Table of Contents

SD CIN ....................................................................................................................................................................................................................... 3 Excise Invoice (Outgoing) .................................................................................................................................................................................... 4 Material Master (Excise Data) ............................................................................................................................................................................ 5 Vendor Master (Country Version India Data) ............................................................................................................................................. 5 Customer Master (Country Version India Data)......................................................................................................................................... 6 Pricing .......................................................................................................................................................................................................................... 7 Excise Duties......................................................................................................................................................................................................... 7 Sales Taxes ............................................................................................................................................................................................................ 8 CUSTOMIZATION SETTINGS .............................................................................................................................................................................. 8 Basic Settings ....................................................................................................................................................................................................... 8 Excise Registration........................................................................................................................................................................................ 8 Maintain Company Code Settings ........................................................................................................................................................... 9 Plant Setting ...................................................................................................................................................................................................10 Maintain Excise Groups .............................................................................................................................................................................10 Maintain Series Groups .............................................................................................................................................................................13 Maintain Excise Duty Indicators............................................................................................................................................................13 Determination of Excise Duty .................................................................................................................................................................14 Master Data .........................................................................................................................................................................................................16 Maintain Chapter IDs .................................................................................................................................................................................16 Assign Users to Material Master Screen Sequence for Excise Duty ........................................................................................17 Define Form Types ......................................................................................................................................................................................17 Account Determination ..................................................................................................................................................................................18 Define G/L Accounts for Taxes ...............................................................................................................................................................18 Specify Excise Accounts per Excise Transaction ............................................................................................................................19 Specify G/L Accounts per Excise Transaction..................................................................................................................................20 Sales from Factories - (J1IIN) ...........................................................................................................................................................................22 Automatic Creation of Excise Invoices ....................................................................................................................................................23 Exemption Forms .............................................................................................................................................................................................24 Export-Oriented Units ....................................................................................................................................................................................24 Creation of Excise Invoices in Batches.....................................................................................................................................................25 Printout of Excise Invoices ...........................................................................................................................................................................26 Creating Pro Forma Excise Invoices .........................................................................................................................................................26 Creating Excise Invoices ................................................................................................................................................................................27 Excise Duty Utilization...............................................................................................................................................................................28 Duty Payable on Sale or Transfer of Capital Goods ............................................................................................................................30 Canceling Excise Invoices..............................................................................................................................................................................31

Sales from Depots J1IJ ......................................................................................................................................................................................31 Creating Excise Invoices for Stock Transfers ........................................................................................................................................32 Creating Excise Invoices for Direct Purchases .....................................................................................................................................33 Creating Additional Excise Entries at Depots .......................................................................................................................................33 Assigning Excise Invoices to a Delivery ..................................................................................................................................................34 Verifying and Posting Excise Invoices Assigned to Delivery ..........................................................................................................35 Other Outward Movements...............................................................................................................................................................................35 Creating Excise Invoices ................................................................................................................................................................................36 Duty Payable on Sale or Transfer of Capital Goods ............................................................................................................................36 Verifying and Posting Excise Invoices .....................................................................................................................................................37 Canceling Excise Invoices..............................................................................................................................................................................38 Creating Excise Invoices for Stock Transfers ........................................................................................................................................38 Making a Transfer Posting ............................................................................................................................................................................38 Exports Under Excise Regulations .................................................................................................................................................................39 Exports Under Bond ........................................................................................................................................................................................39 Excise Bond ....................................................................................................................................................................................................40 ARE-1 Processing.........................................................................................................................................................................................42 Pro Forma of Running Bond Account ..................................................................................................................................................49 Statement Regarding Export of Excisable Goods ...........................................................................................................................49 Bond Summary Report ..............................................................................................................................................................................50 Exports Under Claim for Rebate.................................................................................................................................................................50 ARE-1 Processing.........................................................................................................................................................................................51 Deemed Exports ................................................................................................................................................................................................56 Deemed Export License.............................................................................................................................................................................57 ARE-3 Processing.........................................................................................................................................................................................59 Deemed Export License Summary........................................................................................................................................................65 ARE Documents .................................................................................................................................................................................................65 Transaction Configuration .......................................................................................................................................................................68 ARE Document Numbering......................................................................................................................................................................68 Aging Analysis for ARE Documents ..........................................................................................................................................................73 Transaction Codes ............................................................................................................................................................................................74 Form Tracking ........................................................................................................................................................................................................75 Sales Register ..........................................................................................................................................................................................................75 CENVAT Adjustment Postings..........................................................................................................................................................................76 Making Adjustment Postings for Scrap...............................................................................................................................................77 Making Adjustment Postings for Materials Not Used in Production ......................................................................................78 Making Adjustment Postings for Additional Excise Paid by Vendors ....................................................................................79 Making Adjustment Postings for Money Transferred to PLA....................................................................................................79 Canceling Excise Invoices .........................................................................................................................................................................80

Making Adjustment Postings for Other Transactions ..................................................................................................................80 Assigning Excise Invoices to Line Items .............................................................................................................................................81 Specifying Which CENVAT Accounts to Adjust ...............................................................................................................................81 Displaying CENVAT Account Balances................................................................................................................................................82 Excise Registers: ....................................................................................................................................................................................................82 Forms / Outputs / Reports: ........................................................................................................................................................................... 107 Monthly Reports: ................................................................................................................................................................................................ 107 Transaction Codes for India ........................................................................................................................................................................... 107 Taxes (FI-AP/AR) ............................................................................................................................................................................................... 109 Excise Duty ....................................................................................................................................................................................................... 110 Partial CENVAT Credit ............................................................................................................................................................................ 111 Monthly Remittance of Excise Duty and Service Tax ................................................................................................................. 112 Value Added Tax (VAT) ............................................................................................................................................................................... 114 Configuration for Official Document Numbering ........................................................................................................................ 115 Service Tax ....................................................................................................................................................................................................... 116 GTA Service Tax......................................................................................................................................................................................... 117 Posting GTA Service Tax ........................................................................................................................................................................ 119 Update GAR-7 Challan............................................................................................................................................................................. 121 Sales Tax ............................................................................................................................................................................................................ 125 Sales Tax Register ..................................................................................................................................................................................... 126 Withholding Tax............................................................................................................................................................................................. 126 Tax Collected at Source ............................................................................................................................................................................... 127 Customizing for Tax Collected at Source ........................................................................................................................................ 128

Sales and Distribution CIN

SD CIN
Purpose The Sales and Distribution (SD) component covers the most important laws and business practices specific to India. The following documentation describes these aspects of the component.
Features

Country-Specific Functions Country Version India comes with functions for calculating, posting, and remitting excise duty:

The system determines the excise and other taxes on your sales. You can create outgoing excise invoices, customized to your own requirements, and make the appropriate accounting postings.

The system offers functions for domestic and export sales from factories and depots, including exports under excise regulations. All goods movements are recorded in the appropriate excise registers, including register RG 23D. You can remit the excise duty using the delivered functions.

Country Template The country template for India comes with sample pricing procedures, including all taxes, and settings for automatic account determination to the appropriate excise accounts.

EXCISE INVOICE (OUTGOING)

Definition

A business document, in India, that you prepare when you issue excisable goods from a manufacturing plant, for example:

To be sold to a customer To be transferred to another of your plants

The excise invoice lists the goods that you have issued and states how much excise duty applies. Your customer uses the excise invoice to claim back the excise that it has paid from the excise authorities.
Use

In the 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. As well as creating excise invoices individually, you can also create them in batches (see Creation of Excise Invoices in Batches).
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.
Sales (other goods movements)

Some other goods movements may also require you to create an excise invoice with reference to other documents. The system offers separate functions for these purposes (see Other Outward Movements).
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: a. Number your outgoing excise invoices in sequential order, starting each year on 1 April. b. You must notify the excise authority of the jurisdiction of the invoicing location. c. 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 Customizing for Logistics General, by choosing Taxes on Goods Movements India Basic Settings Maintain 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 pre-numbered forms). You can customize the system so that it prints the excise invoice accordingly, in Customizing for Logistics General, by choosing Taxes on Goods Movements India Basic Settings Maintain Excise Registrations.

MATERIAL MASTER (EXCISE DATA)

Definition

The part of the material master record where you record excise information. To access the material master, from the SAP Easy Access menu, choose Logistics Materials Management Material Master Material The excise data is displayed in a separate group box on the Foreign Trade: Import Data and Foreign Trade: Export Data tabs. Use Customizing In order for the users to be able to see the excise data group box, carry out the IMG activity in Customizing for Logistics General, by choosing Taxes on Goods Movements India Master Data Assign Users to Material Master Screen Sequence or Excise Duty. VENDOR MASTER (COUNTRY VERSION INDIA DATA) The part of the vendor master record where you record information about a vendor relating to sales tax, excise duty, and withholding tax.
To access the vendor master, from the SAP Easy Access screen, choose Purchasing Master Data Vendor Central ....

Logistics

Materials Management

When you have entered the vendor that you want to process, you can access the excise data from every screen, by choosing CIN Details. There are three separate tabs, one for each sort of tax.

If you prefer, you can also maintain this data in the Excise Rate Maintenance transaction (see Vendor Master (Excise Data)).
TAN Exemption You can define the withholding tax exemption for a vendor on the basis of the tax account deduction number (TAN). Choose the CIN Details pushbutton. On the resulting screen, under the TAN Exemption tab, make the following settings: Enter the section code that identifies under which TAN the tax was deducted. Enter the exemption certificate number and the exemption rate.

The exemption certificate field is mandatory. Assign a period to this certificate number that identifies the duration for which the tax exemption is applicable. Enter the reason for exemption from withholding tax.

CUSTOMER MASTER (COUNTRY VERSION INDIA DATA)

Definition The part of the vendor master record where you record information about a vendor relating to sales tax, excise duty, and withholding tax. To access the vendor master, from the SAP Easy Access screen, choose Logistics Sales and Distribution Master Data Business Partners Customer . Use When you have entered the customer that you want to process, you can access the excise data from every screen, by choosing CIN Details. There are three separate tabs, one for each sort of tax. If you prefer, you can also maintain this data in the Excise Rate Maintenance transaction

PRICING
Use When you create a sales document, the system automatically determines the price of the goods you are selling, including any excise duties and sales taxes. Features Country Version India comes with four pricing procedures as follows:

JINFAC (Sales from manufacturing plants) JINEXP (Export sales) JINDEP (Sales from depots) JINSTK (Stock transfers)

These pricing procedures determine the net price (or the assessable value, if there is one) and then calculate all forms of excise duties and sales taxes on the goods.

Excise Duties
For each form of excise duty, there are three separate condition types as follows: Excise duty Ad valorem Specific Total* Basic Additional Special Cess JEXP JEAP JESP JCEP JEXQ JEAQ JESQ JCEQ JEXT JEAT JEST JCET

* These condition types show, for example, the total basic excise duty on the goods (ad valorem duty plus specific duty). It is the values in these condition types that the system uses in follow-on documents. All of these condition types are discount surcharge conditions and are posted using the accounting key EXD. The excise conditions are determined using the access sequence JEXC. This access sequence contains the following condition tables, so that you can create excise condition records for all of the following combinations: Table Conditions 362 357 358 371 369 Country, Chapter ID* Country, Plant, Chapter ID Country, Plant, Chapter ID, Material Country, Plant, Chapter ID, Ship-To Party Country, Plant, Chapter ID, Customer Tax Classification

372

Sales Organization, Reference Document And Item

* The chapter ID is stored in the control code field. When you enter a material's chapter ID in the material master, the system copies the chapter ID to the control code field. When you create a condition record, the field name is control code. If you want to create condition records for different types of customers, for example, those that qualify for concessional tax rates and those that don't, you can define customer tax classifications in Customizing and create condition records for each classification.

Sales Taxes
For central sales tax and local sales tax, there are two condition records each, one for the basic tax (JCST and JLST respectively), and one for surcharges (JCSR and JLSR). These are all tax conditions and are posted with the account key MWS or MW3. When you create a condition record for the sales taxes, you must specify a tax code that you want the tax to be posted under in Financial Accounting (FI). The system determines the central sales tax using the access sequence JCST, and local sales tax using the access sequence JLST. Both access sequences use the following condition tables: Table Conditions 359 367 368 Plant, material group Country, plant, region, material Country, Region Of Delivering Plant, Region Of Ship-To Party, Customer Tax Classification, Material Tax Classification

CUSTOMIZATION SETTINGS
Basic Settings
Excise Registration An entity in India that is entitled by law to produce any goods liable to excise. Each entity is assigned its own excise registration number. Every factory that manufactures excisable goods is required to register separately, so that a business with seven factories requires seven registrations.

Partial CENVAT Credit

Specifies that the excise registration is allowed to credit only a portion of its input excise duty to its CENVAT account.
Dependencies

When you post a goods receipt, the system splits the input excise duty on the material into its deductible and nondeductible amounts. It posts the deductible duty to the appropriate CENVAT account, and adds the nondeductible duty to the material value. This information is also shown when you post the incoming excise invoice. Maintain Company Code Settings

Exch. rate type for CVD: You can use the exchange rate type to define a buying rate, selling rate, or average rate for translating foreign currency amounts. You can use the average rate for the currency translation, and the bank buying and selling rates for valuation of foreign currency amounts.
Exchange rate type for exports:

CVD (Countervailing duty): A form of excise duty imposed on imports that are subsidized by the country in which they were manufactured. Countervailing duty (also known as CVD) is intended to make the imports more expensive, thereby redressing any competitive advantage they might have over goods produced locally. Plant Setting

Maintain Excise Groups A unit within an excise registration, in India, which keeps its own set of excise records. Whereas the excise registration reports to the excise authorities, the excise group is a purely internal organizational unit. Each excise group keeps records of all transactions that have to be reported to the excise authorities. When the time comes to present these records to the authorities, the excise registration compiles the information from all of its excise groups.

Number of Goods Receipts per Excise Invoice:

Specifies whether you are allowed to receive more than one delivery per excise invoice, and if so, whether you can take the CENVAT credit immediately (Multiple Credits) or have to wait until the delivery has been made in full
(Single Credit).

Default Challan Qty. in GR:

Instructs the system, when you post a goods receipt using an incoming excise invoice as a reference document, to copy the excise invoice quantity to the goods receipt.
Excise Invoice during Billing:

Instructs the system to automatically create an outgoing excise invoice immediately you create a commercial invoice or a pro forma invoice. The system creates the excise invoice in the background. Dependencies If you want to make use of this function, you must also define the default plant, excise group, and series groups in Customizing for Excise Duty, by choosing Business Transactions -> Outgoing Excise Invoices -> Maintain Default Excise Groups
and Series Groups.

Create and Post Invoice single step J1IS:

Instructs the system to automatically verify and post excise invoices that you create using the Excise Invoices for Other Movements transaction.
Consumption: Create Part I Entry for Direct Consumption:

Automatically creates two entries in Part I of register RG 23 A or RG 23 C immediately you post a goods receipt for direct consumption, one entry to record the goods receipt, and one for the goods issue. Use Uniquely, goods for direct consumption are not added to a material stock. Instead, the system posts them straight to a consumption account. You do not create a separate goods issue. However, with other goods, it is the goods issue material document that causes the system to create the Part I entry for the goods issue. This function overcomes that problem: When you enter a goods receipt for direct consumption, the sysstem automatically creates two Part I entries (for the receipt and the issue) from the goods receipt document. Examples: You enter a goods receipt for 100 lengths of steel for direct consumption. The system creates a single material document for the goods receipt and issue. From this material document it generates two Part I entries for register RG 23 A, one for the goods receipt and another for the goods issue.
Depot Indicator: Depots are required to prepare register RG 23D, and follow different procedures for goods receipt and invoice generation. Generate Folio Numbers: Automatically generates a folio number when you post goods receipts and goods issues that are recorded in register RG 23D. Folio Number: A number assigned to all entries in register RG 23D. When you enter a goods receipt at a depot, the system generates a separate register entry for each line item in the material document. The entries are numbered consecutively. This is the folio number. Example A warehouseman enters a goods receipt for one table and four chairs. The system generates two entries in register RG 23D, one for each line item. Both entries have the same serial number, but each has a different folio number.

Depot Excise invoice: Automatically verifies and posts the selection of excise invoices that you have assigned to a delivery from a depot. Capture Excise Invoice in MIGO: Enables users to capture incoming excise invoices when they enter a goods receipt in the standard Goods Movement transaction, (MIGO).

This applies to manufacturing plants and depots alike. Dependencies When you run the Goods Movement transaction, it shows two additional Excise Invoice tabs, one at header level and one at item level. You enter the goods receipt details and the excise invoice information. When you save the goods movement, the system automatically saves the excise invoice, to be posted by an excise supervisor later on using the Incoming Excise Invoices transaction.

Maintain Series Groups Based on excise regulations and exemptions from the authorities you can maintain multiple number series for outgoing documents. But each of these series has to be declared to the excise authorities.

