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Master Data

Standard SAP Business Processes

Excise Registers & SAP Reports

This Presentation Covers

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In India , Excise duty is a tax on the manufactured goods that is levied when goods leave the place of manufacturer . Manufacturer can set off the duty paid on input materials against their output duty , this procedure is known as central value added tax [CENVAT ] .

Indian Excise LawIndian Excise Law

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Indian Excise LawIndian Excise Law

General ledger for excise duty updation will be assigned in CIN [ IMG ] under Accounting customization .When ever goods are received , Excise G/L will be updated for Modvat credit on inputs , RG 23 A part 1 for quantity and part 2 for Modvat credit amount . This register is used for material other then Capital Items . For Capital Items RG 23 C Part 1 and Part 2 will be Updated . For Depot receipts and sales RG 23 D Part 1 and Part 2 will be updated .

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SAP Easy Access India Localization MenuSAP Easy Access India Localization Menu

Go To Address Bar and Type Transaction Code J1ILN

You get the SAP India Localisation Menu

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You get the Master Data Screen

Create Chapter-id

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Chapter ID: The number given to a material in the schedules of materials published by the government of India.The schedule lists all materials involved in manufacturing, input materials and output materials alike. It shows how much excise duty is levied on each material.Each material in the schedule is assigned its own identification code, called "chapter ID."

The chapter ID are declared in Excise books are maintained here. We Create Chapter ID for Material Master . All Chapter ID where Cenvat determination Is Applicable should be Maintained First .

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Create New EntriesCreate New Entries

Save the Chapter ID

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Maintain Material & Chapter-id Combination

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Click on New Entries and enter the following details

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Here we indicate a material as Sub-contracting

For all subcontracting Material ( sent and received ) pls tick on Subcontracting BOX

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Here we define material Here we define material type as :type as :ConsumablesAssetsToolsNon ConvertibleRaw MaterialRG1

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Enter the Material no. in Input and Output Norms with Plant assignment along with Excise Declaration date.

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Click on New Entries and update Vendor Excise details

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Put Excise Indicator as :

01 – 100 % Taxable

09 - Nil Tax

The System will determine this Vendor as subject to Excise

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Similar to Vendor, Make Entries for your Customer also

Make sure that you assign Appropriate Excise Indicator to your Customer.

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Here we maintain Excise details for the Plant in a combination of CoCode--Plants—First Month of Excise Year—No. Range—Excise Indicator

Excise Indictor for all Manufacturing Plants in a Company Code will be “1”

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We Maintain the Final Excise Indicator for Vendor & Plant.

Similarly maintain final excise indicator for Customer and Plant.

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We Maintain Excise Tax rate Based on Material Chapter ID and Final Excise Indicator

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This table will be maintained if there is any excise rate other then Excise rates based on Material Chapter ID and Final Excise Indicator. ( e.g.- S.S.I Vendors , Qty based excise amount ). In purchase order first Excise rates will be searched in exceptional table and then in table based on Final excise indicator and material chapter ID. The exceptional rates will be maintained with combination of Material number and vendor Code as follows.

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1. SAP also support Sales Tax Setoff. We define the % on the combination of Plant & Material.

2. Also we can define AED & SED on Quantity Basis

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Standard SAP Business Processes

Procurement:Procurement of Raw Material – Domestic & Import

Procurement of Capital Goods (Assets, Consumables & Tools)

Stock Transfer

Subcontracting –

Without Payment of Excise Duty.

With Payment of Excise Duty.

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Procurement of Raw Material - Domestic. 1. You Create Purchase Order via ME21N or a Schedule Agreement via

ME31L with Pricing which includes Excise Duty. 2. When the goods arrives, the warehouseman enters the goods receipt via

MIGO. Here The System Creates: Material Document to Record Goods Receipt Creates an Accounting Document to debit the inventory account and

credit the GR/IR clearing account Creates Part I Entry in Register RG23A or RG23C

3 The Excise Clerk Captures the Vendor’s Excise Invoice with reference PO/GR Document via J1IEX-Capture.

4 The Excise Supervisor checks the excise invoice captured by the clerk & Posts the CENVAT via J1IEX-Post . The System Creates PART II Entry in Register RG23A or RG23C and a Accounting Document to debit MODVAT Accounts and Credits GR/IR Liability CENVAT.

