CIN Materials Management - 4 (1) .7

INDEX
Country Versions................................................................6
India..............................................................................6
Materials Management (MM)....................................................7
Excise Invoice (Incoming)......................................................8
Use..................................................................................................................8
Material Master (Excise Data).................................................10
Vendor Master (Country Version India Data)................................10
Condition-Based Excise Determination......................................11
Creating Condition Records for Excise Duty................................12
Formula-Based Excise Determination.......................................13
Material Master (Excise Data).................................................15
Chapter IDs....................................................................................................16
Material and Chapter ID Combination...........................................................16
Material Assessable Value.............................................................................17
CENVAT Determination.................................................................................17
Excise Tax Rate.............................................................................................17
Additional Excise Rate...................................................................................18
Exceptional Material Excise Rate..................................................................18
Sales Tax Setoff Percentages.......................................................................18
Vendor Master (Excise Data)........................................................................18
Vendor Excise Details....................................................................................19
SSI Rates.......................................................................................................20
Excise Indicator for Plant and Vendor...........................................................20
Customer Master (Excise Data)....................................................................20
Customer Excise Details...............................................................................21
Pritul CIN-MM 4.7 Page 1 of 137

Excise Indicator for Plant and Customer.......................................................21
Excise Duty for Small-Scale Industries.........................................................21
External Procurement (Domestic)............................................23
One-Step Procedure......................................................................................25
Capture Excise Invoice and Goods Receipt Combined................................25
Capture Excise Invoice Before Goods Receipt.............................................26
Creating Purchase Orders.............................................................................26
Entering Goods Receipts...............................................................................27
Entering and Verifying Invoices....................................................................28
External Procurement (Imports)..............................................29
Prerequisites.....................................................................................................29
Vendor Master Record for Customs Office....................................................29
Condition Type for CVD.................................................................................29
CVD Clearing Account...................................................................................29
Process Flow.................................................................................................30
Entering Invoices for Bills of Entry....................................................................31
Capturing Excise Invoices for Bills of Entry .....................................32

Entering Goods Receipts..................................................................................33
Posting Excise Invoices ....................................................................34
Subcontracting................................................................35
Subcontracting Without Payment of Excise Duty.............................................35

Process Flow.................................................................................................36
Subcontracting Challan.....................................................................................38
Processing Subcontracting Challans.............................................................39
Creating Subcontracting Challans ................................................41

Calculation of Excise Duty on Materials for Subcontractors.............................42
Printing Subcontracting Challans......................................................................43
Reconciling Quantities......................................................................................43

Deleting Assignments........................................................................................45
Completion, Reversal, and Recredit.................................................................46
Reversal of CENVAT Credit..............................................................................47
Completing Subcontracting Challans ...............................................47

Reversing Excise Duty Credit...........................................................................48
Recrediting the CENVAT Account.....................................................................48
Subcontracting Under Full Payment of Duty.....................................................49
Process Flow.................................................................................................49
Creating Subcontract Orders.........................................................................50
Making Transfer Postings..............................................................................50
Creating Excise Invoices for Subcontractors....................................................51
Stock Transfer...................................................................................................51
Process Flow.................................................................................................52
Incoming Excise Invoices.....................................................53
Reference Documents......................................................................................56
Use in External Procurement........................................................................57
Capturing Excise Invoices Using Reference Documents...................58
Procedure..........................................................................................................58
Procedure......................................................................................................60
Capturing Excise Invoices Without Reference Documents................62
Procedure......................................................................................................63
Posting Excise Invoices......................................................66
Rejecting Excise Invoices....................................................69
Rejecting Excise Invoices with CENVAT on Hold...........................70
Rejection Accounting Document.......................................................................71

Posting CENVAT on Rejected Excise Invoices.................................................72
Reversal Rejection Accounting Document........................................................73

Reversal of CENVAT Postings................................................74
Process Flow.....................................................................................................74
Reversing CENVAT Postings............................................................................75
Canceling Excise Invoices................................................................................75
Goods Movements and Excise Documents Combined.....................76
One-Step and Two-Step Procedures................................................................77

Manufacturing Plants........................................................................................78
Depots...............................................................................................................78
Entering Goods Receipts and Excise Invoices Together...................79
Entering Goods Receipts with Reference to Excise Invoices..............80
Entering Goods Receipts Without Excise Invoices.........................82
Entering Goods Receipts for Nonexcisable Goods.........................83
Entering Goods Receipts and Subcontracting Challans Together ........84
Entering Goods Issues and Excise Invoices for Transport Orders ........85
Entering Goods Receipts and Excise Invoices Together at Depots .......87
Multiple Goods Receipts for a Single Excise Invoice.......................90
Capital Goods..................................................................92
Activities.........................................................................................................93
Transfer of CENVAT Credit on Capital Goods..................................................93
Excise Registers...............................................................94
Register RG 1....................................................................................................95
Register RG 1 Entries....................................................................................96
Customizing...................................................................................................96
Register RG 23A/23C.......................................................................................97
Part I Entries..................................................................................................98

Part II Entries.................................................................................................99
CENVAT Document.........................................................................................100
Register RG 23D.............................................................................................101
Example.......................................................................................................102
Serial Numbers...............................................................................................103
Creation of Excise Registers...........................................................................104
Update of Registers RG 1 and RG 23 (Part I)................................................105
Data Extraction................................................................................................109
Register Printout..............................................................................................111
Download Register Data.................................................................................112
Data Structure of Part I................................................................................113
Data Structure of Part II...............................................................................115
Data Structure of RG 23D...........................................................................120
Data Structure of Plant Master Data...........................................................122
Data Structure of RG 1................................................................................123
Monthly Return................................................................................................125
Transaction Codes for India ................................................127
Annexure.....................................................................129
Excise Duty.....................................................................................................129

Country Versions
Purpose
The SAP System offers over forty standard country versions, each of which is
designed to allow you to run your business operations in a particular country.
This documentation concerns the standard country versions only, which are
wholly part of the standard system. Nonstandard country versions, on the other
hand, are provided by SAP's subsidiaries and partners in the form of
modifications and add-ons, and may not necessarily be compatible with other
add-on solutions.
Integration
Country versions do not constitute separate application components. Instead,

the country-specific functions are contained in the various SAP System
application components. This means that the Financial Accounting (FI)
component, for example, does not just contain generic FI functions, but country-
specific functions as well. As such, there is no special procedure for
installing a country version.
India
Purpose
This country version is designed for use by businesses with operations in India.
It comprises functions designed specifically for India, a localization

Implementation Guide (IMG), and a country template to help you customize
the system according to local requirements.

This section explains how the country-specific functions work and what
Customizing settings are made by the country template.
Features
Most of the country-specific functions for India relate to Financials and Logistics,
and center around taxes, including:
 Excise duty and the central value-added tax system (CENVAT)

 Tax deducted at source (TDS)
 Sales tax
All of the menu paths given in this document are based on the India Localization
role
Constraints
CIN does not contain any modifications of standard SAP System objects; hence
technically CIN can exist with other add-ons. However, before you implement
CIN with other add-ons, you must test the business procedures in the SAP
System to ensure that those in the various add-ons are compatible.
Materials Management (MM)
Purpose
The Materials Management (MM) component covers the most important laws
and business practices specific to India. Features
Country-Specific Functions
Country Version India comes with functions for calculating, posting, remitting, and
reporting excise duty, and for handling incoming and outgoing excise invoices.
For these purposes, extra fields are available in the vendor master data and
material master data for information required in India only.

√ Country Version India offers two ways of calculating excise duty, a
condition-based method and a formula-based method.
You can enter incoming excise invoices in the R/3 System for goods receipts
arising from external procurement, subcontracting, and stock transfer. Excise
clerks can capture incoming excise invoices using a dedicated transaction, or,
alternatively, warehousemen can capture them in the standard Goods Movement
transaction, MIGO, when they enter a goods receipt.
Finally, you can prepare copies of all excise registers for submission to the
excise authorities.
Country Template
The country template for India comes with settings for calculating and posting all
forms of taxes from MM, and with the necessary document copying control
settings.
Excise Invoice (Incoming)
Definition
A business document that is issued by your vendor to accompany any goods that
it sends you. It stipulates how much excise duty has been paid on the goods.
Use
When you procure goods externally, each delivery that your vendors make is
accompanied by an excise invoice. You have to post these in the system. This
document is required as proof of the excise duty that you have paid, so that you
can then offset the duty against the excise duty that you levy on outputs.
You can capture and post excise invoices in one or two steps, depending on your
business requirements.

 In the two-step procedure, the excise clerk captures the incoming excise
invoice. This means that the clerk enters the data, but the system does not
yet create an entry in Part II of the appropriate excise register. Another
user (the excise supervisor) checks the excise invoice and posts it. The
system then creates a Part II entry.
 In the one-step procedure, the excise clerk captures and posts the
incoming excise invoice simultaneously. The system creates the Part II
entry automatically.
Generally speaking, you have one excise invoice for each goods receipt.
Structure
In the R/3 System, the excise invoice consists of header data and line items. The
header data comprises:
 An internal number
 The excise invoice number
 The date of the excise invoice
 The details of the original vendor who generated the excise invoice, if your
vendor purchased the goods from another vendor and was merely selling
them on to you
At line item level, the excise invoice lists the materials on the excise invoice,
showing the following information:
 Chapter ID
 Quantity of materials
 Excise duty base amount
 Rates of excise duty
 Amount of duty paid

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 for Excise Duty.
Vendor 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  Materials Management  Purchasing  Master Data  Vendor 
Central  ….
Use

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)).
Condition-Based Excise Determination
Use
When you enter a purchasing document, for example, a purchase order, the R/3
System automatically calculates the applicable excise duties using the condition
technique.
Features
The standard system comes with two tax calculation procedures.
√ TAXINN is only supports condition-based excise determination,

whereas TAXINJ supports condition-based excise determination and
formula-based excise determination.
Both tax procedures contain condition types that cover all of the excise duties
and sales taxes applicable.
Since the exact rates of excise duty can vary on a large number of factors, such
as which vendor you purchase a material from, or which chapter ID the vendor
stocks the material under, you create condition records for every sort of excise
duty.
When you come to enter a purchasing document, the system applies the excise
duty at the rates you have entered in the condition records.

Activities
Customizing
Make the settings in Customizing for Logistics – General, by choosing Taxes on

Goods Movements  India  Basic Settings  Excise Duties Using Condition
Technique and …  Account Determination.
These activities include one activity where you define a tax code for condition-
based excise determination.
Master Data
Create condition records for all excise duties that apply, and enter the tax code
for condition-based excise determination in each.
Day-to-Day Activities
When you enter a purchase order or other purchasing document, enter the tax
code for condition-based excise determination in each line item. The system then
calculates the excise duties using the condition records you have created.
When the ordered materials arrive, you post the goods receipt and the excise
invoice. The system posts the excise duty to the appropriate accounts for
deductible input taxes when you enter the excise invoice.
Creating Condition Records for Excise Duty

1. In the command field, enter FV11
2. Enter the condition type that you want to create a condition record for
The Key Combination dialog box appears.
3. Select the combination of objects that you want to create the condition
record for.

On the dialog box, Control Code means "chapter ID."
So, for example, to create a condition record for a tax that applies to a
combination of country, plant, and chapter ID, select Country/Plant/Control
Code.
4. Choose.
5. Enter data as required.
In the Tax Code field, enter the dummy tax code that you have defined.
6. Save the condition record.
Formula-Based Excise Determination
Use
When you execute a business transaction involving materials that are subject to
excise duty, the system automatically calculates the duty for you.
Prerequisites
In order for the system to be able to determine which rate of excise duty to apply,
you must have maintained all the data on the Excise Rate Maintenance screen,
which you can access from the SAP Easy Access screen by choosing Indirect
Taxes  Master Data  Excise Rate Maintenance.
You maintain the following types of data:
 Plant master data
You assign each of your plants an excise duty indicator. You can use the
same indicator for all the plants with the same excise status from a legal
point of view, such as all those that are in an exempt zone.