No utilization Flag

If you do not need any CENVAT utilization for an excise invoice but would like to just generate an excise invoice then you need to mark this indicator. If the flag is checked then system will create an Excise invoice in the given Series group but there will not be any account postings or Part2 postings.
Immediate Utilization of CENVAT

Specifies that when you create an excise invoice, the system immediately pays the amount from CENVAT and creates the Part II entry. Such invoices will not be listed for fortnightly utilization. If you have both fortnightly and immediate utilization for the same excise group, the account determination within CIN IMG should point to the ED interim account. Account determination for immediate payment will be done exactly the same as being done for fortnightly utilization program. Maintain Excise Duty Indicators

Determination of Excise Duty Select Tax Calculation Procedure

You specify which tax procedure you want to use for determining excise duties and sales taxes on input materials in India.

If you use condition-based excise determination, use a copy of the tax procedure TAXINN. If you use formula-based excise determination, use a copy of the tax procedure TAXINJ.

This tax procedure also supports condition-based excise determination, so that you can work with both concurrently.
We strongly recommend that new customers use condition-based excise determination. Note that once you have started using a tax procedure, you cannot switch to another one; otherwise you will not be able to display old documents.

Maintain Excise Defaults

You define which tax procedure and pricing condition types are used in calculating excise taxes using formula-based excise determination.

Activities
If you use condition-based excise determination, fill out the CVD cond. field and leave all the others blank. If you use formula-based excise determination, fill out all of the fields as follows:

Enter the tax procedure and the pricing conditions that are relevant for excise tax processing. Specify the purchasing and sales conditions types used for basic excise duty, additional excise duty, special excise duty, and Cess. Specify the conditions in the sales order that are used for excise rates. Specify the countervailing duty condition type used for import purchase orders.

Condition-Based Excise Determination Define Tax Code for Purchasing Documents You define a tax code for the purposes of calculating excise duty when you enter purchasing documents. Only carry out this activity if you use condition-based excise determination. Create a new tax code, and set the tax code type to V (input tax). Do not make any other settings for it.

Assign Tax Code to Company Codes Assign the tax code for purchasing documents to the company codes where it will be used. Only carry out this activity if you use condition-based excise determination. Classify Condition Types You specify which condition types you use for which sort of tax. Note that this only applies to condition types that you use with the new excise determination method. The system uses this information when you create a document from another one. For example, when you enter an incoming excise invoice from a purchase order, or when you create an outgoing excise invoice from a sales order, the system determines the various excise duties in the excise invoice using the information that you have entered here.

In addition, when you create a purchasing document, the system only uses the condition types that you enter here.

For taxes on purchases, use the condition types contained in the tax procedure. For taxes on sales, use the condition types contained in the pricing procedures.

Master Data
Maintain Chapter IDs Is 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."
Example

The schedule contains an entry for ceramic roofing tiles, which are liable to basic excise duty at 16%. The chapter ID associated with these tiles is 6903.10.

Assign Users to Material Master Screen Sequence for Excise Duty You customize the material master data so that it shows the information relating to excise duty. Standard settings Country Version India comes with a screen sequence (IN) that shows the excise duty fields. You have to assign it to each of your users. Activities 1. Double-click User Screen Reference. 2. Assign all users who need to see the excise duty information to the screen reference IN.

Define Form Types You define which form types you want to record in the system. You can only use form tracking for the form types that you enter here. Example

Form type: CT3 Form description: Concessional tax form Status: Receive

Account Determination
Define G/L Accounts for Taxes You specify which G/L accounts you will use to record which taxes.

Assign an account to each of the following posting keys. The accounts for VS1, VS2, and VS3 are used as clearing accounts during excise invoice verification.

VS1 (basic excise duty) VS2 (additional excise duty) VS3 (special excise duty) VS5 (sales tax setoff) MWS (central sales tax)

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

Specify Excise Accounts per Excise Transaction

You specify which excise accounts (for excise duty and CENVAT) are to be posted to for the various transaction types. Enter all the accounts that are affected by each transaction type. If you use subtransaction types, enter the accounts for each subtransaction type as well.
Activities

Transaction type UTLZ is used for determining accounts only while posting excise JVs and also if the payment of excise duty has to be done fortnightly.

The fortnightly CENVAT payment utility picks up the credit side accounts from the transaction types of GRPO, EWPO, and TR6C for determining the CENVAT and PLA accounts. There is no separate transaction type for fortnightly payment. Example Excise TT DC ind Account name GRPO GRPO GRPO CR CR DR CENVAT clearing account RG 23 BED account CENVAT on hold account

Specify G/L Accounts per Excise Transaction

You assign the excise and CENVAT accounts to G/L accounts. When you come to execute the various transactions, the system determines which G/L accounts to post to by looking at the:

Excise group Company code Chart of accounts

Furthermore, if you want separate account determination settings within an excise group, you can also use sub transaction types. Requirements

You have already: Defined the G/L accounts Defined the excise groups Maintained the transaction accounts

Activities For each excise group, assign the excise and CENVAT accounts to G/L accounts. For most businesses, one set of accounts will suffice for all transactions. Note You need not remit the CENVAT to the excise department immediately, so maintain the credit account for transaction type DLFC as an excise duty interim account. This will be set off when you remit the duty.

SALES FROM FACTORIES - (J1IIN)

Purpose

This process describes how the SAP system handles sales from factories, 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 Customizing for Logistics General, by choosing Taxes on Goods Movements India Business Transactions Outgoing Excise Invoices Assign Billing Types to Delivery Types. Two sample pricing procedures are provided for this sales procedure, J1INFAC (condition-based excise determination) and JFACT (formula-based excise determination).
Process Flow

1. The sales clerk creates a sales order, following the

standard procedure.

There are special procedures for customers in possession of exemption forms. 2. The shipping clerk creates a delivery, again, following the standard procedure.

On the initial screen, you set the appropriate delivery type. 3. The warehouseman enters the goods issue. 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: Creates an invoice, following the standard procedure. Creates an excise invoice from the invoice

If the invoice is to be sent on at a later date, the shipping clerk: Creates the pro forma excise invoice 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. Creates an excise invoice 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. Instead of creating excise invoices manually, you can also have the system create them automatically. Alternatively, you can create them in batches. 5. You ship the goods. 6. When the time comes to invoice the customer, you create the invoice, following the standard procedure.

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).

Automatic Creation of Excise Invoices

Use

The 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 only.
Activities Customizing

Activate the function in Customizing for Logistics General, by choosing Taxes on Goods Movements India Basic Settings Maintain Excise Groups. Specify which CENVAT accounts the system is to post the different types of excise duty to, in Customizing for Logistics General, by choosing Taxes on Goods Movements India Business Transactions Utilization Utilization Determination.

Specify which excise group and series group the excise invoices are to be created for, in Customizing for Logistics General, by choosing Taxes on Goods Movements India Business Transactions Outgoing Excise Invoices Maintain Default Series Groups and Excise Groups.
Day-to-Day Activities

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. It also determines the excise invoice type automatically.

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.

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.

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). The excise invoices are then created in the background.
Features

To access the report, from the SAP Easy Access (J1ILN CIN) screen, choose Indirect Taxes Sales/Outbound Movements Excise Invoice For Sales Order Batch Utilization (J1I3)
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:
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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.

Prerequisites

You have:

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 .

Creating Pro Forma Excise Invoices

You create a pro forma excise invoice as you would field, select Excise invoice Create any other billing document, but in the Billing type

Creating Excise Invoices

This is the standard procedure that you follow to create an outgoing excise invoice. You create the excise invoice from a reference document: an invoice, a pro forma excise invoice, or a billing document. Prerequisites

You have: 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 Customizing for Logistics - General, by choosing India Basic Settings Maintain Company Codes . Procedure

Taxes on Goods Movements

From the SAP Easy Access screen, choose Indirect Taxes Sales/Outbound Movements Excise Invoice For Sales Order Outgoing Excise Invoice Create/Change/Display ... 1) If you want to create the excise invoice with reference to a pro forma excise invoice or commercial invoice, choose Excise Invoice Create.
a) If you want to create the excise invoice with reference to a delivery note, choose 1. Enter the number of the reference document. If you do not know the document number, you can search for it by choosing 2. Choose

Exc. inv. for delivery Create.

(Due List).

(Continue).

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. 3. Enter header data as required. 4. To check if the utilization is done properly and the document is ready for posting, choose 5. To enter texts for the excise invoice, choose 6. To display the utilization details, choose

(Check).

(Change text). (Calculate).

The system displays the available balance against each duty (CENVAT and Service tax) and each register type. In the Balance Utilization group box, the system lists the amount due and the corresponding account from which the

amount is to be deducted. You can overwrite these fields if you want, and choose utilization is possible.
7. Save the excise invoice. When you save the excise invoice, the system: o

(Check) to check whether

Creates an accounting document that debits the accounts from which the excise duty or the service tax is to be paid. Debit 150.00 50.00 100.00 Credit

Account CENVAT payable Register RG 23A Service Tax o

Generates entries in the Part II table for CENVAT payable. Based on the register used for utilization, the system assigns the following entries: A if RG23A is used for setting off the CENVAT payable C if RG23C is used for setting off the CENVAT payable P if PLA is used for setting off the CENVAT payable S if Service tax credit is used for setting off the CENVAT payable

Excise Duty Utilization Use When you create an excise invoice, 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

You can enable the immediate utilization of CENVAT, in Customizing for Logistics General, by choosing Taxes on Goods Movements India Basic Settings Maintain Series Groups. Features The information is shown in two group boxes:

Excise details

This shows you the excise invoice type, which you can change if necessary by choosing much excise duty will be charged on the sale.

. It also shows you how

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. Excise Invoice Type Use The excise invoice type denotes whether the goods are for the domestic market, or if they are for export, whether they are for export under bond, deemed export, or export under rebate. For more information about these processes, see Excise Bonding. Features In the system, when you set the excise invoice type, it controls:
How the excise duty is calculated Which ARE documents you process the export with

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. ... 1. 2. 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:

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. 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. Nonbonded exports The system applies the tax code defined in Customizing for Logistics General, under Taxes on Goods Movements India Basic Settings Determination of Excise Duty Maintain Excise Defaults, and calculates the excise duty as normal. Again, the excise invoice is created with an export excise invoice number. Excise on Intercompany Billing Documents Use The SAP System allows you to create an excise invoice 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

Duty Payable on Sale or Transfer of Capital Goods

If a service provider receives a CENVAT credit on capital goods, upon sale or transfer of used capital goods, the service provider must pay a percentage of the CENVAT credit for each yearly quarter after the credit was taken. The system enables you to calculate the duty payable by the service provider for the capital goods. This duty is applicable to used capital goods when sold or transferred. Note If the goods are transferred within the same financial year, then no duties are applicable.

End of the note. 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. On this screen, under Master Data, select Material and Chapter-Id combination.

For more information, see Vendor Master (Excise Data). Features

When you post an invoice with a reduced amount at item level, the system: Computes the number of quarters

It calculates the number of quarters that occur from the date you take the original credit until the date you sell or transfer the goods. Calculates the reduced duty accordingly

As a result, the recipient only pays for the reduced excise duties.

Activities Create an excise invoice using Creating Excise Invoices and Other Outward Movements transactions at the item level, and enter data as usual.

Canceling Excise Invoices

Use You follow this procedure in order to cancel an outgoing excise invoice. It reverses any excise duty accounted for. Procedure

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 . Enter the number, year, and series group of the excise invoice that you want to cancel.

A dialog box appears.

Choose Yes. Save the adjustment posting.

SALES FROM DEPOTS J1IJ

Purpose

You may sell finished goods directly from the place of manufacture, as described under Sales from Factories, 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 RG23D 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

Make this setting in Customizing for Logistics General, by choosing Taxes on Goods Movements India Business Transactions Outgoing Excise Invoices Assign Billing Types to Delivery Types.

The item category NLN (standard transport order) so that it is relevant for billing

You do this 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.

The standard pricing procedures for depot sales are JINDEP (condition-based excise determination) and JDEPOT (formula-based excise determination). 2. You create the delivery, again, following the standard procedure. 3. You assign excise invoices to the delivery or material document. 4. You verify that you have selected the correct excise invoices 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.

Creating Excise Invoices for Stock Transfers

From the SAP Easy Access screen, choose Indirect Taxes Procurement Excise Invoice For Depot Create/Change/Display. 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.

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.

Enter the internal document number of the excise invoice sent by the factory. Choose more documents to go the excise invoice details screen. 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.

Go back to the item details screen. Save the excise invoice.

The system creates an entry in register RG 23D.

Creating Excise Invoices for Direct Purchases

From the SAP Easy Access screen, choose Indirect Taxes Procurement Excise Invoice For Depot Create/Change/Display. 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 shipfrom 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.

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. Enter the internal document number of the excise invoice sent by the factory. 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. 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. Go back to the item details screen. Save the excise invoice.

The system creates an entry in register RG 23D. You can change the excise invoice as long as it has not been used in any sales.

Creating Additional Excise Entries at Depots

From the SAP Easy Access screen, choose Indirect Taxes Procurement Excise Invoice For Depot Additional Excise Entry at Depot. 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.

You can maintain the A certificate number, date, and additional BED, AED ,SED and CESS for a given RG 23D Folio. 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. 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. Once an A certificate is used for removals then it cannot be changed. 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.

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).
Procedure

From the SAP Easy Access screen, choose Indirect Taxes Sales/Outbound Movements Excise Invoice For Depot Create/Change/Display Delivery or Material Document RG 23D Selection. Enter the delivery document number or the material number and choose . Select the excise invoice you want. Choose . 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.
Result

Select the excise invoices that are relevant to the delivery. Specify what quantity to be used from each excise invoice. The system recalculates the excise accordingly. Go back to the item details screen. Save the data.

The system creates an entry in register RG 23D and generates the depot excise invoice numbers. 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.

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 are to be assigned to the delivery and have posted the goods issue. Procedure

From the SAP Easy Access screen, choose Indirect Taxes Sales/Outbound Movements Excise Invoice For Depot Create/Change/Display Delivery or Material Document Verify/Post. Enter the number of the delivery that you want to verify and choose . Make sure that the information is correct. Save the data.

The system updates the posting flag in the RG 23D register.

OTHER OUTWARD MOVEMENTS

Use

In the standard procedure for creating outgoing excise invoices (see Sales from Factories), the excise invoice is created with reference to a delivery note or an invoice. The 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 Customizing for Logistics General, by choosing Taxes on Goods Movements India Basic Settings Maintain Excise Groups. You have also specified the maximum number of items allowed per excise invoice, in Customizing for Logistics General, by choosing Taxes on Goods Movements India Basic Settings Maintain Excise Registrations.
Features

Depending on your Customizing settings, you create excise invoices in a single step or in two steps, as follows: In the two-step procedure, the excise clerk first creates the excise invoice, but no postings are made. An excise supervisor then verifies that the invoice is correct and, if so, posts it. If the excise clerks 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, the system automatically posts it in the background. Note that the functions for creating and canceling these excise invoices are different from those for other excise invoices.

Creating Excise Invoices

Use

This is the procedure that you follow to create an excise invoice for the less common types of goods movement.
Procedure

1. From the SAP Easy Access screen, choose Indirect Taxes Sales/Outbound Movements Excise Invoice For Other Movements Create/Change/Display (J1IS) . 2. On the selection screen, enter data as required, including: o Reference group box Specify which document you want to create the excise invoice for and which excise group it is for.
o

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: o Material o Quantity o Unit of measure o Base value o Excise duty 6. To pick the rate and amount from a specific excise invoice, choose Get excise invoice. 7. Save the 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. Duty Payable on Sale or Transfer of Capital Goods If a service provider receives a CENVAT credit on capital goods, upon sale or transfer of used capital goods, the service provider must pay a percentage of the CENVAT credit for each yearly quarter after the credit was taken. The system enables you to calculate the duty payable by the service provider for the capital goods. This duty is applicable to used capital goods when sold or transferred. Note If the goods are transferred within the same financial year, then no duties are applicable.
End of the note.

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. On this screen, under Master Data, select Material and Chapter-Id combination.
Features

When you post an invoice with a reduced amount at item level, the system: Computes the number of quarters

It calculates the number of quarters that occur from the date you take the original credit until the date you sell or transfer the goods. Calculates the reduced duty accordingly

As a result, the recipient only pays for the reduced excise duties.
Activities

Create an excise invoice using Creating Excise Invoices and Other Outward Movements transactions at the item level, and enter data as usual.

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. Procedure

From the SAP Easy Access screen (J1ILN), choose Indirect Taxes Sales/Outbound Movements Excise Invoice For Other Movements Post Excise Invoice. Enter the internal document number of the excise invoice. 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.

To access the balance utilization, choose . To display the balance available on the CENVAT accounts, choose Account Balances. Save the excise invoice.

The system generates the accounting documents.

To print the excise invoice, choose

Canceling Excise Invoices

From the SAP Easy Access screen, choose Indirect Taxes Sales/Outbound Movements Excise Invoice For Other Movements Create/Change/Display . Enter the internal document number. Choose .

A dialog box appears, asking you to confirm whether you want to delete the excise invoice.

Choose Yes.

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. Procedure

From the SAP Easy Access screen, choose Indirect Taxes Sales/Outbound Movements Excise Invoice For Other Movements Create/Change/Display . On the selection screen, enter data as required, including: o 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 3. Choose .

The system copies the details from the transfer posting. 4. For each item: o Enter the net assessable value o Check and change the excise duty rates 5. Save the excise invoice. 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.