5 You enter the Vendor Invoice in the system via MIRO. The system creates an accounting document crediting the Vendor and debiting the GR/IR Document. By this your GR/IR Documents gets Cleared off.

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Eg: PO Conditions

System determine Excise Duty as per TAX Code & Master Data maintained J1ID.

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Eg: Goods Receipt & Capture Excise InvoiceHere we can Capture or Capture & Post Excise Invoice while doing Goods Receipt

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Procurement of Raw Material - Imports

1. You Create Purchase Order with all conditions applicable for Imports via ME21N.

2. You pay for custom duties and planned delivery costs called as customs invoice via MIRO.

3. You do Goods Receipt w.r.f. to PO and custom invoice via MIGO. The System Create PART I Entry in Register RG23A or RG23C and an Accounting Document.

4. You Capture & Post Vendor’s Excise Invoice via J1IEX or together with MIGO. The System Creates PART II Entry in Register RG23A or RG23C and creates the Accounting Document.

5. You Enter the Vendor Invoice via MIRO. The system created accounting Entries crediting your Vendor & debiting the GR/IR Account.

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Procurement of Capital Goods**Capital Goods in SAP – CIN is classified into Assets, Consumables & Tools**

Procurement of Capital Goods is same as Procurement of Raw material.

The Difference is:

As per Excise Law you can take MODVAT 50% in the year of Purchase and 50% in the next year. SAP Supports this feature. What you do is you define All such materials as Capital Goods in Excise Master Data – J1ID as earlier discussed. So, When you Post your CENVAT via J1IEX, The System creates an Accounting Entries by posting 50% in MODVAT Accounts and 50% in MODVAT on HOLD Account.

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Subcontracting There are two ways of handling the excise invoice on the goods that you provide them with:

• Subcontracting without payment of Excise Duty:

The Process Flow is:1. You Create a subcontract order via ME21N with item category “L”.2. You Create a Transfer Posting Document via MB1B w.r.f. to Subcontract Order.3. You Create a Subcontracting Challan widely called as 57F4 Challan via J1IF01.4. You do Goods Receipt with that Challan Reference via MIGO.5. You Reconcile received Qty. with Challan Qty. via J1IFQ.6. You complete the Challan using J1IF13.

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. 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.

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Subcontracting • Subcontracting under Full payment of Excise Duty:.

The Process Flow is:1. You create a Subcontract Order via ME21N. 2. You create a transfer posting for the materials that you want to send to the

subcontractor via MB1B. 3. You create an outgoing excise invoice for the materials via J1IS w.r.f to Material

Document. 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. You capture the subcontractor’s excise invoice, using the purchase order as the

reference document via J1IEX. 7. The warehouseman enters the goods receipt via MIGO. 8. The excise supervisor posts excise invoice via J1IEX. 9. The accounts payable clerk posts the subcontractor’s invoice via MIRO.

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1. You create a stock transport order, and send the order to the issuing plant. 2. The issuing plant has processes your order, and when it is ready to ship:

a. Issue the goods using a transfer posting via MB1B. b. Create an excise invoice via J1IS.c. Verifies and posts the excise invoice. Then Goods are dispatched, together with the excise invoice.

3. Once the goods arrive at receiving Plant, a. Enter the goods receipt, again using the stock transport order as the

reference document via MIGO. b. Capture the excise invoice, using the GR Document as the reference

document via J1IEX.c. Posts the excise invoice via J1IEX.

Stock Transfer

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Standard SAP Business Processes

Sales

Stock Transfer

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Sales from Factory

1. You Create a Sales Order via VA01 or Schedule Order via VA31 with conditions of Excise.

2. You Create an Outbound delivery via VL01N with movement type 601. You define this movement type as relevant for RG1 Register.

3. You Create a Billing Document/Commercial Invoice via VF01. Excise Invoice is created in Background. The system creates two accounting documents.a Dr. Customer A/c.