See also the information about manufacturers that are only entitled to
deduct a certain portion of the duty (see Partial CENVAT Credit).
 Vendor master data
For each of your vendors with the same excise status from a legal
perspective, you define an excise duty indicator. You must also specify the
vendor type – for example, whether the vendor is a manufacturer, a depot,
or a first-stage dealer. You must also stipulate if the vendor qualifies as a
small-scale industry.
For each permutation of plant indicator and vendor indicator, you then
create a final excise duty indicator.
 Customer master data
Similarly, you assign the same excise duty indicator to each of your
customers that share the same legal excise status.
Again, for each permutation of plant indicator and customer indicator, you
then create a final excise duty indicator.
 Material master data
Each material is assigned a chapter ID.
 Excise tax rate
For every chapter ID and final excise duty indicator, you maintain the rate
of excise duty.
If your business only qualifies for partial CENVAT credit, you must customize
your system accordingly.

Activities
Let us consider an example to illustrate how the system determines which rate of
excise duty to apply to a material. Assume you are posting a sale of ball bearings
to a customer. The system automatically determines the rate of excise duty as
follows:
1. Looks up the customer master data to see what status you have assigned
the customer.
Let's assume you've assigned the customer status 3.
2. Looks up the plant master data to see what status you have assigned the
plant.
Similarly, your plant has status 2.
3. The system looks up the table under Excise Indicator for Plant and
Customer to see what the final excise duty indictor is for customer status 3
and plant status 2: It is 7.
4. The system determines the chapter ID of the ball bearing for the plant.
Let’s assume the chapter ID at plant for the ball bearings is 1000.01.
5. Finally, the system looks up the table under Excise Tax Rate to see what
rate of duty applies to chapter ID 1000.01 under status 7.
Material Master (Excise Data)
Definition
The part of the material master record that contains information relating to Indian
excise duty.

Use
In conjunction with other data, this data is used to calculate excise duty on
various transactions.
To maintain the data, from the SAP Easy Access screen, choose Indirect Taxes 
Master Data  Excise Rate Maintenance, and then select the following options
described below.
Structure
The excise part of the material master is divided into the following screens:
Chapter IDs
On this screen, you define the chapter IDs and corresponding descriptions as
described in the excise tariff structure. This information is used when you create
excise invoices and is also shown in the various excise registers.
Material and Chapter ID Combination
On this screen, you maintain the excise data relating to your materials. For each
material, specify:
 Chapter ID
 Whether the material can be sent to subcontractors (see Subcontracting)
 The material type
This denotes, for example, whether the material is a raw material, a capital
good – this affects the CENVAT process – or if it is a finished good on
which excise has been paid, to be covered by the Update of RG 1 and
Part I Registers.
 Whether you accept more than one goods receipt per excise invoice, and
if so, whether the excise duty should be credited to the CENVAT account

immediately a goods receipt is posted (multiple credit) or not until all the
goods receipts have arrived (single credit) (see Multiple Goods Receipts
for a Single Excise Invoice)
This information is valid for a given plant. If the information is valid for all of your
plants, however, leave the Plant field blank.
Material Assessable Value
On this screen, you maintain the net dealer price and the assessable value of all
materials that you send to subcontractors or for any other issue. These values
serve as the excise base value when the materials are issued, and tell the
system how much excise duty to reverse from your CENVAT account.
CENVAT Determination
On this screen, you specify which raw materials are used to produce which
finished (or semifinished) goods. The system uses this information to determine
whether it you can claim a CENVAT credit for a material.
Excise Tax Rate
On this screen, you specify for each chapter ID every possible rate of excise duty
that might apply, so you must take into consideration each permutation of plant
and customer; and each combination of plant and vendor.
You can maintain the basic excise rates in the following forms:
 Ad valorem
 Specific
 As a combination of both
For each rate, specify until which date it applies.

You can also maintain the additional excise duty and special excise duty in ad
valorem form, should any apply. If you need to give these rates as a fixed sum,
use the Quantity Based AED and SED screen.
Additional Excise Rate
On this screen, maintain any cess applicable.
Exceptional Material Excise Rate
On this screen, maintain any exceptions that apply to the excise rates that you
have defined. Exceptions can apply to a single material from all vendors, of to a
single material from one vendor only. If you have an exceptional rate for a
customer–material combination, you can maintain it here as well.
Sales Tax Setoff Percentages
On this screen, maintain the percentage of local sales tax on inputs that you can
deduct against LST on outputs.
√ The setoff amount is deducted from the inventory valuation of the

material.
Currently very few states, for example, Maharashtra and Gujarat, participate
in this scheme.
Vendor Master (Excise Data)
Definition
The part of the vendor master record that contains information relating to excise
duty.

Use
described below.
Structure
The excise part of the vendor master is divided into the following screens:
Vendor Excise Details
On this screen, you enter your vendors' tax numbers, which are used for various
forms of correspondence and reports:
 Excise registration number (and the range, division, and collectorate in

which this is located)
 Central sales tax (CST) number
 Local sales tax (LST) registration number
 Permanent account number (PAN)
In order for the system to be able to calculate which rate of excise duty to apply
on purchases from the vendor, you must also:
 Assign it a vendor excise duty status (for more information about how this
works, see Determination of Excise Duty Rates)
 Specify what type the vendor is, for example, a manufacturer, first-stage
dealer, or importer for 57AE returns
 If the vendor qualifies as a small-scale industry (SSI), you must also

specify:

o What its SSI status is (which you must first have defined under SSI
rates, see below)
o Whether or not it is participating in the CENVAT scheme
SSI Rates
On this screen, you define the excise rates that apply to purchases from vendors
that qualify as SSIs. You define one status for each band (or "slab") of sales
volume provided for by the law, and for each SSI status, the rates of excise duty
that applies to that slab under the two schemes (see Excise Duty for Small-Scale
Industries).
Excise Indicator for Plant and Vendor
On this screen, you define the final excise duty indicator (for more information
about how this works, see Determination of Excise Duty Rates.
Customer Master (Excise Data)
Definition
The part of the customer master record that contains information relating to
Indian excise duty.
Use
described below.

Structure
The excise part of the customer master contains the following information:
Customer Excise Details
On this screen, you enter your customers' tax registration numbers, which are
used for various forms of correspondence and reports:
 Excise registration number (and the range, division, and collectorate in

which this is located)
 Central sales tax (CST) number
 Local sales tax (LST) registration number
 Permanent account number (PAN)
In order for the system to be able to calculate which rate of excise duty to apply
on sales to the customer, you must also assign it a customer excise duty status
(for more information about how this works, see Determination of Excise Duty
Rates).
Excise Indicator for Plant and Customer
On this screen, you define the final excise duty indicator (for more information
about how this works, see Determination of Excise Duty Rates).
Excise Duty for Small-Scale Industries
Use
Businesses that qualify as small-scale industries (SSIs – those with, for example,
no more than two premises and with a sales volume not exceeding an amount
specified by the government) need to pay only reduced rates of excise duty on
their goods movements. The exact rate depends on the business's annual sales
volume (see below).

That means that when you make a purchase from an SSI, the system calculates
a different rate of excise duty. Note that SSIs are not required to pay
additional excise duty or special excise duty.
Prerequisites
In order for the system to be able to calculate the correct rate of excise duty, you
must have:
1. Defined the SSI statuses.
You define a separate SSI status for each of the various "slabs" (sales
volume) (see Vendor Master (Excise Data).
2. In the vendor master:
o Assigned the vendor the SSI status that you have just defined.
o If the vendor participates in the CENVAT scheme (see below),
entered X (Vendor participating in CENVAT scheme).
Features
As far as SSIs are concerned, there are two schemes.
Under the first, an SSI can opt out of the CENVAT scheme. In this case, they
apply basic excise duty at certain flat rates on all transactions. These rates vary
according to their total annual sales.
An SSI with sales of less than INR 100,000 would not apply any excise duty;
those earning up to INR 400,000 would levy basic excise duty on all materials at
2%, and so on.
Under the second scheme, whereby an SSI participates in the CENVAT

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

Turnover (INR) Excise (%) SSI rate (% of Effective SSI excise
excise) (%)
0–100,000 15 60 9
100,000– 15 80 12
400,000
External Procurement (Domestic)
Purpose
This process illustrates how manufacturing plants can use the R/3 System to
procure excisable goods.
In addition to the standard procedure, you also have to capture and post the
incoming excise invoice, and the system creates the appropriate entries in the
excise registers.
Process Flow
1. You create a purchase order for the goods you want and send it to the
vendor.
After a few days, the vendor sends you the goods together with an excise
invoice.
2. When the goods arrive at your company, the warehouseman enters the
goods receipt.
The system:

o Creates a material document to record the goods receipt
o Creates an accounting document to debit the inventory account and
credit the GR/IR clearing account:
o Creates a Part I entry in register RG 23A or 23C
Note that if you first want to post the goods to blocked stock, for any
reason, do so using the standard procedure. The excise clerk then
captures the excise invoice as normal.
3. The excise clerk captures the excise invoice.
For information about what to do if the vendor sends the goods in more
than one delivery, see Multiple Goods Receipts for a Single Excise
Invoice.
4. The excise supervisor checks the excise invoice captured by the clerk,
makes any changes necessary, and posts it.
The system automatically debits the excise duty to the excise duty
accounts and credits the CENVAT clearing account:
It then creates a Part II entry in register RG 23A or 23C to record this

posting.
5. You enter the vendor's invoice, following the standard procedure.

If the excise supervisor has reduced the amount of excise duty that is to
be credited to the CENVAT account, the system adds the difference to the
material price.
The system also creates an accounting document. The document contains

debit postings to clear the clearing accounts for goods receipts and
CENVAT; and a credit posting to create an open item on the vendor's
account:
Alternatives
The above procedure is just one way of using the R/3 System to handle incoming
excise invoices. If your business processes differ from the procedure described
above, there are a number of alternatives available to you.
One-Step Procedure
In the procedure described above, the excise clerk captures the excise invoice
and the excise supervisor posts it (the two-step procedure). If you want, you can
have one person perform both of these activities in a single step, using the
transaction under Indirect Taxes  Procurement  Excise Invoice  Incoming
Excise Invoice  Central Processing  Capture/Change/Cancel/Display/Post.
Capture Excise Invoice and Goods Receipt Combined
Steps 2–3 involve two different system transactions (goods receipt and excise
invoice capture). You can combine these two steps one, if you wish, so that the
warehouseman can capture the excise invoice at the same time as he enters the
goods receipt (see Goods Receipts and Incoming Excise Invoices Combined).

If you want, he can even capture and post the excise invoice at the same time.
Capture Excise Invoice before Goods Receipt
In the procedure described above, the goods receipt is entered before the excise
invoice. However, your business processes may require you to capture the
excise invoice before the goods receipt.
When the warehouseman enters the goods receipt, the system adjusts the
material value for any changes to the taxes that the clerk has made in the
captured excise invoice. An accounting document to debit the inventory account
and credit the GR/IR clearing account is created.
Creating Purchase Orders
To create a purchase order, follow the standard procedure, but when you fill out
the item information, enter the following data on the Invoice tab:
 Enter a tax code.
If you do not, the system will not calculate excise duty or display it on the
excise invoice create screen.
If you use condition-based excise determination, make sure you

enter the tax code that you have defined for this purpose.
If you are only eligible for partial CENVAT credit, you must use an appropriate tax
code. If the CENVAT credit is less than the duty amount entered, the system will
automatically add the difference to the inventory value when you come to verify
the invoice.
 Select GR-based IV, to activate goods receipt-based invoice verification.