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. Procedure

From the SAP Easy Access screen, choose Logistics Materials Management Inventory Management Goods Movement Transfer Posting. Choose Movement type Transfer posting Plant to plant To stock in transit. Enter the number of the issuing plant and storage location. Choose To purchase order. In the dialog box, enter the number of the stock transport order that the receiving plant created and choose . Check the data. Save the transfer posting.

EXPORTS UNDER EXCISE REGULATIONS

Use Manufacturing plants are entitled not to pay any basic excise duty on export sales, as long as the goods are accompanied by an ARE document. The system handles AREs and the appropriate permit documents, such as export bonds and deemed export licenses. The system does not handle exports to Nepal and Bhutan, which are subject to separate legislation. Features The system allows you to process three types of exports: Exports under bond Exports under claim for rebate Deemed exports

You must create an ARE document for all goods that you export under these schemes. You use the same function to process all ARE documents. For information about how to use the function in general, and which features are common to all ARE documents, see ARE Documents.

Exports under Bond

Use One of the ways of exporting goods without paying basic excise duty is to obtain an excise bond from the excise authorities and then fill out an ARE-1 document to go with every export.
Activities Customizing

Carry out the IMG activities in Customizing for Logistics General, under Tax on Goods Movements India Business Transactions Exports Under Excise Regulations Exports and Printouts of ARE Documents.
Master Data

Enter your excise bonds in the system.

Day-to-Day Activities

In order to qualify for an exemption from excise duty, all exports must be accompanied by the appropriate paperwork, including an ARE-1 document, and you must complete the export within the export period. To process and track ARE-1s, use the ARE Documents functions, following the process described under ARE-1 Processing. You can only issue an ARE-1 under a bond. The system automatically keeps track of the bond balance. There are two ad-hoc reports that you can use for tracking bonds and ARE-1s: Bond Summary Report and Aging Analysis for ARE Documents.
Reporting

There are two statutory reports that you prepare at least once a month, Pro Forma of Running Bond Account and Statement Regarding Export of Excisable Goods. Excise Bond
Definition

Document, that effectively licenses a manufacturing plant to remove goods from its premises without paying basic excise duty, on condition that the goods are then exported. An excise bond covers a fixed amount of excise duty. The excise duty of the goods exported under bond cannot exceed the bond value. In the system, the term "excise bond" also covers letters of undertaking, and all of the excise bond functions apply equally to letters of undertaking, unless stated otherwise.
Use Master Data

When you obtain a bond from the excise department, enter it in the system. The system numbers each bond automatically.
Day-to-Day Activities

When you assign an ARE-1 to a bond, the system automatically warns you of any reservations that have already been made against the bond. The system keeps track of the bond balance for you. When you post an ARE-1, the bond balance decreases automatically. In the case of running bonds, the balance increases again when you close the ARE-1. Once an excise bond is no longer of any use to you, for example, if it expires or if you have exhausted a fixed bond, you can close it. This prevents any users from using it afterwards.
Reporting

You can use the system to prepare two statutory reports, the Pro Forma of Running Bond Account and the Statement Regarding Export of Excisable Goods. One further report, the Bond Summary Report, gives you an overview of all of your bonds. Bond Numbering
Use

When you create an excise bond, the system automatically assigns it an internal bond number.

Each bond also has an official bond number.

Activities Customizing

Maintain the number range object for the internal bond number in Customizing for Logistics General, by choosing Tax on Goods Movements India Tools Number Ranges.
Master Data

When you enter an excise bond, you enter the official bond number manually. When you save the bond, the system automatically assigns it a new internal bond number. Bond Balance
Use

Each excise bond only covers a limited amount of basic excise duty, the bond value. Every time you post an ARE-1, the system reduces the bond balance automatically.
Features

Every time you post an ARE-1 under a fixed bond, the system debits the excise duty stated on the ARE-1 to the bond, which reduces the bond balance. When the balance reaches zero, the bond is exhausted. Running bonds, on the other hand, are automatically replenished: Once an export is complete and the excise department sends you confirmation that, the ARE-1 is correct, the system automatically credits the excise duty back to the bond (but see also Fast Credit). You can check the bond balance at any time in the bond master or the Bond Summary Report. If you want to check the debits and credits on a running bond, use the Pro Forma of Running Bond Account. Fast Credit
Use

When you close an ARE-1 covered by a running bond, the system credits the excise duty back to the bond automatically. However, some local excise departments may allow you to credit the excise duty back as soon as you receive the countersigned ARE-1 back from the customs department. This procedure is known in the system as fast credit.
Activities Customizing

If you have a fast credit agreement with its local excise department, enter this information in Customizing for Logistics General, by choosing Tax on Goods Movements India Business Transactions Exports Under Excise Regulations Exports Make Settings for ARE-1 Procedure.
Day-to-Day Activities

If you do not have a fast credit agreement, the system credits the excise duty to the running bond when you close the ARE-1.

With fast credit, the system credits the excise duty back to the running bond when you enter the Arrived Back date (see Updating ARE-1s). Reservations Use The system records the total amount of excise duty from ARE-1s that you have created (but not yet posted) under a given bond. This reservation amount is for information only. It serves to warn you, when you create an ARE-1, that other clerks have already created other ARE-1s under a bond and that they intend to post them under this bond as well.
Activities

When you create a new ARE-1 in the system, you specify which bond the ARE-1 is covered by. When you do so, the system displays the bond's reservation amount. If the reservation amount is already over the bond balance, you might want to use a different bond, if another one is available. But since the reservation amount is for information only, the decision is up to you. Processing Excise Bonds To access the individual functions shown in the table, from the SAP Easy Access screen, choose Indirect Taxes Master Data Excise Bond. Function Follow-on menu path What you should know

Create an excise bond Create Change an excise bond Change Display an excise bond Display Cancel an excise bond Cancel Close an excise bond Close You can only cancel a bond if you have not yet used it. You must have closed all of the ARE-1s that the bond covers.

ARE-1 Processing
Purpose

This procedure describes how you process ARE-1s for exports under bond.
Prerequisites

You have an excise bond from the government and have entered it in the system. You have received a sales order from a customer located abroad. In the system, you have already created the delivery and the outgoing excise invoice. In the excise invoice, you have set the excise invoice type to Export Under Bond.
Process Flow

3. 1. The excise clerk creates an ARE-1.

He then calls the local excise department and asks them to send an excise officer to check the goods.

4. 2. The excise officer comes and checks that the goods match what is on the ARE-1. He fills out Part A of the form (Certification by the Central Excise Office). The clerk then posts the ARE-1 and prints out the requisite number of copies.
The excise officer signs the ARE-1s and takes one copy with him.

5. 3. The shipping department sends the goods to be exported, together with the excise invoice and the ARE-1.
Before the goods can leave the country, they have to go through the customs office, for example, at the airport or at the port.

6. 4. When the goods arrive at customs, the customs officer checks whether the excise invoice and the ARE-1 match the goods.
If he finds that there are fewer goods than stated on the ARE-1, he enters the shortfall in the ARE-1. He then fills out Part B of the ARE-1 (Certification by the Customs Officer) and sends it back to the excise clerk. One of the copies is in a sealed envelope.

7. 5. When the excise clerk receives the ARE-1, he updates the ARE-1 in the system.
He fills out the various certification dates in the ARE-1 (for example, the date when the ARE-1 arrived back at your company). If the customs officer noted a shortfall in the quantity of goods, the excise clerk enters the shortfall as well. Since the whereabouts of the missing goods cannot be accounted for, they no longer qualify for exemption from excise duty. Your company is therefore liable for the excise duty on the shortfall, plus interest, backdated to the date when you removed the goods from your premises. The clerk specifies which excise registers to pay the excise duty from.

8. 6. The clerk sends the ARE-1 in the sealed envelope to the excise department.
The excise officer cross-checks this copy of the ARE-1 with his own copy. When he is satisfied that everything is correct, he sends the excise clerk a final confirmation.

9. 7. When the excise clerk receives the confirmation, he closes the ARE-1. The process is now complete. Creating ARE-1s Use You create an ARE-1 when you want to export goods under bond. Procedure

From the SAP Easy Access screen, choose Indirect Taxes Sales/Outbound Movements Exports Under Excise Regulations Exports Central Processing Create ARE-1. In the top line:

a. Select Create ARE-1. b. Select Outgoing Excise Invoice. c. Enter the excise invoice that the ARE-1 is for and choose . d. If the ARE-1 is to cover more than one excise invoice, repeat step (c) for each of them. 3. Assign an excise bond to the ARE-1. 4. On the Addresses tab, enter the addresses of your local excise department and the customs department that will process the ARE-1. Their addresses will be printed on the ARE-1. For more information, see Automatic Address Determination. 5. On the Additional Data tab, maintain any long texts required in the ARE-1. This information will be printed on the ARE-1. For more information, see Long Texts.

On the Package Details tab, enter any relevant information about how the goods are packaged.

This information will also be printed on the ARE-1.

Save the ARE-1.

Result The system:

Creates the ARE-1 and assigns it an internal ARE-1 number (see ARE Document Numbering) Increases the bond's reservation amount Sets the document status to In Process

The next step you have to carry out in the system is to post the ARE-1. If you need to, you can still cancel the ARE-1. Changing ARE-1s Use Once you have created an ARE-1, you can still change the following information until you post it:

Which excise bond it is assigned to Which excise invoices are assigned to it Which addresses are entered Any long texts Any package details

Procedure

From the SAP Easy Access screen, choose Indirect Taxes Sales/Outbound Movements Exports Under Excise Regulations Exports Central Processing Change ARE-1. In the top line: a. Select Change. b. Select ARE-1 Internal Document.

c. Enter the internal ARE-1 number and choose 3. Change data as required. 4. Save the ARE-1. Assigning Excise Bonds to ARE-1s Use

When you create an ARE-1, you must specify which bond covers it. You can change the bond until such time as you post the ARE-1. Prerequisites You have obtained an excise bond from the excise department and you have entered in the system. Procedure Bond/UT-1 Detail tab, enter the number of the excise bond that you want to cover the ARE-1 and the year in which it was issued. . The system displays the bond details. you want to see which other ARE-1s the bond is already assigned to, choose .

Posting ARE-1s Use When you have created an ARE-1 and the excise officer has confirmed that all the details are correct, you can post the ARE-1. You can still make any changes that you need to before you post it. Procedure Sales/Outbound Movements Exports Under Excise Regulations Exports Central Processing Post ARE-1.

a. Select Post. b. Select ARE-1 Internal Document. c. Enter the internal ARE-1 number and fiscal year and choose . 3. On the Certification Dates tab, enter the date and time that the goods are being dispatched. 4. Save the ARE-1. Result The system:

Assigns the ARE-1 an official ARE-1 number (see ARE Document Numbering) reservation amount and debits it to the bond (see Bond Balance)

You can no longer change the ARE-1. However, you can still reverse it, if need be. Otherwise, the next step is to update it. Updating ARE-1s Use When the goods arrive at customs, the customs officer checks them against the excise invoice and the ARE-1. If there are any discrepancies in the quantity of the goods, he records them on the ARE-1. He also fills out Part B of the ARE-1 (Certification by the Customs Officer) and sends you three copies of the ARE-1, one in a sealed envelope. When you receive the ARE-1, you update the dates in the ARE-1 in the system to match what the customs officer has written on the ARE-1. Procedure Sales/Outbound Movements Exports Under Excise Regulations Exports Central Processing Update ARE-1. the top line: a. Select Update. b. Select ARE-1 Internal Document. c. Enter the internal ARE-1 number and choose . 3. On the Certification Dates tab, fill out the following dates as per the ARE-1: o Arrived at Customs o Countersigned by Customs o Arrived Back 4. Enter any shortfalls that the customs officer has noted on the ARE-1. 5. Save the ARE-1. Result If the bond is a running bond and you have activated the fast credit function, the system credits the excise duty back to the running bond. You must now send the ARE-1 to your local excise department. Entering Shortfalls in ARE-1s Use If, for any reason, the customs officer finds that the quantities of the goods are lower than you have stated on the excise invoice and the ARE-1, he amends the quantity on the ARE-1. You must then enter the shortfall in the ARE-1. Since the whereabouts of the missing goods cannot be accounted for, they no longer qualify for exemption from excise duty. You must therefore pay the excise duty on the shortfall, plus interest, backdated to the date when you removed the goods from your premises. Procedure

Quantities tab, enter the amended quantity, and choose The system displays the shortfall in the Differential Qty field. It

calculates the interest due and displays it on the Utilization tab in the Interest Amount field. Utilization tab, specify whether you want to pay the excise duty from register RG 23A, register RG 23C, or your PLA. Document Details tab, enter the reason for the shortfall in the Reason Code field. Result When you save the ARE-1, the system:

Generates a Part II entry in the registers that you have specified (see

Excise Registers)

appropriate register accounts as follows (assuming, for example, that you want to pay the excise duty and interest from Register RG 23A and the PLA):

Credits this excise duty back to the bond (see Bond Balance)

Reversing ARE-1s Use When you have posted an ARE-1, you can reverse it if necessary until such time as customs has countersigned it. By reversing an ARE-1, you forego the exemption from paying the excise duty that was due on the materials when you removed them from your premises. Consequently, you must pay the excise duty plus interest (see Interest Calculation). Procedure the SAP Easy Access screen, choose Indirect Taxes Sales/Outbound Movements Exports Under Excise Regulations Exports Central Processing Reverse ARE-1.

a. Select Reverse ARE-1. b. Select ARE-1 Internal Document. c. Enter the internal ARE-1 number and choose . 3. On the Utilization tab, specify which excise registers you want to pay the excise duty and the interest from. You can divide the amount payable between the different registers as you wish. 4. On the Document Details tab, enter the reason for reversing the ARE-1. 5. Save the ARE-1. Result The system:

Generates a Part II entry in the registers that you have specified (see

Excise Registers)

appropriate register accounts as follows (assuming, for example, that you want to pay the excise duty and interest from Register RG 23A and the PLA):

Credits this amount of excise duty back to the bond (see Bond Balance)

You can no longer change the ARE-1. Sending ARE-1s to Excise Departments Use Once the customs officer has returned the ARE-1 to you, you send it to the excise department so that they can cross-check it against their original ARE-1. Procedure Taxes Sales/Outbound Movements Exports Under Excise Regulations Exports Central Processing Update ARE-1.

a. Select Update ARE-1. b. Select ARE-1 Internal Document. c. Enter the internal ARE-1 number and choose . 3. On the Certification Dates tab, fill out the Sent to Excise Dept field. 4. Save the ARE-1. Result

The next step is to close the ARE-1. Closing ARE-1s Use When the excise department sends you confirmation that the ARE-1 is correct, you record the date in the system. This closes the ARE-1. Procedure Sales/Outbound Movements Exports Under Excise Regulations Exports Central Processing Update ARE-1.

a. Select Update ARE-1. b. Select ARE-1 Internal Document. c. Enter the internal ARE-1 number and choose . 3. On the Certification Dates tab, fill out the Export Confirmed field. 4. Save the ARE-1. Result If the bond is a running bond, the system also credits the excise duty back to the bond, if it has not already done so (see Bond Balance). The ARE-1 is now complete. Pro Forma of Running Bond Account Use You use this report to prepare the statutory pro forma of running bond account, to be submitted monthly. It shows the following details for a single running bond:

Its opening balance All of the ARE-1s that it has covered The duty debited from it when you posted the ARE-1s and the duty credited back to it once you closed the ARE-1s The bond's current balance

To access the report, from the SAP Easy Access screen, choose Indirect Taxes Sales/Outbound Movements Exports Under Excise Regulations Reports Pro Forma of Running Bond Account. Statement Regarding Export of Excisable Goods Use You use this report to prepare the statutory statement regarding export of excisable goods, to be submitted at least once a month to your local excise department. The report prints out the complete statement in a format acceptable to the excise departments. Features

To access the report, from the SAP Easy Access screen, choose Indirect Taxes Sales/Outbound Movements Exports Under Excise Regulations Reports Statement Regarding Export of Excisable Goods. Selection On the selection screen, specify which parts of the statement you want to prepare as follows: Part Shows I II All stock removals without payment of duty All removals from previous quarters for which you have not yet received a confirmation of receipt from the customs office All stock removals that will exceed the export period by the end of the month All removals that you have reversed A list of your bonds with their balances

III IV V

Bond Summary Report

Use You use this report to prepare a list of all your excise bonds. The list shows the basic information about each excise bond, and you can drill down to see which ARE-1s the bond has been assigned to. Features To access the report, from the SAP Easy Access screen, choose Indirect Taxes Sales/Outbound Movements Exports Under Excise Regulations Reports Bond Summary. Selection Fill out the selection screen with the data for the bonds that you want to display. Output The system displays a list of the bonds that meet the selection criteria. To see which ARE-1s a bond has covered, choose .

Exports Under Claim for Rebate

Use If you have not obtained an excise bond, you must pay any excise duty liable when removing goods from your premises for export. However, you can claim a rebate for the excise duty once you have completed the export if you fill out an ARE-1 to go with the export. Activities Customizing

Carry out the IMG activities in Customizing for Logistics General, under Tax on Goods Movements India Business Transactions Exports Under Excise Regulations Exports and Printouts of ARE-Documents. Day-to-Day Activities In order to qualify for a rebate on the excise duty, all exports must be accompanied by the appropriate paperwork, including an ARE-1 document, and you must complete the export within the export period. To process and track these documents, use the ARE Documents functions, following the process described under ARE-1 Processing. There is an ad-hoc report that you can use for tracking ARE-1s, Aging Analysis for ARE Documents.

