [Page 28])

• Specify what type the vendor is, for example, a manufacturer, first-stage dealer, or importer for 57AE returns

• If the vendor qualifies as a small-scale industry [Page 30] (SSI), you must also specify:

− What its SSI status is (which you must first have defined under SSI rates, see below)

− Whether or not it is participating in the CENVAT scheme

SSI Rates On this screen, you define the excise rates that apply to purchases from vendors that qualify as SSIs. You define one status for each band (or "slab") of sales volume provided for by the law, and for each SSI status, the rates of excise duty that applies to that slab under the two schemes (see Excise Duty for Small-Scale Industries [Page 30]).

Excise Indicator for Plant and Vendor On this screen, you define the final excise duty indicator (for more information about how this works, see Determination of Excise Duty Rates [Page 28]).


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Plant Master (Excise Data) Definition The part of the plant master record that contains information relating to Indian excise duty.



Structure The excise part of the plant master is divided into the following screens:

Excise Indicator for Plant On this screen, you enter your plants' tax registration numbers, which are used for various forms of correspondence and reports:




In order for the system to be able to calculate which rate of excise duty [Page 28] to apply on purchases for this plant, you must also assign it a plant excise duty status (for more information about how this works, see Determination of Excise Duty Rates [Page 28]).


Excise Indicator for Plant and Customer On this screen, you define the final excise duty indicator (for more information about how this works, see Determination of Excise Duty Rates [Page 28]).


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External Procurement (Domestic) Purpose This process illustrates how the basic procurement process – including excise duty – is handled by the SAP System.

Process Flow 1. You create a purchase order [Page 118] for the goods you want and send it to the vendor.

After a few days, the vendor sends you the goods together with an excise invoice.

2. Now that the goods have arrived, you enter the goods receipt and capture the excise invoice.

a. The storeperson enters the goods receipt [Page 119].

The system creates a goods receipt document, and an accounting document to debit the raw materials account and credit the goods receipt clearing account. Assuming that the materials are subject to excise, it also creates an entry for the goods receipt in Part I of the appropriate excise register [Page 175].

Note that if you first want to post the goods to blocked stock, for any reason, do so using the standard procedure [Ext.]. The excise clerk then captures the excise invoice as normal.

b. The excise clerk captures the excise invoice [Page 154].

For information about what to do if the vendor sends the goods in more than one delivery, see Multiple Goods Receipts for a Single Excise Invoice [Page 172].

3. A supervisor in the accounts department checks the excise invoice captured by the clerk, makes any changes necessary, and posts it [Page 162].

The system automatically debits the excise duty to the excise duty accounts and credits the CENVAT clearing account. It the creates an entry in Part II of the appropriate excise register to record this posting.

4. You post the vendor's invoice, following the standard procedure [Ext.].

If the excise supervisor has reduced the amount of excise duty that is to be credited to the CENVAT account, the system adds the difference to the material price.

The system also creates an accounting document. The document contains debit postings to clear the clearing accounts for goods receipts and CENVAT; and a credit posting to create an open item on the vendor's account.

Alternatives The above procedure is just one way of using the SAP System to handle incoming excise invoices. If your business processes differ from the procedure described above, there are a number of alternatives available to you.

Capture Excise Invoice Before Goods Receipt In step 2, the vendor sends you the goods and there are two documents, the goods receipt and the excise invoice. If your business processes require, you can capture the excise invoice before the goods receipt is posted.

During the goods receipt, the system adjusts the material value for any changes to the taxes that the clerk has made in the captured excise invoice. An accounting document to debit the raw materials account and credit the goods receipt clearing account is created.

One Person Captures and Posts Excise Invoice In the procedure described above, the excise clerk captures the excise invoice and the excise supervisor posts it. If you want, you can have one person perform both of these activities in a single step, using the transaction under Indirect Taxes → Procurement → Excise Invoice → Incoming Excise Invoice → Central Processing → Capture/Change/Cancel/Display/Post.


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Creating Purchase Orders To create a purchase order, follow the standard procedure [Ext.], but when you fill out the item information, enter the following data on the Invoice tab:

• Enter a tax code.

If you do not, the system will not calculate excise duty or display it on the excise invoice create screen.

If you are only eligible for partial CENVAT credit [Page 32], you must use an appropriate tax code. If the CENVAT credit is less than the duty amount entered, the system will automatically add the difference to the inventory value when you come to verify the invoice.

• Select GR-based IV, to activate goods receipt-based invoice verification. During invoice verification this will enable the system to update the material value to allow for any discrepancies between the taxes in the purchase order and the taxes stated by the vendor in the excise invoice.

The purchase order shows the excise duty and sales tax that you expect to pay. The taxes are calculated in the purchase order according to the vendor, material, and tax code.


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Entering Goods Receipts Use In this procedure, you enter the goods receipts, following the standard procedure [Ext.].

The standard transaction contains some features that are specific to companies in India only. For example, it contains an additional dialog box in which you can enter the number of the excise invoice that has arrived with the goods. And the transaction also creates an entry for the goods receipt in Part I of excise register [Page 175] RG 23.

If you allow more than one goods receipt per excise invoice, see Multiple Goods Receipts for a Single Excise Invoice [Page 172].

Prerequisites You have maintained the Customizing settings at the excise group level, so that Part I entries are created at GR blocked stock, for stock transport orders, and for consumption stock. You do so in the Country Version India Implementation Guide, by choosing Global Settings → Excise Groups.

Procedure 1. From the SAP Easy Access screen, choose Logistics → Materials Management → Inventory

Management → Goods Movement → Goods Receipt → For Purchase Order → GR for Purchase Order.

2. In the top line, enter the purchase order number and choose .

A dialog box appears.

3. Enter data as required:

− If you have not yet captured the excise invoice:

• Leave the Excise invoice field blank.

• Fill out all of the other fields.

− If you have already captured the incoming excise invoice, enter the excise invoice number.

4. To close the dialog box, choose .

If you choose , the system will not make an entry in Part I of the excise register.

5. Check that all the line items are correct, and adjust them as required.

6. Save the goods receipt.


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Result As well as creating a goods receipt document, the system creates an entry in Part I of the excise register.


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Entering and Verifying Invoices Follow the standard invoice verification procedure, but select Calculate tax on the Vendor Items screen. The system proposes the deductible excise duty items in the invoice document.


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External Procurement (Imports) Purpose This procedure shows you how to handle the countervailing duty [Ext.] (CVD) on imports, which is levied in place of excise duty. Unlike other forms of customs duties, such as basic customs duty or special customs duty, you can credit CVD paid on imports to your CENVAT account.

Prerequisites Vendor Master Record for Customs Office Create a vendor master record [Ext.] for the customs office, so that you can create liabilities for the CVD (see step 3 in the process flow).

Condition Type for CVD The system does not treat the CVD using tax codes, but as a condition type for planned delivery costs. Specify which condition type you use as follows:

1. In the Country Version India Implementation Guide (CIN IMG), choose Global Settings → Excise Defaults.

2. Enter, for the tax calculation procedure that you use, the CVD condition type in the CVD cond. field.

For more information about how the system handles customs duties using condition types, see Planned Delivery Costs [Ext.].

CVD Clearing Account When you post CVD to a CENVAT account (see step 5 below), the system debits the CVD to the BED account and credits it to a CVD clearing account.

To specify which G/L account you want to use as the CVD clearing account:

1. In the CIN IMG, choose Global Settings → Company Settings.

2. Enter the G/L account number in the CVD acct field.

Process Flow 1. You create a purchase order [Page 123] for the goods that you want and sent it to the vendor.

For each material that you will have to pay CVD on when it comes through customs, you enter the CVD as a pricing condition.

2. The vendor ships the goods to you.

When the goods arrive in India, they go through customs. The customs officers issue a bill of entry for the goods, which is in effect an invoice for the CVD on the goods. Once they have inspected the goods, they send them on to you.

3. The goods arrive at your plant, together with the bill of entry. In order to record the bill of entry in the system, the excise clerk:

a. Enters an invoice [Page 124] for the bill of entry

In Accounts Payable (FI-AR), the system creates a new vendor item for the CVD at the customs office. The item is offset to the CVD clearing account.

b. Captures an excise invoice [Page 125] for the bill of entry

4. The storeperson posts the goods receipt [Page 126].

5. The excise supervisor posts excise invoice [Page 127].

6. The excise clerk enters the vendor invoice for the materials, following the standard procedure [Ext.].


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Creating Purchase Orders Use You follow this procedure to create a purchase order for imports.

Country Version India (CIN) contains a sample pricing procedure for imports, J_IMP.

Procedure Create a purchase order for the materials that you want to order using the standard procedure [Ext.], but when you fill out the item information, make sure that you observe the following:

• Invoice tab

− Enter a zero-rate tax code

− Deselect GR-based IV

• Conditions tab

a. Select the countervailing duty (CVD) condition and choose .

b. In the Rate field, enter the rate of CVD that will be levied on the material when it arrives at customs.

c. In the vendor field, enter the vendor master record that you have created for the customs office.

Then, once the vendor has delivered the goods and you enter the invoice, the system will automatically credit the CVD liability to the customs office.


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Entering Invoices for Bills of Entry To enter an invoice for a bill of entry, you follow the standard invoice verification procedure [Ext.], but make sure you observe the following:

Header Data

• Basic data tab

− In the Amount field, enter the amount of countervailing duty (CVD) stated on the bill of entry in rupees.

− Do not enter any other taxes.

• Details tab

− Assuming you specified in the purchase order that the CVD was to be paid to the customs office, the system shows the customs office as the vendor. If not, enter the customs office’s vendor master record in the Inv. party (Invoicing party) field.

Line Items On the PO reference tab, enter data as follows:

1. Enter the number of the purchase order related to this delivery.

− If you only created one purchase order for the goods, enter the purchase order number and select Planned delivery costs.

− If you sent more than one purchase order to the vendor and it sent you all of the ordered materials together in one shipment:

i. Choose .

ii. Enter all of the purchase order numbers in the table.

iii. Select Planned delivery costs.

iv. Select Deliveries and deselect Returns.

v. Choose Adopt.

In both cases, the system displays the line items in the line item overview.

2. For each line item:

− In the Amount field, enter the amount of CVD on the item (if you have more than one item, you may have to work the amount out manually).

− In the Quantity field, enter the quantity of goods on the invoice.

− Enter a zero-rated tax code.

3. Choose Simulate.

A dialog box appears with a list of the postings that will be made to Financial Accounting (FI).

4. Choose Post.


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Capturing Excise Invoices for Bills of Entry 1. From the SAP Easy Access screen, choose Indirect Taxes → Procurement → Excise Invoice →

Incoming Excise Invoice → Individual Processing → Capture/Display.

2. In the top line:

a. Select Capture Excise Invoice

b. Select Purchase Order.

c. Enter the purchase order related to the bill of entry.

d. Choose .


3. Enter the number of the invoice that you entered for the bill of entry and choose .

4. If you need to enter any other purchase orders, enter the number in the top line as for step 3.

Note that this time, you do not need to enter the invoice number.

5. Enter other data as required.

Note that the countervailing duty is displayed in the basic excise duty fields.

6. Save the excise invoice.


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Entering Goods Receipts Use In this procedure, you record the receipt of the goods from the vendor abroad, following the standard procedure [Ext.].


Management → Goods Movement → Goods Receipt → For Purchase Order → GR for Purchase Order.

2. In the top line, enter the purchase order number and choose .


3. Enter the number of the excise invoice that you created for the bill of entry and choose .

4. If you need to enter more purchase orders – for example, if you sent the vendor more than one purchase order and it sent you back all the ordered materials in a single delivery – for each purchase order, enter the number in the top line and choose .

5. Check that the line items in the goods receipt are correct.


Result The system creates:

• A goods receipt document

• An accounting document

• An entry for the goods receipt in Part I of the appropriate excise register


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Posting Excise Invoices 1. From the SAP Easy Access screen, choose Indirect Taxes → Procurement → Excise Invoice →

Incoming Excise Invoice → Individual Processing → Change/Display/Post/Cancel.

2. Select Post CENVAT and Vendor Excise Invoice.

3. Enter the number of the excise invoice that you created for the bill of entry.

4. Check that the data is correct.

5. Choose Simulate CENVAT.

A dialog box appears with a list of the accounting entries that will be made to transfer the CVD from the clearing account to the excise duty account.

To close the dialog box, choose .

6. If the data is correct, choose Post CENVAT.

The system posts the CENVAT and creates a corresponding entry in Part II or the appropriate excise register.


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Subcontracting Use If you work with subcontractors, there are two ways of handling the excise invoice on the goods that you provide them with:

• Subcontracting without payment of excise duty [Page 129]

• Subcontracting under full payment of duty [Page 146]

Country Version India supports both of these approaches.

For information about the standard subcontracting procedure in the SAP System, see Subcontracting [Ext.].