Cr. Sales A/c Cr. Excise duty Recovered Account

Cr. Any other Condition like Freight, Octroi etc.

b Dr. Excise Duty Paid A/c. Cr. Excise Duty payable Account

At the end of the year Recovered Account = Paid Account

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Eg: Sales Order Condition

The System Creates Excise Entries on the Combination of TAX Code and Excise Master Data Maintained in J1ID

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Eg: Accounting Documents

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Stock Transfer

This is the Stock Transfer of our Finished Goods from one Plant to Other. This Stock Transfer follows SD Route.

Process Flow: At Issuing Plant:1. You Create Stock Transfer Order via ME21N or ME27.2. You Create an Outbound Delivery and w.r.f. Purchase Order via VL04.3. You do the Post Goods Issue via VL02N4. You Create Billing Document w.r.f. Outbound Delivery via VF01 and Excise

Invoice is created in Background.At Receiving Plant:1. You do Goods Receipt w.r.f. to Purchase Order via MIGO.2. You Capture Excise Invoice w.r.f. GR Document via J1IEX or the same can

be done in one step via MIGO.3. You Post CENVAT via J1IEX.

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Accounting EntriesMODVAT Entry When making Goods Receipt for Non-Capital Goods ( Coded and Non-coded done through SAP MM Module).

Excise duty –RG23A Part 2 – Input DrTo GR/IR Liability - Cenvat Cr

CENVAT entry – Capital Goods Excise duty – RG23C – CAPITAL Dr (50%)Cenvat In abeyance – CAPITAL Dr (50%)

To GR/IR Liability - Cenvat Cr

Sale of Goods Only excise entry through India version

Excise duty paid DrTo Excise duty – payable account Cr

 

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TR6 Payment Excise Duty – PLA Dr

To XXXX – Intermediate TR6 A/c CrIf the payment is made on account of some expenditure such as Interest, Stationary and overtime account.

XXXX- Expenditure A/c DrTo Excise Duty – PLA Cr This is manual JV.

Monthly AdjustmentWhen monthly or fortnightly payment is made to Excise dept . Excise Duty Payable a/c Dr.

To Excise Duty – RG23A-Input Cr To Excise Duty – RG23C-CAPITAL Cr. To Excise Duty – PLA Cr.

( This is to be done with outgoing payment and clearing only).

Accounting Entries

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Accounting EntriesReturn of Excise goods where payment is required to be done immediately. ( Purchase Return )

GR/IR Liability - Cenvat DrTo Excise Duty – RG23A-Input Cr } Any one a/cTo Excise Duty – RG23C-CAPITAL Cr. }To Excise Duty – Payable Cr. }( All LRN entries will be discussed separately).

 JV every year end to be passed in the subsequent year after the asset is put to use in the subsequent year.

Excise Duty – RG23C- Capital DrTo Cenvat In abeyance – CAPITAL Cr.

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Manual JV for Cancellation RCIA 

GR/IR Liability – Cenvat DrTo Excise duty –RG23A Part 2 – Input Cr

 Sales Return

Excise duty –RG23A Part 2 – Input DrTo Excise Duty Paid Cr

Accounting Entries

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FORT NIGHT UTILISATIONTRAN:J2IU

TYPE THE COMPANY

CODE,PLANT, EXCISE

GROUP,PAYMENT DATEAND PERIOD FROM

AND TO. SELECT PAY SED FM BED

AND PRESS F8

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TYPE THE AMOUNT FOR

WHICH ACCOUNT TO BE PAID.AND PRESS

ENTER. IF THERE IS NO ERROR

SAVE

The System Creates following Accounting Entries:Dr. Excise Duty Payable AccountCr. RG23A BEDA/c.Cr. PLA

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TR6C Challan

When you don’t have enough Balance in either of RG23A BED or RG23C BED to pay off Excise duty, you transfer the Balance amount in your PLA and then do Utilization.

1. You Create an FI Document Dr. PLA and Crediting Bank A/c.

2. You Create a TR6C Challan on the basis of that FI Document

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TR6 CHALLAN ACCOUNTINGTRAN: J1IH

SELECT TR6 ICONIN THE POP SCREEN

TYPETHE ACCOUNTING

DOC NO FROM GLA/C CODE

YEAR COMPANY CODE

PLANT EX GRP AND

SUB TRAN AND PRESS ENTER

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FILL UP THE AMOUNT AS

PER DEPOSITED, AND SAVE

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Excise RegistersRG23A PART I: This Register has now become Obsolete and not required

now a days. This Register shows the quantities of the materials.