ARE-1 Processing Purpose This procedure describes how you process ARE-1s for exports under claim for rebate.
Prerequisites

You have received a sales order from a customer located abroad. In the system, you have already created the delivery and the outgoing excise invoice. In the excise invoice, you have set the excise invoice type to Export Under Claim for Rebate.
Process Flow

1. The excise clerk creates an ARE-1. He then calls the local excise department and asks them to send an excise officer to check the goods. 2. The excise officer comes and checks that the goods match what is on the ARE-1. He fills out Part A of the form (Certification by the Central Excise Office). The clerk then posts the ARE-1 and prints out the requisite number of copies. The excise officer signs the ARE-1s and takes one copy with him. 3. The shipping department sends the goods to be exported, together with the excise invoice and the ARE-1. Before the goods can leave the country, they have to go through the customs office, for example, at the airport or at the port. 4. When the goods arrive at customs, the customs officer checks whether the excise invoice and the ARE-1 match the goods. If he finds that there are fewer goods than stated on the ARE-1, he enters the shortfall in the ARE-1. He then fills out Part B of the ARE-1 (Certification by the Customs Officer) and sends it back to the excise clerk. One of the copies is in a sealed envelope. 5. When the excise clerk receives the ARE-1, he updates the ARE-1 in the system.

He fills out the various certification dates in the ARE-1 (for example, the date when the ARE-1 arrived back at your company). If the customs officer noted a shortfall in the quantity of goods, the excise clerk enters the shortfall as well. Later, when you come to claim the rebate, you will not be able to claim back the excise duty on the shortfall. 6. The clerk sends the ARE-1 in the sealed envelope to the excise department. The excise officer cross-checks this copy of the ARE-1 with his own copy. When he is satisfied that everything is correct, he sends the excise clerk a final confirmation. 7. When the excise clerk receives the confirmation, he closes the ARE-1. The ARE-1 is now complete and you can apply for the rebate on the excise duty that you have paid. Creating ARE-1s
Use

You create an ARE-1 when you want to export goods under claim for rebate.
Procedure

From the SAP Easy Access screen, choose Indirect Taxes Sales/Outbound Movements Exports Under Excise Regulations Exports Central Processing Create ARE-1. In the top line: a. Select Create ARE-1. b. Select Outgoing Excise Invoice. c. Enter the excise invoice that the ARE-1 is for and choose . d. If the ARE-1 is to cover more than one excise invoice, repeat step (c) for each of them. 3. On the Addresses tab, enter the addresses of your local excise department and the customs department that will process the ARE-1.

Their addresses will be printed on the ARE-1. For more information, see Automatic Address Determination. 1. On the Additional Data tab, maintain any long texts required in the ARE-1. This information will be printed on the ARE-1. For more information, see Long Texts.

On the Package Details tab, enter any relevant information about how the goods are packaged.

This information will also be printed on the ARE-1.

Save the ARE-1.

Result The system:

Creates the ARE-1 and assigns it an internal ARE-1 number (see

ARE Document Numbering) document status to In Process The next step you have to carry out in the system is to post the ARE-1. If you need to, you can still cancel the ARE-1. Changing ARE-1s Use Once you have created an ARE-1, you can still change the following information until you post it:

Which

excise invoices are assigned to it addresses are entered long texts

Procedure the SAP Easy Access screen, choose Indirect Taxes Sales/Outbound Movements Exports Under Excise Regulations Exports Central Processing Change ARE-1.

a. Select Change. b. Select ARE-1 Internal Document. c. Enter the internal ARE-1 number and choose 3. Change data as required. 4. Save the ARE-1. Posting ARE-1s Use

When you have created an ARE-1 and the excise officer has confirmed that all the details are correct, you can post the ARE-1. You can still make any changes that you need to before you post it. Procedure Sales/Outbound Movements Exports Under Excise Regulations Exports Central Processing Post ARE-1.

a. Select Post. b. Select ARE-1 Internal Document. c. Enter the internal ARE-1 number and choose . 3. On the Certification Dates tab, enter the date and time that the goods are being dispatched.

4. Save the ARE-1. Result The system assigns the ARE-1 an official ARE-1 number (see ARE Document Numbering). You can no longer change the ARE-1. However, you can still reverse it, if need be. Otherwise, the next step is to update it. Updating ARE-1s Use When the goods arrive at customs, the customs officer checks them against the excise invoice and the ARE-1. If there are any discrepancies in the quantity of the goods, he records them on the ARE-1. He also fills out Part B of the ARE-1 (Certification by the Customs Officer) and sends you three copies of the ARE-1, one in a sealed envelope. When you receive the ARE-1, you update the dates in the ARE-1 in the system to match what the customs officer has written on the ARE-1. Procedure s screen, choose Indirect Taxes Sales/Outbound Movements Exports Under Excise Regulations Exports Central Processing Update ARE-1.

a. Select Update. b. Select ARE-1 Internal Document. c. Enter the internal ARE-1 number and choose . 3. On the Certification Dates tab, fill out the following dates as per the ARE-1: o Arrived at Customs o Countersigned by Customs o Arrived Back 4. Enter any shortfalls that the customs officer has noted on the ARE-1. 5. Save the ARE-1. Result You must now send the ARE-1 to your local excise department.

Entering Shortfalls in ARE-1s Use If, for any reason, the customs officer finds that the quantities of the goods are lower than you have stated on the excise invoice and the ARE-1, he amends the quantity on the ARE-1. You must then enter the shortfall in the ARE-1. Later, when you come to claim the rebate, you will not be able to claim back the excise duty on the shortfall. Procedure

Choose the line item that you want to adjust.

In the detail data, on the Quantities tab, enter the amended quantity, and choose . The system displays the shortfall in the Differential Qty field. On the Document Details tab, enter the reason for the shortfall in the Reason Code field.

Reversing ARE-1s Use When you have posted an ARE-1, you can reverse it if necessary until such time as customs has countersigned it. Procedure From the SAP Easy Access screen, choose Indirect Taxes Sales/Outbound Movements Exports Under Excise Regulations Exports Central Processing Reverse ARE-1. In the top line: a. Select Reverse ARE-1. b. Select ARE-1 Internal Document. c. Enter the internal ARE-1 number and choose . 3. On the Document Details tab, enter the reason for reversing the ARE-1. 4. Save the ARE-1. Result You can no longer change the ARE-1. Sending ARE-1s to Excise Departments Use Once the customs officer has returned the ARE-1 to you, you send it to the excise department so that they can cross-check it against their original ARE-1. Procedure es Sales/Outbound Movements Exports Under Excise Regulations Exports Central Processing Update ARE-1.

a. Select Update ARE-1. b. Select ARE-1 Internal Document. c. Enter the internal ARE-1 number and choose . 3. On the Certification Dates tab, fill out the Sent to Excise Dept field. 4. Save the ARE-1. Result The next step is to close the ARE-1. Closing ARE-1s Use

When the excise department sends you confirmation that the ARE-1 is correct, you record the date in the system. This closes the ARE-1. Procedure Sales/Outbound Movements Exports Under Excise Regulations Exports Central Processing Update ARE-1.

a. Select Update ARE-1. b. Select ARE-1 Internal Document. c. Enter the internal ARE-1 number and choose . 3. On the Certification Dates tab, fill out the Export Confirmed field. 4. Save the ARE-1. Result If the bond is a running bond, the system also credits the excise duty back to the bond, if it has not already done so (see Bond Balance). The ARE-1 is now complete.

Deemed Exports
Use You can ship deemed exports to any customers in possession of a deemed export license without paying any basic excise duty, but only if the goods are accompanied by an ARE-3 document. Activities Customizing Carry out the IMG activities in Customizing for Logistics General, under Tax on Goods Movements India Business Transactions Exports Under Excise Regulations Deemed Exports and Printouts of ARE Documents. Master Data Enter your customers' deemed export licenses in the system. Day-to-Day Activities In order to qualify for an exemption from excise duty, all deemed exports must be accompanied by the appropriate paperwork, including an ARE-3 document, and you must complete the deemed export within the rewarehousing period. To process and track ARE-3s, use the ARE Documents functions, following the process described under ARE-3 Processing. You can only issue an ARE-3 with reference to a customer's license. The system automatically keeps track of the license balance. There are two ad-hoc reports that you can use for tracking licenses and ARE-3s: Deemed Export License Summary and Aging Analysis for ARE Documents.

Deemed Export License

Definition A license issued by the excise authorities under which an exporter can procure goods from a manufacturer without payment of basic excise duty. The license is not a blanket exemption. It only applies to purchases of specific quantity or value of specific goods from a specific vendor, for example, 20 personal computers from Computer World Pvt. Ltd. Use Master Data When your customers obtain a deemed export license from the excise authorities, they send you a copy. You enter your customers' licenses in the system; the system numbers each license automatically. If, later on, a customer gets an extension on the expiry date of the license from the excise authorities, you can enter it there as well. When a license is exhausted, you close it. Day-to-Day Activities When you sell a customer some goods that are covered by a license, you create an ARE-3 to go with the goods shipment. In the ARE-3, you specify which license the goods are covered by. The system reduces the license balance accordingly. When the license balance is exhausted, you can close it. Reporting You can keep track of your customers' licenses using the Excise Bonding License Summary.

License Numbering Use When you create a deemed export license, the system automatically assigns it an internal license number. Each license also has an official license number. Activities Customizing Maintain the number range object for the internal license number in Customizing for Logistics General, by choosing Tax on Goods Movements India Tools Number Ranges. Master Data When you enter a license, you enter the official license number manually. When you save the license, the system automatically assigns it an internal license number. License Balances Use

Each deemed export license only covers a limited quantity of goods or goods to a limited value, depending on its quantification method. Every time you post an ARE-3 against a license, the remaining quantity or value decreases automatically. The system thus keeps track of the license balances for you. Features The excise authorities issue several different license types with different quantification methods. When you define the license types in the system (see Customizing below), you specify which quantification method each uses. Activities Customizing Define the license types in Customizing for Logistics General, by choosing Tax on Goods Movements India Business Transactions Exports Under Excise Regulations Deemed Exports Maintain License Types. Master Data When you enter a license in the system, you specify the license type and the quantity or value of the goods covered. The license type controls which quantification method applies to the license. Day-to-Day Activities When you post an ARE-3, the system automatically debits the value or quantity of the goods stated in the ARE-3 to the license. The license balance decreases accordingly. If you reverse an ARE-3, the license balance does not go back up. You can check the license balances at any time in the license master or in the Deemed Export License Summary. License Validity
Use Deemed export licenses are only valid for a limited period of time. The system ensures that you can only use licenses if they are valid, and allows you to extend their validity period if required. Activities Master Data When you enter a license, you enter the validity period as stated on the original document. If a license expires and the excise authorities grant your customer an extension on the validity period, enter the extension date in the license master. Note that this field only appears once the license expires. Otherwise, you close the license. Day-to-Day Activities The system will not allow you to assign an invalid license to an ARE-3.

Processing Deemed Export Licenses To access the individual functions shown in the table, from the SAP Easy Access screen, choose Indirect Taxes Master Data Deemed Export License. Function Follow-on path a Create menu What you should know

Create license Change license Display license Cancel license

The system assigns the license an internal license number and sets the license status to Active. You can only change a license if you have not already assigned it to an ARE-3.

a Change

a Display

a Cancel

You can only cancel a license if you have not yet used it. The system sets the status to Canceled.

Close a license Close

Close a license when all of the ARE-3s that it has covered are closed. The system sets the status to Closed.

ARE-3 Processing Purpose This procedure describes how you process ARE-3s for deemed exports. Prerequisites Your customer has supplied you with a copy of its deemed export license and you have entered the license in the system. You have received a sales order from the customer for goods covered by this license. In the system, you have already created the delivery and the outgoing excise invoice. In the excise invoice, you have set the excise invoice type to Deemed Exports. Process Flow 2. ... 10. 1. The export clerk creates an ARE-3 and, when he is ready, posts it. He also prints out the ARE-3 and encloses a copy with the delivery. 11. 2. The shipping department sends the goods to the customer, together with the excise invoice and the ARE-3. 12. 3. When the customer's warehouseman receives the goods, he checks whether the excise invoice and the ARE3 match the goods.

If he finds that there are fewer goods than stated on the ARE-3, he enters the shortfall in the ARE-3. He then fills out Part 2 of the ARE-3 (Certificate of Warehousing by the Consignee) and sends it back to the excise clerk.

13. 4. When the excise clerk receives the ARE-3, he updates the ARE-3 in the system.
He fills out the various certification dates in the ARE-3 (for example, the date when the ARE-3 arrived back at your company). If the warehouseman noted a shortfall in the quantity of goods, the excise clerk enters the shortfall as well. Since the whereabouts of the missing goods cannot be accounted for, they no longer qualify for exemption from basic excise duty. You must therefore pay the excise duty on the shortfall, plus interest, backdated to the date when you removed the goods from your premises. The clerk specifies which excise registers to pay the excise duty from.

The process is now complete. Creating ARE-3s Use You create an ARE-3 when you want to send a customer a deemed export. Procedure Sales/Outbound Movements Exports Under Excise Regulations Deemed Exports Central Processing Create ARE-3.

a. Select Create ARE-3 b. Select Outgoing Excise Invoice. c. Enter the excise invoice that the ARE-3 is for and choose . d. If the ARE-3 is to cover more than one excise invoice, repeat step (c) for each of them. 3. Assign the deemed export license to the ARE-3. 4. On the Addresses tab, enter the address of your local excise department. Its address will be printed on the ARE-3. For more information, see Automatic Address Determination. 5. On the Additional Data tab, maintain any long texts required in the ARE-3. This information will be printed on the ARE-3. For more information, see Long Texts. Package Details tab, enter any relevant information about how the goods are packaged. This information will also be printed on the ARE-3. -3. Result

The system creates the ARE-3 and assigns it an internal ARE-3 number (see ARE Document Numbering).

Changing ARE-3s Use Once you have created an ARE-3, you can still change the following information until you post it:

Which

export licenses are assigned to the line items excise invoices are assigned to it addresses are entered long texts

Procedure Sales/Outbound Movements Exports Under Excise Regulations Deemed Exports Central Processing Change ARE-3.

a. Select Change. b. Select ARE-3 Internal Document. c. Enter the internal ARE-3 number and choose 3. Change data as required. 4. Save the ARE-3.

Assigning Deemed Export Licenses to Line Items Use When you create an ARE-3, assign the line items the deemed export license that covers them. Procedure

License tab in the detail data, enter the internal license number and year.

Posting ARE-3s Use When you have created an ARE-3 and you are ready to ship the goods, you can post and print the ARE-3.

You can still make any changes that you need to before you post it. Procedure rect Taxes Sales/Outbound Movements Exports Under Excise Regulations Deemed Exports Central Processing Post ARE-3.

a. Select Post. b. Select ARE-3 Internal Document. c. Enter the internal ARE-3 number and choose . 3. On the Certification Dates tab, enter the time that the date and time that the goods are being dispatched. 4. Save the document. Result The system:

Assigns the ARE-3 an official ARE-3 number (see ARE Document Numbering) License Balances)

You can no longer change the ARE-3. However, you can still reverse it, if need be. Otherwise, the next step is to update it. Updating ARE-3s Use When the goods arrive at the customers premises, the customer checks them against the excise invoice and the ARE-3. If there are any shortfalls in the quantity of the goods he records them on the ARE-3. The customer also fills out Part 2 of the ARE-3 (Certification of Warehousing by the Consignee) and sends you a copy. When you receive the ARE-3, you update the ARE-3 in the system to match what the customer has written on the ARE-3. Procedure rect Taxes Sales/Outbound Movements Exports Under Excise Regulations Deemed Exports Central Processing Update ARE-3.

a. Select Update. b. Select ARE-3 Internal Document. c. Enter the internal ARE-3 number and choose . 3. On the Certification Dates tab: o Enter the Countersigned by Customer date as per the ARE-3. o Enter the Arrived Back date. 4. Enter any shortfalls that the customer has noted on the ARE-3. 5. Save the ARE-3. Result

The ARE-3 is now complete.

Entering Shortfalls in ARE-3s Use If, for any reason, your customer finds that the quantities of the goods are lower than you have stated on the excise invoice and the ARE-3, he enters the shortfall on the ARE-3. You must then enter the shortfall in the ARE-3. Since the whereabouts of the missing goods cannot be accounted for, they no longer qualify for exemption from excise duty. You must therefore pay the excise duty on the shortfall, plus interest, backdated to the date when you removed the goods from your premises. Procedure he line item that you want to adjust. Quantities tab, enter the amended quantity, and choose The system displays the shortfall in the Differential Qty field. It calculates the interest due and displays it on the Utilization tab in the Interest Amount field. Utilization tab, specify whether you want to pay the excise duty from register RG 23A, register RG 23C, or your PLA. Document Details tab, enter the reason for the quantity change in the Reason Code field. Result When you save the ARE-3, the system:

Generates a Part II entry in the registers that you have specified (see

Excise Registers)

appropriate register accounts as follows (assuming, for example, that you want to pay the excise duty and interest from Register RG 23A and the PLA):

Reversing ARE-3s

When you have posted an ARE-3, you can reverse it if necessary until such time as you enter the rewarehousing date.