During invoice verification this will enable the system to update the

material value to allow for any discrepancies between the taxes in the
purchase order and the taxes stated by the vendor in the excise invoice.
The purchase order shows the excise duty and sales tax that you expect to pay.
The taxes are calculated in the purchase order according to the vendor, material,
and tax code.
Entering Goods Receipts
Use
In this procedure, you enter the goods receipts, following the standard procedure.
In addition:
 You enter the number of the excise invoice, if it is available

 The system automatically creates an entry in Part I of the excise register
RG 23A or RG 23C
This procedure only applies if the warehouseman is not entitled to enter excise
invoices himself (see Goods Movements and Excise Documents Combined).
Prerequisites
You have specified whether you want the system to create a Part I entry when
you post goods receipts to blocked stock, for stock transport orders, and to
consumption stock. You do so in Customizing for Logistics – General, by
choosing Taxes on Goods Movements  India  Basic Settings  Maintain
Excise Groups.
Procedure

1. From the SAP Easy Access screen, choose Logistics  Materials
Management  Inventory Management  Goods Movement  Goods
Receipt  For Purchase Order  GR for Purchase Order.
2. In the top line, enter the purchase order number and choose.
A dialog box appears.
3. Enter data as required:
o If you have not yet captured the excise invoice:
 Leave the Excise Invoice field blank.

 Fill out all of the other fields.
o If you have already captured the incoming excise invoice, enter the
excise invoice number.
4. To close the dialog box, choose.
If you choose, the system will not make an entry in Part I of the excise
register, in which case you must update the register later.
5. Check that all the line items are correct, and adjust them as required.
6. Save the goods receipt.
Entering and Verifying Invoices
Follow the standard invoice verification procedure, but select Calculate tax on the
Vendor Items screen. The system proposes the deductible excise duty items in
the invoice document.

External Procurement (Imports)
Purpose
This process shows you how to handle the countervailing duty (CVD) on
imports, which is levied in place of excise duty. Unlike other forms of customs
duties, such as basic customs duty or special customs duty, you can credit CVD
paid on imports to your CENVAT account.
Prerequisites
Vendor Master Record for Customs Office
Create a vendor master record for the customs office, so that you can create
liabilities for the CVD (see step 3 in the process flow).
Condition Type for CVD
The system handles CVD using a condition type for planned delivery costs.
Specify which condition type you use in Customizing for Logistics – General, by
choosing Taxes on Goods Movements  India  Basic Settings  Determination
of Excise Duty  Excise Defaults.
For more information, see Planned Delivery Costs.
CVD Clearing Account
When you post CVD to a CENVAT account (see step 5 below), the system
debits the CVD to the BED account and credits it to a CVD clearing
account.
Specify which G/L account you want to use as the CVD clearing account, in
Customizing for Logistics – General, by choosing Taxes on Goods Movements 
India  Basic Settings  Maintain Company Code Settings.

Process Flow
1. You create a purchase order for the goods that you want and sent it to the
vendor.
For each material that you will have to pay CVD on when it comes through
customs, you enter the CVD as a pricing condition.
2. The vendor ships the goods to you.
When the goods arrive in India, they go through customs. The customs
officers issue a bill of entry for the goods, which is in effect an invoice for
the CVD on the goods. Once they have inspected the goods, they send
them on to you.
3. The goods arrive at your plant, together with the bill of entry. In order to
record the bill of entry in the system:
a. The excise clerk enters an invoice for the bill of entry
In Accounts Payable (FI-AP), the system creates a new vendor

item for the CVD at the customs office. The item is offset to the
CVD clearing account.
b. He then captures an excise invoice for the bill of entry
4. The warehouseman posts the goods receipt.

5. The excise supervisor posts the excise invoice.
6. The excise clerk enters the vendor invoice for the materials, following the
standard procedure.
Entering Invoices for Bills of Entry
To enter an invoice for a bill of entry, you follow the standard invoice verification
procedure, but make sure you observe the following:

Header Data
 Basic data tab
o In the Amount field, enter the amount of countervailing duty (CVD)

stated on the bill of entry in rupees.
o Do not enter any other taxes.
 Details tab
o Assuming you specified in the purchase order that the CVD was to
be paid to the customs office, the system shows the customs office
as the vendor. If not, enter the customs office’s vendor master
record in the Inv. party (Invoicing party) field.
Line Items
On the PO reference tab, enter data as follows:
1. Enter the number of the purchase order related to this delivery.
o If you only created one purchase order for the goods, enter the
purchase order number and select Planned delivery costs.
o If you sent more than one purchase order to the vendor and it
sent you all of the ordered materials together in one shipment:
i. Choose.
ii. Enter all of the purchase order numbers in the table.
iii. Select Planned delivery costs.
iv. Select Deliveries and deselect Returns.
v. Choose Adopt.
In both cases, the system displays the line items in the line item overview.
2. For each line item:

o In the Amount field, enter the amount of CVD on the item (if you
have more than one item, you may have to work the amount out
manually).
o In the Quantity field, enter the quantity of goods on the invoice.
o Enter a zero-rated tax code.
3. Choose Simulate.
A dialog box appears with a list of the postings that will be made to
Financial Accounting (FI).
4. Choose Post.
Capturing Excise Invoices for Bills of Entry

1. From the SAP Easy Access screen, choose Indirect Taxes 
Procurement  Excise Invoice  Incoming Excise Invoice  Individual
Processing  Capture/Display.
2. In the top line:
a. Select Capture Excise Invoice

b. Select Purchase Order.
c. Enter the purchase order related to the bill of entry.
d. Choose.
3. Enter the number of the invoice that you entered for the bill of entry and
choose.
4. If you need to enter any other purchase orders, enter the number in the
top line as for step 3.
Note that this time, you do not need to enter the invoice number.

5. Enter other data as required.
Note that the countervailing duty is displayed in the basic excise duty
fields.
6. Save the excise invoice.
Entering Goods Receipts
Use
In this procedure, you record the receipt of the goods from the vendor abroad,
following the standard procedure.
Procedure

2. In the top line, enter the purchase order number and choose .
3. Enter the number of the excise invoice that you created for the bill of entry
and choose.
4. If you need to enter more purchase orders – for example, if you sent the
vendor more than one purchase order and it sent you back all the ordered
materials in a single delivery – for each purchase order, enter the number
in the top line and choose.
5. Check that the line items in the goods receipt are correct.
Result

The system creates:
 A goods receipt document

 An accounting document
 An entry for the goods receipt in Part I of the appropriate excise register
Posting Excise Invoices

Procurement  Excise Invoice  Incoming Excise Invoice  Individual
Processing  Change/Display/Post/Cancel.
2. Select Post CENVAT and Vendor Excise Invoice.
3. Enter the number of the excise invoice that you created for the bill of entry.
4. Check that the data is correct.
5. Choose Simulate CENVAT.
A dialog box appears with a list of the accounting entries that will be made
to transfer the CVD from the clearing account to the excise duty account.
To close the dialog box, choose.
6. If the data is correct, choose Post CENVAT.
The system posts the CENVAT and creates a corresponding entry in Part
II or the appropriate excise register.
Subcontracting
Use
If you work with subcontractors, there are two ways of handling the excise
invoice on the goods that you provide them with:
 Subcontracting without payment of excise duty

 Subcontracting under full payment of duty
Country Version India supports both of these approaches.
For information about the standard subcontracting procedure in the SAP System,
see Subcontracting.
Subcontracting Without Payment of Excise Duty
Purpose
When you issue materials to a subcontractor, you need to keep track of what
materials you have issued and when they have to be returned by.
The reason for this close monitoring has to do with India’s tax law. Under excise
law 57AC, when you send materials to a subcontractor for processing, you
are not required to pay any excise duty, even though the materials have left
your premises. However, if the materials have not been returned to you
within a given length of time specified by the law (in 2000, 180 days), you
will have to reverse any excise credit that you posted when you purchased
the materials (see Completion, Reversal, and Recredit). In the case of
materials that you have manufactured in-house, you will have to post credit
entries to the extent of the CENVAT rate of the assessable value of the
materials.
Prerequisites
You have made the Customizing settings in Customizing for Logistics – General,
by choosing Taxes on Goods Movements  India  Business Transactions 
Subcontracting.

You have made the Customizing settings for the accounting postings in
India  Account Determination.
You have set up the number range for the subcontracting challan in Customizing
for Logistics – General, by choosing Taxes on Goods Movements  India 
Tools  Number Ranges.
You have maintained the subcontracting information in the material masters (see
Material Master (Excise Data)).
You have made the following settings in Customizing for Materials

Management  Inventory Management and Physical Inventory:
 Goods Issue/Transfer Postings  Define Screen Layout.
For movement type 541, in the Change View Field Selection Overview,
pick the 541 movement type and in the Select Group Materials
Management, make the Purchase Order field an optional entry.
 Output Determination  Maintain Output Types

 Output Determination  Assign Forms and Programs
 Output Determination  Printer Determination  Printer Determination by
Plant/Storage Location
Process Flow
1. You create a subcontract order for the goods that you want to subcontract.
2. You create a transfer posting order for the materials that are to be sent to
the vendor. This document is, however, for your own use only.
3. You create a subcontracting challan on the basis of the transfer posting
order.

This is the consignment document that you will send to the
subcontractor along with the materials that are to be processed.
4. You send the materials to the subcontractor, along with a printout of the
subcontracting challan.
5. The subcontractor processes the materials and returns the finished goods.
When the goods are delivered back to you, the storeperson posts the
goods receipt and the challan.
The delivery may not necessarily cover all the goods from the challan: It
may also include goods from a number of different challans. The SAP
functions allow for this eventuality.
6. The excise department reconciles the goods receipt against the challan,
thereby accounting for the return of the materials that you have sent for
subcontracting.
The challans here include those that have been captured online at the
time of goods receipt and those entered manually.
7. You create a list of the outstanding challans.

8. You complete the challan.
If a subcontractor fails to return all the materials within the time allotted,
you have to scrap the material by specifying it as such in the bill of
material for the parent material then assigning the bill of material to the
subcontracting purchase order. If the scrap generated is not returned by
the subcontractor, excise duty relevant to the scrap generated has to be
paid. If this scrap is returned after the duty has been paid, an excise
journal voucher should be created to reverse the excise duty paid.
Alternatives

The procedure given in step 5 shows how to enter the goods receipt using the
old Goods Movement transaction. If you want to use the new Goods Movement
transaction, MIGO, see Entering Goods Receipts and Subcontracting Challans
Together.
Subcontracting Challan
Definition
A document that you use to issue and track subcontracting work. It allows
you to make sure that all the materials you have sent to the subcontractor for
processing are returned.
The Challan is also widely known as the 57F4 Challan , after the law under which
it was defined up until the 2000 budget. This law has now been superceded by a
new one, 57AC.
Use
You create challans from transfer orders to accompany any materials that you
send to subcontractors under rule 57AC. In this respect, they are an extended
form of delivery note, with additional information about the excise duty on each
material that you have supplied. Materials that are not liable to excise duty do not
have to be included in the challan.
As the subcontractors return the finished goods to you, you record the returns in
the challan, to make sure that all are returned within the allotted time limit.
If the finished goods returned to you by the subcontractor are of substandard

quality, you can also create a subcontracting challan from the returns order.
Structure

The challan consists of a header and line items. The header, in addition to
organizational data, allows you to enter:
 Preprinted number
 Additional data
 Identification marks
 Nature of processing
Furthermore, each challan has two numbers, an internal document number and a
challan number, which the system assigns to the challan when you save it. From
a business perspective, this is the most important number. Each challan also has
a status, which shows you what stage in processing it is at.
The line items are copied across from the transfer posting when you create the
challan. You can also enter additional data for each item.
Processing Subcontracting Challans
To access the individual functions shown in the table, from the SAP Easy Access
screen, choose Indirect Taxes  Procurement  Subcontracting 
Subcontracting Challans  …
Function Follow-on menu path What you should know
Create a Create. See Creating Subcontracting

challan Challans
Print a Create or See Printing Subcontracting

challan  Change. Challans.
You can only change challans with

Change a Change.
the status Posted.
challan

Furthermore, you can only change
data that relates to the challan
printout. If you need to change
accounting data, you must delete
the challan and create a new one.
To save the cancellation, save the

Cancel a
challan.
Change  .
challan
The challan status changes to
Canceled.
See Completing Subcontracting

Complete a Complete/Reverse/Recre
Challans.
challan dit
The challan status changes to
Completed.
See Reversing Excise Duty Credit.