RG23A PART II: Part II shows the amounts of excise duty on the materials, and how much you have transferred to the CENVAT accounts

RG23C PART I: This Register has now become Obsolete and not required now a days. This Register shows the quantities of the materials.

RG23C PART II: Part II shows the amounts of excise duty on the materials, and how much you have transferred to the CENVAT accounts

PLA: These is Personal Ledger Account for Excise.

RG23D: It records the receipts & issues of excisable materials at Depot.

RG1: A register of excisable finished goods kept by manufacturing plants. The register shows goods movements from the factory to a store specifically for excisable finished goods.

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RG1 Register

Follow the Process:

1. Update Register via T. Code J1I5

2. Extract Register via T. Code J2I5

3. Print RG1 Register via T. Code J2I6

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UPDATION OF RG1 REGISTER T.CODE: J1I5

RECEIPTS

Enter : Posting date Movement Type for Receipts Classification as “ROP” Select RG1 and press f8

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You get the List of Material Documents for Receipts

Select all & Simulate. Traffic Lights goes Green. Again Select All and Click on “Create Register Entry”. System will update your RG1 Register.

This is called Traffic Lights

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RG1 Updation for Dispatches

Repeat the Procedure:Enter Posting date Movement Type Classification as IDH Select RG1 and press f8

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RG1 Updation for Dispatches

If Traffic lights goes Green, it means system will update the material Documents but if it goes Red then it means that there is no stock

Select all and click on “Create Register Entries”. The System updates the RG1 Register

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REGISTER EXTRACTIONT.CODE J2I5

Enter : Excise Group

Start & End Date

Select Register

Execute

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REGISTER PRINTINGT.CODE: J2I6

Select Register and Execute

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Report: Monthly Return Under Rule 57AET.CODE:J2I9

Enter: Company code Excise Group Posting Date

Select the Annexure for Transaction details & Abstract for Total Credits and Total Debits

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CENVAT AVAILMENT OF CAPITAL GOODS IN NEXT FINANCIAL YEAR

T.CODE: J2I8

ENTER: COMANY CODE PLANT

EXCISE GROUP POSTING DATE

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SELECT ALL AND SELECT TRANSFER OF CREDIT

You get the List of Excise Invoices for which you have to avail CENVAT

Select the Excise Invoice(s) and Click on Transfer Credit.

System Creates an Accounting Entry:Dr. CENVAT on HOLD A/c.

Cr. MODVAT Clearing A/c.

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Report: CENVAT not availed

T.CODE J1I7Enter Document Year

Excise GroupSelect No posting or

Part1 posted, Part2 not posted Click on Execute or Press F8

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SYSTEM DISPLAYS THE LIST OF EXCISE INVOICE FOR WHICH CENVAT IS NOT AVAIED

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DAY TO DAY ACTIVITIES

J1IEX_C – Capture Excise InvoiceJ1IEX_P – Post CENVATJ1IIN – Create an Outgoing Excise InvoiceJ1IF01 – Create Subcontracting ChallanJ1IS – Create an Excise Invoice for other MovementsJ1IH – CENVAT AdjustmentJ1I7 – CENVAT not availedJ1IFQ – Subcontracting Challan reconciliationJ1I5 – Finished Goods receipts & Issues updationJ2I5 - Register ExtractionJ2I6 – Register Printing

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MONTHLY ACTIVITIES

J2IU - PLANING TR6 AMOUNT DEPOSIT BY SIMULATE

J1IH - UPDATION OF TR6 CHALLAN AMOUNT IN PLA REGISTER

J2IU - UTILIZE THE CENVAT AMOUNT

J2I6 - PRINTOUT OF E1 MONTHLY RETURN

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YEARLY ACTIVITIES

On Union Budget Check any Tariff ED % changes update if any

Close all Pending Excise Transaction

J1IH – CENVAT Adjustment

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ON BEGINING OF THE FINANCIAL PERIOD

Excise Number Range Copy to New Fiscal Year.

Carry forward of Balance in PLA, RG23A & RG23C Accounts.

J2I8 – Transfer of 50% MODVAT on Capital Goods