Procurement of Imported Materials – Business Process Procedure

Procurement of Imported Materials

Purpose
This process Procurement of Imported Materials 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

The following scenario specific master data must be created for operation of this building block
and subsequent dependent building blocks.

• Material Master record

(Refer User Manual – Procurement of Stock Materials (Domestic)

• Vendor Master record

Ensure that GR based IV is not selected in Purchasing Data.
(Refer User Manual – Procurement of Stock Materials (Domestic)

• CIN Master Data

(Refer User Manual – Procurement of Stock Materials (Domestic)
Creating Contract

Use
Contracts and proposals safeguard both the freelancer AND the client. A proposal spells out the
details of what is to be done, deadlines, fees, covered expenses, payment dates, etc. Landing a
contract is the goal of a proposal - the contract is the legal agreement. Writers and editors will
often sign contracts that include all the details; proposals aren't used as often in the publishing
world as they are in other industries.

Remember - signed contracts are legally binding documents. By detailing all information, there
is no argument later about who said what when. But be sure you understand what you are
signing. If you aren't sure, get legal advice.

Prerequisites

In the case of Import, The Quantity contract will be created.

Procedure
1. Access the transaction choosing one of the following navigation options:
SAP R/3 menu Logistics  Materials Management  Purchasing 
Outline Agreement  ContractVendor/Supplying Plant
Known
Transaction code ME31k
 Enter Vendor
Code

• Enter Agreement Type

i.e ZQTY
• Agreement Date

• Enter Purchase
Organization i.e. 9999
• Purchase Group

Enter Validity End

Date

Enter Payment
Terms
 Define under & over
delivery tol.

Define Tax Code i.e

Z1

Net Price

Material Target
Code Quantity
Result

Contract is created.

Example
Document no. 4800000005 created
Creating Purchase Order
Use
A purchase order is a legal document used to record an individual purchase with the vendor. It
also provides the vendor with a reference document to link to goods receipt and invoice
verification processes. The purchase order is a commitment to a vendor for a given material, in a
specified quantity at a predetermined price and delivery date.

Prerequisites

Before starting the process, please ensure the following information:

• Commissioner of Customs, CHA, Surveyor etc are created as domestic vendor,.

• In master record of main imported vendor GR-based invoice verification tick should not
be there on Purchasing Data screen of vendor master. And Schema group, Vendor is filled with
schema group Import.
• These are basic master data changes with respect to this process only.

For all purchase order a release procedure is applied.

Procedure
2. Access the transaction choosing one of the following navigation options:
SAP R/3 menu Logistics  Materials Management  Purchasing 
Purchase Order  CreateVendor/Supplying Plant
Known
Transaction code ME21N

3. On the Create Purchase Order screen, make the following entries:

 Click on Document
Overview On

Select the
document type

Click on the
Selection Variant

Click theContracts to
create the PO as per
reference and then click
the adopt button
 Enter Purchase
Organization & Purchase
Group & Plant

Enter Net Price

Change the Click the condition button to

vendor if it is maintain conditions
different
Enter Invoice &
enter the tax code

Reference of Contract Number which is send by the vendor will be shown in the PO---
Communication----Your Reference Column.
2.4 Message Output
2.4.1 Use

A Purchase Order needs to be printed for transmitting to vendor.

2.4.2 Procedure

1. Access the transaction choosing one of the following navigation options:

SAP R/3 menu Logistics  Materials Management  Purchasing  Purchase
Order  Messages  Print/Transmit
Transaction code ME9F

2. On the Message Output screen, make the following entries

3. Choose to Execute.

4. On screen Message Output select the appropriate Document number and perform the following:
Choose Output Message and/or
Choose Display Message and/or
Choose Message Detail and/or
Choose Trial Printout.
CAPTURING BILL OF ENTRY
Use

In this process of Logistics Invoice Verification all the Incoming Invoices are verified
in terms of their content, prices and arithmetic. When the invoice is posted, the
invoice data is saved in the system. The system updates the data saved in the invoice
documents in Materials Management and Financial Accounting.

Procedure
1. Access the transaction choosing one of the following navigation options:
SAP R/3 menu Logistics  Materials Management  Logistics invoice
Verification  Document Entry  Enter Invoice
Transaction code MIRO

2. If you are opening for the first time this transaction, system will ask for Company Code,
please give 1000 to go inside the transaction.

3. On the Enter Incoming Invoice: Company Code 1000 screen, make the following entries:

Enter Invoice Date

Enter Tax Code

Choose Planned Delivery Costs

Enter Invoice
Party
 Enter PO
No.