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Subcontracting Without Payment of Excise Duty Purpose When you issue materials to a subcontractor, you need to keep track of what materials you have issued and when they have to be returned by.

The reason for this close monitoring has to do with India’s tax law. Under excise law 57AC, when you send materials to a subcontractor for processing, you are not required to pay any excise duty, even though the materials have left your premises. However, if the materials have not been returned to you within a given length of time specified by the law (in 2000, 180 days), you will have to reverse any excise credit that you posted when you purchased the materials (see Completion, Reversal, and Recredit [Page 139]). In the case of materials that you have manufactured in-house, you will have to post credit entries to the extent of the CENVAT rate of the assessable value of the materials.

Prerequisites You have:

• Maintained the subcontracting information in the material masters (see Material Master (Excise Data) [Page 113])

• Made the appropriate Customizing settings in the Country Version India (CIN) Implementation Guide (IMG), by choosing:

− Logistics → Subcontracting

− Accounting → Maintain Transaction Accounts

− Accounting → Assign G/L Accounts to Transaction Types and Excise Groups

− Number Ranges (maintain number ranges for the object J_1I57FC, the number range number being mentioned in the subcontracting attributes)

• Made the Customizing settings in the standard IMG, under Materials Management → Inventory Management and Physical Inventory:

− Goods Issue/Transfer Postings → Define Screen Layout.

For movement type 541, in the Change View Field Selection Overview, pick the 541 movement type and in the Select Group Materials Management, make the Purchase Order field an optional entry.

− Output Determination → Maintain Output Types

− Output Determination → Assign Forms and Programs

− Output Determination → Printer Determination → Printer Determination by Plant/Storage Location

Process Flow 1. You create a subcontract order [Ext.] for the goods that you want to subcontract.

2. You create a transfer posting order [Page 148] for the materials that are to be sent to the vendor. This document is, however, for your own use only.

3. You create a subcontracting challan [Page 131] on the basis of the transfer posting order.

This is the consignment document that you will send to the subcontractor along with the materials that are to be processed.

4. You send the materials to the subcontractor, along with a printout of the subcontracting challan.

5. The subcontractor processes the materials and returns the finished goods. When the goods are delivered back to you, the storeperson posts the goods receipt [Page 144] and the challan.


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The delivery may not necessarily cover all the goods from the challan: It may also include goods from a number of different challans. The SAP functions allow for this eventuality.

6. The excise department reconciles the goods receipt [Page 137] against the challan, thereby accounting for the return of the materials that you have sent for subcontracting.

The challans here include those that have been captured online at the time of goods receipt and those entered manually.

7. You create a list of the outstanding challans [Page 145].

8. You complete the challan [Page 140].

If a subcontractor fails to return all the materials within the time allotted, you have to scrap the material by specifying it as such in the bill of material for the parent material then assigning the bill of material to the subcontracting purchase order. If the scrap generated is not returned by the subcontractor, excise duty relevant to the scrap generated has to be paid. If this scrap is returned after the duty has been paid, an excise journal voucher should be created to reverse the excise duty paid.


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Subcontracting Challan Definition A document that you use to issue and track subcontracting work. It allows you to make sure that all the materials you have sent to the subcontractor for processing are returned.

The challan is also widely known as the 57F4 challan, after the law under which it was defined up until the 2000 budget. This law has now been superceded by a new one, 57AC.

Use You create challans from transfer orders to accompany any materials that you send to subcontractors under rule 57AC. In this respect, they are an extended form of delivery note, with additional information about the excise duty on each material that you have supplied. Materials that are not liable to excise duty do not have to be included in the challan.

As the subcontractors return the finished goods to you, you record the returns in the challan, to make sure that all are returned within the allotted time limit.

If the finished goods returned to you by the subcontractor are of substandard quality, you can also create a subcontracting challan from the returns order.

Structure The challan consists of a header and line items. The header, in addition to organizational data, allows you to enter:

• Preprinted number

• Additional data

• Identification marks

• Nature of processing

Furthermore, each challan has two numbers, an internal document number and a challan number, which the system assigns to the challan when you save it. From a business perspective, this is the most important number. Each challan also has a status, which shows you what stage in processing it is at.

The line items are copied across from the transfer posting when you create the challan. You can also enter additional data for each item.


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Processing Subcontracting Challans To access the individual functions shown in the table, from the SAP Easy Access screen, choose Logistics → Procurement → Subcontracting → Subcontracting Challans → … Function Follow-on menu path What you should know

Create a challan → Create. See Creating Subcontracting Challans [Page 133]

Print a challan → Create or → Change.

See Printing Subcontracting Challans [Page 136].

Change a challan → Change. You can only change challans with the status Posted.

Furthermore, you can only change data that relates to the challan printout. If you need to change accounting data, you must delete the challan and create a new one.

Cancel a challan → Change → . To save the cancellation, save the challan.

The challan status changes to Canceled.

Complete a challan

→ Complete/Reverse/Recredit

See Completing Subcontracting Challans [Page 140].

The challan status changes to Completed.

Reverse the excise duty credit


See Reversing Excise Duty Credit [Page 141].

The challan status changes to Reversed.

Recredit the excise duty


See Recrediting the CENVAT Account [Page 142].

The challan status changes to Reversed/completed.

Reconcile quantities

→ Reconcile Quantity See Reconciling Quantities [Page 137].

The challan status changes to Assigned/fully reconciled.

Display a list of challans

→ Challan Listing See List of Subcontracting Challans [Page 145].


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Creating Subcontracting Challans 1. From the SAP Easy Access screen, choose from the SAP Easy Access screen, choose

Logistics → Procurement → Subcontracting → Subcontracting Challans → Create.

2. Enter the reference transfer posting document, the document year, the serial group, and the excise group, and choose .

The system calculates the excise duty [Page 134] for the materials.

3. Specify which excise invoice [Page 135] the materials are from.

Once you have assigned the materials to an invoice, the system reads how much excise duty you have paid on the materials that you are sending.

4. If you want to print the challan straight away, select Print immediately on the Posting tab.

5. Change the posting date, if necessary.

This is the date from which the system calculates the return due date. It is set by default to the day’s date. However, you can change it you need to.

6. Save the document.


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Calculation of Excise Duty on Materials for Subcontractors Use When you send materials to a subcontractor for processing, you have to determine how much excise duty is applicable. This of course depends on the base value. The different amounts of excise duty (basic excise duty, special excise duty, and additional excise duty) are printed on the subcontracting challan.

Thus, when you create a subcontracting challan, the system determines the base excise value of each material and the amount of excise due automatically.

Prerequisites You have maintained the materials’ excise data (see Material Master (Excise Data) [Page 113]).

Features When determining the excise duty for materials purchased from third parties, the SAP System uses the excise rate from the latest excise invoice for the material received from the vendor.

Where materials manufactured in-house are concerned, the SAP System determines the taxable value of the material on the basis of the following information, in this order:

1. The latest excise invoice value for the material

2. The material's assessable value (that is, the price determined by an external auditor)

3. The material’s net dealer price (the material’s list price; the price at which you sell the material to customers)


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Selecting Excise Invoices 1. Select the material that you want to assign the excise invoices to and choose Excise invoice

selection.

2. Select the excise invoice or invoices.

3. Choose .


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Printing Subcontracting Challans You can print a subcontracting challan when you create it, or if you need to print it later on, in the change transaction.

1. From the SAP Easy Access screen, choose Logistics → Procurement → Subcontracting → Subcontracting Challans → Change.

2. On the Posting tab, select Print immediately.

3. Enter the number of the preprinted stationery, if necessary.

This number will be saved for future reference.

4. Save the challan.


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Reconciling Quantities Use Once a subcontractor has processed your materials and returned them to you, you match the items in the challan against those that have been returned.

Prerequisites You have posted the goods receipt (or any other material document) for the returned goods.

Procedure 1. From the SAP Easy Access screen, choose Logistics → Procurement → Subcontracting →

Subcontracting Challans → Reconcile Quantity.

2. Enter the following data:

− In the Material doc. and Mat. doc. year fields, enter the number of the goods receipt document and the year in which it was created.

− In the table below, enter the challan numbers and the years in which they were created.

If the material document is a goods receipt document with movement type 101, you can enter the challans that were not captured when the goods receipt was posted. However, if all the relevant challans were entered during goods receipt, they need not be entered here

3. Choose Reconcile.

A new screen appears. At the top is the information about the goods receipt (or other document); at the bottom is the information from the challans that you have entered.

4. Specify which challans the materials in the goods receipt originated from:

− If you have sent a subcontractor a number of different challans, all containing the same material, you can automatically specify that the materials should come from the oldest challans first, by choosing .

− Otherwise, for each challan, enter manually the quantity of materials has been returned, and choose to refresh the display.

5. Once you have accounted for all the materials in the goods receipt, save the challan.

Result The system changes the challans' status as follows:

• If you have accounted for all of the materials in a challan, the system sets its status to Fully reconciled. In this case, you can complete the challan [Page 140].

• If you have accounted for only some of the materials, it sets the status to Assigned. In this case, you must assign the remaining quantity of materials to another goods receipt later on.

• Scrap generated is assigned to a challan only if the percentage component scrap is specified in the bill of material for the parent material and this bill of material is assigned to the subcontracting purchase order.


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Deleting Assignments Use You follow this procedure if you have assigned the wrong challan to a goods receipt or other material document (see Reconciling Quantities [Page 137]).


• Assigned the challans to a goods receipts document

• Assigned the challans to a material document in quantity reconciliation

• Not completed or reversed the challans

Procedure 1. From the SAP Easy Access screen, choose Logistics → Procurement → Subcontracting →

Subcontracting Challans → Reconcile Quantity → Delete Assignments.

2. Choose Delete Assignment.

Result The assignments will be deleted. The challans will no longer be related to the material document until another assignment takes place between the same.


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Completion, Reversal, and Recredit Use You use this function to close a challan completely after all the materials have been accounted for. If a challan's return date has elapsed, and thus your right to the CENVAT credit, you use it to reverse the excise credit – or, should your subcontractor return the goods subsequently, to recredit the excise credit.

To access the function, from the SAP Easy Access screen, choose Logistics → Procurement → Subcontracting → Subcontracting Challans → Complete/Reverse/Recredit.

Features Exactly which function is available depends on the challan's status as follows:

Completion You can complete [Page 140] a challan if you have accounted for all of the materials in it (and it thus has the status Fully reconciled). This prevents you from making any more changes to it.

Reversal of CENVAT Credit If the allotted number of days elapses and the subcontractor has not returned some or any of the materials in the challan (status: Posted or Assigned), you must reverse the excise duty [Page 141] that you have credited to your CENVAT account. The scrap has to be returned by the subcontractor. If it is not returned, the excise duty for the scrap has to be reversed.

This function sets the status to Reversed. From here, you have two options:

• If you do note expect the subcontractor to return the materials, you can complete it [Page 140].

• If you do expect the subcontractor to return at least some of the materials, you can leave it as it is for the time being. Then, when the materials arrive, you can recredit the excise duty to the account (see below).

Recredit If a subcontractor returns materials after the return date, you can recredit [Page 142] the excise duty credit that you have reversed.


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Completing Subcontracting Challans 1. From the SAP Easy Access screen, choose Logistics → Procurement → Subcontracting →

Subcontracting Challans → Complete/Reverse/Recredit.

2. Enter the challan number and year.

3. Choose .

4. Select Complete challan.



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Reversing Excise Duty Credit 6. From the SAP Easy Access screen, choose Logistics → Procurement → Subcontracting →



8. Choose .

9. Select Reverse challan.



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Recrediting the CENVAT Account 1. From the SAP Easy Access screen, choose Logistics → Procurement → Subcontracting →



3. Choose .

4. Select either of the following options:

− Take recredit for receipts

This leaves the challan open for further goods receipts.

− Take recredit if any and complete challan

This completes the challan and writes off finally any CENVAT credit that you might have been able to claim.



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Making Transfer Postings Use You follow this procedure to create transfer postings, with or without reference to a purchase order.

Prerequisites In the standard Implementation Guide (IMG), you have made the appropriate settings under Materials Management → Inventory Management and Physical Inventory → Goods Issue/Transfer Postings → Define Screen Layout.

In the Change View Field Selection Overview, select movement type 541 and mark the Purchase order field as an optional entry.

Procedure Follow the standard procedure [Ext.] (see the section Providing Components from Inventory Management). Note that the movement type supplied with the standard system for transfer postings to stock for subcontractors is 541.


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Posting Goods Receipts from Subcontractors Use When you post a goods receipt for a purchase order, you follow the standard procedure, but there are a couple of extra dialog boxes in which you can enter the challan data, if any is available. If the delivery note does not show the challan numbers, you can ignore the prompts to enter them.

Procedure 1. On the initial selection screen, enter data as follows:

− Movement type

In the standard system, enter 101 for goods receipts for purchase orders into warehouse.