By reversing an ARE-3, you forego the exemption from paying the excise duty that was due on the materials when you removed them from your premises. Consequently, you must pay the excise duty plus interest (see Interest Calculation).

Procedure
1. From the SAP Easy Access screen, choose

Indirect Taxes Sales/Outbound Movements Excise Regulations Deemed Exports Central Processing Reverse ARE-3 .

Exports Under

2. In the top line: 1. Select Reverse ARE-3. 2. Select ARE-3 Internal Document. 3. Enter the internal ARE-3 number and choose

(Continue).

3. On the Utilization tab, specify the service tax credit or which excise registers you want to pay the excise duty and the interest from. You can divide the amount payable between the different registers as you wish. 4. On the Document Details tab, enter the reason for reversing the ARE-3. 5. Save the document.

Result
The system:

Generates a Part II entry in the registers that you have specified (see Excise Registers). Based upon the register used for utilization, the system assigns the following entries:
o o o o A if RG23A is used for setting off the CENVAT payable C if RG23C is used for setting off the CENVAT payable P if PLA is used for setting off the CENVAT payable S if Service tax credit is used for setting off the CENVAT payable

Creates an accounting document to debit the excise duty to the CENVAT reversal account and credit it to the service tax credit accounts and other appropriate register accounts as follows (assuming, for example, that you want to pay the excise duty and the interest from Register RG 23A and the service tax account): Debit 150.00 50.00 100.00 Credit

Account CENVAT reversal Register RG 23A Service Tax

Displays the available balance against each duty (CENVAT and Excise duty) and each register type. 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 (Check) to check whether utilization is possible. Does not reinstate the value or quantity of the goods to the license

You can no longer change the ARE-3.

Deemed Export License Summary

Use You use this report to prepare a summary of the deemed export licenses that you have entered in your system. Features To access the report, from the SAP Easy Access screen, choose Indirect Taxes Sales/Outbound Movements Excise Bonding Reports Deemed Export License Summary. Selection Enter selection criteria as required. If you want to see which ARE-3s the licenses have been used for, select Display ARE3s Referred To. Output For each license, the list shows the header data, the materials covered by the license, and the license balance. If you selected Display ARE-3s Referred To, the list also shows the ARE-3s assigned to each license. If the list shows an ARE-3 without an official ARE-3 number, that means that the ARE-3 has only been created and not yet posted.

ARE Documents
Use This function is for use by excise clerks and excise supervisors, so that they can create and process ARE-1s and ARE-3s used to execute exports and deemed exports. The following documentation describes the functions common to all types of exports under excise regulations. For information about the individual procedures involved, see Exports Under Bond, Exports Under Claim for Rebate, and Deemed Exports. To access the ARE Documents function, from the SAP Easy Access screen, choose Indirect Taxes Sales/Outbound Movements Exports Under Excise Regulations . There are several different transactions under this menu path. For more information about the different transactions available, see Transaction Configuration. Integration

This function allows you to create ARE documents using outgoing excise invoices as a reference document, which in turn you create on the basis of deliveries. As such it is integrated with Sales and Distribution (SD) and Materials Management (MM). Any entries that the system makes in relation to an ARE document, in Part II of the excise registers RG 23 A and C, are also shown in the transaction. It is thus integrated with Financial Accounting (FI). Features The screen consists of the following areas:

Top Line This is where you specify what document you want to process. When you create an ARE document, you specify the reference document in this area. When you process an ARE document that you have already created, you enter the ARE document number. Header Data This area consists of four tabs, each with information that relates to the whole of the excise document. Tab Document Details Total Duties Use Basic header data, such as the internal and official ARE numbers and the document status. Total amounts of basic excise duty in the ARE document and any changes made by customs (ARE-1s) or the customer (ARE-3s)

Certification Dates Various dates used to track the progress of the ARE document.

Bond/UT-1 Detail

In exports under bond, shows which bond the export is covered by. This tab is only shown for exports under bond.

Excise Summary Addresses

Invoice The excise invoices that the ARE document covers.

Shows the addresses of the local excise department and the customs office that is handling the ARE document. Fields for any additional information that you might want to enter, including various long texts to be printed on the ARE document. Any entries in Part II of the excise registers RG 23A, RG 23C, or PLA made as a result of your updating the quantities in the ARE document. Note that this tab is not displayed if there are no Part II entries.

Additional Data

Part II

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 Item Quantities Use Basic information about the material itself. 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. The rates of excise duty on the item. The excise duty on the item, and how much of it has already been credited to the CENVAT accounts. The license that this item is covered by (deemed exports only). Any information about the packages that needs to be printed on the ARE document. The other SAP documents associated with the item.

Duty Rates Duty Values

License Package Details Reference Documents Additional Data

Fields for any additional information that you might want to enter, this time at item level.

Transaction Configuration Use You can execute the ARE Documents function using different transaction codes. Each transaction code controls how users can process ARE documents and which reference documents they can use. Features The standard system comes with one central processing transaction and three individual processing transactions for each type of ARE document:
The central processing transactions allow users to carry out all functions on the ARE document and are suited to a system administrator, for example. The individual processing transactions restrict the users to specific processing modes only (for example, creating and displaying ARE documents, or updating and displaying ARE documents). You can assign these transactions to excise clerks or supervisors.

For a list of the transaction codes provided, see Transaction Codes. Activities Customizing If the delivered settings do not meet your requirements, you can change them in Customizing for Logistics General, by choosing Tax on Goods Movements India Business Transactions Exports Under Excise Regulations Transaction Configuration. ARE Document Numbering Use In the system, each ARE document has two numbers: an internal number, which is the number that the system uses to identify the ARE document, and an official number, which corresponds to the serial numbers assigned to you by the excise department for the ARE document forms. Activities Customizing To activate internal numbering, maintain the number range object J_1IINTNUM in Customizing for Logistics General, by choosing Tax on Goods Movements India Tools Number Ranges. To activate official numbering, maintain the number range object J_1IARE1 for ARE-1s, and J_1IARE3 for ARE-3s. Create a separate number range for each series group. Day-to-Day Activities When you create an ARE document, the system automatically assigns it an internal document number. The system only assigns the ARE document an official number when you post it. Both numbers are displayed on the Doc. Details tab. You cannot change either of the numbers manually.

Automatic Address Determination

Use When you print ARE documents, they must show the address of your local excise department and the customs department that will be handling the export. Activities Customizing Enter the name and address of every excise department and customs department that you have dealings with in Customizing for Logistics General, by choosing Tax on Goods Movements India Master Data Maintain Postal Addresses. Define a default local excise department address for each series group, in Customizing for Logistics General, by choosing Tax on Goods Movements India Master Data Maintain Series Groups. Day-to-Day Activities When you create an ARE document, the system automatically enters the address of the local excise department that you have assigned to the series group. The address data is shown on the Addresses tab. You can change it if you want to.

Long Texts
Use The forms that ARE-1s and ARE-3s are printed on contain spaces for various pieces of information, for example, the mode of transport or the export seal number. When you create an ARE document, you can enter this information using the long text function and it will be printed at the appropriate positions. Activities Customizing Country Version India comes with long texts already customized to go with the ARE-1 and ARE-3 forms. However, if you need to, you can define other long texts in Customizing for Logistics General, by choosing Tax on Goods Movements India Tools Long Texts. Day-to-Day Activities When you create an ARE document and you want to enter a long text for it, on the Additional Data tab, choose 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. When you print out the document, the texts appear at the appropriate positions. Long

Printouts of ARE Documents Use

You can print out ARE-1s or ARE-3s on blank A4 paper. The system prints out the entire form with the details filled in from the ARE that you have created. Since multiple copies are required of each ARE document, the system automatically prints out the number of copies needed. Features Country Version India comes with all the settings you need to print out ARE-1s and ARE-3s in the appropriate format. Two SAPscript forms are provided, one for ARE-1s and one for ARE-3s. These forms use the same printing program and output type. The output type is J1IB. Activities Customizing Check the output type settings provided in Customizing for Logistics General, by choosing Tax on Goods Movements India Business Transactions Excise Bonding Exports Under Excise Regulations Printouts of ARE Documents. Assign the output type to the ARE-1s and ARE-3s, in Customizing for Logistics General, by choosing Tax on Goods Movements India Business Transactions Excise Bonding Exports Under Excise Regulations Make Settings for ARE-1 Procedure and Deemed Exports Make Settings for ARE-3 Procedure. In the same activities, specify how many copies of each ARE document you want the system to print. Day-to-Day Activities There are two ways of printing a document, as follows:

When you post an ARE, select Print ARE Document on the Document Details tab.

Then, when you save the ARE, the system prints out the number of copies that you have specified.

When you display an ARE, choose

Note that this function is only available in display mode. Export Periods and Rewarehousing Periods Use Exports under bond must be completed within the export period defined by the excise authorities, otherwise you no longer qualify for the exemption on the basic excise duty. Exports under claim for rebate must also be completed within this time or you will not be able to reclaim the duty. Similarly, deemed exports must also be completed within the allotted rewarehousing period. The system keeps track of these periods for you automatically. Activities Customizing Enter the export period in Customizing for Logistics General, by choosing Tax on Goods Movements India Business Transactions Exports Under Excise Regulations Exports.

Enter the rewarehousing period in Customizing for Logistics General, by choosing Tax on Goods Movements India Business Transactions Exports Under Excise Regulations Deemed Exports. Day-to-Day Activities If an ARE-1 or ARE-3 reaches the end of the period without being closed, you can apply to the excise department for an extension.

If the extension is granted, enter the extension date in the ARE document (see

Extending Export Periods and Rewarehousing Periods). reverse the ARE-1 or reverse the ARE-3. You can track which AREs are coming to the end of their export or rewarehousing periods using the Aging Analysis for ARE Documents.

Extending Export Periods and Rewarehousing Periods Use If you have not closed an ARE document within the prescribed export period or rewarehousing period and you have obtained an extension from the excise department, you can enter the new date in the document. Procedure e SAP Easy Access screen, choose Indirect Taxes Sales/Outbound Movements Exports Under Excise Regulations Exports or Deemed Exports Central Processing Update ARE-1 or Update ARE-3.

a. Select Update. b. Select ARE-1 Internal Document or ARE-3 Internal Document. c. Enter the internal ARE document number and choose . Certification Dates tab, fill out the Extended Until field. This field only appears once an ARE document exceeds the export period or rewarehousing period. Save the document. Result Once you have entered the extension date, you can continue processing the ARE document as normal.

Interest Calculation Use

Whenever you have to pay the excise duty originally exempted by an ARE document, you also have to pay interest on that amount, backdated to the date on which you removed the goods from your premises. The system calculates the amount of interest due automatically. Features Interest is due whenever you reverse an ARE document (for example, when an ARE-1 exceeds the export period and the excise authorities do not grant you an extension). It is also due when a customs officer updates the quantity of goods on the ARE-1, or a customer updates the quantity of goods on an ARE-3. The applicable interest rates are announced by the excise authorities. Activities Customizing Maintain the interest rates in Customizing for Logistics General, by choosing Tax on Goods Movements India Business Transactions Exports Under Excise Regulations Exports Make Settings for ARE-1 Procedure and Deemed Exports Make Settings for ARE-3 Procedure. Day-to-Day Activities The system automatically calculates interest when:

You enter shortfalls in ARE-1s or enter shortfalls in ARE-3s You reverse an ARE-1 or reverse an ARE-3

You can overwrite the excise duty and interest that the system proposes. Adding Excise Invoices to AREs Use If you have already created an ARE document, you can still add additional excises to it until such time as you post it. Procedure Excise Invoice Summary tab, enter the excise invoice number and year in the Additional Excise Invoices field. .

Removing Excise Invoices from AREs Use If you have assigned an excise invoice to an ARE document and you wish to remove it, you can do so until such time as you have posted it. Procedure

Excise Invoice Summary tab, enter the excise invoice number and year in the Additional Excise Invoices field. .

Canceling AREs Use If you have already created an ARE document but not yet posted it, you can cancel it if you need to. Procedure Sales/Outbound Movements Exports Under Excise Regulations Exports or Deemed Exports Central Processing Cancel ARE-1 or Cancel ARE-3.

a. Select Cancel. b. Select ARE-1 Internal Document or ARE-3 Internal Document. c. Enter the internal ARE number and choose .

Aging Analysis for ARE Documents

Use You use this report to prepare a list of all ARE documents by their status. It allows you to see which documents need to be processed within a certain amount of time, for example, which ARE-1s are approaching the end of their export period and need to be extended. Features To access the report, from the SAP Easy Access screen, choose Indirect Taxes Sales/Outbound Movements Exports Under Excise Regulations Reports Aging Analysis for ARE Documents. Selection

Enter data as follows: a. In the Documents field, enter the status of the documents that you want to see. b. Then either enter a date range or enter a period.

The period can refer to the next so many days, or the past so many days, depending on what status you have selected. c. Choose Output Each document is assigned a status as follows: .

: Activity is overdue : Activity is due today : Activity has been completed

The list is formatted using the SAP List Viewer: see this documentation for more information about navigating and formatting options within the list.

Transaction Codes
Transaction Function J1IA101 J1IA102 J1IA103 J1IA104 J1IA301 J1IA302 J1IA303 J1IA304 J1IBN01 J1IBN02 J1IBN03 J1IBN04 J1IBN05 J1ILIC01 J1ILIC02 J1ILIC03 J1ILIC04 J1ILIC05 Create, change, update, cancel, display ARE-1 Create, change, display ARE-1 Update, display ARE-1 Cancel, display ARE-1 Create, change, update, cancel, display ARE-3 Create, change, display ARE-3 Update, display ARE-3 Cancel, display ARE-3 Create bond Change bond Display bond Cancel bond Close bond Create license Change license Display license Cancel license Close license

J1IANX18 J1IANX19

Pro Forma of Running Bond Account Statement Regarding Export of Excisable Goods

J1IARE_AGE Aging Analysis for ARE Documents J1IBONSUM Bond Summary Report J1ILICSUM License Summary Report

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. SALES REGISTER In India, you use this report to determine the various taxes and duties that sales organizations pay for sales transactions over a period of time.
Features Selection

On the selection screen, you enter the following data:

General data such as company code, sales organization In the Further Selection group box, you can choose any one of the following:

o o o

Sales Order Delivery Billing

If you choose the Sales Order radio button, then enter the sales order number, sales order date, and sold-to party details. In the Sales Process group box, choose any one of the following: Domestic Export Sales

If you choose the Delivery radio button, then enter the sales delivery number, sales delivery date, and ship-to party details. In the Sales Process group box, choose any one of the following: Domestic Export Interstate Intrastate All

If you choose the Billing radio button, then enter the sales billing number, sales billing date, and business place details. In the Sales Process group box, choose any one of the following: Domestic Export All

Output

The result screen displays the sales orders, dispatches, billing invoices/documents, and receipts of your sales and excise invoices. Activities To access this report on the SAP Easy Access screen, choose Register . Indirect Taxes Sales/Outbound Movements Sales

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 Materials that you have not used in production Additional excise paid by vendors Money that you have transferred to your personal ledger account PLA Other transactions

You can also use this function to cancel excise invoices.

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 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 Specifying which G/L accounts are to be adjusted Displaying balances of CENVAT accounts

When you save your changes, the system creates an accounting document to make the appropriate postings. 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

From the SAP Easy Access screen, choose Indirect Taxes Excise JV Create (J1IH) Matl write-off.

Enter data as required, including: o Document number Enter the number of the document that you used to scrap the material. o 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.

Choose

The system displays the information from the material document. Adjust the posting date as necessary. Adjust the excise duty for each line item either: o Manually o By assigning the line item to an excise invoice 6. Specify which G/L accounts are to be posted to. 7. Save the adjustment posting.

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

From the SAP Easy Access screen, choose Indirect Taxes Excise JV Create Matl non-prod. Enter data as required, including: o Document number

Enter the number of the material document that the adjustment posting is to refer to.
o

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.

Choose

The system displays the information from the material document.

Adjust the posting date as necessary. Adjust the excise duty for each line item either: o Manually

By assigning the line item to an excise invoice 6. Specify which G/L accounts are to be posted to. 7. Save the adjustment posting. 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

From the SAP Easy Access screen, choose Indirect Taxes Excise JV Create Additional excise. Enter data as required.

In the Document number field, enter then number of the document sent to you by the vendor.

Choose . Adjust the posting date as necessary. Enter the amount of excise duty in either of the following ways: o To enter line items for different materials and the excise duty accordingly, choose and enter the line items in the table. o To enter the excise duty only, choose and enter the excise duty in the totals fields at the foot of the screen. If the duty qualifies as countervailing duty (CVD): a. Select CVD applicable. b. Enter the CVD amount in the BED amount field. Specify

Which G/L accounts are to be posted to.

Save the adjustment posting.

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

From the SAP Easy Access screen, choose Indirect Taxes Excise JV Create TR6 challan. Enter data as required, including the document number.

You can enter either the challan number or the number of the accounting document. Choose .

If you entered the accounting document number, the system displays the information from it.
Use

Enter the amounts against the accounts that you require. Save the adjustment posting.

