il account entries

Accounting Entries

In this chapter, the accounting entries created for accounting localization taxes are discussed. In the general ledger proper accounts need to be defined for accountinglocalization taxes. Accounting entries will be created on completion of therespective transaction and the same can be imported to General Journal.

Oracle India Localization User’s Reference Guide 530

Accounting entries in India Local Inventory

The following Accounting Entries are passed in India Local Inventory.

On Receipt of Material

Account Debit Credit

Inventory Receiving A/c PO price

AP Accrual A/c PO price

On Claim ing CENVAT credit


Inventory Receiving A/c Total tax amount

AP Accrual A/c Taxes other than customsduty & CVD

BOE/ customs duty paid a/c Only customs duty andCVD amount

CENVATable tax amount * CENVAT percentage

Inventory Receiving A/c CENVATable tax amount *CENVAT percentage

CENVAT A/c

Creation of Invoice for accounting III rd party taxes


AP Accruals Tax amount of the respective tax

Tax amount of therespective tax

Supplier a/c


Delivery of Material For Average Costing Organization ( Bonded Warehouse Sub Inventory)


Sub inventory A/c All non-CENVATable taxes +Amount not loaded in CENVATable taxes

Inventory Receiving A/c All non-CENVATable taxes +Amount not loaded in CENVATable taxes

* In addition to passing these accounting entries, Item cost gets increased by the amount that is additionally loaded on to the inventory.

Delivery of Material For Standard Costing Organization ( Bonded Warehouse Sub Inventory)


Purchase Price Variance (PPV) A/c All non-CENVATable taxes +Amount not loaded in CENVATable taxes

Inventory Receiving A/c All non-CENVATable taxes +Amount not loaded in CENVATable taxes

Delivery of Material (Duty paid Sub Inventory-non bonded)For Average Costing Organization


All tax amounts both CENVATable/non-CENVATable taxes except Individual taxes

All tax amounts both CENVATable/non-CENVATable taxes except Individual taxes

Sub inventory A/c

Inventory Receiving A/c



For Standard Costing Organization


Purchase Price Variance (PPV) A/c All tax amounts both CENVATable/non-CENVATable taxes except Individual taxes

Inventory Receiving A/c All tax amounts both CENVATable/non-CENVATable taxes except Individual taxes

Delivery of Material (Bonded/Duty paid Sub Inventory)For All Other Taxes


Respective Tax A/c Tax amount * Tax credit percentage

Inventory Receiving A/c Tax amount * Tax credit percentage

Delivery of expense item to Bonded/Duty paid Sub Inventory(Both Average and Standard Costing)


Expense A/c Note 1

Total Tax amount

Inventory Receiving A/c Total Tax amount

Note:1. W here the delivery of an Inventory Item is made to an Expense Subinventory, the Expense Account is picked up from the Subinventory setup. Similarly, the same account would be consideredfor reversal entries created on Return to receiving.

Return to Vendors

Return to Receiving(Bonded Sub Inventory)On Return from Inventory to Receiving Inspection (By Base product)


Receiving Inspection A/c Item Purchase Price

Item Purchase PriceInventory Receiving A/c


On Return from Inventory to Receiving Inspection (Localization entries)

Return to receiving for Average Costing Organization


Inventory Receiving A/c All Non-CENVATable taxes loaded to inventoryfor the delivery

Sub Inventory A/c All Non-CENVATable taxes loaded to inventory for the delivery

Return to receiving for Standard Costing Organization


Inventory Receiving A/c All Non-CENVATable taxes loaded to inventoryfor the delivery

Purchase Price Variance (PPV) A/c All Non-CENVATable taxes loaded to inventory for the delivery

Return to Receiving (Duty paid Sub Inventory) For Average CostingOrganization


Inventory Receiving A/c All tax amounts both CENVATable/non-CENVATable taxes except Individual taxes

Sub Inventory A/c All tax amounts both CENVATable/non-CENVATable taxes except Individual taxes


Return to Receiving (Duty paid Sub Inventory For Standard CostingOrganization


Inventory Receiving A/c All tax amounts both CENVATable/ non-CENVATable taxes except Individual taxes