Reverse Complete/Reverse/Recre
the excise dit The challan status changes to
duty credit Reversed.
See Recrediting the CENVAT

Recredit Complete/Reverse/Recre
Account.
the excise dit
duty The challan status changes to
Reversed/completed.
See Reconciling Quantities.

Reconcile Reconcile Quantity
quantities The challan status changes to
Assigned/fully reconciled.

Creating Subcontracting Challans
1. From the SAP Easy Access screen, choose from the SAP Easy Access
screen, choose Indirect Taxes  Procurement  Subcontracting 
Subcontracting Challans  Create.
2. Enter the following data:
o Material Document: The transfer posting document number

o Material Document Year: The year that you created the transfer
posting document
o Excise Group
o Series Group
3. Choose.
The system calculates the excise duty for the materials.
4. Specify which excise invoice the materials are from.
Once you have assigned the materials to an invoice, the system reads
how much excise duty you have paid on the materials that you are
sending.
5. If you want to print the challan straight away, select Print immediately on
the Posting tab.
6. Change the posting date, if necessary.
This is the date from which the system calculates the return due date. It is
set by default to the day’s date. However, you can change it you need to.
7. Save the document.

Calculation of Excise Duty on Materials for Subcontractors
Use
When you send materials to a subcontractor for processing, you have to

determine how much excise duty is applicable. This of course depends on the
base value. The different amounts of excise duty (basic excise duty, special
excise duty, and additional excise duty) are printed on the subcontracting challan.
Thus, when you create a subcontracting challan, the system determines the base
excise value of each material and the amount of excise due automatically.
Prerequisites
You have maintained the materials’ excise data (see Material Master (Excise
Data)).
Features
When determining the excise duty for materials purchased from third parties,
the R/3 System uses the excise rate from the latest excise invoice for the
material received from the vendor.
Where materials manufactured in-house are concerned, the SAP System

determines the taxable value of the material on the basis of the following
information, in this order:
1. The latest excise invoice value for the material

2. The material's assessable value (that is, the price determined by an
external auditor)
3. The material’s net dealer price (the material’s list price; the price at which
you sell the material to customers)
Selecting Excise Invoices

1. Select the material that you want to assign the excise invoices to and
choose Excise invoice selection.
2. Select the excise invoice or invoices.
3. Choose.
Printing Subcontracting Challans
You can print a subcontracting challan when you create it, or if you need to print it
later on, in the change transaction.
1. From the SAP Easy Access screen, choose Indirec Taxes 

Procurement  Subcontracting  Subcontracting Challans  Change.
2. On the Posting tab, select Print Immediately.
3. Enter the number of the preprinted stationery, if necessary.
This number will be saved for future reference.
4. Save the challan.
Reconciling Quantities
Use
Once a subcontractor has processed your materials and returned them to you,
you match the items in the challan against those that have been returned.
Prerequisites
You have posted the goods receipt (or any other material document) for the
returned goods.
Procedure

Procurement  Subcontracting  Subcontracting Challans  Reconcile
Quantity.
2. Enter the following data:
o In the Material Doc. and Mat. Doc. Year fields, enter the number of
the goods receipt document and the year in which it was created.
o In the table below, enter the challan numbers and the years in
which they were created.
If the material document is a goods receipt document with

movement type 101, you can enter the challans that were not
captured when the goods receipt was posted. However, if all the
relevant challans were entered during goods receipt, they need not
be entered here
3. Choose Reconcile.
A new screen appears. At the top is the information about the goods
receipt (or other document); at the bottom is the information from the
challans that you have entered.
4. Specify which challans the materials in the goods receipt originated from:
o If you have sent a subcontractor a number of different challans, all

containing the same material, you can automatically specify that the
materials should come from the oldest challans first, by choosing.
o Otherwise, for each challan, enter manually the quantity of
materials has been returned, and choose to refresh the display.
5. Once you have accounted for all the materials in the goods receipt, save
the challan.
Result

The system changes the challans' status as follows:
 If you have accounted for all of the materials in a challan, the system sets
its status to Fully Reconciled. In this case, you can complete the challan.
 If you have accounted for only some of the materials, it sets the status to
Assigned. In this case, you must assign the remaining quantity of
materials to another goods receipt later on.
 Scrap generated is assigned to a challan only if the percentage
component scrap is specified in the bill of material for the parent material
and this bill of material is assigned to the subcontracting purchase order.
Deleting Assignments
Use
You follow this procedure if you have assigned the wrong challan to a goods
receipt or other material document (see Reconciling Quantities).
Prerequisites
You have:
 Assigned the challans to a goods receipts document

 Assigned the challans to a material document in quantity reconciliation
 Not completed or reversed the challans
Procedure

Procurement  Subcontracting  Subcontracting Challans  Reconcile
Quantity  Delete Assignments.
2. Choose Delete Assignment.

Result
The assignments will be deleted. The challans will no longer be related to the
material document until another assignment takes place between the same.
Completion, Reversal, and Recredit
Use
You use this function to close a challan completely after all the materials have
been accounted for. If a challan's return date has elapsed, and thus your right to
the CENVAT credit, you use it to reverse the excise credit – or, should your
subcontractor return the goods subsequently, to recredit the excise credit.
To access the function, from the SAP Easy Access screen, choose Indirect
Taxes  Procurement  Subcontracting  Subcontracting Challans 
Complete/Reverse/Recredit.
Features
Exactly which function is available depends on the challan's status as follows:
Completion
You can complete a challan if you have accounted for all of the materials in it
(and it thus has the status Fully Reconciled). This prevents you from making any
more changes to it.
Reversal of CENVAT Credit
If the allotted number of days elapses and the subcontractor has not returned
some or any of the materials in the challan (status: Posted or Assigned), you
must reverse the excise duty that you have credited to your CENVAT account.

The scrap has to be returned by the subcontractor. If it is not returned, the excise
duty for the scrap has to be reversed.
This function sets the status to Reversed. From here, you have two options:
 If you do note expect the subcontractor to return the materials, you can
complete it.
 If you do expect the subcontractor to return at least some of the materials,
you can leave it as it is for the time being. Then, when the materials arrive,
you can recredit the excise duty to the account (see below).
Recredit
If a subcontractor returns materials after the return date, you can recredit the
excise duty credit that you have reversed.
Completing Subcontracting Challans

Procurement  Subcontracting  Subcontracting Challans 
2. Enter the challan number and year.
3. Choose .
4. Select Complete Challan.
Reversing Excise Duty Credit

3. Choose .

4. Select Reverse Challan.
Recrediting the CENVAT Account

3. Choose.
4. Select either of the following options:
o Take Recredit for Receipts
This leaves the challan open for further goods receipts.
o Take Recredit If Any and Complete Challan
This completes the challan and writes off finally any CENVAT credit
that you might have been able to claim.

Subcontracting Under Full Payment of Duty
Purpose
This procedure illustrates how you use the R/3 System to send materials to your
subcontractors for processing using normal excise invoices.
Prerequisites
You have created a condition type for manually entering excise duty in the
subcontract order. In the standard system, you can use condition type JEXC.
Process Flow
1. The purchasing clerk creates a subcontract order for the subcontractor’s
services.
2. The warehouseman creates a transfer posting for the materials that you
want to send to the subcontractor.
3. The excise clerk creates an outgoing excise invoice for the materials.
4. You send the materials to the subcontractor, together with the excise
invoice.
5. The subcontractor processes the materials and returns them to you,
together with another excise invoice.
6. The excise clerk captures the subcontractor’s excise invoice, using the
purchase order as the reference document.
7. The warehouseman enters the goods receipt.
8. The excise supervisor posts excise invoice.
9. The accounts payable clerk posts the subcontractor’s invoice.
Creating Subcontract Orders

Management  Purchasing  Purchase Order  Create 
Vendor/Supplying Plant Known.

2. Set the order type to Standard PO.
3. In the Vendor field, enter the subcontractor.
4. Fill out the Org. data (Organizational data) tab.
5. In the item overview, enter the line items as described in the standard
procedure.
6. In the item details, on the Invoice tab:
o Select GR-based IV (Goods receipt-based invoice verification)

o Enter a zero-rate tax code
7. On the Conditions tab, enter the excise duty on the line item in the
Condition value field for the manual excise value condition (in the standard
system, condition type JEXC).
8. Save the subcontract order.
Making Transfer Postings
Use
You follow this procedure to create transfer postings, with or without reference to
a purchase order.
Prerequisites
You have made the appropriate settings in Customizing for Materials

Management, by choosing Inventory Management and Physical Inventory 
Goods Issue/Transfer Postings  Define Screen Layout.
In the Change View Field Selection Overview, select movement type 541 and
mark the Purchase order field as an optional entry.
Procedure

Follow the standard procedure (see the section Providing Components from
Inventory Management). Note that the movement type supplied with the standard
system for transfer postings to stock for subcontractors is 541.
Creating Excise Invoices for Subcontractors
Use
To create an outgoing excise invoice for the subcontracting materials, follow the
standard procedure.
On the selection screen, in the Reference group box, enter the number of the
transfer posting document as the reference document. The reference document
type is MATD (Material document).
Stock Transfer
Purpose
This process shows you how to order goods from another plant in your company,
taking into account all of the excise regulations. For information about the
standard procedure, see Two-Step Procedure – Plant.
Prerequisites
Before you can start, set up customer and master records for both plants as
follows:
1. Create a customer master record for the issuing plant.

2. Create a vendor master record for the issuing plant, and enter customer
account number in the Customer field on the Control screen.
3. Repeat steps 1 and 2 for the receiving plant.

4. Assign the plants to the customer master record in Customizing for
Materials Management (MM), by choosing Purchasing  Purchase
Order  Set Up Stock Transport Order  Plants.
Process Flow
1. You create a stock transport order, following the standard procedure, and
send the order to the issuing plant.
2. The issuing plant has processes your order, and when it is ready to ship:
a. The storeperson at the issuing plant issues the goods using a

transfer posting.
b. The excise clerk there creates an excise invoice
c. The excise supervisor verifies and posts the excise invoice.
It then sends the goods to you, together with the excise invoice.
3. Once the goods arrive, you follow the standard procedure for incoming
excise invoices:
a. The excise clerk captures the excise invoice, using the stock
transport order as the reference document.
b. The storeperson enters the goods receipt, again using the stock
transport order as the reference document.
Alternatively, you can first enter the goods receipt and then capture the
excise invoice.
4. The excise supervisor then posts the excise invoice.
Incoming Excise Invoices
Use

This transaction is mainly for use by excise clerks, so that they can capture
incoming excise invoices, and excise supervisors, who then post the excise
invoices captured by the clerks.
To access the function, from the SAP Easy Access screen, choose Indirect
Taxes  Procurement  Excise Invoice  Incoming Excise Invoices  Individual
Processing  Capture/Display for excise clerks or Change/Display/Post/Cancel
for excise supervisors.
Prerequisites
You have made the appropriate settings in Customizing for Logistics – General,
by choosing Taxes on Goods Movements  India  Business Transactions 
Incoming Excise Invoices.
Integration
The function is an integral part of the procurement process in Country Version

India and contains information relating to material movements and taxes. As such
it is integrated with Materials Management (MM) and Financial Accounting (FI).
Any entries that the system makes in relation to an incoming excise invoice, in
Parts I and II of the excise registers RG 23A and 23C, are also shown in the
transaction.
Features
The screen consists of the following areas:

Top Line
This is where you specify what document you want to process. When you
capture an incoming excise invoice, you specify the reference document in this
area. When you process an excise invoice that you have already captured, you
enter the excise invoice number.
Header Data
This area consists of four tabs, each with information that relates to the whole of the
excise document.
Tab Use
Excise Invoice Basic header data that you would expect to find at the top of the
excise invoice itself, such as the excise invoice number and the
date.