Canceling Excise Invoices You follow this procedure in order to cancel an outgoing excise invoice. It reverses any excise duty accounted for.
Procedure

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 . Enter the number, year, and series group of the excise invoice that you want to cancel.

A dialog box appears.

Use

Choose Yes. Save the adjustment posting.

Making Adjustment Postings for Other Transactions 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

From the SAP Easy Access screen, choose Indirect Taxes Excise JV Create Other adj. Enter data as required, including: o Document number

Enter the number of the external document that you want to refer to.
o

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. Choose .

The system displays the information from the material document. Adjust the posting date as necessary. Enter the amount of excise duty in either of the following ways: o To enter line items for different materials and the excise duty accordingly, choose and enter the line items in the table. o To enter the excise duty only, choose and enter the excise duty in the totals fields at the foot of the screen. 6. Specify

which G/L accounts are to be posted to. Save the adjustment posting.

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 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. Select the excise invoice that you want and choose .

The system:
o o

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.

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. 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 whether you want the users to be able to add extra debit accounts (see below), in Customizing for Logistics General, by choosing Taxes on Goods Movements India Basic Settings Maintain Company Codes. Procedure

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. Add another account, if you need to, and adjust the other postings so that the credits and debits match. Enter a business area and cost center, if necessary. To close the dialog box, choose .

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.

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 as and when necessary. Alternatively, you can download the data for processing by non-SAP software.
Features

The SAP system handles the following excise registers: Register RG 1 Register RG 23A and 23C, Parts I and II Register RG 23D Personal Ledger Account (PLA)

This is the bank account from which you transfer any money owing to the excise authorities. 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.

Excise Registers:
a. RG23A Part I: - Part I shows the quantities of the Input Materials. b. RG23C Part I: - Part I shows the quantities of the Capital Goods. c. RG23A Part II: - Part II shows the amounts of excise duty on the Materials, and how much you have transferred to the CENVAT accounts. d. RG23C Part II: - Part II shows the amounts of excise duty on the Capital Goods, and how much you have transferred to the CENVAT accounts. Note: - Previously, manufacturers were required to keep two separate registers, RG 23A and RG 23C for raw materials and capital goods respectively. This is no longer the case, but the distinction still remains in the system. e. PLA: - Personal Ledger Account

f. RG23D: - A record of receipts and issues of excisable materials, as kept by depots. g. RG1: - A register of excisable finished goods kept by manufacturing plants. h. ER 1: - The Government of India vide Notification No 26/2005-Central Excise (N.T.) prescribed the form E.R.-1 to be filled with excise authorities, by all the assesses (as defined under Central Excise Act) on a monthly basis for production and removal of goods and other relevant particulars and CENVAT credit. Note: - Now ER 1 fulfills requirement of RT-12 i.e. Monthly Return which is to be submitted to Excise Authorities every month end.

Register RG 1
Definition

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.
Use

The SAP system generates all the necessary entries in the register, and to prepare a copy of the register. Set the material type to Finished Goods in the material masters that you use for finished goods. Register RG 1 Entries
Use

The SAP system creates all register RG 1 entries automatically.

Features

In most cases, the system does not generate an RG 1 entry at runtime. It generates any missing entries when you execute the Register Update program (Page 89). It assigns all entries a serial number.
Activities Customizing

If you want the system to generate entries for goods issues entered using the standard Goods Movement transaction, MIGO, specify in Customizing for Logistics General, by choosing Taxes on Goods Movements India Basic Settings Maintain Excise Groups.
Day-to-Day Activities

The system does not automatically generate entries for goods receipts from production orders. You have to generate this yourself (see below). Nor does it generate entries for goods issues, except for goods issues entered using the Goods Movements transaction if you have made the Customizing settings described above.
Periodic Processing

Generate the missing entries once a day using the Register Update program.
Reporting

Prepare a copy of the register as described under Creation of Excise Registers.

Register RG 23A/23C
Definition

A record of receipts and issues of excisable materials, as kept by manufacturing plants. The register consists of two parts: Part I shows the quantities of the materials. Part II shows the amounts of excise duty on the materials, and how much you have transferred to the CENVAT accounts.

Previously, manufacturers were required to keep two separate registers, RG 23A and RG 23C for raw materials and capital goods respectively. This is no longer the case, but the distinction still remains in the system.
Use

The system generates all the necessary entries in the register. You can prepare a copy of the register as required.

Part I Entries
Use

The SAP system creates Part I entries for all excisable goods movements.
Activities Day-to-Day Activities

When you enter a goods receipt for excisable materials, the system automatically asks you if you want to create the Part I entry in Register RG 23A or RG 23C. If so, the system generates a Part I entry. If not, it does not, but you can generate all missing Part I entries later. The system automatically enters the excise invoice number in the Part I entry. If the excise clerk has already captured the excise invoice when the warehouseman enters the goods receipt, the system enters the excise invoice number in the Part I entry immediately. If the warehouseman enters the goods receipt before the excise clerk enters the excise invoice, the Part I entry does not contain a link to the excise invoice number. However, the system updates the excise invoice number automatically when the excise clerk captures the excise invoice later on. The system does not automatically generate Part I entries for goods issues of excisable materials, with two exceptions: When you enter a goods issue for vendor returns When you enter a goods issue for stock transport orders for plants, but only when you use the Goods Movements transaction

Periodic Processing

Generate the missing entries once a day using the Update of Registers RG 1 and RG 23 (Part I) program.
Reporting

Prepare a copy of the registers as described under Creation of Excise Registers.

Part II Entries Use Whenever you as a manufacturing plant post an incoming excise invoice, or create an outgoing excise invoice, the system automatically creates an entry in Part II of the appropriate register (RG 23A or RG 23C). Features The system assigns all Part II entries a serial number, and creates an accounting document for each, to transfer the various types of excise duty to the appropriate CENVAT account. Activities Day-to-Day Activities The system only creates a Part II entry when you post an incoming excise invoice. It does not create one if you only capture an excise invoice. That way, you can ensure that excise clerks can capture excise invoices but cannot make any Part II entries. The excise supervisors can then check and post the excise invoices posted by the clerks. Similarly, the system also creates a Part II entry when you post an outgoing excise invoice. Reporting All Part II entries are shown when you prepare the excise registers.

CENVAT Document
Definition

An accounting document that the system automatically creates when it generates a Part II entry. Use Customizing Specify which document type you want the CENVAT documents to use, in Customizing for Logistics General, by choosing Taxes on Goods Movements India Basic Settings Maintain Company Code Settings. Day-to-Day Activities When the system generates a Part II entry for an incoming excise invoice, it creates a CENVAT document to debit the excise duty to the excise duty account, and credit it to the CENVAT clearing account:

The excise duty is cleared from the clearing account when the accounting clerk enters the vendor invoice. When the system generates a Part II entry for an outgoing excise invoice, it creates a CENVAT document to debit the excise duty to the excise duty account, and credit it to the CENVAT suspense account:

Register RG 23D
Definition

A record of receipts and issues of excisable materials, as kept by depots.

Use

In procurement, when the warehouseman posts a goods receipt, the system creates a register entry. In sales, when a sales clerk creates a sales order, he has to specify which excise invoices were delivered with the goods that are being sold. Then, when the warehouseman posts the goods issue, the system generates another register entry. The system generates all the necessary entries in the register. You can prepare a copy of the register as required. Register RG 23D Entries
Use

The system creates RG 23D entries for all receipts of excisable materials, and when you enter a goods issue, you specify which RG 23D entries the goods came from originally.
Activities Day-to-Day Activities

When you enter a goods receipt for excisable materials, the system generates a Part I entry in Register 23D. The system creates one entry for each goods receipt, each of which is numbered with a serial number. Each entry contains a separate line item for each material in the goods receipt, and each line item has its own folio number. When you enter a goods issue, you have to specify which folio numbers are associated with it. Again, each entry has its own serial number. The excise duty associated with these items is then added to the customer invoice.
Reporting

Prepare a copy of the registers as described under Creation of Excise Registers.

Example A purchasing clerk places an order with a vendor. When the warehouseman enters the goods receipt, the system generates the appropriate RG 23D entry automatically, as follows:

The RG 23D entry contains a separate line item for each material in the goods receipt, and each line item has its own folio number. Later that day, a second lot of goods is delivered. Again, the warehouseman enters the goods receipt in the system, and the system creates the RG 23D entry automatically.

This is the second RG 23D entry, so the serial number is 0002. The folio numbers start at the next available number, in the example, 004. Later on, a sales clerk enters a sales order. When the excise clerk selects the RG 23D entries to go with the goods issue, the system generates the following RG 23D entry:

Serial Numbers
Use The system automatically numbers all entries in the following registers with a serial number:

RG 1 RG 23A and RG 23C, Parts I and II RG 23D PLA

Each excise group defines its own number range intervals.

Use

Customizing Set up the number ranges in Customizing for Logistics General, by choosing Taxes on Goods Movements India Tools Number Ranges. Day-to-Day Activities Whenever the system creates a register entry, it automatically assigns it a serial number. Reporting The serial numbers are shown in the excise registers when you prepare them.

Creation of Excise Registers

Purpose You follow this procedure to create the excise registers. Process Flow You update register RG 1 and the Part I registers 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. When you need to submit the registers, you run the Data Extraction report, and the system saves the data to an internal table. You run the Register Printout report, which reads the data from this table and prints it out.

Update of Registers RG 1 and RG 23 (Part I) 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 report
Prerequisites

You have specified in the material master data 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 EXGRP DATUM MATNR FORM Field entries Materials excise group Date from which RG1 report is required, normally the date of going live Material Enter P (Packed) or L (Loose). Do not leave this field blank. WERKS OP FN UOM Leave this field blank. Leave these fields blank.

OP BN UOM All quantities in this table are updated in the base unit of measure of the material. CB FN UOM USNAM CPUDT CPUTM 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:

User ID of the person filling out the table. Date of entry Time of entry

Which documents you want to cover: o Enter general organizational details in the Company details group box. o 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 RG 23A Goods issues IIM IPD IWD RG 23C IIM IPD IWD RG 1 IDH IDE IWE IWT IWO RMA ROP ROP Goods receipts ROP

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. o You can reselect the required line items and repeat the Simulate process. 3. Select the line items you want and choose Register entry.
o

The system updates the Part I or RG 1 tables with the material documents.

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. Data Extraction Use You use this report to extract the data in order to create the excise registers (see Creation of Excise Registers).
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 EXGRP REGISTER Entry Excise group of the registers Type of register Make an entry for each of the following:

RG23ABED RG23ASED RG23AAED RG23CBED RG23CSED RG23CAED PLABED PLASED PLAAED PLACESS

DATUM WERKS OP BAL

Date of the closing balance Leave this field blank Leave this field blank

CL BAL EXAMT EXIND USNAM CPUDT CPUTM Features

Closing balance in the register Leave this field blank Leave this field blank User ID of the person making the entries Date of entry Time of entry

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 report. 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.
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.

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. 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). 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 RG 23A and C, Part I and Part II RG 23D Plant excise details

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 REGTYP Length 1 Use Register A C TRNTYP EXGRP SNO SYEAR PDATE MAKTX MENGE MEINS EXNUM EXDAT NAME1 4 2 10 4 8 40 13 3 10 8 35 RG23A RG23C

Transaction type (GRPO = goods receipt) Excise group Part I serial number Year of serial number Posting date Material description Quantity Unit Excise invoice number Excise invoice date Vendor name

ORT01 PSTLZ EXCCD EXCRN EXCRG EXCDI EXCCO CHAPID P2NO RISIND STATUS

35 10 20 20 40 20 20 12 10 1 1

City Pin code Excise code number of vendor Excise registration number of vendor Excise range number Division number Excise collectorate of vendor Chapter ID Corresponding Part II entry number Receipt/issue indicator Entry status U D Undeclared material Deleted item

MBLNR MJAHR BWART

10 4 3

Material document number Material document year Movement type

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. Structure Field REGTYP Length 1 Use Register type A C P TRNTYP 4 RG23A RG23C PLA

Transaction type 57CM 57FC 57NR CAPE CEIV DIEX DLFC 57F4 completion 57F4 subcontractor goods issue Non receipt of 57F4 Capital goods Canceling the generated excise invoice Differential excise posting Factory sale and stock transfer

GRPO MRDY MRRD MRWO TR6C OTHR EWPO EXGRP SNO SYEAR PDATE EXNUM EXDAT NAME1 ORT01 PSTLZ EXCCD EXCRN 2 10 4 8 10 8 35 35 10 20 20 Excise group

Goods receipt (raw material) Reversal without reference Reversal in case of consumption other than production CENVAT reversal for write of cases PLA account adjustment through TR6 challan Excise paid on other movements Excise invoice without PO

Part II serial number Year of the serial number Posting date Excise invoice number Excise invoice date Vendor/customer/subcontractor name City Pin code Excise code number of vendor/customer/subcontractor Excise registration number of vendor/customer/subcontractor

EXCRG EXCDI EXCCO BED SED AED CESS CURR CHAPID P1NO PREPRN CVDIND EXPIND

40 20 20 19 19 19 19 3 12 10 10 1 1

Excise range number (in case of credit entries) Division number (in case of credit entries) Excise collectorate of vendor/customer/subcontractor BED SED AED CESS Currency Chapter id Corresponding part I entry number (in case of credit entries) Preprinted excise invoice number CVD indicator (X = CVD) Export indicator in sales Blank B D N Local sale Export under bond Deemed export Export without bond

CAPIND

Capital goods indicator

A T C CERTNO 20

Assets Tools Consumable

(Capital goods only) Field use depends on material type: Assets Consumable Tools Installation certificate number Intimation document number Intimation document number

CERTDT ANLN1 REMARKS PROCES STATUS

8 12 50 50 1

Intimation/certificate date (capital goods only) Asset number (for capital goods: assets only) Remarks Process for subcontracting challan Status Space R Normal Reversed

RDOC1 RYEAR1 LIFNR MBLNR

10 4 10 10

Reference document number Reference document year Vendor number Material document number

MJAHR

Material document year

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.
Structure

Field INDCTR

Length 1

Use Receipt/issue indicator I R Issue Receipt

EXNUM EXDAT NAME1 ORT01 PSTLZ EXCCD EXCRN EXCRG EXCDI EXCCO

10 8 35 35 10 20 20 40 20 20

Supplier's excise invoice number Supplier's excise invoice date Vendor/consignee name City of vendor/consignee Pin code Excise code number Excise registration number Excise range number Division number Excise collectorate

MAKTX MENGE MEINS CHAPID BED SED AED CURR VBELN PDATE NAME1B ORT01B PSTLZB

40 13 3 12 19 19 19 3 10 8 35 35 10

Material description Quantity Unit Chapter ID BED SED AED Currency Invoice (delivery document) Invoice date Name of buyer City of buyer PIN code of the buyer

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. Structure Field Length Use

WERKS NAME1 NAME2 STRAS PFACH PSTLZ ORT01 LAND1 EXCCD EXCRN EXCRG EXCDI EXCCO

4 30 30 30 10 10 25 3 20 20 40 20 20

Plant code Plant name 1 Plant name 2 Street and house number Post office box Postal code City Country Excise code number Excise registration number Excise range number Division number Excise collectorate

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. Structure Field MANDT Length 3 Use Client

EXGRP SYEAR SERIALN MBLNR MJAHR ZEILE BWART MATNR MENGE MEINS MAKTX RISIND DOWNL DECLRD EXPIND REASON RDOC1 RYEAR1

2 4 10 10 4 4 3 18 7 3 40 1 1 1 1 40 10 4

Excise group Year of the serial number RG 1 serial number Number of a material document Year of material document Item in material document Movement type (inventory) Material number Quantity Base unit of measure Material description Receipt/issue indicator Download indicator Item declared for excise Export type Reason for movement Reference document 1 Reference year 1

RIND1 BEDRATE AEDRATE SEDRATE EXCUR EXBAS EXBED EXAED EXSED CESS STATUS USNAM CPUDT CPUTM AEDAT AENAM

1 3 3 3 5 7 7 7 7 7 1 12 8 6 8 12

Reference document type 1 Basic excise duty rate Additional excise duty rate Special excise duty rate Currency Base value for excise calculation Basic excise duty Additional excise duty Special excise duty Cess amount Register entry status Created by Document entry date Time of entry Changed on Changed by

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, 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:

Organizational data 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.

Depot Quarterly Returns

You use this report to prepare and print out CENVAT return. Depots (registered dealers) are required by law to submit a CENVAT return at the end of each quarter of the financial year. The return contains details about the excise duties on deliveries and issues of goods, as recorded in register RG 23D.
The return is due on the 15th of the month after the end of the quarter. For example, for the quarter ending June 30, you must submit the return by July 15. Features Selection

On the selection screen, enter the following details: In the General data group box, enter the company code and excise group. In the Excise Invoice Selection group box, enter the posting date.

In the Further Selection group box, enter the depot. In the Download to XML file group box, select the XML checkbox to generate an XML file.

Output

The report displays the quarterly returns for the respective dealer. The return contains details about the materials purchased by the dealer as well as details of materials sold by the dealer in the specified period. If you select the XML checkbox on the selection screen, the report generates an XML file in the prescribed format as required by law. The file is stored in .XML format and contains the following sections: Header Data Invoice Header Document Header Self-assessment Memorandum

Activities

To access this report, on the SAP Easy Access screen, choose Quarterly Returns .

