MM - Excise - Domestic

Basics

Excise and Service tax are central government revenues.

The following duties are leviable under excise.
- Basic Excise Duty (BED)
- Education Cess (ECESS)
- Higher Education Cess (HECess)

Over the years many type of taxes have been introduced. The
above are applicable in the year 2007-2008.

Excise - MM - Domestic

Basics

At the time of purchase, a company is entitled to take credit of

the excise duties it has paid.
At the time of sales, the excise duties are charged to the
customer.
The net difference between the excise credit (at purchase) and
excise debit (at sales) is to be paid to the government.
It is required that separate accounts are maintained for each of
the levies, so that utilization can be shown to the authorities.
Excise may be applicable for certain products, while for some it
may not be so. These are determined by the government from time
to time.
The rates of duties, applicable is also determined by the
government from time to time.

Excise - MM - Domestic

Basics

The following registers are to be maintained for excise

determination.
RG23A part 1 quantity posting for raw material items.
RG23A part 2 value posting for raw material value
RG23C part 1 quantity posting for capital items
RG23C part 2 value posting for capital items
RG1 Register for finished goods
In SAP, the part 1 posting has to be completed first before, part
2 can be posted. Part 1 posting is done on the basis of the material
document created at the time of GR.

Excise - MM - Domestic

Basics

Once the purchase and sales documents are posted, then programs
are run to update the various excise registers.
The monthly utilization program is run, to determine the payout to
the government.
A separate account called PLA will be credited with amount for
making payouts. The payout is determined through the TR6 challan.

Excise - MM - Domestic

PO Creation & Tax Code Assignment

Create Purchase order (ME21N) and release (ME29N).

Assign the relevant tax code for excise and sales tax processing. It is
the tax code which determine, what taxes are applicable. Since this is a
manual selection, this has to be done perfectly, for excise details to
flow in the system.

Excise - MM - Domestic

PO Creation & Tax Code Assignment

Click the taxes button on the invoice tab to view the tax details.
The tax code W2 has BED 16% (CnTy JMO1), ECESS 2% (CnTy JEC1),
and HECess 1% (CnTy JA1S).
The taxes are calculated automatically by the system, which are used
at the time of GR and invoice posting.
Since, these are taken credit for, these cannot be inventorized, i.e., it
will not become part of the item cost.

Excise - MM - Domestic

Method 1 : Automatic posting of excise invoice at the

time of GR

Make all the quantity entries in MIGO.

Select OK and check. The excise tab will appear. Enter the excise invoice number
and date. The status is 01 Capture and Post Excise Invoice which indicates
automatic posting. Save the document to create the excise invoice.
Both the part 1 and part 2 entries are passed at the same time by the system.
This can be used when the GR person himself clears the excise document.

The excise values being posted are

shown here

Excise - MM - Domestic

Method 1 : Automatic posting of excise invoice at the

time of GR

Let us look at the accounting postings. Goto MIGO Display mode material
document number excise invoice tab.
From the detail screen (as in 1), double click accounting document, which will
show the accounting entry view (as in 2)

Excise - MM - Domestic

Method 1 : Automatic posting of excise invoice at the

time of GR

As the item is a raw material, the excise is posted to the RG23A accounts. If it
were a capital item, it would have been posted to the RG23C accounts.

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Method 2 : Part 1 at the time of GR, part 2 separately

In the excise invoice tab, choose Part 1. The amount details shown
immediately vanish. Post and Note the document number generated.
At this point of time only the quantity has been posted, which is the
part 1 part. The value posting is done through transaction J1iEX.
Part 2 posting is done with reference to the material document. Choose
Capture Excise Invoice, Material Document Number.

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Method 2 : Part 1 at the time of GR, part 2 separately

At this point of time only the quantity has been posted, which is the
part 1 part.
Run TXN J1iEX with selections as capture excise invoice and goods
receipt. Give the GR document number and enter.

In the following screen give the excise invoice number and document
date. Document date cannot be lesser than GR date.

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Method 2 : Part 1 at the time of GR, part 2 separately

The following details are shown in the respective tabs.

1.

Duty rates

2.

Duty values (editable if required)

3.

Part 1, details

3
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Method 2 : Part 1 at the time of GR, part 2 separately

Give the excise invoice number and date. Then click check to check if all the
details are posted. Then click simulate cenvat button (info in next slide).

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Method 2 : Part 1 at the time of GR, part 2 separately

Click the simulate button to check if the
all the accounts are generated in the
entry and also the amounts that are
posted. Click post invoice to post the
document. The following display will be
generated by the system.

On simulation

On posting

Choose display in J1iex

to view the posted
document.
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Method 3 : Only GR, Part 1 & part 2 separately

Follow the procedure to make the GR and come to the excise tab. In
the Excise tab choose No Excise Entry and post the document. Note
the document number generated.
Run Transaction J1i5 to first make the part 1 entry.
After, this through J1iEX, we have to capture the invoice and post,
which is the process followed in method 2.
Method 3, can be followed where, the inventory person be not bothered
with the excise details. His only requirement, is to inward the goods. All
the other activities are done by the excise person.

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Method 3 : Only GR, Part 1 & part 2 separately

Run transaction J1i5.

Give the details as shown. Give
the material document number
for quick processing.

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Method 3 : Only GR, Part 1 & part 2 separately

The items relevant are displayed as shown below. Select the items and click the simulate
button.
Simulate

Once simulated the icon shown green color. Select the item again and then click create.
Create button

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Method 3 : Only GR, Part 1 & part 2 separately

After creation the document will vanish from the screen and the
following will be displayed if all documents listed previously were
processed. This completes the part 1 posting.

Now, process TXN J1iex. Choose capture excise invoice and select
goods receipt. Give the material document number and press enter. The
system lists the items in the material document. The following are the
screen shot of the excise invoice.

Excise - MM - Domestic

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Method 3 : Only GR, Part 1 & part 2 separately

Save the document to post the part 2. The same procedure applies for capital goods.

Excise - MM - Domestic

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Method 3 : Only GR, Part 1 & part 2 separately

On saving the following information is displayed by the system.

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Cancellation / Reversal of excise documents

Return of material to vendor

Make the return through 122 movement.

Note the material document number.

Through TXN J1iS process the returns material document to post

to excise. This excise invoice can be sent to the vendor along with
the document.

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Cancellation / Reversal of excise documents

Return of material to vendor

Excise - MM - Domestic

Give IIM

23

Cancellation / Reversal of excise documents

Now run TXN J1is. Then click on create.

Excise - MM - Domestic

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Cancellation / Reversal of excise documents

Now run TXN J1is. Then click on create.

Enter Net Assessable value manually. This is equal

to the basic price of the item.

Next give the tax percentages manually and click

enter. System will ask for recalculation. Say yes to
calculate.

Post the document. This should appear in J2iun

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Cancellation / Reversal of excise documents

Now run TXN J1iv or in J1is screen click post Excise Invoice as in figure below, which will take
you to J1iv Txn screen.

Give the excise document internal number and the document year and
click on release to accounting.

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Cancellation / Reversal of excise documents

Give the posting date and pre-printed excise invoice number if any and click save. The excise
portion along with posting to various registers are displayed.

On Saving

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Viewing the financial documents

The document posted can be seen in Txn FB03. Proceed as shown below

Click document list and the screen

to the right is displayed. Enter the
details as shown. The document
type for excise related postings is
ED

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Viewing the financial documents

View of excise documents posted in FB03 Txn

J1iex capture excise

invoice separately
MIGO automatic posting
of excise invoice
J1iv returns posting
J1ih adjustment posting
J1in excise invoice
through sales processing

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