Totals Total amounts of different types of excise duty in the excise
invoices.
Information about the manufacturer of the goods, if different from

Miscellaneous
the vendor that sent you the goods, and about the
manufacturer’s excise registration details.
You can also enter a serial number, if the excise invoice was
printed on preprinted stationery, or a rejection code, if you need
to reject the invoice.
Additional Fields for any additional information that you might want to enter,
Data according to your own requirements.
Any entries in Part II of the excise registers RG 23A or RG 23C.

Part II
Note that this tab is not displayed if there are no Part II entries.
Item Overview
This area lists all of the items in the excise invoice. To process an item, you click
the item number and process it in the detail data , but you process the items in
the detail data area.
Detail Data
This area consists of seven tabs, each with information about a particular item.
Tab Use
Item Basic information about the material itself.

Quantities Information the quantity of goods in the excise invoice, and how
much of this quantity have entries in Parts I and II of the excise
registers.
Duty Rates The rates of excise duty on the item.
Duty Values The excise duty on the item, and how much of it has already been
credited to the CENVAT accounts.
Reference The other SAP documents associated with the item.

Documents
Additional Fields for any additional information that you might want to enter,
Data this time at item level.
Part I, Part II Any entries in Part I or Part II of the excise registers RG 23A or
RG 23C.
Reference Documents
Use
When you capture an incoming excise invoice, the first piece of information that
you enter is the reference document, in the top line.
Immediately you enter the reference document, the system copies all the
appropriate header data and line items from it into the excise invoice, so that
there is less typing for you to do and less likelihood of making errors.
By specifying the reference document, you also ensure that the excise invoice is
properly integrated into the SAP document flow.

Features
There are two scenarios where you might be sent an excise invoice:
 External procurement, where a vendor sends you some goods

accompanied by an excise invoice
 Stock transport orders, where another of your business’s plants sends
goods to your plant, again, accompanied by an excise invoice
Use in External Procurement
In the external procurement process, there are several types of documents that
you can use as a reference documents. You specify the document type in the top
line.
If you have already posted a goods receipt for the deliver, use the goods receipt
as the reference document in preference to any other documents related to the
delivery.
If the goods were delivered as the result of a purchase order, contract, or

scheduling agreement but you have not yet posted the goods receipt, use one
of these documents.
When you use one of these documents, the system cross-checks all the data you
enter in the excise invoice against the master data and transaction data already
at its disposal.
Fewer Cross-Checks
Alternatively, if you have a material document but for whatever reason you want
fewer cross-checks, select Without Purchase Order and enter the material
document number.

The system still copies the data from the material document, but the cross-
checks are less stringent.
No Reference Documents Available
If for any reason a vendor sends you a delivery and excise invoice for which you
do not have any reference documents, you can still capture the excise invoice,
but you have to do it manually, so select Without Purchase Order. Again, there
are few cross-checks that the system can carry out.
For more information, see Capturing Excise Invoices Without Reference

Documents.
Use in Stock Transport Orders
If your plant has created a stock transport order for materials to be sent from
another plant, you select Stock Transport Order.
Capturing Excise Invoices Using Reference Documents
Use
You use this procedure to capture incoming excise invoices using a reference
document.
Procedure
Procurement  Excise Invoice  Incoming Excise Invoices  Individual
Processing  Capture/Display.
2. Specify the reference documents.
3. Edit the excise invoice header data.

4. Remove any items from the item overview that you do not need.
5. Edit the items.

If at any time you want to start over, choose .
Result
The system:
 Creates the excise invoice and assigns it an internal excise invoice

number
 Sets the document status (on the Excise invoice tab) to In process
The excise supervisor then has to post the excise invoice in a separate step.
Specifying Reference Documents
1. In the top left-hand corner of the screen, in the top line, select Capture
Excise Invoice.
2. In the next field, select the reference document type (for example, Goods
Receipt or Purchase Order).
3. In the next field, enter the number of the reference document.
If you only want one of the line items from the reference document, enter
the line item number in the following field. Otherwise, leave the field blank.
4. Choose.
The system copies the relevant header data and items from the reference
document into the screen.
5. If you need to specify another reference document – for example, if you

sent the vendor two separate purchase orders and it sent the ordered
materials in one delivery with one excise invoice – repeat steps 1–4.

This only applies to purchase orders, scheduling agreements, and
contracts.
The system copies the additional line items into the screen.
Editing Header Data
Use
Once you have specified the reference documents, the next step in capturing the
excise invoice is to edit the excise invoice header data on the screen to match
what is printed on the excise invoice itself.
Much of the header data is copied automatically from the reference documents,
but some information you will have to maintain manually.
Procedure
1. On the Excise invoice tab, enter the excise invoice number and date from
the vendor’s excise invoice.
2. If the materials were supplied by a different vendor than the one in the
purchase order, enter the vendor in the Ship-from field on the
Miscellaneous tab and choose .
The system changes the excise range, division, and ECC number
accordingly.
This information shows who paid the excise duty on the materials. If your
vendor has not manufactured the materials itself, but has purchased them
from another business, it will be the latter who has paid the excise duty,
not the vendor.
3. Choose Check to check the header data.

o If the data is in incomplete or incorrect, the system displays a list of
the problems.
o If the data is all right, the traffic light on the Excise invoice tab turns
green.
Removing Items from the Item Overview
Use
When you specify the reference documents, the system automatically enters all
the line items from the documents. However, there may be fewer items in the
excise invoice than in the reference document. In that case, you have to remove
the excess items from the overview.
Procedure
1. In the item overview, mark the line items that are in the excise invoice as
OK.
2. Choose Delete.
The system removes all of the items that are not marked as OK.
Editing Line Items
Use
Once you have specified the reference documents and have edited the line item
overview, edit each line item to make sure that the information on the screen
matches the information in the vendor’s excise invoice.
Procedure
1. In the item overview, click the number of the item that you want to edit.

The system displays the item in the detail data and grays it out in the
overview so that you cannot edit it there.
2. In the detail data, check the quantities, duty rates, and duty values against
the vendor’s excise invoice and adjust the information in the system to
match it if necessary.
3. Select Item OK.
When you save the excise invoice, the system only saves the items that
you have marked as OK.
4. To check the item data to make sure that the system accepts it, choose
Check.

the problems.
o If the data is all right, the item’s traffic light in the item overview
turns green.
Capturing Excise Invoices Without Reference

Documents
Use
This procedure shows you how to capture an incoming excise invoice if you do
not have any reference documents.
You can also follow this procedure if you do have a material document that you
want to use as a reference document, but you want the system to cross-check
the excise invoice data against other master data or transaction data less
stringently than it normally would (for more information, see Reference
Documents).

You commission a construction company build a new plant for you. The company
purchases all the materials it needs to build the plant, deals with all of the
invoices and most of the other paperwork, with the exception of the incoming
excise invoices, which the law requires you to deal with yourself. The
subcontractor sends you all excise invoices accordingly and you capture them in
the system without any reference documents.
Procedure
1. From the SAP Easy Access screen, choose SAP Easy Access screen,
choose Indirect Taxes  Procurement  Excise Invoice  Incoming
Excise Invoices  Individual Processing  Capture/Display.
2. In the top line:
a. Select Capture Excise Invoice.

b. Select Without Purchase Order.
c. If you have a material document, enter the material document
number and choose . If you do not have any reference

documents, leave the field blank.
3. Enter the header data.

4. Enter the line items.
Result
Once you have saved the excise invoice, you treat it as you would any other
excise invoice.

Entering Header Data
1. On the Excise invoice tab:
o Copy the information from the vendor’s excise invoice into the
following fields:
 Excise invoice number

 Excise invoice date
 Vendor
o Fill out the Excise group field.
2. On the Miscellaneous tab, enter the following data:
o If the vendor who sent you the excise did not manufacture the
goods itself, but obtained them from a different manufacturer, enter
the manufacturer in the Ship-from field and choose Enter.
o Change the excise range, excise division, and ECC number if they
are incorrect.
3. Choose Check to check the header data.

the problems.
o If the data is all right, the traffic light on the Excise invoice tab turns
green.
Entering Line Items
1. On the Item tab, enter the following data:
o Material

o Plant
2. Choose.
The system:
o Adds the line item to the item overview

o Fills out the Material type, Description, and Chapter ID fields using
the information from the material master record
If you have not maintained a material master record for this

material, no information will be displayed, but you can enter it here
manually.
3. On the Quantities tab:
o Enter the item quantity and change the unit of measure, if

necessary
o Enter the quantity of goods still available for CENVAT credit
4. On the Duty values tab, enter the following data:
o Excise base amount

o Excise amounts
5. To check the item data to make sure that the system accepts it, choose
Check.

the problems.
o If the data is all right, the item’s traffic light in the item overview
turns green.
6. To add a new item, choose and repeat steps 1–5.

Posting Excise Invoices
Use
Once the excise clerk has captured the excise invoice, the excise supervisor
checks it to make sure that the data has been entered correctly, and then posts
the excise invoice.
If, however, there is a problem with the excise invoice and you need to reject it,
see Rejection of Excise Invoices.
Procedure

2. In the top line:
a. Select Post CENVAT.

b. Select Vendor Excise Invoice.
c. Enter the excise invoice number.
3. Choose .
4. Check the information in the system against the vendor’s excise invoice
and adjust the information in the system to match.
You must pay particular attention to the excise duty that is to be credited to
the CENVAT accounts.
5. To check the CENVAT postings, choose Simulate CENVAT.
A dialog box appears with a list of the postings that will be made. The
excise duty accounts will be debited, and the CENVAT clearing account
credited.

6. To post the excise invoice and make the CENVAT postings, choose Post
CENVAT.
You can also save your changes without making any CENVAT postings by
choosing.
Result
The system:
 Creates an accounting document to make the appropriate CENVAT

postings
 Creates the corresponding entries in Part II of the appropriate excise
register
Long Texts
Use
When you capture an excise invoice, you can enter notes relating to the excise
invoice – for your own reference only – as long texts.
Activities
Customizing
You define what sorts of long texts that you want to be able to enter in
Customizing for Logistics – General, by choosing Tax on Goods Movements 
India  Tools  Long Texts.

You could define one long text for information about the bill of lading, and one for
information about the Part II entry.
When you capture an excise invoice and you want to enter a long text for it, on
the Additional Data tab, choose Long Text.
In the dialog box, double-click the sort of long text that you want to enter, and
type the text in the field next to it.
Rejection of Excise Invoices
Use
If a vendor sends you an excise invoice that as it stands is unacceptable – for

example, if it is illegible or some of the data is missing – you still post the excise
invoice, but you assign it a rejection code.
Features
If you only capture an excise invoice, the rejection code does not have any effect
on the excise invoice other than to denote it as rejected in some way.
However, if you post an excise invoice, the rejection code controls whether the
system creates a normal CENVAT document or if it posts the excise duty to the
CENVAT on hold account pending clarification of the invoice.
Activities
Customizing
Define the rejection codes in Customizing for Logistics – General, by choosing

Taxes on Goods Movements  India  Business Transactions  Incoming
Excise Invoices  Maintain Rejection Codes.