Indirect Taxes Registers Excise Tax Depot

Monthly Return of Excisable Goods and Availment of CENVAT Credit

The Government of India vide Notification No 26/2005-Central Excise (N.T.) prescribed the form E.R.-1 to be filled with excise authorities, by all the assessees (as defined under Central Excise Act) on a monthly basis for production and removal of goods and other relevant particulars and CENVAT credit.
You can run the report for a plant for a particular month. The system displays and prints the various sections of the form for a Registration Number of a plant for a particular month. Using this report, you can also generate the output in an XML format as required by law. Activities

1. To access the report, on the SAP Easy Access screen, choose Indirect Taxes Procurement Excise Invoice Reports Monthly Return of Excisable Goods and Availment of CENVAT Credit . 2. Enter the selection criteria. This is based on the Excise Group, Plant and a particular month. 3. Enter the Last Utilization Period. This is the period during which the excise duty credit has been used for the particular month. If you do not specify a period here, the system reads the last utilization period. 4. In the Output Format group box, you can select either one of the following: o XML. If you select the XML button, then you also need to need to enter the path where you want to save the file in the Details group box. o Details. If you select the Details button, in the Details group box, select the section of the form that you want to display in the Details group box. 5. Select the section of the form that you want to display and print. For a complete ER1 reporting, you must print all the sections.

Purchase Register
In India, you use this report to determine the various taxes and duties that purchase organizations pay for purchase transactions over a period of time.
Features

Selection On the selection screen, enter the following details: General data such as company code, purchase organization In the Further Selection groupbox, you can choose any one of the following: o Purchase Order o Material Document o Invoice

If you choose the Purchase Order radio button, then enter the purchasing document and document date details. If you choose the Material Document radio button, then enter the material document and posting date details. If you choose the Invoice radio button, then enter the invoice document number and posting date details. In the Purchase Process group box, choose any one of the following: o Domestic purchase o Import purchase o Intrastate purchase o Interstate purchase

Output

The result screen displays the purchase orders, goods receipts, vendor invoices, and receipts of purchases and vendor invoices.
Activities

To access this report on the SAP Easy Access screen, choose

Indirect Taxes Procurement Purchase Register

FORMS / OUTPUTS / REPORTS:

u2022 Invoice output u2013 to check whether the existing invoice format is acceptable / make arrangements for a new invoice as per excise compliance u2022 Tarrange for the formats of all excise registers and reports. Tname a few RG23A RG23C Monthly return for Excise RG1 PLA RT-12

MONTHLY REPORTS:
J1I7 - Query Excise invoices (Excise Transaction Details) J2I6 - Print Utility (Printout of RG23A Part I & II, RG23C Part I & II, RG1, PLA, RT-12, etc...) J2I9 - New Monthly Returns Report Rule 57AE (Annexure - X) J2IER1 - Monthly ER1 report

Above reports are to be submitted on monthly basis to the Govt.

TRANSACTION CODES FOR INDIA

Transaction

Action

J1I2

Prepare a sales tax register Create outgoing excise invoices in batches Update the RG 1 and Part I registers Incoming Excise Invoices (central transaction) Capture an incoming excise invoice (excise clerk) Post an incoming excise invoice (excise supervisor) Create a subcontracting challan Change a subcontracting challan Display a subcontracting challan Complete, reverse, or recredit a subcontracting challan Reconcile quantities for subcontracting challans List subcontracting challans Make a CENVAT adjustment posting Create an outgoing excise invoice Assign excise invoices to a delivery for sales from depots Adjust withholding tax Item Reprint a withholding tax certificate for a vendor

J1I3

J1I5

J1IEX

J1IEX_C

J1IEX_P

J1IF01

J1IF11

J1IF12

J1IF13

J1IFQ

J1IFR

J1IH

J1IIN

J1IJ

J1INJV

J1INREP

J1IQ

Year-End Income Tax Depreciation Report Download register data Process an excise invoice (outgoing) for other movements Process exemption forms Verify and post an incoming excise invoice Create an incoming excise invoice (without reference to purchase order) Transfer excise duty to CENVAT account Remit excise duty fortnightly Monthly CENVAT return Excise invoice entry at depot Create additional excise entry at depot Extract data for excise registers Print excise registers

J1IR

J1IS

J1IU

J1IW

J1IX

J2I8

J2IU

J2I9

J1IG

J1IGA

J2I5

J2I6

TAXES (FI-AP/AR)
Purpose

The Taxes component covers the most important laws and business practices specific to India. The following documentation describes these aspects of the component. For generic information about Taxes.
Features Country-Specific Functions

Country Version India uses the standard functions for calculating and collecting withholding taxes. However, both Classic Withholding Tax and Extended Withholding Tax come with additional functions for tax remittance, journal vouchers, creating withholding tax certificates, and preparing annual returns. If you want to handle excise duties, you must post the excisable transactions using the Materials Management (MM) and Sales and Distribution (SD) components. The system calculates the excise duty in these components and creates the appropriate line items in Financial Accounting (FI). However, if you only want to handle withholding taxes, you can use FI on its own.
Country Template

The country template for India comes with settings for calculating and posting withholding taxes, and account determination settings for posting excise duty.

Excise Duty
Use

The SAP system automatically calculates excise duties in Materials Management (MM) and in Sales and Distribution (SD), and posts them in Financial Accounting (FI). The system covers all types of excise duty, all of which need to be calculated and reported separately: Basic excise duty (BED)

It is one of the main excise duties in India. It is levied on a wide range of products, for example, foodstuffs, metals, jewelry, leather goods, and machinery. Special excise duty (SED)

This too is a form of excise duty in India - on a limited number of goods, mostly luxury goods, including pan masala, sparkling waters, furs, and yachts. Additional excise duty (AED)

A form of excise duty, in India, levied on a select range of products, for the most part, textiles. National calamity contingency duty (NCCD)

In India, a form of excise duty levied over and above additional excise duty. It applies to a range of products, such as tobacco or high-speed diesel and oil. Cess

In India, a tax on the manufacture of certain products, mostly foodstuffs. Payroll India (PY-IN): An additional tax calculated based on a persons income tax payable and levied for particular purpose in India, usually is certain percentage of the total tax payable. For example education Cess. Education Cess

A surcharge of 2% applicable in India, on the total excise duty for the product.

Countervailing duty

A form of excise duty imposed on imports that are subsidized by the country in which they were manufactured. Countervailing duty (also known as CVD) is intended to make the imports more expensive, thereby redressing any competitive advantage they might have over goods produced locally. Additional duty of customs

Imports duty in India, over and above the countervailing duty, basic customs duty and price of the product. This duty is applicable on all products and is charged at 4% on the aggregate price plus duties. Education Cess is not calculated on ADC.
Features

The system of excise duties is complex, and differs from the generic functions for taxes on sales and purchases in a number of ways: The rate of duty on a single material can vary according to which chapter ID it is listed under. You cannot offset all excise duty on inputs against outputs.

Depots cannot offset any input duties at all. Manufacturing plants can only offset input duties if they can show that the input materials are used to produce output materials. You have to record all excise duty (inputs and outputs) in excise registers. Your company may only be entitled to offset a portio0 n of the duty on inputs against duty on outputs. Companies that qualify as small-scale industries can levy excise duty on outputs at reduced rates, so if you purchase materials from these companies, you must calculate a different rate of excise duty.

Excise Determination

MM comes with two ways of determining excise duties (and sales taxes) on input materials: formula-based excise determination and condition-based excise determination. The system calculates excise duties using a tax procedure. SD also supports formula-based and condition-based excise determination, but in SD, the system calculates the taxes using a pricing procedure, not the tax procedure (see Pricing).
Reporting

You have to remit the excise duty that you have collected to the central excise authorities. The law requires you to remit excise duty twice monthly: for the first half of any given month (115 inclusive) and from 16 to month-end. In each case, you are allowed five days to remit the excise duty. Country Version India offers a report to help you do just that (see Remittance of Excise Duty Fortnightly). A small number of transactions have to be remitted on the same day (see Other Outward Movements). In addition, the system allows you to prepare printouts of the various excise registers for the tax authorities. 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.

Activities Customizing

If any of your excise registrations are only entitled to claim partial CENVAT credit, set the indicator in Customizing for Logistics General, by choosing Taxes on Goods Movements India Basic Settings Maintain Excise Registrations.

Configure separate tax codes that split the excise and post some as tax and add the rest to the material price.
Day-to-Day Activities

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.

Monthly Remittance of Excise Duty and Service Tax You use this report to calculate how much excise duty you must remit to the authorities. Legislation requires you to remit excise duty monthly - for all the goods issued and services provided in the given month. In each case, you are allowed five days to remit the excise duty and service tax. 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, from the service tax credit accounts, from the personal ledger account (PLA) or from the service tax clearing accounts. If the service tax is to be paid from the service tax credit and CENVAT credit, and the credit available is not sufficient to pay off the service tax, then the amount is pushed to the service tax clearing accounts.
Note

You use the service tax clearing accounts for service payments and personal ledger accounts for CENVAT payments respectively.
Prerequisites

You 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 Made the settings in Customizing for Logistics - General, by choosing Taxes on Goods Movements India Business Transactions Utilization Maintained the various service tax G/L account details in Customizing for Logistics General, under Taxes on Goods Movements India Service Tax Service Tax Account Assignment .

Features

To access the report, on the SAP Easy Access screen, choose Utilization .

Indirect Taxes Sales/Outbound Movements Monthly

On the selection screen of this report, you can no longer maintain the General Ledger (G/L) accounts. To maintain the G/L accounts, do so in Customizing for Logistics General, under Tax on Goods Movements India Service Tax Assign Service Tax Accounts .
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)

Note 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.
Note

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). Payment options

You can pay the CENVAT and Service Tax payable amount from CENVAT credit or service tax credit accounts. 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 and Service Tax account(Available balances)

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. You can save the entries only when you have utilized all the duties. The system then: Creates an accounting document that debits the accounts from which the excise duty or the service tax is to be paid. Debit 250.00 50.00 200.00 Credit

Account CENVAT account Excise duty account Service Tax

Generates entries in the Part II table for service tax payable. The system assigns a new register type T and also updates the Excise Part II details (J_1IPART2) and the Excise invoice line item details (J_1IEXCDTL) tables with the service tax serial number. Similarly, the system also generates entries in the Part II table for service tax exemption payable and assigns new register type X. The system generates entries in the Part II table for service tax utilization with register type S.

Value Added Tax (VAT)

Use

In India, VAT has been levied in certain states from April 1, 2005. VAT is levied instead of the Local Sales Tax (LST). VAT also replaces other taxes such as, turnover tax, surcharge, additional surcharge.
Prerequisites

You can configure the following tax procedures:


Features

For Condition-Based Excise Determination, configure the tax procedure TAXINN. For more information about TAXINN, see Configuration of Tax Calculation Procedure TAXINN. For Formula-Based Excise Determination, configure the tax procedure TAXINJ. For more information about TAXINJ, see Configuration of Tax Calculation Procedure TAXINJ.

The essence of VAT is that you can set off the input tax against the tax paid earlier. VAT is based on the value addition to the goods, and your VAT liability is calculated by deducting input tax credit from tax collected on sales during the payment period (say, a month).

You have purchased input worth INR 1,00,000 and your sales are worth INR 2,00,000 in a month, and input tax rate and output tax rate are 4% and 10% respectively, then input tax credit/set-off and calculation of VAT will be as follows: Input purchased within the month = INR 1,00,000 Output sold in the month = INR 2,00,000 Input tax paid = INR 4,000 Output tax payable = INR 20,000 VAT payable during the month after set-off/input tax credit = INR (20,000 4,000) = INR 16,000

The excise invoice that you capture contains one of the following: VAT Number If your buyer belongs to a state where VAT is levied, VAT Number has to be printed on the excise invoice. Bill of Sale Number - If your buyer belongs to a state where VAT is not levied, Bill of Sales Number has to be printed on the excise invoice.

During billing, the system generates the VAT number if the VAT Registration number is maintained in customer master in the Tax Code 2 field. Else, the system generates a Bill of Sale number. These numbers have to printed serially and separately for Bill of Sale, VAT invoice, credit and debit notes. You can do this using the Official Document Numbering. Configuration for Official Document Numbering
Purpose

Official Document Numbering is used to to print the numbers serially and separately for Bill of Sale (BOS), Value Added Tax (VAT) invoice, credit and debit notes.
Process Flow

To configure the Official Document Numbering for India, execute the following activities in the IMG under CrossApplication Components General Application Functions Cross-Application Document Numbering Taiwan. 14. 1. Define Business Places for different plants. 15. 2. Assign Business Place to Sales Office. 16. 3. Maintain different document classes to generate different number ranges, for example, B for Bill of Sale, V for VAT Invoice. 17. 4. Assign the document class for the VAT and BOS to the Document Type. 18. 5. Maintain the Number Group.

19. 6. Maintain the Number Ranges for the Number Group. 20. 7. Assign the Number Range to a combination of Business place, Document Class and Number Group.

Service Tax
This is a tax that is levied on taxable services as defined by law. Service providers are responsible for the service tax payment. Prerequisites In addition to the standard Implementation Guide (IMG) settings for taxes on sales/purchases, and deferred taxes, you must also have maintained the tax registration numbers of your vendors, customers, and your own plants. Note If there are multiple tax registration numbers, you should have separate account postings to different General Ledger Accounts based on service registration number. You can do this if you have maintained a separate tax code for each service registration number. For every service registration number, you should define separate General Ledger Accounts for service tax and education cess on service tax. Features Service tax has the following features: It is charged at a certain percentage on the amount the service provider received for the services rendered. The Education Cess and the Secondary and Higher Education Cess are applicable at a certain percentage on the service tax. For the service provider (for example, vendor, landlord), this is a deferred tax. The tax payment becomes liable on receipts from the service receiver (for example, customer, tenant). In case of partial payment, the proportional amount of the taxes (Service Tax, Education Cess, and the Secondary and Higher Education Cess) must be paid to the tax authorities. The output taxes that became liable have to be transferred from the deferred tax account to the normal output tax account with the Deferred Tax Transfer (RFUMSV50) program as described in SAP Note 921634.

For the service receiver, the tax credit can be utilized for payment of tax due when the vendor is paid for the whole invoice amount. In case of partial payment, the assessee is not eligible to take credit on the proportional amount of the input taxes. Consequently, the taxes must be transferred from the deferred tax account to the normal tax account when the payment for the whole invoice is made. The interim general ledger account contains the total service tax that you have to receive or pay as required. The final general ledger account contains only the actual amount that you have received or paid. This means that the corresponding tax codes have to possess a target tax code. The tax codes defined for Service Taxes should not have a tax rate defined in the tax code itself. We recommend that you define the tax rate in the condition records of the tax procedure (TAXINN) to cope with the frequent changes in tax rates easily. The interim general ledger account contains the total service tax until the full payment of the invoice or receipt from customer.

Credit utilization or tax payment amounts are determined from the final general ledger account. Cross-utilization of input credit between Services and Goods is permitted, so you can use the Service Tax credit to set off Basic Excise Duty that is payable by you. This tax is payable to and administered by the Central Excise Commissionerates working under the Central Board of Excise and Customs (CBES) of the Department of Revenue in the Ministry of Finance. Corporate assessees need to pay the tax on the value of taxable service received in a month, by a specified period in the following month. Period for payment of tax by individual assessees are also defined. All the financial documents for which service tax must be paid should contain information about the business place that identifies the tax office that is responsible for collecting the service tax.

In the Flexible Real Estate Management (RE-FX) component, the leased-out rental objects are subject to service tax that you need to pay to the responsible federal tax office. You identify the federal tax offices with the business place. Example The price of the service is INR 10,000. Service tax that is applicable is INR 1,000 (10%). Education Cess is INR 20 and Secondary and Higher Education Cess is INR 10. Total amount the customer needs to pay is INR 11,030. The system updates the interim general ledger account with this amount. For service provider: Assume that the customer makes a partial payment, out of which INR 500 is against service tax. You have to manually update the final general ledger account with this amount. You can offset only INR 500 against the payables in that month. For service receiver: Assume that you pay the vendor (providing the service) the value of INR 11,030. In such a case, the credit of INR 1030 can be utilized to pay output tax.

GTA Service Tax

Unlike other types of services in India, recipients of transport services from goods transport agencies (GTA) are responsible for withholding and submitting the service tax to the tax authorities on behalf of the transport service providers. The system automatically calculates the GTA service tax and makes the relevant postings in Financial Accounting (FI). Prerequisites

You have: Made the settings described in Customizing for GTA Service Tax. Entered the GTA withholding tax type and withholding tax code and selected the Liable checkbox in the vendor master for your transport service vendors.