− Purchase order

− Plant

− Storage location

2. Choose Adopt + details.

A dialog box appears, which is not relevant for subcontracting.

3. Choose .

Another dialog box appears.

4. Enter the challans from which the materials were supplied, if available.

5. Choose .

6. Enter the challan numbers and the years that they were created.

7. Choose .



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List of Subcontracting Challans Use You use this report to create a list of subcontracting challans. Depending on what selection criteria you enter, you can use it for finding out:

• Which challans are still with the subcontractor and are due back the following week

• Which challans you can make a recredit for

• Which challans have been entered for a goods receipt, but not reconciled

• Which challans' reference documents have been canceled

• Annexure IV

Features To access the report, from the SAP Easy Access screen, choose, choose Logistics → Procurement → Subcontracting → Reports → Challan Listing.

Output The system displays a list of the subcontracting challans that meet your selection criteria. For more information about a particular challan, click it.


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Subcontracting Under Full Payment of Duty Purpose This procedure illustrates how you use the SAP System to send materials to your subcontractors for processing using normal excise invoices.

Prerequisites You have created a condition type for manually entering excise duty in the subcontract order. In the standard system, you can use condition type JEXC.

Process Flow 1. You create a subcontract order [Page 147] for the subcontractor’s services.

2. You create a transfer posting [Page 148] for the materials that you want to send to the subcontractor.

3. You create an outgoing excise invoice [Page 149] for the materials.

4. You send the materials to the subcontractor, together with the excise invoice.

5. The subcontractor processes the materials and returns them to you, together with another excise invoice.

6. The excise clerk captures the subcontractor’s excise invoice [Page 154], using the purchase order as the reference document.

7. The storeperson enters the goods receipt [Page 119].

8. The excise supervisor posts excise invoice [Page 162].

9. The accounts payable clerk posts the subcontractor’s invoice.


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Creating Subcontract Orders 1. From the SAP Easy Access screen, choose Logistics → Materials Management → Purchasing →

Purchase Order → Create → Vendor/Supplying Plant Known.

2. Set the order type to Standard PO.

3. In the Vendor field, enter the subcontractor.

4. Fill out the Org. data (Organizational data) tab.

5. In the item overview, enter the line items as described in the standard procedure [Ext.].

6. In the item details, on the Invoice tab:

− Select GR-based IV (Goods receipt-based invoice verification)

− Enter a zero-rate tax code

7. On the Conditions tab, enter the excise duty on the line item in the Condition value field for the manual excise value condition (in the standard system, condition type JEXC).

8. Save the subcontract order.


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Making Transfer Postings Use You follow this procedure to create transfer postings, with or without reference to a purchase order.

Prerequisites In the standard Implementation Guide (IMG), you have made the appropriate settings under Materials Management → Inventory Management and Physical Inventory → Goods Issue/Transfer Postings → Define Screen Layout.

In the Change View Field Selection Overview, select movement type 541 and mark the Purchase order field as an optional entry.

Procedure Follow the standard procedure [Ext.] (see the section Providing Components from Inventory Management). Note that the movement type supplied with the standard system for transfer postings to stock for subcontractors is 541.


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Creating Excise Invoices for Subcontractors Use To create an outgoing excise invoice for the subcontracting materials, follow the standard procedure [Page 221].

On the selection screen, in the Reference group box, enter the number of the transfer posting document as the reference document. The reference document type is MATD (Material document).


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Stock Transfer Purpose This process shows you how to order goods from another plant in your company, taking into account all of the excise regulations. For information about the standard procedure, see Two-Step Procedure – Plant [Ext.].

Prerequisites Before you can start, set up customer and master records for both plants as follows:

1. Create a customer master record for the issuing plant.

2. Create a vendor master record for the issuing plant, and enter customer account number in the Customer field on the Control screen.

3. Repeat steps 1 and 2 for the receiving plant.

4. Assign the plants to the customer master record in Customizing for Materials Management (MM), by choosing Purchasing → Purchase Order → Set Up Stock Transport Order → Plants.

Process Flow 1. You create a stock transport order, following the standard procedure [Ext.], and send the order to

the issuing plant.

2. The issuing plant has processes your order, and when it is ready to ship:

a. The storeperson at the issuing plant issues the goods using a transfer posting [Page 225].

b. The excise clerk there creates an excise invoice [Page 224]

c. The excise supervisor verifies and posts the excise invoice [Page 222].

It then sends the goods to you, together with the excise invoice.

3. Once the goods arrive, you follow the standard procedure for incoming excise invoices:

a. The excise clerk captures the excise invoice [Page 154], using the stock transport order as the reference document.

b. The storeperson enters the goods receipt [Page 119], again using the stock transport order as the reference document.

Alternatively, you can first enter the goods receipt and then capture the excise invoice.

4. The excise supervisor then posts the excise invoice [Page 162].


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Incoming Excise Invoices Use This transaction is mainly for use by excise clerks, so that they can capture incoming excise invoices [Page 154], and excise supervisors, who then post the excise invoices [Page 162] captured by the clerks.

To access the function, from the SAP Easy Access screen, choose Indirect Taxes → Procurement → Excise Invoice → Incoming Excise Invoices → Individual Processing → Capture/Display for excise clerks or Change/Display/Post/Cancel for excise supervisors.

Prerequisites You have made the Customizing settings, in the Country Version India Implementation Guide (CIN IMG), by choosing Logistics → Incoming Excise Invoices.

Integration The function is an integral part of the procurement process in CIN and contains information relating to material movements and taxes. As such it is integrated with Materials Management (MM) and Financial Accounting (FI).

Any entries that the system makes in relation to an incoming excise invoice, in Parts I and II of the excise registers RG 23 A and C, are also shown in the transaction.

Features The screen consists of the following areas:

Detail data

Top line Header data

Item overview

Top Line This is where you specify what document you want to process. When you capture an incoming excise invoice, you specify the reference document in this area. When you process an excise invoice that you have already captured, you enter the excise invoice number.

Header Data This area consists of four tabs, each with information that relates to the whole of the excise document.


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Tab Use

Excise invoice Basic header data that you would expect to find at the top of the excise invoice itself, such as the excise invoice number and the date.

Totals Total amounts of different types of excise duty in the excise invoices.

Miscellaneous Information about the manufacturer of the goods, if different from the vendor that sent you the goods, and about the manufacturer’s excise registration details.

You can also enter a serial number, if the excise invoice was printed on preprinted stationery, or a rejection code, if you need to reject the invoice.

Additional data Fields for any additional information that you might want to enter, according to your own requirements.

Part II Any entries in Part II of the excise registers RG 23A or RG 23C.

Note that this tab is not displayed if there are no Part II entries.

Item Overview This area lists all of the items in the excise invoice. To process an item, you click the item number and process it in the detail data , but you process the items in the detail data area.

Detail Data This area consists of seven tabs, each with information about a particular item.

Tab Use

Item Basic information about the material itself.

Quantities Information the quantity of goods in the excise invoice, and how much of this quantity have entries in Parts I and II of the excise registers.

Duty rates The rates of excise duty on the item.

Duty values The excise duty on the item, and how much of it has already been credited to the CENVAT accounts.

Reference documents

The other SAP documents associated with the item.

Additional data Fields for any additional information that you might want to enter, this time at item level.

Part I, Part II Again, any entries in Part II of the excise registers RG 23A or RG 23C.


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Reference Documents Use When you capture an incoming excise invoice, the first piece of information that you enter is the reference document [Ext.], in the top line.

Immediately you enter the reference document, the system copies all the appropriate header data and line items from it into the excise invoice, so that there is less typing for you to do and less likelihood of making errors.

By specifying the reference document, you also ensure that the excise invoice is properly integrated into the SAP document flow.

Features There are two scenarios where you might be sent an excise invoice:

• External procurement, where a vendor sends you some goods accompanied by an excise invoice

• Stock transport orders, where another of your business’s plants sends goods to your plant, again, accompanied by an excise invoice

Use in External Procurement In the external procurement process, there are several types of documents that you can use as a reference documents. You specify the document type in the top line.

If you have already posted a goods receipt for the deliver, use the goods receipt as the reference document in preference to any other documents related to the delivery.

If the goods were delivered as the result of a purchase order, contract, or scheduling agreement but you have not yet posted the goods receipt, use one of these documents.

When you use one of these documents, the system cross-checks all the data you enter in the excise invoice against the master data and transaction data already at its disposal.

Fewer Cross-Checks Alternatively, if you have a material document but for whatever reason you want fewer cross-checks, select Without Purchase Order and enter the material document number.

The system still copies the data from the material document, but the cross-checks are less stringent.

No Reference Documents Available If for any reason a vendor sends you a delivery and excise invoice for which you do not have any reference documents, you can still capture the excise invoice, but you have to do it manually, so select Without Purchase Order. Again, there are few cross-checks that the system can carry out.

For more information, see Captureing Excise Invoices Without Reference Documents [Page 159].

Use in Stock Transport Orders If your plant has created a stock transport order for materials to be sent from another plant, you select Stock Transport Order (see …).


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Capturing Excise Invoices Using Reference Documents Use You use this procedure to capture incoming excise invoices using a reference document.

Procedure 1. From the SAP Easy Access screen, choose Indirect Taxes → Procurement → Excise Invoice →

Incoming Excise Invoices → Individual Processing → Capture/Display.

2. Specify the reference documents [Page 155].

3. Edit the excise invoice header data [Page 156].

4. Remove any items from the item overview [Page 157] that you do not need.

5. Edit the items [Page 158].


If at any time you want to start over, choose .

Result The system:

• Creates the excise invoice and assigns it an internal excise invoice number [Ext.]

• Sets the document status (on the Excise invoice tab) to In process

The excise supervisor then has to post the excise invoice [Page 162] in a separate step.


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Specifying Reference Documents 1. In the top left-hand corner of the screen, in the top line, select Capture Excise Invoice.

2. In the next field, select the reference document type (for example, Goods Receipt or Purchase Order).

3. In the next field, enter the number of the reference document.

If you only want one of the line items from the reference document, enter the line item number in the following field. Otherwise, leave the field blank.

4. Choose .

The system copies the relevant header data and items from the reference document into the screen.

5. If you need to specify another reference document – for example, if you sent the vendor two separate purchase orders and it sent the ordered materials in one delivery with one excise invoice – repeat steps 1–4.

This only applies to purchase orders, scheduling agreements, and contracts.

The system copies the additional line items into the screen.


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Editing Header Data Use Once you have specified the reference documents, the next step in capturing the excise invoice is to edit the excise invoice header data on the screen to match what is printed on the excise invoice itself.

Much of the header data is copied automatically from the reference documents, but some information you will have to maintain manually.

Procedure 1. On the Excise invoice tab, enter the excise invoice number and date from the vendor’s excise

invoice.

2. If the materials were supplied by a different vendor than the one in the purchase order, enter the vendor in the Ship-from field on the Miscellaneous tab and choose .

The system changes the excise range, division, and ECC number accordingly.

This information shows who paid the excise duty on the materials. If your vendor has not manufactured the materials itself, but has purchased them from another business, it will be the latter who has paid the excise duty, not the vendor.

3. Choose Check to check the header data.

− If the data is in incomplete or incorrect, the system displays a list of the problems.

− If the data is all right, the traffic light on the Excise invoice tab turns green.


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Removing Items from the Item Overview Use When you specify the reference documents, the system automatically enters all the line items from the documents. However, there may be fewer items in the excise invoice than in the reference document. In that case, you have to remove the excess items from the overview.

Procedure 1. In the item overview, mark the line items that are in the excise invoice as OK.

2. Choose Delete.

The system removes all of the items that are not marked as OK.


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Editing Line Items Use Once you have specified the reference documents and have edited the line item overview, edit each line item to make sure that the information on the screen matches the information in the vendor’s excise invoice.

Procedure 1. In the item overview, click the number of the item that you want to edit.

The system displays the item in the detail data and grays it out in the overview so that you cannot edit it there.

2. In the detail data, check the quantities, duty rates, and duty values against the vendor’s excise invoice and adjust the information in the system to match it if necessary.

3. Select Item OK.

When you save the excise invoice, the system only saves the items that you have marked as OK.

4. To check the item data to make sure that the system accepts it, choose Check.


− If the data is all right, the item’s traffic light in the item overview turns green.


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Capturing Excise Invoices Without Reference Documents Use This procedure shows you how to capture an incoming excise invoice if you do not have any reference documents.

You can also follow this procedure if you do have a material document that you want to use as a reference document, but you want the system to cross-check the excise invoice data against other master data or transaction data less stringently than it normally would (for more information, see Reference Documents [Page 153]).

You commission a construction company build a new plant for you. The company purchases all the materials it needs to build the plant, deals with all of the invoices and most of the other paperwork, with the exception of the incoming excise invoices, which the law requires you to deal with yourself. The subcontractor sends you all excise invoices accordingly and you capture them in the system without any reference documents.