To reject an excise invoice, set the appropriate rejection code.
If you want, the system puts the excise duty on hold. Then, once you have
checked the excise invoice, you can post the excise duty from the CENVAT on
hold account to the excise duty accounts.
Rejecting Excise Invoices
Use
Follow this procedure to reject an excise invoice, if you still want to post the
excise duty to the normal accounts.
Procedure

2. In the top line:
b. Select Excise Invoice Number.
3. Choose .
4. On the Miscellaneous tab, enter a rejection code that posts the excise
duty to the normal accounts.
A dialog box appears, showing you that the system will debit the excise
duty to the excise duty accounts and credit it to the CENVAT clearing
account.

To close the dialog box, choose .
6. Choose Post CENVAT.
Result
The system posts the excise invoice as normal. It:
 Posts the excise duty to the appropriate accounts

 Creates the appropriate entries in Part II of register RG 23A or RG 23C
 Changes the document status (on the Excise invoice tab) to Posted
Rejecting Excise Invoices with CENVAT on Hold
Use
Follow this procedure to reject an excise invoice and post the excise duty to a
CENVAT on hold account, pending the receipt of more information.
Procedure

2. In the top line:
3. Choose .
4. On the Miscellaneous tab, enter a rejection code that posts the excise
duty to a CENVAT on hold account.

A dialog box appears, showing you that the system will debit the excise
duty to the CENVAT on hold account and credit it to the CENVAT clearing
account.
Result
The system creates an accounting document to posts the excise to the

appropriate accounts, but does not create any entries in Part II of registers RG
23A or RG 23C.
If you display the excise invoice, you see:
 On the Excise invoice tab, the document status is In process

 On the Miscellaneous tab, there is a link to the accounting document
Once the vendor has provided you with the information you need, you can post
the CENVAT on the rejected excise invoice.
Rejection Accounting Document
Definition
An accounting document that the system creates when you reject an excise
invoice with CENVAT on hold.

Use
When you reject an excise invoice with CENVAT on hold, the system creates an
accounting document to debit the excise duty to the CENVAT on hold account
and credit it to the CENVAT clearing account:
Posting CENVAT on Rejected Excise Invoices
Use
Follow this procedure if you have an excise invoice that you have rejected, with
the CENVAT credit on hold, and you now want to take the CENVAT credit.
Procedure

2. In the top line:
3. Choose.
4. On the Miscellaneous tab, delete the rejection code.
A dialog box appears, showing you what CENVAT postings will be made.

The system will credit the CENVAT on hold account, and debit the
appropriate excise duty accounts.
Result
The system:
 Posts the CENVAT credit as normal

 Creates the corresponding entries in Part II of the appropriate excise
registers.
Reversal Rejection Accounting Document
Definition
An accounting document that the system creates when you post the CENVAT on
a rejected excise invoice, to reverse the posting to the CENVAT on hold account.
Use
When you post the CENVAT, the system creates an accounting document to
debit the excise duty to the excise duty accounts and credit it to the CENVAT on
hold account:

Reversal of CENVAT Postings
Purpose
Assume you have posted a goods receipt and then posted the CENVAT on the
excise invoice accordingly. Then it transpires there is a problem with the goods
and the goods receipt has to be reversed. Under excise laws, that means you are
no longer entitled to the CENVAT credit.
In the SAP System, therefore, you have to reverse CENVAT posting

correspondingly.
Process Flow
1. You reverse the goods receipt.
The system:
o Creates a reversal document to cancel the goods receipt

o Creates additional entries in Part I of the appropriate excise register
to reverse the original entries
o Changes the excise invoice document status to In process.
2. You reverse the CENVAT posting on the excise invoice.
The system:
o Creates an accounting document to reverse the CENVAT postings

o Creates a corresponding entry in Part II of the appropriate excise
register
3. If your plant does not allow multiple goods receipts per excise invoice,
you must also cancel the excise invoice.
The system changes the excise invoice status to Canceled.

If, however, you do allow multiple goods receipts per excise invoice, you
do not have to cancel it. If you want, you can leave the excise invoice as it
stands. Then, if you receive another delivery of goods for this excise
invoice, enter the excise invoice number when you post the goods receipt.
Reversing CENVAT Postings

2. In the top line:

d. Choose.
A dialog box appears, showing which postings the system will make to
reverse the CENVAT.
To close the dialog box, choose .
Canceling Excise Invoices

2. In the top line:
a. Select Cancel.

d. Choose.
Goods Movements and Excise Documents Combined
Use
If your business processes require, your warehousemen can process the

necessary excise documents (for example, excise invoices or subcontracting
challans) at the same time as they enter a goods movement, using the standard
Goods Movement transaction, MIGO.
Features
Users in manufacturing plants can use the transaction when they receive
goods from external procurement, goods transferred from another plant, or goods
manufactured by subcontractors. They can also use the transaction when they
issue goods to be transferred to another manufacturing plant or depot, or when
they send scrap to a vendor.
Users in depots can use the transaction when they receive goods procured
externally or transferred from a manufacturing plant. They can also enter goods
issues for sending scrap to a vendor.
In all the above scenarios, the transaction supports the one-step and two-step
procedures.

Activities
Customizing
You activate this function for each excise group separately, in Customizing for
Logistics – General, by choosing Tax on Goods Movements  India  Basic
Settings  Excise Groups.
When you run the Goods Movement transaction, the system displays an
additional tab at header level for the excise invoice header information, and one
tab at item level for the excise invoice line item information. You then fill out the
data as required.
When you save the goods receipt or goods issue, the system also saves the
excise invoice (either captured/created or posted). It creates all appropriate
excise register entries, material documents, and accounting documents.
Note that once you have entered an incoming or outgoing excise invoice using
the standard Goods Movement transaction, you can only process it further using
the other excise invoice transactions.
One-Step and Two-Step Procedures
Use
You can customize the system so that the warehousemen can post the
necessary excise documents duty (the one-step procedure) or whether you want
excise supervisors to do this (the two-step procedure).
Features
This function works slightly differently for manufacturing plants and depots.

Manufacturing Plants
When the warehouseman in a manufacturing plant enters a goods movement, he

can only post an incoming or outgoing excise invoice if you have made the
appropriate Customizing settings (see below). If you want to follow the two-step
procedure, he can only capture incoming excise invoices and create outgoing
excise invoices.
You can also customize the system so that the warehouseman can only post an
excise invoice if he does not change any of the excise data proposed by the
system.
Depots
If you follow the one-step procedure, the warehouseman can post incoming
excise invoices for goods receipts.
The only form of goods issue that the standard Goods Movement transaction
supports is scrap, for which you do not require an outgoing excise invoice.
However, the warehouseman must assign the goods issue to the appropriate
folio numbers from the goods receipt (RG 23D selection. You can decide whether
he can capture the RG 23D selection or post it as well.
Again, you can customize the system so that he can only post the data if he does
not change the data proposed by the system.
Activities
Customizing
You can customize different procedures for each excise group.
Make the settings in Customizing for Logistics – General, by choosing Tax on

Goods Movements  India  Basic Settings  Maintain Excise Groups.

When the warehouseman enters a goods movement, he can only capture (or
create) and post the excise invoice if you have authorized it for his excise group.
The excise supervisor follows the standard procedures for posting incoming
excise invoices and posting outgoing excise invoices that need to be posted.
Entering Goods Receipts and Excise Invoices Together
Use
This procedure describes how warehousemen at manufacturing plants enter the

receipt of goods procured externally, together with the incoming excise invoice.
You follow the standard procedure, and in addition, you also enter the excise
invoice details at header level and item level.
Procedure

3. Enter header data as required, following the standard procedure.
In addition, on the Excise Invoice tab:
a. Set the excise action to Capture Excise Invoice or Capture & Post
Excise Invoice.
b. Enter the official excise invoice number and the excise invoice date.
If you need to enter any more data, choose .

4. Enter line item data as required, again, following the standard procedure.
In addition, on the Excise Item tab, change the data so that it matches the
vendor's excise invoice, if necessary.
Result
If you set the excise action to Capture Excise Invoice, the system creates:
 A material document to record the goods receipt

 An accounting document to debit the inventory account and credit the
GR/IR clearing account
 A Part I entry in register RG 23A or 23C
The next step is to post the excise invoice, for which you use the Incoming
Excise Invoices transaction.
If you set the excise action to Capture & Post Excise Invoice, the system also
creates:
 A Part II entry in register RG 23A or 23C

 A CENVAT accounting document
The next step is to post the vendor's invoice, when it arrives.
Entering Goods Receipts with Reference to Excise

Invoices
Use

receipt of goods procured externally if the excise clerk has already entered

(captured or posted) the excise invoice using the Incoming Excise Invoices
transaction.
You enter the goods receipt, following the standard procedure, and in addition,
you enter the excise invoice number.
Procedure

a. Set the excise action to Only Refer Excise Invoice or, if you want to
post the excise invoice, Refer & Post Excise Invoice.
c. Choose.
The system displays all the information from the excise invoice. You
cannot change it.
4. Enter line data as required, again, following the standard procedure.

Result
If you set the excise activity to Only Refer Excise Invoice, the system creates:

GR/IR clearing account.

If the excise invoice that you referred to has not yet been posted, the next step is
to post the excise invoice, for which you use the Incoming Excise Invoices
transaction. Otherwise, the next step is to enter the vendor's invoice, when it
arrives.
If you set the excise activity to Refer & Post Excise Invoice, the system also
creates:

The next step is to post the vendor's invoice, when it arrives.
Entering Goods Receipts Without Excise Invoices
Use

receipt of excisable goods procured externally if the excise invoice is not yet
available.
you also set the excise action as appropriate. You can still create an entry in Part
I of register RG 23A or RG 23C, but the excise invoice number will be missing
from it. It will be entered later on when the excise clerk captures the excise
invoice.
Procedure


In addition, on the Excise Invoice tab, set the excise action to Part I Only.
Result
The system creates:

 A Part I entry in register RG 23A or RG 23C
However, the Part I entry is incomplete, as the excise invoice number is

missing from it.
The next step is to capture (and post) the excise invoice, for which you use the
Incoming Excise Invoices transaction. When you do so, the system automatically
links the excise invoice to the Part I entry.
Entering Goods Receipts for Nonexcisable Goods
Use

receipt of nonexcisable goods.
you also set the excise action as appropriate.

Procedure

In addition, on the Excise Invoice tab, set the excise action to No Excise
Entry.
Result
The system creates:

That is the end of the procedure for nonexcisable goods.
Entering Goods Receipts and Subcontracting Challans

Together

receipt of goods from subcontract orders.
you also enter the subcontracting challan details at header level and item level.

Procedure

2. In the top line, enter the subcontract order number and choose .
A dialog box appears, which is not relevant for subcontracting.
a. Set the excise action to Refer Subcontracting Challan.

b. Choose.
c. Enter the subcontracting challan number and the fiscal year, and
choose.
Result
The system creates a material document to record the transfer from stock of
material provided to vendor to normal stock.
The next step is to reconcile the subcontracting challan.
Entering Goods Issues and Excise Invoices for

Transport Orders
Use
This procedure describes how warehousemen at manufacturing plants issue

goods for a stock transport order placed by another manufacturing plant or depot.