For more information, see Vendor Master (Withholding Tax Data) Example Consider an invoice for the transport of goods of INR 15000 with a service tax of 12 percent. The service recipient pays the service tax. During the invoice verification process, the system makes the following postings: Account GR/IR clearing Dr Debit (Dr) Credit (Cr) 15000

Service tax receivable Dr 1800 Vendor Cr Service tax payable Cr 15000 1800

Customizing for GTA Service Tax

To calculate and report GTA service tax, make the following settings (all under country key IN) : Customizing 1. Financial Accounting Financial Accounting Global Settings Withholding Tax Extended Withholding Tax Basic Settings Define Withholding Tax Keys 2. Financial Accounting Financial Accounting Global Settings Withholding Tax Extended Withholding Tax Calculation Withholding Tax Type Define Withholding Tax Type for Invoice Posting Settings Create official withholding tax key GTA

Create withholding tax type G1 with the name GTA, and make the following settings: Base amount = Gross amount Rounding rule = W/tax comm. round. Select Post w/tax amount checkbox Accumulation type = No accumulation Control data = select checkboxes W/tax base manual, Manual w/tax amnt, and No cert. numbering

3. Financial Accounting Financial Accounting Global Settings Withholding Tax Extended Withholding Tax Calculation Withholding Tax Codes Define Withholding Tax Codes

Select withholding tax type G1 Enter withholding tax code G1 with description GTA Select official withholding tax key GTA Enter base amount percentage subject to tax 100% Select posting indicator 3 (Offsetting entry to G/L account) Under Calculation, specify the applicable service tax and select the W.tax form. checkbox Select the row containing the withholding tax type/code combination for GTA, and double-click Formulas for calculating withholding tax from the dialog structure. Define the gross amount over and above which the service tax for GTA must be calculated as follows by creating the following entries: 1. Enter the minimum amount on which GTA is applicable in the To base amn field and leave other fields blank 2. Enter 9,999,999,999 in the To base amnt and the currently applicable rate of service tax for GTA in the WhldTax (Withholding Tax R

4. Financial Accounting Financial Accounting Global Settings Withholding Tax Extended Withholding Tax Calculation Withholding Tax Codes Define Formulas for Calculating Withholding Tax

Posting GTA Service Tax

Process This process illustrates how goods transport agencies can use the SAP system to post service tax. 1. Follow the standard invoice verification procedure to enter and verify invoices. The system computes the service tax on the base amount withheld by the recipient of the service 2. Create a GTA Challan. The system generates an internal challan number and displays the total tax amount payable to the government by the recipient of the services. 3. Display clearing document that the system generates during challan posting. The system debits the withholding tax payable account and credits the bank account. 4. You create the bank challan, following the standard procedure, wherein you update the payment details.

The system updates the bank details. Account Service Tax clearing account GTA Service Tax final account Vendor GTA Payable Debit 10000 1000 10000 1000 Credit

Create Challan for Remittance of GTA Service Tax

In this procedure, you create a GTA challan to consolidate the total tax amount that the service recipient needs to remit to the government. Features On the selection screen, enter the following data: In the Company Details group box, enter the company code, fiscal year, and the business place. In the Details of Withholding Tax Items group box, enter the section as GTA. In the Tax Remittance Details group box, enter the document date, posting date, and the bank account.

Activities 1. Access this report on the SAP Easy Access screen by choosing Service Tax -> Goods and Transport Agency -> Create Challan for Remittance of GTA Service Tax. 2. Maintain the relevant selection criteria on the selection screen. 3. Choose (Execute).

The Choose Selection Criterion dialog box appears. 4. Select the appropriate selection criteria and choose (Continue).

The system selects all the accounting line items by default and displays them on the Post Outgoing Payments: Process open items screen. To deselect a line item, double-click the relevant entry. 5. Choose the Charge off diff. pushbutton to enter the tax amount. On the Post Outgoing Payments: Display Overview screen, to enter the total value, double-click the line item. 6. On the Post Outgoing Payments: Correct G/L Account Item screen, to compute the total tax amount, enter *. 7. In the menu bar, on the Document tab, choose Simulate.

The system creates an accounting document. The document debits the withholding tax payable account and credits the bank account. Account Debit Credit

GTA Payable 1000 Bank Account 8. Save your entries. On saving your entries, the Create GTA Challans for Remittance screen appears that displays the clearing document along with the accounting document information. On this screen, select the line item and choose the Cleared Docs. pushbutton to view the clearing document. 1000

Update Bank Challan for GTA Service Tax

You use this report to update the internal challan with the bank challan number after remittance of the total service tax to the government. Note For challan amounts that have been updated with the bank challan numbers, you need to manually post from interim service tax credit account to final service tax credit account. Activities 1. To access this report on the SAP Easy Access screen, choose Update Bank Challan for GTA Service Tax . 2. On the selection screen, enter the relevant data. 3. Choose (Execute). Service Tax Goods and Transport Agency

The system updates the Table for Internal and external Challan nos-EWT India (J_1IEWTCHLN) application table with the bank challan details.

Update GAR-7 Challan

You use this report to capture the information about GAR-7 challan used to pay service tax. Once you remit the amount to bank through GAR-7 Challan, you run this report to update the challan. You also have the option to capture the information about any advance amounts paid and adjustments done if any. Note In case the GAR-7 challan is not updated, then few of the section-4 details will not be filled in the Service Tax report. Using this report, you cannot update challan numbers for normal incoming invoices and normal outgoing invoices. Prerequisites

You have: Maintained the various service tax G/L account details in Customizing for Logistics General, under Goods Movements India Service Tax Account Assignment . Calculated how much excise duty and service tax you must remit to the authorities. Taxes on

Features Selection On the selection screen, you enter the following data: In the Transaction field, you can display, create, or cancel a challan. On the Doc. Data tab, enter the accounting document details such as company code, plant, and fiscal year. If you choose Create in the Transaction field, then the provides the following output options: o o o o Update cash payments made through GAR-7 Update advance payments made through GAR-7 Adjust payable by advance amount available Adjust payable by excess amount available

The report displays the output based on your selection criteria. The system also provides you an option to cancel based on the internal challan.

Output The report updates the Recordings of GAR-7 (J_1IGAR7) table with GAR-7 details and creates separate forms for each company code, plant, and fiscal year that you have entered. Each form shows the cash flow for each G/L account. This report also shows the following information based on the settings you make on the selection screen: Challan details Cash flows in the period covered by the report Amount available from advance and excess G/L accounts Cash payments made from the respective service tax G/L accounts Cash exempted for the respective service tax G/L accounts

The system creates an accounting document to debit the excise duty to the individual service tax clearing accounts and credit it to the bank accounts. Account Debit Credit

Account

Debit

Credit

CENVAT reversal 150.00 Register RG 23C Service Tax Activities To access this report from the SAP Easy Access screen, choose Service Tax Update GAR-7 Challan . 50.00 100.00

File Service Tax Returns

You use this report to file electronic service tax returns for services that are taxable. You prepare the service tax returns on a half-yearly basis. However, the system also allows you to prepare the service tax returns from anywhere between 1 to 6 months. Note Using this report, you can generate details of only the following sections: Section 3 - 3A1, 3B, 3F(I), and 3F(II) Section 4 - 4A(I)[a,b,c,d]and 4C Section 5 - 5AA(a,b,c,d,e), 5B(I)[excluding b(iv), b(v),c(v)], and 5B(II)[excluding b(iv),b(v),c(iv)]

Assessees filing the service tax returns for the first time are required to furnish details regarding all of the accounts maintained by them, pertaining to service tax. Prerequisites You have: Customized the system so that when you create a service entry in Financial Accounting (FI), Materials Management (MM), and Sales and Distribution (SD), the system automatically updates the invoices with service category details in the Invoices with Service Category (J_1ISER_BSEG) table. Determined how much excise duty and service tax you must remit to the authorities using the Monthly Remittance of Excise Duty and Service Tax report. Captured the amount paid in cash to the bank towards service tax and updated the GAR-7 challan.

Features Selection On the selection screen, you enter the following data: General data such as company code, plant

Posting date

The date that you enter must be for the entire month (that is, from 1st to the 31st). Advance document type Service tax codes for exemption, export, import Choose the section of the form that you want to display

Output The system displays the various sections of the form for a registration number of a plant for a particular reporting period (anywhere between 1 to 6 months). If you choose the Section 3 of ST3 report radio button on the selection screen, the system displays the gross amount relating to the service provided for a particular service category. All the relevant details for the service provided for a particular service tax category. If you choose the Section 4 of ST3 report radio button on the selection screen, the system displays the service tax amount payable. Displays GAR-7 relevant info. If you choose the Section 5 of ST3 report radio button on the selection screen, the system displays the CENVAT credit taken and utilized for different material types. Note You cannot run the report across fiscal years. For example, you cannot run this report from January 2009 to June 2009.

Service Category Maintenance

You use this report to maintain service categories while executing a business transaction that involves materials subject to service tax. Using this transaction, the system automatically determines the service category for invoices. Prerequisites You have performed the following settings: Defined condition types in Customizing for Sales and Distribution, under Control Define Condition Types . Basic Functions Pricing Pricing

Assigned condition types to tax procedure in Customizing for Sales and Distribution, under Basic Functions Pricing Pricing Agreements Set up Sales Deals Condition Type Groups Assign Condition Types/Tables To Condition Type Groups . Classified condition types in Customizing for Logistics - General, under Tax on Goods Movements India Basic Settings Determination of Excise Duty Condition-Based Excise Determination Classify Condition Types .

Classify the condition types irrespective of whether you use TAXINN (condition-based excise determination) or TAXINJ (formula-based excise determination). Defined tax codes in Customizing for Financial Accounting (New), under Financial Accounting Global Settings (New) Tax on Sales/Purchases Calculation Define Tax Codes for Sales and Purchases .

Features Selection On the selection screen, select any one of the following: FI-SD Service Category Determination

If you select this radio button, the system allows you to define service categories for outgoing financial accounting customer invoices for service tax reporting. FI-MM Service Category Determination

If you select this radio button, the system allows you to define service categories for incoming financial accounting vendor invoices for reporting service tax. SD Service Category Determination

If you select this radio button, the system allows you to define service categories for billing documents. MM Service Category Determination

If you select this radio button, the system allows you to define service categories for invoices. If you select any one of the above options and then choose the Key Combination pushbutton, a dialog box appears. In this dialog box, a list of Customizing activities related to the selected service category is displayed. Select the relevant activity and choose Continue. The system takes you to the selected Customizing activity screen, wherein you save your entries. Activities To access this report, on the SAP Easy Access screen, choose Service Tax Service Category Maintenance .

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, customers, and your own plants. 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)).
Features

There are two types of sales tax. Interstate sales (for example, between Karnataka 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 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 is also available that tells you how much sales tax you have paid and collected. 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, on 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.

Withholding Tax
Use

Country Version India comes ready configured with all the settings you need to track and remit withholding taxes under the following sections of the Income Tax Act, 1961. Payments to contractors and subcontractors (Section 194 C) Insurance commission (Section 194 D) Rent (Section 194 I) Fees for professional or technical services (Section 194 J) Interest other than interest on securities (Section 194 A) (only supported in the Extended Withholding Tax solution)

Features

Country Version India offers you two solutions for handling withholding tax (also known as tax deducted at source or TDS). You can either use the Classic Withholding Tax solution or the Extended Withholding Tax solution. If you are installing the SAP system for the first time, we recommend that you use the Extended Withholding Tax solution. 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 Withholding Tax. Taxes withheld under each section are treated differently with regard to the time limits for remitting tax to the authorities, providing the taxpayer with a withholding tax certificate, and filing a quarterly return. In addition, the formats for the withholding tax certificates and the returns also differ. The Income Tax Act requires you to calculate taxes as soon as you enter an invoice. However, if you make a down payment to a vendor before you have received an invoice from it, you withhold tax on the down payment. Then, once the invoice arrives, you clear the down payment against it. When you prepare your quarterly returns, the act also requires you to make provisions for taxes on services received but not yet invoiced.
Country Version India

Country Version India complements the generic Classic Withholding Tax and Extended Withholding Tax solutions with additional functions that meet the needs of the Income Tax Act. These functions allow you to: Ensure that you remit taxes within the due date Track and report withholding tax surcharges separately Adjust withholding taxes when you clear a down payment against an invoice Prepare withholding tax certificates and quarterly returns Calculate withholding tax on provisions

Tax Collected at Source

This is a form of tax in India, which is collected at source from the buyer by the seller of prescribed items. It is commonly referred to as TCS.

The system automatically calculates the tax collected at source and makes the relevant postings in Financial Accounting (FI) and Sales and Distribution (SD).
Prerequisites You have: Made settings as described in Customizing for Tax Collected at Source Entered the TCS withholding tax type and withholding tax code and selected the W/tax checkbox in the customer master.

For more information, see Customer Master (Withholding Tax Data). Features Tax Collected at Source has the following features:

The rate of tax collected at source differs based on the type of commodity. The Education Cess and the Secondary and Higher Education Cess are applicable at a certain percentage on the tax collected at source. The seller of the items should furnish a tax certificate specifying whether tax has been collected, the amount that has been collected, rate of tax applied, and such other particulars as may be prescribed.

Activities You post the tax collected at source by creating: 1. A sales order using the Create Sales Order (VA01) transaction. 2. An outbound delivery using the Create Inbound Delivery (VL01) or the Create Inbound Delivery with Order Reference (VL01N) transactions. 3. A billing document using the Create Billing Document (VF01) transaction. Example Consider an invoice for goods of INR 1000 and TCS of 10%. The goods buyer pays the tax collected at source. During the creation of billing document, the system makes the following postings: Account Debit (Dr) Credit (Cr)

Customer A/c Dr 1100 Sales A/c Cr TCS payable Cr 1000 100

Customizing for Tax Collected at Source

To calculate and report tax collected at source, make the following settings (all under country key IN) : Customizing 1. Financial Accounting (New) Financial Accounting Global Settings (New) Withholding Tax Extended Withholding Tax Basic Settings Define Withholding Tax Keys 2. Financial Accounting (New) Financial Accounting Global Settings (New) Withholding Tax Extended Withholding Tax Calculation Withholding Tax Type Define Withholding Tax Type for Invoice Posting Settings Create official withholding tax key 206C

Create withholding tax type S1 with the name Tax Collected at SourceBase and make the following settings: - Base amount = Modif. net amount - Rounding rule = Round w/tax amnt up

- Select Post w/tax amount checkbox - Accumulation type = No accumulation - Control data = select checkboxes W/tax base manual, Manual w/tax amnt, and No cert. numbering Similarly create withholding tax types S2, S3, and S4 with the names Tax Collected at Source-Surcharge, Tax Collected at Source-Education Cess, and Tax Collected at Source-SECESS respectively and make settings as stated above. 3. Sales and Distribution Basic Functions Pricing Pricing Control Define Access Sequences (choose Maintain Access Sequences) Copy the existing access sequence J1AW and create a new access sequence J1IW with the name Withholding tax code - country-specific and make the following settings: - Access sequence-Access number = 10 - Condition table = 399 4. Sales and Distribution Basic Functions Pricing Pricing Control Define Condition Types (choose Maintain Condition Types) Create condition type JTCS with the name TCS-Base and make the following settings: - Access sequence = J1IW - Cond. class = W - Calculat. type = A - Cond. category = D - Select Item Condition checkbox Similarly create condition types JTEC and JTSE with the names ECS on TCS and SECess on TCS respectively and make settings as stated above. 5. Financial Accounting (New) Financial Accounting Global Settings (New) Withholding Tax Extended Withholding Tax Calculation Withholding Tax Type Assign Condition Type to Withholding Tax Type 6. Financial Accounting (New) Financial Accounting Global Settings (New) Withholding Tax Extended Withholding Tax Calculation Withholding Tax Code Define Withholding Tax Codes Assign condition types JTCS, JTEC, and JTSE to withholding tax types S1, S3, and S4 respectively.

Create withholding tax code S1 with name TCS-Base and make the following settings: - Off. W/Tax Key = 206C - Post.indic. = 3 Similarly create withholding tax codes S3 and S4 with the names Education cess on TCS and SECess on TCS and make settings as

stated above. 7. Financial Accounting (New) Financial Accounting Global Settings (New) Withholding Tax Extended Withholding Tax Posting Accounts for Withholding Tax Define Accounts for Withholding Tax to be Paid Over Enter the chart of accounts CAIN. You need to maintain the same G/L account for the transaction key WIT-based tax line items and SD-FI condition based tax line items. Maintain a separate G/L account for the transaction key OFF-based line items. Since posting of TCS happens on both SD and FI documents, ensure that you assign the same G/L account for each combination of withholding tax type and withholding tax code. Note To post tax collected maintain the same Distribution, by Assignment/Costing Accounts . 8. Sales and Distribution Basic Functions Free Goods Control Free goods Pricing Maintain Pricing Procedure For Pricing at source for Sales and Distribution documents, G/L account in Customizing for Sales and choosing Basic Functions Account Revenue Account Determination Assign G/L

Select the pricing procedure JINFAC and double-click Control data. The system displays the Control data screen. Define the condition types JTCS, JTEC, and JTSE and add them to the pricing procedure JINFAC. The system calculates the values of the goods but does not post them directly to the Sales and Distribution document (SD). Instead, posting takes place based on the assignment of condition types to the withholding tax types (refer step 5).

9. Sales and Distribution Basic Functions Pricing Pricing Control Define Condition Types (choose Maintain Condition Types)

Create a new condition type JWTS to post TCS to Financial Accounting (FI) documents. Add this condition type to the pricing procedure JINFAC. Similarly create condition types JETS for ECS on TCS and JSTS for SECess on TCS and add them to the pricing procedure JINFAC.