Procedure 1. From the SAP Easy Access screen, choose SAP Easy Access screen, choose Indirect Taxes →

Procurement → Excise Invoice → Incoming Excise Invoices → Individual Processing → Capture/Display.

2. In the top line:

a. Select Capture Excise Invoice.

b. Select Without Purchase Order.

c. If you have a material document, enter the material document number and choose . If you do not have any reference documents, leave the field blank.

3. Enter the header data [Page 160].

4. Enter the line items [Page 161].


Result Once you have saved the excise invoice, you treat it as you would any other excise invoice.


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Entering Header Data 1. On the Excise invoice tab:

− Copy the information from the vendor’s excise invoice into the following fields:

• Excise invoice number

• Excise invoice date

• Vendor

− Fill out the Excise group field.

2. On the Miscellaneous tab, enter the following data:

− If the vendor who sent you the excise did not manufacture the goods itself, but obtained them from a different manufacturer, enter the manufacturer in the Ship-from field and choose Enter.

− Change the excise range, excise division, and ECC number if they are incorrect.

3. Choose Check to check the header data.


− If the data is all right, the traffic light on the Excise invoice tab turns green.


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Entering Line Items 1. On the Item tab, enter the following data:

− Material

− Plant

2. Choose .

The system:

− Adds the line item to the item overview

− Fills out the Material type, Description, and Chapter ID fields using the information from the material master record

If you have not maintained a material master record for this material, no information will be displayed, but you can enter it here manually.

3. On the Quantities tab:

− Enter the item quantity and change the unit of measure, if necessary

− Enter the quantity of goods still available for CENVAT credit

4. On the Duty values tab, enter the following data:

− Excise base amount

− Excise amounts

5. To check the item data to make sure that the system accepts it, choose Check.


− If the data is all right, the item’s traffic light in the item overview turns green.

6. To add a new item, choose and repeat steps 1–5.


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Posting Excise Invoices Use Once the excise clerk has captured the excise invoice, the excise supervisor checks it to make sure that the data has been entered correctly, and then posts the excise invoice.

If, however, there is a problem with the excise invoice and you need to reject it, see Rejection of Excise Invoices [Page 164].


Incoming Excise Invoices → Individual Processing → Change/Display/Post/Cancel.

2. In the top line:

a. Select Post CENVAT.

b. Select Vendor Excise Invoice.

c. Enter the excise invoice number.

3. Choose .

4. Check the information in the system against the vendor’s excise invoice and adjust the information in the system to match.

You must pay particular attention to the excise duty that is to be credited to the CENVAT accounts.

5. To check the CENVAT postings, choose Simulate CENVAT.

A dialog box appears with a list of the postings that will be made. The excise duty accounts will be debited, and the CENVAT clearing account credited.


6. To post the excise invoice and make the CENVAT postings, choose Post CENVAT.

You can also save your changes without making any CENVAT postings by choosing .

Result The system:

• Creates an accounting document to make the appropriate CENVAT postings

• Creates the corresponding entries in Part II of the appropriate excise register


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Long Texts Use When you capture an excise invoice, you can enter notes relating to the excise invoice – for your own reference only – as long texts.

Activities Customizing You define what sorts of long texts that you want to be able to enter in the Country Version India Implementation Guide, by choosing Text Determination → Long Texts.

You could define one long text for information about the bill of lading, and one for information about the Part II entry.

Day-to-Day Activities When you capture an excise invoice and you want to enter a long text for it, on the Additional data tab, choose Long text.

In the dialog box, double-click the sort of long text that you want to enter, and type the text in the field next to it.


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Rejection of Excise Invoices Use If a vendor sends you an excise invoice that as it stands is unacceptable – for example, if it is illegible or some of the data is missing – you still post the excise invoice, but you assign it a rejection code.

As well as indicating that the excise invoice has been rejected, and for what reason, the rejection codes also control which CENVAT accounts the system posts the excise duty to.

Features When you assign a rejection code to an excise invoice, you may still want to credit the excise duty to the CENVAT account immediately. In this case, the system creates an accounting document with the normal CENVAT postings.

For more information about the procedure, see Rejecting Excise Invoices [Page 165].

On the other hand, you may want to wait until you take the CENVAT credit. In this case, when you capture the excise invoice, the system debits the excise duty to the CENVAT on hold account and credits it to the CENVAT clearing account. Then, when the vendor has provided you with the information you need, you can post the excise on the excise invoice to the CENVAT account.

For more information about this procedure, see Rejecting Excise Invoices with CENVAT on Hold [Page 166] and Posting CENVAT on Rejected Excise Invoices [Page 167].


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Rejecting Excise Invoices Use Follow this procedure to reject an excise invoice, if you still want to post the excise duty to the normal accounts.



2. In the top line:


b. Select Excise Invoice Number.


3. Choose .

4. On the Miscellaneous tab, enter a rejection code that posts the excise duty to the normal accounts.


A dialog box appears, showing you that the system will debit the excise duty to the excise duty accounts and credit it to the CENVAT clearing account.


6. Choose Post CENVAT.

Result The system posts the excise invoice as normal. It:

• Posts the excise duty to the appropriate accounts

• Creates the appropriate entries in Part II of register RG 23A or RG 23C

• Changes the document status (on the Excise invoice tab) to Posted


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Rejecting Excise Invoices with CENVAT on Hold Use Follow this procedure to reject an excise invoice and post the excise duty to a CENVAT on hold account, pending the receipt of more information.



2. In the top line:




3. Choose .

4. On the Miscellaneous tab, enter a rejection code that posts the excise duty to a CENVAT on hold account.


A dialog box appears, showing you that the system will debit the excise duty to the CENVAT on hold account and credit it to the CENVAT clearing account.



Result The system creates an accounting document to posts the excise to the appropriate accounts, but does not create any entries in Part II of registers RG 23A or RG 23C.

If you display the excise invoice, you see:

• On the Excise invoice tab, the document status is In process

• On the Miscellaneous tab, there is a link to the accounting document

Once the vendor has provided you with the information you need, you can post the CENVAT on the rejected excise invoice [Page 167].


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Posting CENVAT on Rejected Excise Invoices Use Follow this procedure if you have an excise invoice that you have rejected, with the CENVAT credit on hold, and you now want to take the CENVAT credit.



2. In the top line:




3. Choose .

4. On the Miscellaneous tab, delete the rejection code.


A dialog box appears, showing you what CENVAT postings will be made.

The system will credit the CENVAT on hold account, and debit the appropriate excise duty accounts.



Result The system:

• Posts the CENVAT credit as normal

• Creates the corresponding entries in Part II of the appropriate excise registers.


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Reversal of CENVAT Postings Purpose Assume you have 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, that means you are no longer entitled to the CENVAT credit.

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

Process Flow 1. You reverse the goods receipt [Page 169].

The system:

− Creates a reversal document to cancel the goods receipt

− 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. You reverse the CENVAT posting [Page 170] on the excise invoice.

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 your plant does not allow multiple goods receipts per excise invoice, you must also cancel the excise invoice [Page 171].

The system changes the excise invoice status to Canceled.

If, however, you do allow multiple goods receipts per excise invoice, you do not have to cancel it. If you want, you can leave the excise invoice as it stands. Then, if you receive another delivery of goods for this excise invoice, enter the excise invoice number when you post the goods receipt.


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Reversing Goods Receipts 1. From the SAP Easy Access screen, choose Logistics → Materials Management → Inventory

Management → Goods Movement → Goods Movement (MIGO).

2. In the top line:

a. Select Cancellation.

b. Select Material document.

c. Enter the number of the goods receipt that you want to cancel

d. Choose .

3. Flag all of the line items as OK.

4. Save the reversal document.


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Reversing CENVAT Postings 1. From the SAP Easy Access screen, choose Indirect Taxes → Procurement → Excise Invoice →


2. In the top line:




d. Choose .


A dialog box appears, showing which postings the system will make to reverse the CENVAT.




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Canceling Excise Invoices 1. From the SAP Easy Access screen, choose Indirect Taxes → Procurement → Excise Invoice →


2. In the top line:

a. Select Cancel.



d. Choose .



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Multiple Goods Receipts for a Single Excise Invoice Use Under normal circumstances, your vendors send you one excise invoice per delivery. Sometimes one excise invoice covers more than one delivery, for example, if you order a large quantity of oil and the vendor requires several trips to complete the delivery.

Prerequisites You have specified the maximum number of goods receipts per excise invoice per excise group, and whether you want multiple goods receipts with single or multiple CENVAT credits. You do so in the CIN Implementation Guide (IMG), by choosing Global Settings → Excise Group.

You have also specified which materials multiple goods receipts are allowed for. If you do not, the system will display a warning for each material when you come to post the excise invoice (see under Material and Chapter ID Combination in Material Master (Excise Data) [Page 113]).

Features The SAP System allows you to control:

• Which of your excise groups allow multiple goods receipts (see above)

• Which materials you allow multiple goods receipts for (see above)

• When to credit the excise duty on the goods to your CENVAT account, either:

− As soon as the accounts supervisor has verified and posted the excise invoice, irrespective of whether the delivery has been made in full

− Whether to wait until the full quantity has been delivered

You have ordered a consignment of INR 800,000 worth of fuel from a vendor with excise duty at INR 80,000. The vendor sends the fuel in two batches. When the first batch arrives, the storeperson posts the goods receipt for INR 400,000 (plus INR 40,000 of duty); the excise supervisor does not post the excise invoice for the quantity delivered. When the second batch arrives, you can credit INR 80,000 to your CENVAT account.

Activities Working with multiple goods receipts entails the following activities:

• Posting goods receipts [Page 119]


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When you post a second (or third, or fourth) goods receipt for an excise invoice, the system prompts you to confirm that this is correct.

• Posting excise invoices [Page 162]

When you come to post an excise invoice, the system displays all the receipts created for the invoice. If at material level multiple credit is disallowed, the system prompts you to confirm that you want to accept the credit. Otherwise, you can credit the CENVAT account for each receipt separately.


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Transfer of CENVAT Credit on Capital Goods Use You use this report to display a list of the vendor excise invoices where the vendor has levied excise duty but you have not posted it (in full) to your CENVAT account.

This is particularly useful in the case of capital goods [Page 33], in order to find out how much credit remains from previous years.

Features To access the report, from the SAP Easy Access screen, choose Indirect Taxes → Procurement → Excise Invoice → Reports → Balance Credit for Capital Goods.

Selection On the selection screen, enter:


• Data of the documents that you want

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

• 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 you want and choose Transfer credit. If you 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 [Page 175].


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Excise Registers Use The excise authorities require you to maintain a number of registers relating to excise duty. They have to be printed out monthly and shown to the authorities in the event of an audit. The SAP System makes all the entries for these registers automatically, and you can prepare copies of them [Page 177] as and when necessary. Alternatively, you can download the data [Page 184] for processing by non-SAP software.

Features The SAP System handles the following excise registers:

• Register RG 23 (A and C), Part I

In Part I of register RG 23A, you record purchases of materials that you have paid excise duty on. Each entry shows the quantity of the materials purchased and the numbers of the excise invoices sent with the materials.

The system automatically makes an entry in this register when you post goods receipts [Page 119].

• Register RG 23 (A and C), Part II

Part II of these registers shows how much excise duty you have credited and debited to your CENVAT accounts. The system automatically creates an entry here when you post the CENVAT on an excise invoice [Page 162].

Register RG 23A, which was reserved for raw materials, and register RG 23C, which was for capital goods, were combined into one register in 2000. The system still distinguishes between the two, however, to allow for the possibility of the old system returning.

• Personal Ledger Account (PLA)

This is the bank account from which you transfer any money owing to the excise authorities.

• Register RG 23D

This is a register that is kept by depots (see Sales from Depots [Page 213]). It shows all of the depot's goods receipts; the details of the incoming excise invoices; and the goods issues from the depot.

• Register RG 1


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This register shows the production information relating to all finished goods on which excise is paid. It shows all the issues of finished goods from a factory into a store for excisable finished goods; and any sales of these goods.

• Register RT-12

This is a monthly report that summarizes the CENVAT and PLA information from the other registers.

Activities For information about how to create the registers, see Creation of Excise Registers [Page 177].


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Creation of Excise Registers Purpose You follow this procedure to create the excise registers.

Process Flow 1. You update register RG 1 and the Part I registers [Page 178] daily.

This report updates any missing data for the RG 1 register, and Part I of the RG 23A and RG 23C registers. Its main purpose is to update the issue information in the Part I register, which is not otherwise tracked by the system.

2. When you need to submit the registers, you run the Data Extraction [Page 181] report, and the system saves the data to an internal table.