Purchase Price Variance (PPV) A/c All tax amounts both CENVATable/non-CENVATable taxes


except Individual taxes

On Return to Receiving Inspection to Vendor (by Base Product)


AP Accrual A/c Item Purchase Price

Receiving Inspection A/c Item Purchase Price

On Return to Receiving Inspection to Vendor


AP Accrual A/c Total Tax Amount at the time of Receipt

Receiving Inspection A/c All taxes loaded to inventory for the Receipt

CENVAT A/c Amount of CENVAT Originally Claimed (Only on Generation of Excise Invoice on RTV)

Individual Tax A/c Taxes (except Excise &

CVD) with CENVAT

On Return to Vendor in the year of Purchase

In case a part of goods received are returned in the year of purchase, then followingentries would be passed on RTV

Dr. CENVAT AccountCr. CENVAT Receivable Account

For the balance amount (Balance credit for a Quantity returned)

Dr. Inventory Receiving AccountCr. CENVAT Account

100% of the credit for the Quantity Returned

On Return to Vendor a year after Purchase (After claim of 100%CENVAT Credit)

Dr. Inventory Receiving AccountCr. CENVAT Account

100% of the credit for the Quantity Returned


Accounting entries on claiming CENVAT

Accounting entries on Claiming CENVAT on inputs


CENVAT Raw material A/c CENVATable tax amount * CENVAT percentage

Inventory Receiving A/c CENVATable tax amount * CENVAT percentage

Accounting entries on Claiming CENVAT on capital goods


CENVAT Capital goods A/c CENVATable tax amount * CENVAT percentage

Inventory Receiving A/c CENVATable tax amount * CENVAT percentage

CENVAT receivable Account Percentage of creditdeferred for the nextfinancial year

CENVAT Capital goods Account Percentage of creditdeferred for the nextfinancial year

Accounting entries on claiming the balance credit on capital goods


CENVAT Capital goods Account Amount of credit that is being availed

CENVAT receivable Account Amount of credit that is being availed


Accounting entries regarding OSP Transaction

While sending the material through 57 F (4) Challan


OSP Excise A/c With percentage of duty set up in the additionalorganization informationscreen

CENVAT / PLA A/c With percentage of duty set up in the additionalorganization informationscreen

On receipt of goods cleared under 57 F (4) Challan


CENVAT A/c Duty paid at the time of clearance

OSP Excise A/c Duty paid at the time of clearance

* According the current provisions of Excise Rules there is no need to pay duty while clearing the goods for sub contracting operations. User should take care to record zero percentage for OSP rate in the additional organization information


RMA Receipts

RMA Receipts into a Bonded Warehouse For the sale price amount with out excise duty.


Sub inventory a/c Sales Inventory Cost

Cost of goods sold a/c Sales Inventory Cost

RMA Receipts considered as ‘Production Input’

CENVAT Credit For Excise and CVD Taxes


CENVAT RM/CG A/c Tax Amount

Excise Paid Payable Account Tax Amount

RMA Receipts considered as ‘Finished Goods Return’Localization accounting entry for Excise Tax treatment


CENVAT RM/CG A/c Excise Amount

Excise Paid Payable Account Excise Amount

RMA Receipts considered as ‘Scrap’


Scrap Cost a/c Item cost

Sub Inventory a/c Item cost

Localization accounting entry for Excise Tax treatment


Excise Expense a/c Excise Amount

Excise Paid Payable Account Excise Amount

(Excise duty paid will be written off as an expense account)


Accounting entries related to AP invoices

On Matching the Payable Invoice with PO/ReceiptLocalization Entry for Tax amounts


AP Accruals a/c Sum of Tax amount of the respective tax + Line Amount

Vendor a/c Sum of Tax amount of the respective tax + Line Amount

On Creation of Credit Memo at the time of approving the created Regular Invoice for TDS Deduction


Vendor a/c Amount debited towardsTDS

TDS a/c Amount debited towardsTDS

On Creation of TDS Invoice at the time of approving the created Regular Invoice for TDS deduction


TDS a/c Amount debited towardsTDS

TDS Tax Vendor a/c Amount debited towardsTDS

*Same accounting entries will be passed for different type of withholding taxes.