Enter the Amounts of the Customs Duties Manually in the Amount Column with referring to PO.
Field name Description R/ O / C User action and values Comment
Transaction Invoice R Select Invoice from drop
down list
Header Data Header data of Invoice R Defaulted by system
Basic tab Basic information tab R Select basic information tab
to give initial information
Invoice Date Invoice Date R Enter the Vendor invoice
date
Reference Invoice reference O Enter the vendor invoice
reference
For Example
USERMANUAL
Posting date Posting Date R Enter the posting date of System will give
document current date as
default
Amount Invoice Amount R Enter invoice gross amount Amount
including taxes and duties mentioned is
39.80 only an example

Currency R Enter the currency in which

the bill is presented by
vendor, if not entered by
user system will default the
document currency from
purchase order
USD
Calculate tax Check box calculate O Check this tick box, system
tax will calculate tax amount
Tax code R Select the tax code from
drop down list
V0
Bus.place/se Business place or R Enter section code if Tax Leave blank for
ctn section code deduction for source is this process
active for this vendor
Text Text O Enter text if required for
reference
Payment tab Payment tab R Select payment details tab
BaselineDt Base line date for R Enter the base line date for Will be defaulted
payment payment if payment terms
entered in PO
Pmnt terms Payment terms O Payment terms of
document, if entered will be
 defaulted from purchase
order
Due on Payment due on O Will be calculated by Grayed out
system
Discount Cash discount O Enter if cash discount is
offered by vendor
Purchase order / R Select Purchase order / Defaulted for
Schedule Agreement Schedule Agreement in the user
reference document
category from drop down
list
PO Purchase order R Enter the first purchase
Reference number order number generated
above
Details Tab
Invoice Party Vendor Code R Enter the vendor code

4. Choose Enter to complete the document feeding part.

5. To check the document credit and debit is balanced on the top right corner of your screen a traffic
light is displayed. Beside that Balance of the document is displayed.

Ensure that the Balance is ZERO before posting the document and the traffic light is green or
yellow color.

6. If you want to see the accounting postings in simulation mode, Choose Simulation on middle of fourth
row of your screen.
7. Choose Display Currency which will lead to small pop-up window having the company code currency
and Document Currency, position the cursor on the INR to convert to Document Currency and press
the details button.

8. Choose Save / Post, for posting the document.

 Result
Logistics Invoice verification document is posted.

Example
Document no. 5105600168 created

Above MIRO Step will be followed for the capturing the Invoice of other parties for e.g
CHA Charges, Inspection Agency etc.
 Goods Receipt for Imported Purchase Order
Use

Goods are received from the Vendor as a result of a Purchase Order at the receiving plant. A
goods movement is entered into the system referencing this PO and a goods receipt material
document is posted. Appropriate general ledger accounts are also posted and stocks are
updated.

Procedure
1. Access the transaction choosing one of the following navigation options:
SAP R/3 menu Logistics  Materials Management  Inventory Management 
Goods Movement  Goods Receipt  For Purchase Order 
PO Number Known
Transaction code MIGO

2. On the Goods Receipt Purchase Order screen, make the following entries:

Field name Description R/ O / C User action and values Comment

Goods Goods Receipt R Select from drop down list
Receipt for action
Inbound Purchase Order R Enter the Purchase Order
Delivery No. Generated above
4540000010
Movement 101
Type
Plant Kandla 5001
Enter
 Enter Qty of
Material according
to Draft Survey

Enter QTY of
Material according
to Bill of Lading

Note: Material will be received at the Kandla Port

Stock Transfer Order from Port to Plant:

Procedure
Access the transaction choosing one of the following navigation options:
SAP R/3 menu Logistics  Materials Management  Purchasing 
Purchase Order  CreateVendor/Supplying Plant
Known
Transaction code ME21N

Enter
Document
Enter
Type ZSTM
Supplying
Plant

Enter Receiving
Enter
Plant & Storage
Quantity
Location

Enter
Conditions
e.g. Railway
Freight,
Insurance
etc and
change the
vendor if it is
different
Goods Issue from Port to Plant with Reference to STO:

Access the transaction choosing one of the following navigation options:

SAP R/3 menu Logistics  Materials Management  Inventory
Management  Goods Movement  Goods Receipt  For
Purchase Order  PO Number Known
Transaction code MIGO

Enter Stock
Transfer

Enter STO
No

MT is 351
GOODS RECEIVE AT PLANT

Access the transaction choosing one of the following navigation options:

SAP R/3 menu Logistics  Materials Management  Inventory
Management  Goods Movement  Goods Receipt  For
Purchase Order  PO Number Known
Transaction code MIGO

Goods Receipt
Document type &
enter STO no.

No Excise Capture during

MIGO & MT is 101

Enter RR
No.

Actual qty
received at
plant
Capturing of Excise in Plant

Transaction code: J1IH

For Raw Sugar Imported:

Click on
Additional
excise

Enter Bill of
Entry No.

• Enter Document Year

• Company Code i.e 1000
• Enter Plant
• Excise Group
 Click on this
to enter
details

Material
Number Enter
Quantity

Click on
save to post
the excise

Enter excise duties

For PP Bags:

Click on
Additional
excise

Enter Bill of
No.

• Enter Document Year

• Company Code i.e 1000
• Enter Plant
• Excise Group
 Click on this
to enter
details

Material
Number Enter
Quantity

Click on
save to post
the excise

Enter excise duties