3. You run the Register Printout [Page 183] report, which reads the data from this table and prints it out.


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Update of RG 1 and Part I Registers Use You use this report to update the information in the following registers:

• RG 1

• RG 23A, Part I

• RG 23C, Part I

This report only creates register entries for goods movements that have not already been entered. It does not create duplicate entries.

You cannot print or display these registers using this report. It is solely for the purpose of updating the registers. Instead, to download the registers, use the Download Register Data [Page 184] report

Prerequisites You have specified in the material master data [Page 113] which materials are to be entered in register RG 1.

For each of these materials, you have maintained the material form in table J_2IRG1BAL as below. Do not make any entries in fields that are not listed below:

Field Field entries

EXGRP Material’s excise group

DATUM Date from which RG1 report is required, normally the date of going live

MATNR Material

FORM Enter P (Packed) or L (Loose). Do not leave this field blank.

WERKS Leave this field blank.

OP FN UOM

OP BN UOM

CB FN UOM

Leave these fields blank.

All quantities in this table are updated in the base unit of measure of the material.

USNAM User ID of the person filling out the table.

CPUDT Date of entry


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CPUTM Time of entry

Features To access the report, from the SAP Easy Access screen, choose Indirect Taxes → Registers → Excise Tax → Update RG 23A/C Issues and RG 1.

Selection On the selection screen, you specify:

• Which documents you want to cover:

− Enter general organizational details in the Company details group box.

− Enter details about the documents that you want to include in the register, in the Document header and Document details group boxes.

• Which register you want to update, in the Registers group box

• Whether you want to run the program in batch mode

You can also check what date the data was last extracted.

Output The system displays a list of material documents that have not yet been entered in the register.

1. Select the documents that you want to add to the register.

2. To check if there is enough stock in the specific excise group for the register for issues or receipts, select the line items and choose Simulate.

We recommend that you use this option before proceeding; it will show the line items that can be updated in the register.

Issues and receipts are handled separately based on the following register and classification code combinations:

Register Type Goods issues Goods receipts

IIM ROP

IPD

RG 23A

IWD

IIM ROP

IPD

RG 23C

IWD

IDH RMA

IDE ROP

IWE

IWT

RG 1

IWO

− Lines that can be updated in the register will be shown with a green traffic light, while those which are not eligible (for example, if there is not enough stock on hand) will be marked with a red traffic light.

− You can reselect the required line items and repeat the Simulate process.

3. Select the line items you want and choose Register entry.

The system updates the Part I or RG 1 tables with the material documents.


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For RG 1 issues to sales, wherever there is an excise invoice it is picked up and used for RG 1 updating.

The same option can be used for creating entries in RG 23A or RG 23C Part I registers. While creating entries in the register, system will pick up only those material documents for which Part I posting has not been done yet.


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Data Extraction Use You use this report to extract the data in order to create the excise registers (see Creation of Excise Registers [Page 177]).

Prerequisites You have entered the closing balance of the RG23A Part II, RG23C Part II, and PLA registers in table J_2IACCBAL, as they were on the day prior to your extracting the register data.

Assume you want the extract the registers from 1 January 2001. You have to maintain the closing balances in the table J_2IACCBAL as on 31 December 2000.

You make the entries in table J_2IACCBAL as described below:

Field Entry

EXGRP Excise group of the registers

REGISTER Type of register

Make an entry for each of the following:

• RG23ABED

• RG23ASED

• RG23AAED

• RG23CBED

• RG23CSED

• RG23CAED

• PLABED

• PLASED

• PLAAED

• PLACESS

DATUM Date of the closing balance

WERKS Leave this field blank


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OP BAL Leave this field blank

CL BAL Closing balance in the register

EXAMT Leave this field blank

EXIND Leave this field blank

USNAM User ID of the person making the entries

CPUDT Date of entry

CPUTM Time of entry

Features To access the report, from the SAP Easy Access screen, choose Indirect Tax → Registers → Excise Tax → Extract.

Selection On the selection screen, enter data as follows:

• If you select All registers, the system will create an extract for all registers. If you only want to create an extract for specific registers, select Select any register and then the registers that you want.

• If you want to find out when an extract was last created, select Last extracted dates. The system then displays the information in a dialog box.

Output The system extracts the data. You can now print it out using the Register Printout [Page 183] report.


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Register Printout Use You use this report to print out your excise registers.

Prerequisites Before you can print a register, you must have extracted the data [Page 181].

Features To access the report, from the SAP Easy Access screen, choose Indirect Tax → Registers → Excise Tax → Print Utility Program.

Selection On the first selection screen, you specify which excise register you want.

On the second selection screen, you specify:

• Which excise group and plant are to be covered

• Which period of time is to be covered

• Whether you want the debit entries to the accounts to be shown individually or consolidated for each day

Output The system prints out the registers.


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Download Register Data Use You use this report to download data from the registers listed below onto your hard drive. The information is saved in flat file format and can then be processed by non-SAP software to produce registers. This solution is thus an alternative to that described under Creation of Excise Registers [Page 177].

This report covers the following registers:

• RG 1

• RG 23 A and RG 23 C (Parts I and II)

• PLA

• Plant excise details

You can only download data once.

Prerequisites Before you can download the data for registers RG 1 and RG 23, you must have updated them (see Update of RG 1 and Part I Registers [Page 178]).

Features To access the report, from the SAP Easy Access screen, choose Indirect Tax → Registers → Excise Tax → Data Download.

Selection On the selection screen, specify:

• Which data you want to download (in the Register to be downloaded group box)

• Which documents are to be included (by document date and excise group)

• The location and name of the file that you want to save the information in (in the File name field)

Output The system saves the data in a file on your hard disk. For information about how the files are structured, see:

• RG 1 [Page 192]


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• RG 23A and C, Part I [Page 186] and Part II [Page 187]

• RG 23D [Page 190]

• Plant excise details [Page 191]


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Data Structure of Part I Definition The table below shows the data structure of the file that the system creates when you download the data from Part I.

Structure Field Length Use

Register

A RG23A

REGTYP 1

C RG23C

TRNTYP 4 Transaction type (GRPO = goods receipt)

EXGRP 2 Excise group

SNO 10 Part I serial number

SYEAR 4 Year of serial number

PDATE 8 Posting date

MAKTX 40 Material description

MENGE 13 Quantity

MEINS 3 Unit

EXNUM 10 Excise invoice number

EXDAT 8 Excise invoice date

NAME1 35 Vendor name

ORT01 35 City

PSTLZ 10 Pin code

EXCCD 20 Excise code number of vendor

EXCRN 20 Excise registration number of vendor

EXCRG 40 Excise range number

EXCDI 20 Division number

EXCCO 20 Excise collectorate of vendor

CHAPID 12 Chapter ID

P2NO 10 Corresponding Part II entry number

RISIND 1 Receipt/issue indicator

Entry status

U Undeclared material

STATUS 1

D Deleted item

MBLNR 10 Material document number

MJAHR 4 Material document year

BWART 3 Movement type


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Data Structure of Part II Definition The table below shows the data structure of the file that the system creates when you download the data from Part II.

In case of Part II entries for debit and credit (except for capital goods), if the excise invoice contains multiple chapter IDs, then the excise value per chapter ID is shown in the lines immediately following the Part II entry. These entries have the same Part II serial number. Only the fields REGTYP, TRNTYP, EXGRP, SNO, SYEAR, EXNUM, EXDAT, BED, SED, AED, CESS, CURR, and CHAPID will have valid values.

In case of the Part II credit entries for capital goods, after the Part II entry, the excise amount is shown per excise invoice. These entries have the same Part II serial number. Only the fields REGTYP, TRNTYP, EXGRP, SNO, SYEAR, EXNUM, NAME1, ORT01, PSTLZ, BED, SED, AED, CESS, CURR will have valid values.


Register type

A RG23A

C RG23C

REGTYP 1

P PLA

Transaction type

57CM 57F4 completion

57FC 57F4 subcontractor goods issue

57NR Non receipt of 57F4

CAPE Capital goods

CEIV Canceling the generated excise invoice

TRNTYP 4

DIEX Differential excise posting


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DLFC Factory sale and stock transfer

GRPO Goods receipt (raw material)

MRDY Reversal without reference

MRRD Reversal in case of consumption other than production

MRWO CENVAT reversal for write of cases

TR6C PLA account adjustment through TR6 challan

OTHR Excise paid on other movements

EWPO Excise invoice without PO


SNO 10 Part II serial number

SYEAR 4 Year of the serial number

PDATE 8 Posting date

EXNUM 10 Excise invoice number

EXDAT 8 Excise invoice date

NAME1 35 Vendor/customer/subcontractor name

ORT01 35 City

PSTLZ 10 Pin code

EXCCD 20 Excise code number of vendor/customer/subcontractor

EXCRN 20 Excise registration number of vendor/customer/subcontractor

EXCRG 40 Excise range number (in case of credit entries)

EXCDI 20 Division number (in case of credit entries)

EXCCO 20 Excise collectorate of vendor/customer/subcontractor

BED 19 BED

SED 19 SED

AED 19 AED

CESS 19 CESS

CURR 3 Currency

CHAPID 12 Chapter id

P1NO 10 Corresponding part I entry number (in case of credit entries)

PREPRN 10 Preprinted excise invoice number

CVDIND 1 CVD indicator (X = CVD)

Export indicator in sales

Blank Local sale

B Export under bond

EXPIND 1

D Deemed export


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N Export without bond

Capital goods indicator

A Assets

T Tools

CAPIND 1

C Consumable

(Capital goods only) Field use depends on material type:

Assets Installation certificate number

Consumable Intimation document number

CERTNO 20

Tools Intimation document number

CERTDT 8 Intimation/certificate date (capital goods only)

ANLN1 12 Asset number (for capital goods: assets only)

REMARKS 50 Remarks

PROCES 50 Process for subcontracting challan

Status

Space Normal

STATUS 1

R Reversed

RDOC1 10 Reference document number

RYEAR1 4 Reference document year

LIFNR 10 Vendor number

MBLNR 10 Material document number

MJAHR 4 Material document year


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Data Structure of RG 23D Definition The table below shows the data structure of the file that the system creates when you download the data from RG 23D.


Receipt/issue indicator

I Issue

INDCTR 1

R Receipt

EXNUM 10 Supplier's excise invoice number

EXDAT 8 Supplier's excise invoice date

NAME1 35 Vendor/consignee name

ORT01 35 City of vendor/consignee

PSTLZ 10 Pin code

EXCCD 20 Excise code number

EXCRN 20 Excise registration number



EXCCO 20 Excise collectorate


MENGE 13 Quantity

MEINS 3 Unit

CHAPID 12 Chapter ID

BED 19 BED

SED 19 SED

AED 19 AED

CURR 3 Currency

VBELN 10 Invoice (delivery document)

PDATE 8 Invoice date

NAME1B 35 Name of buyer

ORT01B 35 City of buyer

PSTLZB 10 PIN code of the buyer


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Data Structure of Plant Master Data Definition The table below shows the data structure of the file that the system creates when you download the plant master data.


WERKS 4 Plant code

NAME1 30 Plant name 1

NAME2 30 Plant name 2

STRAS 30 Street and house number

PFACH 10 Post office box

PSTLZ 10 Postal code

ORT01 25 City

LAND1 3 Country

EXCCD 20 Excise code number

EXCRN 20 Excise registration number



EXCCO 20 Excise collectorate


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Data Structure of RG 1 Definition The table below shows the data structure of the file that the system creates when you download the data from RG 1.


MANDT 3 Client


SYEAR 4 Year of the serial number

SERIALN 10 RG 1 serial number

MBLNR 10 Number of a material document

MJAHR 4 Year of material document

ZEILE 4 Item in material document

BWART 3 Movement type (inventory)

MATNR 18 Material number

MENGE 7 Quantity

MEINS 3 Base unit of measure


RISIND 1 Receipt/issue indicator

DOWNL 1 Download indicator

DECLRD 1 Item declared for excise

EXPIND 1 Export type

REASON 40 Reason for movement

RDOC1 10 Reference document 1

RYEAR1 4 Reference year 1

RIND1 1 Reference document type 1

BEDRATE 3 Basic excise duty rate

AEDRATE 3 Additional excise duty rate

SEDRATE 3 Special excise duty rate

EXCUR 5 Currency

EXBAS 7 Base value for excise calculation

EXBED 7 Basic excise duty

EXAED 7 Additional excise duty

EXSED 7 Special excise duty

CESS 7 Cess amount

STATUS 1 Register entry status

USNAM 12 Created by


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CPUDT 8 Document entry date

CPUTM 6 Time of entry

AEDAT 8 Changed on

AENAM 12 Changed by


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Monthly Return Use The central excise authorities have by vide notification no: 2000-(N.T) dated 28th April, 2000, prescribed the form of monthly return under rule 57AE of the central Excise Rules, 1944.

The SAP System offers you a report with which you can prepare the necessary printouts. It covers both of the following:

• Annexure

This is a list of all the invoices and bills of entry for which you have made a Part II credit posting over the past month. For each document, it shows the information required by the authorities.