Accounting entries related to Bill of Entry

On Approval of BOE Invoice


BOE/ customs duty paid A/c BOE Amount

Customs authority - Vendor BOE Amount

On Payment of the BOE Invoice


Customs authority - Vendor BOE Amount

Bank A/c BOE Amount

On writing of the customs duty paid


BOE & Customs duty written off a/c Write off Amount

BOE & Customs duty paid a/c Write off Amount

Accounting entries for PLA Payments

On Approval of PLA Invoice


PLA A/c PLA invoice amount

Excise authority - Vendor PLA invoice amount

On Payment of PLA Invoice


Excise authority - Vendor PLA payment amount

Bank A/c PLA payment amount


Ship Confirmation

Accounting entries on Ship Confirmation Base Application Accounting entries


Cost of Goods Sold a/c Sales Inventory Cost

Sub Inventory a/c Sales Inventory Cost

Accounting entries for updating the excise accounts


Excise Paid Payable a/c Total Excise Duty Payable

CENVAT/ PLA a/c Total Excise Duty Payable


Accounting entries in AR

On Invoicing in ARAccounting entries for raising invoices for dispatches made from both a duty paid or Bondedwarehouse (After running Receivable Interfaces in OM and moved to AR module)


Receivables a/c Sales Inventory Cost +Total of all taxes

Revenue a/c Sales Inventory Cost

Individual Excise Tax a/c Individual Excise Amounts

Other Individual Tax a/c Individual Tax Amounts

On saving AR Transactions




Individual Excise Tax a/c Individual Excise Amounts


On completion of an AR Transaction


Excise Paid Payable a/c Total Excise Duty Payable

CENVAT/ PLA a/c Total Excise Duty Payable

Raising Credit Memo from AR Transactions



Excise Paid Payable a/c Excise Duty Paid



For debiting duty under Rule 6 of The CENVAT Credit Rules (Old Rule 57 CC)


CENVAT Recovered a/c 8% on Selling Price (basedon Organization.


Parameters)

CENVAT a/c-RG23A-Part II 8% on Selling Price (basedon Organization.Parameters)


Accounting entries for RG consolidation Transactions

On setting off the CENVAT credit with PLA Debits


PLA Account Total transfer amount fromCENVAT registers

CENVAT RM Account Amount set off from theCENVAT on input Account

CENVAT on Capital goods A/c Amount set off from theCENVAT on capital goods

On payment of excise duty (On approval of the PLA Invoice)


PLA Account Amount of the PLA invoice

Excise Authority Account Amount of the PLA invoice


Accounting entries for Internal Sales Order Transactions

The following Accounting Entries passed during an Internal Sales Order Transaction..

Excise Invoice Generation

Account Organization Debit Credit

Excise Paid/Payable account Sending EXCISE AMOUNT

RG23 Register/ PLA Account Sending EXCISE AMOUNT

Issue Transaction (In Transit Transfer)

FOB Point is set to Receipt:


In-transit inventory account Sending EXCISE AMOUNT


FOB Point is set to Shipment:


Inter-Organization Receivable Sending EXCISE AMOUNT


In-transit Inventory account Receiving EXCISE AMOUNT

Inter-Organization Payable Receiving EXCISE AMOUNT

Receipt Transaction (In Transit Transfer)

FOB Point is set to Receipt:



In-transit Inventory account Sending EXCISE AMOUNT

Inventory Receiving account Receiving EXCISE AMOUNT


FOB Point is set to Shipment:



In-transit Inventory account Receiving EXCISE AMOUNT


Direct Transfer






CENVAT Entries (If the Receiving Unit is Bonded)


CENVAT Account Receiving EXCISE AMOUNT

Receiving EXCISE AMOUNTInventory Receiving Account

Delivery (If the Receiving Unit is Non-Bonded/ Trading)


Inventory Valuation Account Receiving EXCISE AMOUNT

Receiving EXCISE AMOUNTInventory Receiving Account


Process flow

To update the chapter number, press ALT F9. Update the sequence number as appropriate, for example 1, 2, etc. and press ALT F9 again. Highlight the chapter number and press F9 to updatethe number. This chapter contains a diagrammatic presentation of certain activities on how IndiaLocalization on Oracle Applications -Release11 addresses your business needs under Indian Laws.