You enter the goods issue, following the standard procedure, and in addition, you
also enter the excise invoice details at header level and item level.
Procedure

Issue (MIGO).
a. Set the excise action to Create Excise Invoice or Create & Post
Excise Invoice.
b. Enter any other data required.
c. If you have activated Immediate Utilization for the series group,
choose. On the CENVAT Utilization tab, specify which accounts you
want to pay the excise duty from. Choose to close the dialog
box.
In addition, check the data on the Excise Item tab, and change it if
necessary.
5. Save the goods issue.
Result
If you set the excise activity to Create Excise Invoice, the system creates:
 A material document to record the goods issue to stock in transfer

 An accounting document to debit the manufactured components in stock
account at the issuing plant and credit the same account at the receiving
plant
 An entry in register RG 1 (if you have customized the excise group
accordingly, and if the goods are finished goods)
The next step is to post and print the excise invoice.
If you set the excise activity to Create & Post Excise Invoice, the system also
creates:

The next step is to print the excise invoice.
Entering Goods Receipts and Excise Invoices Together

at Depots
Use
This procedure describes how warehousemen at depots enter the receipt of

goods and the incoming excise invoice for:
 Goods transferred from a manufacturing plant

 Goods purchased from a vendor
Follow the standard procedure, and in addition, enter the excise invoice details at
header level and item level.
Procedure

2. In the top line:
a. Set the reference document to Purchase Order.

b. Enter the stock transport order number or the purchase order
number.
c. Choose.
a. Set the excise action to Create RG 23D Entry.
If you have already entered a partial goods receipt for these goods
and have entered the excise invoice already, select Create RG 23D
Entry for Existing Excise Invoice.
If you have already entered the excise invoice, the system displays the
information from the excise invoice created at the manufacturing plant.
You cannot change any of the information at header level or item level.
Otherwise, enter header data as required.
4. If you have not yet entered the excise invoice, enter line item data as
required, again, following the standard procedure.
In addition, on the Excise Item tab, change the data so that it matches the
vendor's excise invoice, if necessary.

Result
The system creates:

GR/IR clearing account.
 An entry in register RG 23D
Entering Goods Issues and Excise Invoices Together at Depots
Use
This procedure describes how warehousemen at depots issue scrap and assign
the goods issue to the appropriate folio number from RG 23D.
Procedure

Issue (MIGO).
2. In the top line, set the reference document to Others.
3. Enter line item data as required, including the material and plant, and
choose.
In the header, the Excise Invoice tab appears, and in the detail data, the
Excise Item tab appears.
On the Excise Item tab, the system displays a list of goods receipts of this
material that you have already entered, together with their folio numbers.
The list is in chronological order. You can overwrite the proposed
quantities.

a. Set the excise action to Only Select RG 23D.

b. Enter any other data required.
5. Save the goods issue.
Result
The system creates:
 A material document to record the goods issue

 An accounting document to credit the inventory account
 An entry in register RG 23D to record the goods issue
Multiple Goods Receipts for a Single Excise Invoice
Use
Under normal circumstances, your vendors send you one excise invoice per
delivery. Sometimes one excise invoice covers more than one delivery, for
example, if you order a large quantity of oil and the vendor requires several trips
to complete the delivery.
Prerequisites
You have specified the maximum number of goods receipts per excise invoice
per excise group, and whether you want multiple goods receipts with single or
multiple CENVAT credits. You do so in Customizing for Logistics – General, by
choosing Taxes on Goods Movements  India  Basic Settings  Maintain
Excise Groups.

You have also specified which materials multiple goods receipts are allowed for.
If you do not, the system will display a warning for each material when you come
to post the excise invoice (see Material Master (Excise Data)).
Features
The R/3 System allows you to control:
 Which of your excise groups allow multiple goods receipts (see above)
 Which materials you allow multiple goods receipts for (see above)
 When to credit the excise duty on the goods to your CENVAT account,
either:
o As soon as the accounts supervisor has verified and posted the

excise invoice, irrespective of whether the delivery has been made
in full
o Whether to wait until the full quantity has been delivered
You have ordered a consignment of INR 800,000 worth of fuel from a vendor with
excise duty at INR 80,000. The vendor sends the fuel in two batches. When the
first batch arrives, the storeperson posts the goods receipt for INR 400,000 (plus
INR 40,000 of duty); the excise supervisor does not post the excise invoice for
the quantity delivered. When the second batch arrives, you can credit INR 80,000
to your CENVAT account.
Activities
Working with multiple goods receipts entails the following activities:
 Posting goods receipts
When you post a second (or third, or fourth) goods receipt for an excise
invoice, the system prompts you to confirm that this is correct.

 Posting excise invoices
When you come to post an excise invoice, the system displays all the
receipts created for the invoice. If at material level multiple credit is
disallowed, the system prompts you to confirm that you want to accept the
credit. Otherwise, you can credit the CENVAT account for each receipt
separately.
Capital Goods
Use
Businesses are allowed to set off excise duty on purchases of capital goods
against excise duty on outputs. However, unlike with raw materials, you can only
set off half of the duty in the first year, and the rest in any year after that.
Prerequisites
In the material master, you have classified the capital goods as such.
Because duty on capital goods is handled using excise transaction type CAPE,
you must also have specified that you want this transaction to credit the excise
duty to the CENVAT on hold account. You make this setting in Customizing for
Logistics – General, by choosing Taxes on Goods Movements  India  Account
Determination  Specify Excise Accounts Per Excise Transaction.
You must then have specified which G/L account is the CENVAT on hold account,
again in Customizing for Logistics – General, by choosing Taxes on Goods
Movements  India  Account Determination  Specify G/L Accounts per Excise
Transaction.

Features
When you post an excise invoice that contains capital goods, the system posts
half of the excise duty to your CENVAT account and posts the rest to a G/L
account for CENVAT on hold.
In following years, you can use a report to identify the capital goods with excise
duty on hold and transfer the duty to the CENVAT account (see Transfer of
CENVAT Credit on Capital Goods).
Activities
When working with excise invoices that include capital goods, note the following:
 Capturing vendor excise invoices
When you create an excise invoice with capital goods, you have to set the
material type to A (assets), C (consumables), or T (tools).
 Posting excise invoices
When you come to post the excise invoice, the system posts only half of
the excise duty to the CENVAT account. The system does not round the
amount off.
Transfer of CENVAT Credit on Capital Goods
Use
You use this report to display a list of the vendor excise invoices where the
vendor has levied excise duty but you have not posted it (in full) to your CENVAT
account.
This is particularly useful in the case of capital goods, in order to find out how
much credit remains from previous years.

Features
To access the report, from the SAP Easy Access screen, choose Indirect Taxes 
Procurement  Excise Invoice  Reports  Balance Credit for Capital Goods.
Selection
On the selection screen, enter:
 Organizational data
 Data of the documents that you want
Output
The system displays a list of excise invoices with excise duty outstanding. It
shows you:
 The total amounts of the various types of excise duties levied on the
excise invoice
 How much duty has still to be posted to the CENVAT account
Select the excise invoices that you want and choose Transfer credit. If you want
to transfer only a portion of the remaining amount, enter this amount as the
amount to be credited.
The system creates an accounting document to post the duty to the CENVAT
account and creates an entry in the Part II register.
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 R/3 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.
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 R/3 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 R/3 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
(see below).
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.
The system does not automatically generate entries for goods receipts from
production orders. You have to generate these 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 R/3 System.
Use
The R/3 System generates all the necessary entries in the register. You can
prepare a copy of the register as required.

Part I Entries
Use
The R/3 System creates Part I entries for all excisable goods movements.
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
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
India  Basic Settings  Maintain Company Code Settings.
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 R/3 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 R/3 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
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.
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
1. 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.

2. When you need to submit the registers, you run the Data Extraction report,
and the system saves the data to an internal table.
3. 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 Field entries
EXGRP Material’s excise group

DATUM Date from which RG1 report is required, normally the date of
going live
MATNR Material
FORM Enter P (Packed) or L (Loose). Do not leave this field blank.
WERKS Leave this field blank.
Leave these fields blank.

OP FN UOM
All quantities in this table are updated in the base unit of measure
OP BN UOM of the material.
CB FN UOM
USNAM User ID of the person filling out the table.
CPUDT Date of entry
CPUTM Time of entry
Features
Registers  Excise Tax  Update RG 23A/C Issues and RG 1.
Selection
On the selection screen, you specify:
 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 Goods issues Goods receipts
RG 23A IIM ROP
IPD

IWD
RG 23C IIM ROP
IPD
IWD
RG 1 IDH RMA
IDE ROP
IWE
IWT
IWO
o 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.
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 Entry
EXGRP Excise group of the registers
Type of register
REGISTER
Make an entry for each of the following:
 RG23ABED
 RG23ASED
 RG23AAED
 RG23CBED
 RG23CSED
 RG23CAED

 PLABED
 PLASED
 PLAAED
 PLACESS
DATUM Date of the closing balance
WERKS Leave this field blank
OP BAL Leave this field blank
CL BAL Closing balance in the register
EXAMT Leave this field blank
EXIND Leave this field blank
USNAM User ID of the person making the entries
CPUDT Date of entry
CPUTM Time of entry
Features
To access the report, from the SAP Easy Access screen, choose Indirect Tax 
Registers  Excise Tax  Extract.
Selection
On the selection screen, enter data as follows:

 If you select All registers, the system will create an extract for all registers.
If you only want to create an extract for specific registers, select Select
any register and then the registers that you want.
 If you want to find out when an extract was last created, select Last
extracted dates. The system then displays the information in a dialog box.
Output
The system extracts the data. You can now print it out using the Register Printout
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
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
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 Length Use
REGTYP 1 Register

A RG23A
C RG23C
TRNTYP 4 Transaction type (GRPO = goods receipt)
EXGRP 2 Excise group
SNO 10 Part I serial number
SYEAR 4 Year of serial number
PDATE 8 Posting date
MAKTX 40 Material description
MENGE 13 Quantity
MEINS 3 Unit
EXNUM 10 Excise invoice number
EXDAT 8 Excise invoice date
NAME1 35 Vendor name
ORT01 35 City
PSTLZ 10 Pin code

EXCCD 20 Excise code number of vendor
EXCRN 20 Excise registration number of vendor
EXCRG 40 Excise range number
EXCDI 20 Division number
EXCCO 20 Excise collectorate of vendor
CHAPID 12 Chapter ID
P2NO 10 Corresponding Part II entry number
RISIND 1 Receipt/issue indicator
STATUS 1 Entry status
U Undeclared material
D Deleted item
MBLNR 10 Material document number
MJAHR 4 Material document year
BWART 3 Movement type
Data Structure of Part II
Definition

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 Length Use
REGTYP 1 Register type
A RG23A
C RG23C
P PLA
TRNTYP 4 Transaction type
57CM 57F4 completion

57FC 57F4 subcontractor goods
issue
57NR Non receipt of 57F4
CAPE Capital goods
CEIV Canceling the generated

excise invoice
DIEX Differential excise posting
DLFC Factory sale and stock

transfer
GRPO Goods receipt (raw

material)
MRDY Reversal without reference
MRRD Reversal in case of

consumption other than
production
MRWO CENVAT reversal for write

of cases
TR6C PLA account adjustment

through TR6 challan

OTHR Excise paid on other
movements
EWPO Excise invoice without PO
SNO 10 Part II serial number
SYEAR 4 Year of the serial number
PDATE 8 Posting date
EXNUM 10 Excise invoice number
EXDAT 8 Excise invoice date
NAME1 35 Vendor/customer/subcontractor name
ORT01 35 City
PSTLZ 10 Pin code
EXCCD 20 Excise code number of vendor/customer/subcontractor
EXCRN 20 Excise registration number of

vendor/customer/subcontractor
EXCRG 40 Excise range number (in case of credit entries)

EXCDI 20 Division number (in case of credit entries)
EXCCO 20 Excise collectorate of vendor/customer/subcontractor
BED 19 BED
SED 19 SED
AED 19 AED
CESS 19 CESS
CURR 3 Currency
CHAPID 12 Chapter id
P1NO 10 Corresponding part I entry number (in case of credit

entries)
PREPRN 10 Preprinted excise invoice number
CVDIND 1 CVD indicator (X = CVD)
EXPIND 1 Export indicator in sales
Blank Local sale
B Export under bond
D Deemed export

N Export without bond
CAPIND 1 Capital goods indicator
A Assets
T Tools
C Consumable
CERTNO 20 (Capital goods only) Field use depends on material type:
Assets Installation certificate

number
Consumable Intimation document

number
Tools Intimation document

number
CERTDT 8 Intimation/certificate date (capital goods only)
ANLN1 12 Asset number (for capital goods: assets only)
REMARKS 50 Remarks
PROCES 50 Process for subcontracting challan
STATUS 1 Status