• Abstract

This is a summary of the excise information from the annexure.

Prerequisites You have maintained the vendor types in the vendor master data [Page 115], so that they can be are shown on the list.

Features To access the report, from the SAP Easy Access screen, choose Indirect Taxes → Registers → Excise Tax → CENVAT Register.

Selection On the selection screen, enter data as follows:


• Posting dates of the documents to be covered

• Whether you want to print the annexure or the abstract

If you want to print the annexure, you must also specify whether the report is required for inputs or for capital goods. If you want to print the abstract, the details are printed for both inputs and capital goods.


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Sales and Distribution (SD) Purpose Country Version India (CIN) contains a number of enhancements to standard Sales and Distribution (SD) functions that allow you to handle local requirements, in particular excise duty.

Features In Country Version India, (CIN), this component handles sales processes as found in India. In addition to the generic functions, it allows you to:

• Handle CENVAT in your sales processes

The system calculates excise on your sales and creates excise invoices as required and makes the appropriate postings to your CENVAT accounts.

It covers sales from factories, sales from depots, and offers functions for other types of goods movements; it also covers sales to export-oriented units and export sales.

• Record concessional and exemption forms sent to you by your customers

• Make adjustment postings to your CENVAT accounts


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Excise Invoice (Outgoing) Definition The document that acts as the proof of payment of excise duty and is required for the customer to take CENVAT credit on the item.

Use In the SAP System, there are three different procedures for creating excise invoices

• Sales direct from the factory

This procedure is for when you sell manufactured goods straight from the factory at which they were produced, in which case you levy excise duty when the goods leave the factory on their way to the customer.

If, when you send the goods to the customer, you enclose the commercial invoice, you create the excise invoice with reference to the commercial invoice. If you want to send the commercial invoice after you have dispatched the goods, however, you create the excise invoice with reference to a pro forma commercial invoice. For more information about these procedures, see Sales from Factories [Page 199].

As well as creating excise invoices individually, you can also create them in batches (see Creation of Excise Invoices in Batches [Page 205]).

• Sales from depots

A depot is a site at which the goods are stored, away from the factory at which they were produced. In this procedure, you have to levy the excise duty when you transfer the goods from the factory to the depot, and then make sure this is passed on to the customer when it makes a purchase. For more information, see Sales from Depots [Page 213].

• Sales (other goods movements)

Some other goods movements may also require you to create an excise invoice with reference to other documents. The SAP System offers separate functions for these purposes (see Excise Invoices (Outgoing) for Other Movements [Page 220]).

Structure Numbering of Excise Invoices Outgoing excise invoices have two numbers: an internal document number, which is assigned immediately you create an excise invoice; and an excise invoice number, which is not assigned until you have verified and posted it.

As far as the excise invoice number is concerned, you have to number your outgoing excise invoices in sequential order, starting each year on 1 April. You must notify the excise authority of the jurisdiction of the invoicing location. The serial number must be printed on each page of the excise invoice.

Each number range is governed by a series group. You must create at least one series group in order to be able to number the excise invoices. If you need more than one number range, you must create the corresponding number of series groups. You do so in the CIN Implementation Guide (IMG), by choosing Global Settings → Series Groups.

Number of Line Items Per Excise Invoice Some states allow you to include only a limited number of items for each page of an excise invoice (for example, if the excise invoices are to be printed on prenumbered forms). You can customize the system so that it prints the excise invoice accordingly, in the CIN IMG, by choosing Global Settings → Excise Registration IDs.


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Customer Master (Excise Data) Definition The part of the customer master record that contains information relating to Indian excise duty.



Structure The excise part of the customer master contains the following information:

Customer Excise Details On this screen, you enter your customers' tax registration numbers, which are used for various forms of correspondence and reports:

• Excise registration number (and the range, division, and collectorate in which this is located)




In order for the system to be able to calculate which rate of excise duty [Page 28] to apply on sales to the customer, you must also assign it a customer excise duty status (for more information about how this works, see Determination of Excise Duty Rates [Page 28]).



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Plant Master (Excise Data) Definition The part of the plant master record that contains information relating to Indian excise duty.



Structure The excise part of the plant master is divided into the following screens:

Excise Indicator for Plant On this screen, you enter your plants' tax registration numbers, which are used for various forms of correspondence and reports:




In order for the system to be able to calculate which rate of excise duty [Page 28] to apply on purchases for this plant, you must also assign it a plant excise duty status (for more information about how this works, see Determination of Excise Duty Rates [Page 28]).




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Sales from Factories Purpose This process describes how the SAP System handles the sales process, allowing for the creation of excise invoices, which you have to send with each delivery that is subject to excise duty. There are two scenarios, depending on whether you want to send the commercial invoice along with the delivery or at a later date.

Prerequisites In order for the system to be able to copy the information from document to document, you must have set up the copying control procedures in Customizing for Sales and Distribution (SD). This differs according to when you want to send the commercial invoice:

• Along with the delivery

In this case, the document flow would be OR (standard sales order type) – LF (standard delivery type) – F2 (invoice).

• At a later date

The document flow would be OR – JF (delivery type, a copy of LF) – JEX (pro forma billing document type, a copy of document type F8) – F2.

In addition, you must also have maintained the settings in the Country Version India (CIN) Implementation Guide (IMG), by choosing Global Settings → Assign Excise Invoice Billing Type to Delivery Type.

A sample pricing procedure, JFACT, is provided for this sales procedure.

Process Flow 1. The sales clerk creates a sales order, following the standard procedure [Ext.].

There are special procedures for:

− Customers in possession of exemption forms [Page 202]

− Exports [Page 204]

2. The shipping clerk creates a delivery, again, following the standard procedure [Ext.].

On the initial screen, you set the appropriate delivery type (see above).

3. In the warehouse, the storeperson issues the goods.

The system only allows users to create a pro forma excise invoice if the delivery is complete, so as to prevent them from creating multiple pro forma excise invoices.

4. What you do at this stage depends on whether you want to send the commercial invoice along with the delivery or whether you want to invoice the customer later.

− If the invoice is to be shipped with delivery, the shipping clerk:

i. Creates an invoice, following the standard procedure [Ext.].

ii. Creates an excise invoice [Page 208] from the invoice

− If the invoice is to be sent on at a later date, the shipping clerk:

i. Creates the pro forma excise invoice [Page 207]

The pro forma excise invoice is only required for technical purposes and is not sent to the customer. The system does not make any accounting postings at this stage.

ii. Creates an excise invoice [Page 208] from the pro forma excise invoice

In both these cases, the system creates an accounting document to post the excise duty to a clearing account.


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Instead of creating excise invoices manually, you can also have the system create them automatically [Page 201]. Alternatively, you can create them in batches [Page 205].

5. You ship the goods.

6. When the time comes to invoice the customer, you create the invoice, following the standard procedure [Ext.].

Irrespective of the number of excise invoices that you have issued, you can combine the delivery items in a single invoice (if the standard requirements are met).


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Automatic Creation of Excise Invoices Use The SAP System can automatically create an outgoing excise invoice for you immediately you post a commercial invoice (or a pro forma invoice) for a customer sale. This function applies to excise invoices for sales from factories [Page 199] only.

Prerequisites To activate this function, in the Country Version India (CIN) Implementation Guide (IMG), make the following settings:

• Under Global Settings → Excise Groups, select Create EI.

This activates the automatic creation function.

• Under Sales and Distribution → Utilization Determination.

Here, you specify which CENVAT accounts the system is to post the different types of excise duty to.

• Under Sales and Distribution → Excise Group–Series Group Determination.

Here, you specify which excise group and series group the excise invoices are to be created for.

Features When you post an invoice, the system creates an excise invoice. All the information that it needs to create the excise invoice is provided either by the invoice or by the Customizing settings that you have made in Sales and Distribution. It also determines the excise invoice type [Page 210] automatically by means of a user exit.


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Exemption Forms Use Some customers may be liable to excise duty at reduced rates or exempt from it altogether (for example, customers abroad). Such businesses must provide you with a copy of their exemption forms in order to claim their exemption.

Activities If you make a sale to a customer that is in possession of an exemption form, you have to record the form number in the sales order. The system then automatically applies the appropriate rate of excise duty.

When you create the sales order, enter the form, using the customer tax classification fields. Based on the customer tax classification status, you can use different excise rates for a sale transaction.

If the form has not been submitted by the time you create the pro forma excise invoice, the excise value will be recalculated at the normal rate.

See also: Form Tracking [Page 226]


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Export-Oriented Units Use Any sales that you make to export-oriented units (EOUs) require special treatment by the SAP System.

Prerequisites You have maintained a zero-rate excise duty indicator for customers that qualify as 100% EOUs.

Activities When you come to create the excise invoice, the excise value is zero in the pro forma excise invoice document. No excise duty is debited to the CENVAT account, and so no accounting entries are generated. However, the sale is marked as a deemed export, and the system generates an outgoing excise invoice.

Even though the excise duty is zero, when you print the excise invoice, the system calculates the duty for the purposes of printing.


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Exports Use Some exports require special treatment by the SAP System with respect to excise duty: Exports under bond are not subject to excise duty and thus have to be handled accordingly. Exports not under bond, however, are handled like any other goods issue.

Features The SAP System handles export sales as it does all other sales from factories, with one or two exceptions as described below.

Automatic Recognition of Exports If you post a sales order, the system assumes it is an export in any of the following cases:

• The document is not in Indian rupees

• The ship-to party is from abroad

• The sold-to party is from abroad

If so, the system automatically applies a pricing procedure for exports (in the standard system, JEXPOR).

Excise Invoice Type When you come to create an excise invoice for an export sale, you specify more precisely what sort of export it is (see Excise Invoice Type [Page 210]). In addition, at this stage you can also change domestic sales to deemed export sales.


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Creation of Excise Invoices in Batches Use You use this report to create excise invoices for batches of invoices and batches of pro forma excise invoices, instead of creating each one individually (see Sales from Factories [Page 199]). The excise invoices are then created in the background.

Features To access the report, from the SAP Easy Access screen, choose Indirect Taxes → Sales/Outbound Movements → Excise Invoice → For Sales Order → Batch Utilization.

Selection On the selection screen, specify which billing documents (invoices or pro forma excise invoices) you want to create excise invoices for.

Output A list of commercial invoices and pro forma excise invoices appears, which you process as follows:

1. If you want to see how much credit is available on your CENVAT accounts – and if there is enough to cover the excise duty that you will incur when you create the excise invoices – choose Account balances.

A dialog box appears with the following information:

− The amounts under Balances are the amounts available on the CENVAT accounts.

− The amounts under Utilization are the total amounts of the excise duties to be levied.

− If the CENVAT accounts do not contain enough credits to cover the excise duties, the amount short is shown under Deficit.

2. When you know which documents you want to process, select them and choose Batch utilization.


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Printout of Excise Invoices Use You use this report to print outgoing excise invoices.


• Customized the output for billing documents

You can do so in Customizing for Sales and Distribution (SD), by choosing Basic Functions → Output Control → Output Determination → Output Determination Using Condition Technique → Maintain Output Determination for Billing Documents.

You can use output type J1I0 and the SAPscript form J_1I_EXC_INVOICE. The driving program is J_1IEXCP. The output determination has been set up for the billing document that is used as the excise invoice reference.

• Maintained condition records for the output

You can do this in Logistics → Sales and Distribution → Master Data → Output → Billing Document → Create. This ensures that output gets copied to all the excise reference documents.

Features To access this function, from the SAP Easy Access screen, choose Indirect Taxes → Sales/Outbound Movements → Excise Invoice → For Sales Order → Print.

Selection On the selection screen, enter the numbers of the excise invoices. If any of these are reprints, select Incl. printed excise inv.

Output From the list of excise invoices, you have the following options:

• To display an excise invoice, select it and choose .

• To print an excise invoice, select it and choose .


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Creating Pro Forma Excise Invoices You create a pro forma excise invoice as you would create any other billing document [Ext.], but in the Billing type field, select Excise invoice.


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Creating Excise Invoices Use This is the standard procedure that you follow to create an outgoing excise invoice. You create the excise invoice from a reference document: either an invoice, a pro forma excise invoice, or a billing document.


• Customized the rounding-off indicator for sales transactions

• Specified which exchange rate type to use for export invoices

You make both of these settings in the Country Version India Implementation Guide (CIN IMG), by choosing Global Settings → Company Settings.

Procedure 1. From the SAP Easy Access screen, choose Indirect Taxes → Sales/Outbound Movements →

Excise Invoice → For Sales Order → Outgoing Excise Invoice Create/Change/Display → …

− If you want to create the excise invoice with reference to a pro forma excise invoice or commercial invoice, choose Excise Invoice → Create.

− If you want to create the excise invoice with reference to a delivery note, choose Exc. inv. for delivery → Create.