Deduction of Tax at Source (TDS) Process

Enter IT registration Details and TDS Section & limit for Suppliers and at Supplier Site in Additional VendorInfo.

Define Tax withTDS type

Enter Invoice with applicableTDS Tax type matching with PO Approve

Enter Prepayment invoice with applicable TDS tax Approve Pay

Approve relatedTDS Invoices and pay in batch inbatch

Apply Prepaymentamount net of Tax

system will adjust proportionate TDS

Enter TDS tax Namesand specify TDS section to which it belongs.

Define Income Tax as supplier of type Tax Authority

Enter IT registration Details For Organization

Generate TDSCertificate PrintOriginal

Review Print Status of certificate to print Originalagain

Print reports on TDS at Concessional rates


Duty Drawback Process

User’s Reference Guide 549

Process

Material in Oracle BOM

Enter Bill Of Material in India LocalizationInventory

Attach Order source or AR Invoice type to bond register or indicate it as for Export type

Invoice of Export Type

AR Invoice

Invoice created by Auto invoice Program

Enter Proof of Export

Manual Duty DrawbackProcess Specify the receipt selection method i.e. LIFO/FIFO

Automatic Duty DrawbackProcess Specify the receipt selection method i.e. LIFO/FIFO

Setup

orEnter Bill Of

Oracle India Localization

Process continued … ..

Automatic DutyDrawback ProcessSpecify the receiptselection method i.e. LIFO/FIFO

If Bill Of Material defined in Oracle BOM module process will consider latest wrt.Removal date else latest Bill Of Material defined in Oracle Inventory module process will be considered.

Selected BOM will be exploded to the lowest level

Receipts will getselected based on receipt selectionmethod selected

Process will calculate the claimamount for eachreceipt till amount against entirequantity is claimed

If MODVAT is claimed againstselected receipt Process will reverse the MODVAT credit in RG 23 A part II and corresponding GL entry will be passed. If the balance in register isinsufficient then process will stop.

Print Duty DrawbackClaim Report

Manual DutyDrawback ProcessSpecify the receiptselection methodi.e. LIFO/FIFO

If Bill Of Material defined in Oracle BOM module process will consider latest wrt.Removal date else latest Bill Of Material defined in Oracle Inventory module processwill be considered.

Selected BOM will be exploded to the lowest level and you can view that in ComponentsWindow

Receipts will get listed based on receipt selectionmethod selected.Select Receiptsagainst which Duty Drawback to beclaimed

Process will calculate the claimamount for eachselected receipt till amount againstentire quantity is claimed

If MODVAT is claimed againstselected receipt Process will reverse the MODVAT credit in RG 23 A part II and corresponding GL entry will be passed. If the balance in register is insufficient thenprocess will stop.


Support for Trading Process

Define Trading Item by enabling Trading Flag to ‘Y’ in Item Definition

Enter Purchase Order for Trading Item with Ship to Organization being ‘Trading’

Report RG23D

Match Receipt While matching receipt for aninvoice Excise Duty per unit will be defaulted from the receipt line. Excise Duty will be made Zero for a delivery to duty exempted customer.

Enter Receipt for Purchase Order anddeliver them toTrading Sub Inventory

RG23D RegisterUpdated duringReceipts, Invoice,RTV and RMA

Enter Trading registration DetailsFor Organization / Location(Additional organizationinformation)

Sales Order For Trading Item

AR Transactionfor Trading Item


RMA Process

Enter Sales Order

India Localized &

Click On Open

Enter the

Base Sales

Order

Header

Enter Line

Details

Prepare RMA With or

Without Reference

RMA with

Reference

RMA without

Reference

Localization

DFF with

India Invoice

Localization

DFF Not

Required

Reference to

Order or Invoice

Invoice Order

Localization

DFF with

India Sales

Order

Automatic

Population of

Delivery Detail

id

Save RMA Order Save RMA Order

Return to India

Localized Sales

Order Screen

Return to India

Localized Sales

Order Screen

Taxes are

display mode

only based on

the Delivery

Detail id

Taxes are

defaulted

based on

setup & can

be modified

Return to

Base Apps

Sales Order

Form

Book RMA Order

Book RMA Order with

India Localization


Descriptive Flex fields used in India Localization

This document details Descriptive Flex fields being used/reserved for India Localization. The users are advised not to use these attributes while doing their In-house Customization. Any data present in these fields has to be migrated to attributesother than those used by Localization, failing which the data will be lost on applicationof Localization patch..