Space Normal
R Reversed
RDOC1 10 Reference document number
RYEAR1 4 Reference document year
LIFNR 10 Vendor number
MBLNR 10 Material document number
MJAHR 4 Material document year
Data Structure of RG 23D
Definition
you download the data from RG 23D.
Structure
Field Length Use
INDCTR 1 Receipt/issue indicator
I Issue

R Receipt
EXNUM 10 Supplier's excise invoice number
EXDAT 8 Supplier's excise invoice date
NAME1 35 Vendor/consignee name
ORT01 35 City of vendor/consignee
PSTLZ 10 Pin code
EXCCD 20 Excise code number
EXCRN 20 Excise registration number
EXCCO 20 Excise collectorate
MENGE 13 Quantity
MEINS 3 Unit
CHAPID 12 Chapter ID

BED 19 BED
SED 19 SED
AED 19 AED
CURR 3 Currency
VBELN 10 Invoice (delivery document)
PDATE 8 Invoice date
NAME1B 35 Name of buyer
ORT01B 35 City of buyer
PSTLZB 10 PIN code of the buyer

Data Structure of Plant Master Data
Definition
you download the plant master data.
Structure
Field Length Use
WERKS 4 Plant code
NAME1 30 Plant name 1
NAME2 30 Plant name 2
STRAS 30 Street and house number
PFACH 10 Post office box
PSTLZ 10 Postal code
ORT01 25 City
LAND1 3 Country
EXCCD 20 Excise code number
EXCRN 20 Excise registration number

EXCCO 20 Excise collectorate
Data Structure of RG 1
Definition
you download the data from RG 1.
Structure
Field Length Use
MANDT 3 Client
SYEAR 4 Year of the serial number
SERIALN 10 RG 1 serial number
MBLNR 10 Number of a material document
MJAHR 4 Year of material document
ZEILE 4 Item in material document

BWART 3 Movement type (inventory)
MATNR 18 Material number
MENGE 7 Quantity
MEINS 3 Base unit of measure
RISIND 1 Receipt/issue indicator
DOWNL 1 Download indicator
DECLRD 1 Item declared for excise
EXPIND 1 Export type
REASON 40 Reason for movement
RDOC1 10 Reference document 1
RYEAR1 4 Reference year 1
RIND1 1 Reference document type 1
BEDRATE 3 Basic excise duty rate
AEDRATE 3 Additional excise duty rate

SEDRATE 3 Special excise duty rate
EXCUR 5 Currency
EXBAS 7 Base value for excise calculation
EXBED 7 Basic excise duty
EXAED 7 Additional excise duty
EXSED 7 Special excise duty
CESS 7 Cess amount
STATUS 1 Register entry status
USNAM 12 Created by
CPUDT 8 Document entry date
CPUTM 6 Time of entry
AEDAT 8 Changed on
AENAM 12 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
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.
Transaction Codes for India
Transaction Action
J1I2 Prepare a sales tax register
J1I3 Create outgoing excise invoices in batches

J1I5 Update the RG 1 and Part I registers
J1IEX Incoming Excise Invoices (central transaction)
J1IEX_C Capture an incoming excise invoice (excise clerk)
J1IEX_P Post an incoming excise invoice (excise supervisor)
J1IF01 Create a subcontracting challan
J1IF11 Change a subcontracting challan
J1IF12 Display a subcontracting challan
J1IF13 Complete, reverse, or recredit a subcontracting challan
J1IFQ Reconcile quantities for subcontracting challans
J1IFR List subcontracting challans
J1IH Make a CENVAT adjustment posting
J1IIN Create an outgoing excise invoice
J1IJ Assign excise invoices to a delivery for sales from depots
J1INJV Adjust withholding tax Item
J1INREP Reprint a withholding tax certificate for a vendor

J1IQ Year-End Income Tax Depreciation Report
J1IR Download register data
J1IS Process an excise invoice (outgoing) for other

movements
J1IU Process exemption forms
J1IW Verify and post an incoming excise invoice
J1IX Create an incoming excise invoice (without reference to

purchase order)
J2I8 Transfer excise duty to CENVAT account
J2IU Remit excise duty fortnightly
J2I9 Monthly CENVAT return
J1IG Excise invoice entry at depot
J1IGA Create additional excise entry at depot
J2I5 Extract data for excise registers
J2I6 Print excise registers

Annexure
Excise Duty
Use
In India, excise duty is a tax on the manufacture of goods that is levied

when goods leave the place of manufacture. Manufacturers can set off the
duty paid on input materials against their output duty, a procedure known
as central value-added tax (CENVAT).
Features
The system automatically calculates the excise duty on all transactions that
are subject to it and records the duty to the appropriate G/L accounts. It allows
for all types of excise duty, all of which need to be calculated and reported
separately:
 Basic excise duty (BED)

 Special excise duty (SED)
 Additional excise duty (AED)
 Cess, a form of luxury tax that is levied over and above the other forms of
excise duty
For the most part, you can offset the excise duty that you have paid on your
purchases. However, one exception is cess: Cess on inputs cannot be claimed
back.

Activities
Customizing
In order for the system to be able to calculate and report excise duty, you must
make the Customizing settings in the CIN Implementation Guide (IMG) under
Global Settings.
In the CIN IMG under Accounting, you must have specified which G/L accounts
you use for recording excise duty.
Master Data
You must make the master data settings described under Determination of
Excise Duty.
Here is an outline of what features relating to excise duty the SAP System offers
in Financial Accounting (FI). For more information about how excise duty is
involved in the logistics processes, see Sales and Distribution (SD) and Materials
Management (MM):
Reporting
Once levied, the excise duty has to be remitted to the central excise
authorities. The law requires you to remit excise duty twice monthly: for the
first half of any given month (1–15 inclusive) and from 16 to month-end. In
each case, you are allowed five days to remit the excise duty. CIN offers a report
to help you do just that (see Remittance of Excise Duty Fortnightly).

There is a small number of transactions that have to be remitted on the same day
(see Excise Invoices (Outgoing) for Other Movements).
In addition, the system allows you to prepare printouts of the various excise
registers for the tax authorities.
Remittance of Excise Duty Fortnightly
Use
You use this report to calculate how much excise duty you must remit to the
authorities. Legislation requires you to remit excise duty twice monthly: for all the
goods issues in the first half of any given month (1–15 inclusive) and from 16 to
month-end. In each case, you are allowed five days to remit the excise duty.
Once the report has determined how much you have to pay, it allows you to
specify where the money should be paid from – whether it should be deducted
from the CENVAT credits that you have accumulated, or whether it should be
deducted from the personal ledger account (PLA).
Irrespective of which date you execute the report on, you can only utilize
CENVAT credits posted up until the 15th or the last day of the month as the case
may be.
Prerequisites
You must have:
 Customized the system so that when you create an excise invoice for a
sale, the system automatically debits the excise to a CENVAT clearing
account
 Defined which CENVAT accounts are to be debited by default, in the CIN
Implementation Guide (IMG), by choosing Sales and Distribution ®
Utilization Determination.

 Defined the minimum balances of your CENVAT accounts, in the CIN IMG,
by choosing Accounting ® Maintain Minimum Balances for Excise
Accounts
Features
To access the report, from the SAP Easy Access screen, choose Indirect Taxes ®
Sales/Outbound Movements ® Fortnightly Payment.
Selection
On the selection screen, enter data as required:
 Organizational data (in the General data group box)

 Posting date for the CENVAT payment, if it is different from the run date
 The period to be covered by the report (for example, 1–15 January)
If, for any reason, you want to select an excise invoice individually, you can do
so. Any entry in the Period field will be disregarded.
To display a list of all the excise invoices whose excise duty you have not yet
remitted, choose Display pend. invoices.
To display a list of only the excise invoices for a given period, enter the period in
the Period fields, select Select pending inv. for period, and choose Display pend.
invoices. You can also print the list of pending invoices.
To display the last date when tax was remitted, choose Display last util. date
(Display last utilization date).
Output
For each sort of excise duty, the system shows you:
 How much you have to remit (Amounts payable group box)

 How much credit you have at your disposal on the appropriate CENVAT
account (Available balances)
This figure is equal to the credits on the CENVAT account less the
minimum balance.
 How much credit you have on the CENVAT accounts (G/L account
balances)
You now have to specify which accounts can be used to utilize the duty amount.
In the Balance Utilization group box, the system proposes how much money
should be taken from which accounts. You can overwrite these fields if you want,
and choose to refresh the display.
For a list of excise invoices that are considered for the CENVAT payment, choose
Display excise invoices. You can print the list and use it as an annexure.
When you have finished, save your entries. The system then:
 Creates an accounting document that:
o Credits the CENVAT clearing account to remove the excise duty

owed
o Debits the accounts from which the excise duty is to be paid
 Updates the Part II register

CIN Materials Management - 4 (1) .7

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INDEX

Materials Management (MM)....................................................7

Excise Invoice (Incoming)......................................................8

Material Master (Excise Data).................................................10

Vendor Master (Country Version India Data)................................10

Condition-Based Excise Determination......................................11

Creating Condition Records for Excise Duty................................12

Formula-Based Excise Determination.......................................13

Material Master (Excise Data).................................................15

Pritul CIN-MM 4.7 Page 1 of 137

External Procurement (Domestic)............................................23

External Procurement (Imports)..............................................29

Capturing Excise Invoices for Bills of Entry .....................................32

Posting Excise Invoices ....................................................................34

Subcontracting Without Payment of Excise Duty.............................................35

Creating Subcontracting Challans ................................................41

Pritul CIN-MM 4.7 Page 2 of 137

Completing Subcontracting Challans ...............................................47

Incoming Excise Invoices.....................................................53

Capturing Excise Invoices Using Reference Documents...................58

Capturing Excise Invoices Without Reference Documents................62

Posting Excise Invoices......................................................66

Rejecting Excise Invoices....................................................69

Rejecting Excise Invoices with CENVAT on Hold...........................70

Rejection Accounting Document.......................................................................71

Pritul CIN-MM 4.7 Page 3 of 137

Goods Movements and Excise Documents Combined.....................76

One-Step and Two-Step Procedures................................................................77

Entering Goods Receipts and Excise Invoices Together...................79

Entering Goods Receipts with Reference to Excise Invoices..............80

Entering Goods Receipts Without Excise Invoices.........................82

Entering Goods Receipts for Nonexcisable Goods.........................83

Entering Goods Receipts and Subcontracting Challans Together ........84

Entering Goods Receipts and Excise Invoices Together at Depots .......87

Multiple Goods Receipts for a Single Excise Invoice.......................90

Pritul CIN-MM 4.7 Page 4 of 137

Transaction Codes for India ................................................127

Pritul CIN-MM 4.7 Page 5 of 137

Country versions do not constitute separate application components. Instead,

It comprises functions designed specifically for India, a localization

Pritul CIN-MM 4.7 Page 6 of 137

 Excise duty and the central value-added tax system (CENVAT)

Materials Management (MM)

Pritul CIN-MM 4.7 Page 7 of 137

Excise Invoice (Incoming)

Pritul CIN-MM 4.7 Page 8 of 137

Pritul CIN-MM 4.7 Page 9 of 137

Vendor Master (Country Version India Data)

Pritul CIN-MM 4.7 Page 10 of 137

Condition-Based Excise Determination

The standard system comes with two tax calculation procedures.

√ TAXINN is only supports condition-based excise determination,

Pritul CIN-MM 4.7 Page 11 of 137

Make the settings in Customizing for Logistics – General, by choosing Taxes on

Creating Condition Records for Excise Duty

The Key Combination dialog box appears.

Pritul CIN-MM 4.7 Page 12 of 137

6. Save the condition record.

Formula-Based Excise Determination

You maintain the following types of data:

 Plant master data

Pritul CIN-MM 4.7 Page 13 of 137

 Vendor master data