2. Enter the number of the reference document.

If you do not know the document number, you can search for it by choosing Due list.

3. Choose .

The excise invoice screen appears. The header data is displayed at the top; the line items, which the system has copied from the reference document, are displayed at the bottom.

4. Enter header data as required.

5. To check if the utilization is done properly and the document is ready for posting, choose .

6. To enter texts for the excise invoice, choose .

The text IDs for the outgoing excise invoice are created using the Country Version India (CIN) Implementation Guide (IMG).

7. To display the balances of the CENVAT accounts, choose Balances.

8. To display the utilization details [Page 209], choose .



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Excise Duty Utilization Use When you create an excise invoice [Page 208], the system allows you to display the information about the excise duty, including which CENVAT accounts the excise will be debited to. To access this function, choose .

If a company defaults in the fortnightly payment of CENVAT, the excise collectorate can enforce an immediate payment of excise. Alternatively, you may have excess CENVAT credit and want to pay the duty immediately and not wait for a fortnight. This is also the case for some export removals where you claim the refund from DGFTA, in which case you need to pay the duty immediately.

Prerequisites To enable immediate utilization of CENVAT, you can do so in the Country Version India Implementation Guide (CIN IMG), by choosing Global Settings → Series Groups.

Features The information is shown in two group boxes:

• Excise details

This shows you the excise invoice type [Page 210], which you can change if necessary by choosing . It also shows you how much excise duty will be charged on the sale.

• Balance utilization

This shows you which CENVAT accounts the excise duty will be debited to.

The system automatically proposes which CENVAT accounts it is to debit the excise duty to. It first takes the RG 23 accounts, and if there is not enough credit to cover it, it debits the remainder to the personal ledger account (PLA). The cess component of excise can only be taken from the PLA.

If immediate utilization is active for a series group, you can change the default utilization proposal. You can decide from which register to pay the amount. When you save the invoice, the system generates Part II entries in the appropriate registers. These excise invoices are not listed further during fortnightly payment of CENVAT.

If immediate utilization is off for the series group, the system proposes the excise duty values directly in the RG 23A fields, but the postings are made to intermediate accounts for excise duty. The system does not create any Part II entries. Entries are posted into a dispatch register. When you then run the fortnightly payment program, the system picks up these invoices and allows payment of CENVAT.

For information about debiting the excise duty to a different company, see Intercompany Excise Duty Utilization [Page 211]


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Excise Invoice Type Use The excise invoice type denotes whether the excise invoice is for domestic use or for exports [Page 204] (exports under bond, exports not under bond, and deemed exports). It affects the amount of excise duty calculated, for example.

Activities When you come to create an excise invoice for an export sale, if you need to change the excise invoice type, follow this procedure:

1. Set the excise invoice type to Deemed, Bond, or No bond.

2. Choose Calculate tax.

The system recalculates the excise duty according to the excise invoice type (see below). To do so, it translates the assessable value into the local currency as at the excise invoice date. What happens next depends on the excise invoice type:

− Deemed exports

The excise to be paid will be zero. This information will be used when the Part II registers are downloaded.

When the system creates the excise invoice, it numbers it as a domestic excise invoice.

− Exports under bond

The system sets the excise duty to zero and generates an outgoing excise invoice. It does not generate any entries for the Part II register.

The excise invoice is created with an export excise invoice number.

− Exports not under bond

The system applies the tax code defined in the CIN Implementation Guide (IMG) and calculates the excise duty as normal.

Again, the excise invoice is created with an export excise invoice number.


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Excise on Intercompany Billing Documents Use The SAP System allows you to create an excise invoice [Page 208] for intercompany billing documents.

For example, assume one company code places a sales order, and the goods are delivered to another. The first company has to create an excise invoice, in this scenario, with reference to the intercompany billing document.


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Canceling Excise Invoices Use You follow this procedure in order to cancel an outgoing excise invoice. It reverses any excise duty accounted for.

Procedure 1. From the SAP Easy Access screen, choose Indirect Taxes → Excise JV → Create → Cancel exc.

inv. or Indirect Taxes → Sales and Outbound Movements → Excise Invoice Create/Change/Display → Cancel.

2. Enter the number, year, and series group of the excise invoice that you want to cancel.


3. Choose Yes.

4. Save the adjustment posting.


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Sales from Depots Purpose You may sell finished goods directly from the place of manufacture, as described under Sales from Factories [Page 199], or you may first ship them to a separate location for storage (a depot), from where you will sell them. The second procedure is described here.

Sales from depots are handled differently from sales from factories because of excise law: Excise duty is payable when you send the goods from the factory to the depot, but it is not levied again when you sell the goods.

Sometimes when you make a final sale of goods from a depot, price escalations could have happened with retrospective effect. In such scenarios you need to pay the extra excise duty at the factory using an A Certificate. You need to register the A certificate details in the RG 23D register and the excise recovered from the customer.

Prerequisites You have customized:

• Stock transport processing, in Customizing for Materials Management (MM), by choosing Purchasing → Purchase Order → Set Up Stock Transport Order

• The copying control for copying stock transport order NL to excise invoice JEX

You make this setting in the Country Version India (CIN) Implementation Guide (IMG), by choosing Sales and Distribution → Assign Excise Invoice Billing Type to Delivery Type.

• The item category NLN (standard transport order) so that it is relevant for billing

You do this in the standard IMG, in Customizing for Sales and Distribution (SD), by choosing Sales → Sales Documents → Sales Document Item.

Process Flow 1. You create the sales order, following the standard procedure [Ext.].

The standard pricing procedure for depot sales is JDEPOT.

2. You create the delivery, again, following the standard procedure [Ext.].

3. You assign excise invoices to the delivery [Page 217] or material document.

4. You verify that you have selected the correct excise invoices [Page 219] and post them. Alternatively, if you have selected the wrong excise invoices, you can cancel the assignment.

5. You create the invoice, following the standard procedure [Ext.].


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Creating Excise Invoices for Stock Transfers 1. From the SAP Easy Access screen, choose Indirect Taxes → Procurement → Excise Invoice →

For Depot → Create/Change/Display.

2. In the Material document field, enter the goods receipt number and choose .

The system displays the information from the goods receipt, for example, the sending plant, the excise registration, the range, the division, and the collectorate.

3. Choose Details.

The system copies the items from the goods receipt document. In the depot it is possible to have a separate excise invoice at line item level.

4. Enter the internal document number of the excise invoice sent by the factory.

5. Choose More documents to go the excise invoice details screen.

6. Enter the internal document number of the excise invoice from the factory.

The system copies the information to the line item (for example, the excise invoice number, the excise invoice date, the item number , the chapter ID, the excise invoice quantity, the amount of excise duty paid, the excise base value, and the serial number of the Part II register entry with which the excise was paid).

You can change the receipt quantity to match the actual quantity received at the depot, if necessary. The system automatically adjusts the excise accordingly.

7. Go back to the item details screen.


The system creates an entry in register RG 23D [Page 175].


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Creating Excise Invoices for Direct Purchases 9. From the SAP Easy Access screen, choose Indirect Taxes → Procurement → Excise Invoice →

For Depot → Create/Change/Display.

10. In the Material document field, enter the goods receipt number and choose .

The system displays the information from the goods receipt, for example, the sending plant, the excise registration, the range, the division, and the collectorate.

You can also maintain the excise registration details for the ship-from party, as for with the vendor. The ship-from can be different from the vendor code. (The delivering plant can be maintained as a ship-from in the system. When a valid ship-from is entered, the excise registration details copied from the vendor will be overwritten by the ship-from excise registration details.)

The ship-from registration details displayed can also be overwritten manually.

The dealer's commercial invoice number can be stored in the vendor excise invoice number, as in this case the dealer himself will not have an excise invoice.

11. Choose Details.

The system copies the items from the goods receipt document. It also copies the vendor's excise invoice number and the serial numbers of the entries in the RG 23A, RG 23C, and personal ledger account (PLA) registers.

12. Enter the internal document number of the excise invoice sent by the factory.

13. Select an item and choose More documents to go the excise invoice details screen.

In the case of direct purchases, there will not be any excise invoice in the system, so leave the internal document field blank. The vendor's invoice will show the details of the excise invoices through which excise has been paid for the item that is being dispatched. You can enter these details here.

14. For each item, the chapter ID, excise base value, and excise duty amounts are defaulted from the purchase order. You can change them if there is any difference. Enter the excise amount paid and the receipt quantity. You also enter the Part II register serial numbers with which the excise duty was paid and the excise registration information from the original excise invoice.



The system creates an entry in register RG 23D [Page 175]. You can change the excise invoice as long as it has not been used in any sales.


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Creating Additional Excise Entries at Depots 17. From the SAP Easy Access screen, choose Indirect Taxes → Procurement → Excise Invoice →

For Depot → Additional Excise Entry at Depot.

18. In the Internal exc. inv. no. field, enter the internal excise invoice number at the depot along with the year, and choose .

The system displays the information from the excise invoice which has already been created at the depot, including the excise group, vendor excise invoice number, ship from, and all the receipt against that excise invoice, highlighting the RG 23D folio and serial numbers.

An excise invoice item can have multiple A certificates attached to it. The A certificates will have the same folio number as the original line item, but the serial numbers will be different. A hierarchy icon differentiates the additional lines for an item line.

19. You can maintain the A certificate number, date, and additional BED, AED ,SED and CESS for a given RG 23D Folio.

20. After entering an A certificate you cannot delete the A certificate from the system, but you can change it until it is picked up during removals from the depot.

21. If some of the values in an A certificate are incorrect, you can make the values zero so that they do not have an impact on the final excise value.

22. Once an A certificate is used for removals then it cannot be changed.

23. Save additional excise entry.

The system creates an entry in register RG 23D. Folio number generation must be active for you to make use of this supplementary invoice functionality at depot.


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Assigning Excise Invoices to a Delivery Use You follow this procedure to specify which excise invoices are to be assigned to a delivery from a depot (or other material document).

You can also automate this procedure, using the batch selection program (J_1IJCHK), by making the appropriate Customizing settings in the Country Version India (CIN) Implementation Guide (IMG).


Excise Invoice → For Depot → Create/Change/Display → Delivery or Material Document → RG 23D Selection.

2. Enter the delivery document number or the material number and choose .

3. Select the excise invoice you want.

4. Choose .

5. Choose Excise invoice.

A list of excise invoices appears. These are the excise invoices at the depot with a balance quantity.

The system also shows a list of the A certificates that can be used. You can pick up any of the A certificates, but they must be for the same excise invoice. You can only pick up an A certificate in its entirety. You cannot select part of an A certificate.

6. Select the excise invoices that are relevant to the delivery.

7. Specify what quantity to be used from each excise invoice.

The system recalculates the excise accordingly.


9. Save the data.

Result The system creates an entry in register RG 23D [Page 175] and generates the depot excise invoice numbers.


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If you selected any A certificates, the system also generates additional entries in the RG 23D register. The system marks the original A certificates as updated, so that they cannot be used for any other removals.


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Verifying and Posting Excise Invoices Assigned to Delivery Use You follow this procedure to verify that the correct excise invoices have been assigned to a delivery. If everything is correct, you can then post the delivery.

Prerequisites You have selected which excise invoices [Page 217] are to be assigned to the delivery and have posted the goods issue.


Excise Invoice → For Depot → Create/Change/Display → Delivery or Material Document → Verify/Post.

11. Enter the number of the delivery that you want to verify and choose .

12. Make sure that the information is correct.

13. Save the data.

The system updates the posting flag in the RG 23D register.


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Other Outward Movements Use In the standard procedure for creating outgoing excise invoices (see Sales from Factories [Page 199]), the excise invoice is created with reference to a delivery note or an invoice. The SAP System also allows you to create an excise invoice with reference to various other documents, as follows:

• Goods issue documents (for example, transfer postings)

• Vendor excise invoices (for when you return faulty goods to a vendor, for example)

• Factory excise invoice (for sales returns)

In addition, you can create an excise invoice without reference to any document at all.

Prerequisites You have specified, per excise group, whether you want to create these excise invoices in one or two steps (see below). You do so in the CIN Implementation Guide (IMG), by choosing Global Settings → Excise Groups.

You have also specified the maximum number of items allowed per excise invoice, in the CIN IMG, by choosing Global Settings → Excise Registration IDs.

Features Depending on your Customizing settings, you to create excise invoices in a single step or in two steps, as follows:

• In the two-step procedure, one operator first creates the excise invoice [Page 221], but no postings are made. A second operator then verifies that the invoice is correct and, if so, posts it [Page 222].

• If the operators are more experienced, you may want to use the one-step procedure, which is quicker, but more prone to error.

In this case, when you create an excise invoice [Page 221], the system automatically posts it in the background.

Note that the functions for creating and canceling [Page 223] these excise invoices are different from those for other excise invoices.