Details of attributes used / being used in DFF by Release. 11i Localization

Sl.No

Title AttributeApplication Context Segment Name Remarks

1 OracleInventory

Items India Items Attribute1 excise_flag

Attribute2 modvat_flag

Attribute3

Attribute4 item_tariff

Attribute5 item_folio

Attribute13 Future use


Attribute15 trading_flag

2 OracleInventory

India Other Transaction

TempTransactionhistory

Attribute1 Non-Display

3 Oracle HumanResources

AdditionalOrganizationUnit Details

India Org Info Attribute1 Tan No.

Attribute2 Pan No.

Attribute3 Ward No.

Attribute4 OM Tax Source


4 OraclePurchasing

Excise Invoice No. ReceivingTransactions

India Receipt Attribute1

Attribute2 Excise Invoice Date

Attribute3 Claim CENVAT on Receipt

India Return to Vendor

Attribute4 Generate ExciseInvoice


India RMAReceipt

Attribute1 Excise Invoice No



Attribute4 RM_ITEM_NO

Attribute5 RMA_Type

5 OraclePurchasing

RCV_SHIPMENT_HEADERS

India Receipt Attribute1 Excise Invoice No.



Attribute5 Paddr Transaction Type

India RMAReceipt

Attribute1 Excise Invoice No.


item_class_id



Attribute4 RM_ITEM_NO

Attribute5 RMA_Type

6 OraclePayables

InvoiceDistribution

IndiaDistributions

Attribute1 JA_IN_TDS_TAX_NAME_INV

Attribute2 JA_IN_WCT

Attribute3 JA_IN_WCT1

Attribute4 Future use Non-Display

Attribute5 Future use Non-Display

7 ApplicationObject Library

CommonLookups

India LookupCodes

Attribute1 Classification

Attribute2 TDS Limit

Attribute3 Tax Type

8 Oracle OrderManagement

AdditionalLine AttributeInformation

Invoice India Attribute2 Delivery Detail Id

Attribute3 Allow ExciseCredit?

Allow Sales Tax Credit?

Attribute5 Excise Duty Rate per Unit

Excise Duty Rate (%)

Customer POIndia

Delivery Detail Id


Attribute4 Allow Sales Tax Credit?


Attribute14 Excise Duty Rate (%)

Sales OrderIndia

Attribute2 Delivery Detail Id


Attribute4 Allow Sales Tax Credit?


Attribute14 Excise Duty Rate (%)

9 OracleReceivables

LineTransactionFlexField

SUPPLEMENTCM

INTERFACE_LINE_ATTRIBUTE2

Value2

Attribute4

Attribute14

Attribute2


SUPPLEMENTDM


Value2

SUPPLEMENTINVOICE


Value2

TDS CREDIT INTERFACE_LINE_ATTRIBUTE2

Value2

10 Oracle Assets AssetCategory

India B Of Assets

Attribute1 Date of Acquisitions

Attribute2 Block of Assets

11 OraclePayables

PaymentInformation

India PaymentInformation

Attribute1 Check Deposit date

Attribute2 Bank Name

Attribute3 Challan No.

OraclePayables

India OriginalInvoice for TDS

Attribute1 Original Invoice-TDS

India VAT DynamicRegistration

VAT InvoiceNumber

DynamicRegistration

VAT Invoice Date

13 Oracle Assets MassAdditions

India B Of Assets

Attribute1 Date of Acquisitions

Attribute2 Block of Assets

14 Oracle OrderManagement

AdditionalLine Return Information

LEGACY None None

12 Invoice

In addition to the above, we intend using First 5 attributes for all the remaining tables/ flex fields, in normal cases and/or Attribute 14,15 in special cases for future development, if required.


il account entries

Documents

ac cenvatable tax

cenvatablenoncenvatable

ac total tax amountnote

accounting localization

accounting entries

cenvatable taxesinventory

accountinglocalization

total tax amountinventory