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Creating Excise Invoices Use This is the procedure that you follow to create an excise invoice for the less common types of goods movement.


Excise Invoice → For Other Movements → Create/Change/Display → .

2. On the selection screen, enter data as required, including:

− Reference group box

Specify which document you want to create the excise invoice for and which excise group it is for.

− Details group box

Specify the vendor or customer that you are sending the invoice to.

3. Choose .

If you entered an internal document number, the system copies the item details from it.

4. Choose .

5. Enter line items for each of the materials to be included in the excise invoice. For each item, enter the following data:

− Material

− Quantity

− Unit of measure

− Base value

− Excise duty

6. To pick the rate and amount from a specific excise invoice, choose Get excise invoice.


If you are using the one-step procedure, the system creates and posts an excise invoice. Otherwise, the system saves the information but does not make any postings: it now has to be verified [Page 222].


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Verifying and Posting Excise Invoices Use You follow this procedure to verify that the information in an excise invoice that has already been created, and to post it once you are satisfied.


Excise Invoice → For Other Movements → Posting.

4. Enter the internal document number of the excise invoice.

5. Choose Release to accounting.

The system displays the excise invoice. The excise duty that is to be posted is displayed at the foot of the screen, which you can change if necessary.

6. To access the balance utilization, choose .

7. To display the balance available on the CENVAT accounts, choose Account balances.


The system generates the accounting documents.

9. To print the excise invoice, choose .


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Canceling Excise Invoices 1. From the SAP Easy Access screen, choose Indirect Taxes → Sales/Outbound Movements →

Excise Invoice → For Other Movements → Create/Change/Display → Cancel excise invoice.

2. Enter the internal document number.

3. Choose Cancel excise invoice.

A dialog box appears, asking you to confirm whether you want to delete the excise invoice.

4. Choose Yes.


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Creating Excise Invoices for Stock Transfers Use Follow this procedure to create an outgoing excise invoice for a stock transfer to another plant. For more information about this function, see Other Outward Movements [Page 220].


Excise Invoice → For Other Movements → Create/Change/Display → .

11. On the selection screen, enter data as required, including:

− Ref. doc. type: MATD (Material document)

− Doc. number: Transfer posting number

− Vendor: Leave this field blank

− Customer: The customer account number of the receiving plant

4. Choose .

The system copies the details from the transfer posting.

6. For each item:

− Enter the net assessable value

− Check and change the excise duty rates


If you are using the one-step procedure, the system creates and posts the excise invoice. Otherwise, the system saves the information but does not make any postings: it now has to be verified [Page 222].


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Making a Transfer Posting Use In this procedure, you make a transfer posting for the goods ordered by another plant. For more information about this function, see Entering the Removal from Storage at the Issuing Plant [Ext.].


Management → Goods Movement → Transfer Posting.

2. Choose Movement type → Transfer posting → Plant to plant → To stock in transit.

3. Enter the number of the issuing plant and storage location.

4. Choose To purchase order.

5. In the dialog box, enter the number of the stock transport order that the receiving plant created and choose .

6. Check the data.

7. Save the transfer posting.


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Form Tracking Use You use this function to record and monitor forms relating to tax concessions. You can record the forms that your customers send you against their sales orders, and those that you send to your vendors against your purchase orders.

You can also use these functions for monitoring other routine activities, for example, when you transfer money to your personal ledger account (PLA) using a TR6 challan.

Features Forms for concessional sales tax must be submitted by the buyer after the goods have been delivered or after it has paid the invoice. In the case of interstate concessional sales tax rate sales, the concessional rate is granted against the issue of C-forms.

Exemption from excise duty may be granted by the excise authorities under certain circumstances, for example, on exports or deemed exports. In such cases, the buyer has to produce certain statutory forms to claim concessional rates of excise duty or exemptions. The exporter has to provide the vendor with proof of export (form AR3A).

If the buyer is unable to furnish the certificate at the appropriate time, material supply should be at the normal rate of sales tax or excise duty.

Activities To access the form tracking function, from the SAP Easy Access screen, choose Indirect Taxes → Forms Tracking → Create/Change/Display.


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CENVAT Adjustment Postings Use You use these functions if you need to make an adjustment posting to any of your CENVAT accounts. You can make adjustment postings to account for:

• Scrap [Page 228]

• Materials that you have not used in production [Page 229]

• Additional excise paid by vendors [Page 230]

• Money that you have transferred to your personal ledger account [Page 231]

• Other transactions [Page 233]

You can also use this function to cancel excise invoices [Page 232].

Features Each of the different types of adjustment postings are documented separately. However, they all work on the same principle, as follows.

Reference Document On the initial screen of the transaction, you specify the reference document, that is, the document which the adjustment posting is to refer to – either an internal document, such as a material document or a subcontracting challan – or an external document, such as an incoming excise invoice.

You also specify which registers are affected by the posting. In many cases, the adjustment will have to be remitted to the authorities on a fortnightly basis. The adjustment will then be included when you run the Remittance of Excise Duty Fortnightly [Page 34] report. If the adjustment has to be remitted immediately, you specify which register is affected.

Excise Details When you proceed to the detail screen, the system automatically shows the line items from the reference document, if it is an internal document. You specify how much excise duty is to be adjusted and which CENVAT accounts the adjustment posting is to be made to.

When you edit the excise details, there are a number of functions that are available, depending on the type of adjustment posting:

• Assigning excise invoice to line items [Page 234]

• Specifying which G/L accounts are to be adjusted [Page 236]

• Displaying balances of CENVAT accounts [Page 237]

When you save your changes, the system creates an accounting document to make the appropriate postings.


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Making Adjustment Postings for Scrap Use You follow this procedure if you have scrapped a material and want to reverse the excise duty debited to your CENVAT account.

Procedure 1. From the SAP Easy Access screen, choose Indirect Taxes → Excise JV → Create → Matl write-

off.


− Document number

Enter the number of the document that you used to scrap the material.

− 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. Choose .

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

− By assigning the line item to an excise invoice [Page 234]

6. Specify which G/L accounts are to be posted to [Page 236].



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Making Adjustment Postings for Materials Not Used in Production Use You follow this procedure if you have not used a material in the production process and want to reverse the excise duty debited to your CENVAT account.

Procedure 3. From the SAP Easy Access screen, choose Indirect Taxes → Excise JV → Create → Matl non-

prod.


− Document number

Enter the number of the material document that the adjustment posting is to refer to.



6. Choose .



8. Adjust the excise duty for each line item either:

− Manually

− By assigning the line item to an excise invoice [Page 234]




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Making Adjustment Postings for Additional Excise Paid by Vendors Use You follow this procedure if a vendor has increased the amount of excise duty that it originally charged you and you want to debit the difference to your CENVAT account.

Procedure 5. From the SAP Easy Access screen, choose Indirect Taxes → Excise JV → Create → Additional

excise.

6. Enter data as required.

In the Document number field, enter then number of the document sent to you by the vendor.

7. Choose .


9. 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 and enter the line items in the table.

− To enter the excise duty only, choose and enter the excise duty in the totals fields at the foot of the screen.

6. 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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Making Adjustment Postings for Money Transferred to PLA Use You follow this procedure to make an adjustment posting when you transfer money to your personal ledger account (PLA).

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

Procedure 10. From the SAP Easy Access screen, choose Indirect Taxes → Excise JV → Create → TR6 challan.

11. Enter data as required, including the document number.

You can enter either the challan number or the number of the accounting document.

12. Choose .

If you entered the accounting document number, the system displays the information from it.

13. Enter the amounts against the accounts that you require.



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Canceling Excise Invoices Use You follow this procedure in order to cancel an outgoing excise invoice. It reverses any excise duty accounted for.

Procedure 5. From the SAP Easy Access screen, choose Indirect Taxes → Excise JV → Create → Cancel exc.

inv. or Indirect Taxes → Sales and Outbound Movements → Excise Invoice Create/Change/Display → Cancel.

6. Enter the number, year, and series group of the excise invoice that you want to cancel.


7. Choose Yes.



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Making Adjustment Postings for Other Transactions Use You follow this procedure if you want to make an adjustment posting that does not fall into any of the other categories of adjustment offered by this function. You can only use an external document as your reference document.

Procedure 15. From the SAP Easy Access screen, choose Indirect Taxes → Excise JV → Create → Other adj.


− Document number

Enter the number of the external document that you want to refer to.



9. Choose .



11. 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 and enter the line items in the table.

− To enter the excise duty only, choose and enter the excise duty in the totals fields at the foot of the screen.




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Assigning Excise Invoices to Line Items Use When you make an adjustment posting, you follow this procedure if you want to specify the original excise invoice associated with a line item.

Procedure 1. Select the line item that you want and choose Get excise invoice.

The system displays a list of all the excise invoices that you have posted from this vendor for this particular material.

2. Select the excise invoice that you want and choose .

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.

If you then overwrite these amounts, you 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.


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You have a line item with ten plates of glass that you have broken and are to be scrapped. You have three excise invoices from the same vendor to choose from. You pick one for 20 plates of glass with BED at INR 200. The system automatically apportions INR 100 to the line item that is to be reversed.


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Specifying Which CENVAT Accounts to Adjust Use When you make an adjustment posting, you have to specify which CENVAT accounts are to be adjusted.

Prerequisites You have specified in the Country Version India (CIN) Implementation Guide (IMG) whether you want the users to be able to add extra debit accounts (see below), by choosing Global Settings → Company Settings.

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 you entered on the selection screen.

2. Add another account, if you 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, choose .


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Displaying CENVAT Account Balances To display the balances of your CENVAT accounts, choose Balances.

The system displays the balances only of the CENVAT accounts that are affected by your G/L postings.


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Transaction Codes for India Transaction Action

J1I2 Prepare a sales tax register [Page 107]

J1I3 Create outgoing excise invoices in batches [Page 205]

J1I5 Update the RG 1 and Part I registers [Page 178]

J1I8 Post the challan used to remit TDS [Page 72]

J1IC194C Create annual return under section 194 C (Classic TDS) [Page 77]

J1IC194D Create annual return under section 194 D (Classic TDS) [Page 77]

J1IC194I Create annual return under section 194 I (Classic TDS) [Page 77]

J1IC194J Create annual return under section 194 J (Classic TDS) [Page 77]

J1IEX Incoming Excise Invoices [Page 151] (central transaction)

J1IEX_C Capture an incoming excise invoice [Page 154] (excise clerk)

J1IEX_P Post an incoming excise invoice [Page 162] (excise supervisor)

J1INBANK Post a bank challan [Page 63]

J1INCANC Cancel a vendor withholding tax certificate [Page 55]

J1INCERT Print a vendor withholding tax certificate [Page 52]

J1INCHLN Create a remittance challan [Page 59]

J1INCUST Post a customer withholding tax certificate [Page 56]

J1INHC Withholding Tax Migration Health Check Program [Page 96]

J1INMIG Withholding Tax Data Migration Tool [Page 101]

JI1NCHLC Create a remittance challan for customers [Page 59]

J1INCC Print customer withholding tax certificates [Page 52]

J1INMIS Withholding Tax Information System [Page 65]

JI1NAR Prepare annual returns (Extended Withholding Tax) [Page 64]

J1IF01 Create a subcontracting challan [Page 133]

J1IF11 Change a subcontracting challan [Page 132]

J1IF12 Display a subcontracting challan [Page 132]

J1IF13 Complete, reverse, or recredit a subcontracting challan [Page 139]

J1IFQ Reconcile quantities [Page 137] for subcontracting challans

J1IFR List subcontracting challans [Page 145]

J1IH Make a CENVAT adjustment posting [Page 227]

J1IIN Create an outgoing excise invoice [Page 208]

J1IJ Assign excise invoices to a delivery [Page 217] for sales from depots

J1INJV Adjust withholding tax Item [Page 49]

J1INREP Reprint a vendor withholding tax certificate [Page 54]

J1INREV Reverse a remittance challan [Page 62]

J1INPR Calculate withholding tax on clearing accounts [Page 46]


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J1INUT Clear withholding tax on clearing accounts [Page 48]

J1IR Download register data [Page 184]

J1IS Process an excise invoice (outgoing) for other movements [Page 220]

J1IU Process exemption forms [Page 226]

J1IW Verify and post an incoming excise invoice [Page 162]

J1IX Create an incoming excise invoice [Page 154] (without reference to purchase order)

J2I8 Transfer excise duty to CENVAT account [Page 174]

J2ID Archive tax deducted at source (TDS) documents [Page 78]

J2IE Locate tax deducted at source documents in archive [Page 83]

J2IU Remit excise duty fortnightly [Page 34]

J2I9 Monthly CENVAT return

J1IG Excise invoice entry at depot [Page 214]

J1IGA Create additional excise entry at depot [Page 216]

J2I5 Extract data for excise registers [Page 181]

J2I6 Print excise registers [Page 183]