Interest Calculation: As per the Company Policy, interest is calculated @ 24% p.a. on the balance overdue. Company has taken working capital loans from their bankers for which they are paying interest @ 14% p.a.
Account balance interest or Interest on arrears can be calculated on customer as well as vendor accounts Balance interest calculates interest on balance amounts periodically where as Item interest calculates interest for the overdue or delayed days of payments.
Standard Interest Calculation Types available P: Item Interest
S: Balance Interest Z: Penal Interest Interest Indicators
CB: Balance Interest Indicator CI: Item Interest Indicator
T Code: OB46 Reference Interest rates
CSC1: Reference Interest @ 24%
CSC2: Reference Interest @ 14%
T Code: OBAC Time based terms
CB: Term – Debit Interest: Balance Interest calculation CB: Term – Credit Interest: Balance Interest calculation CI: Term – Debit Interest: Arrears Interest calculation CI: Term – Credit Interest: Arrears Interest calculation
T Code: OB81
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11. REMINDERS
11.1 Dunning Procedure
The dunning procedure determines how business partners can be dunned. It contains the number of dunning levels, dunning frequency, minimum amounts and dunning activities.
Dunning Level indicates how often an item or an account has been dunned and describes the steps to be maintained for a dunning procedure. Dunning levels control the dunning process.
Dunning Area is an organizational unit within a company code from which dunning is conducted. The dunning procedure is controlled and the dunning notices are sent separately per dunning area.
A dunning area can represent the following:
Business Area Sales Organization Distribution Channel Division
11.2 Dunning Notices
Weekly reminders are sent to customers with regard to overdue more than Rs.30000/-.
Fortnightly reminders are sent to customers with regard to overdue less than Rs.30000/-.
Yearly once Balance confirmation statement is sent to vendors Dunning charges will be charged.
Interest notice send to the customers on overdue Dunning procedure: CSCL
Dunning Interval in days: 7 Dunning levels: 4
Minimum amount for dunning: INR 30000 Dunning charges: INR 100 to 500
T Code: FBMP
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12. TAXATION
12.1 Taxes on Sales & Purchases
The following are the Taxes, which the company is paying on Sales and Purchases Sales: Output Tax: Excise duty payable,
Customs Duty payable, Cess payable,
SH Cess payable, VAT payable, CST payable,
Purchases: Input Tax: Excise duty paid, Customs Duty Paid,
Cess paid, VAT paid, CST paid.
Tax on sales and purchases are procedure-based taxation in FI component.
Condition Types:
Condition Types Description
CS01 Excise Duty Paid
CS02 Education Cess Paid
CS03 SH Education Cess Paid
CS04 VAT Paid
CS05 CST Paid
CS06 Customs Duty Paid
CL01 Excise Duty Payable
CL02 Education Cess Payable
CL03 SH Education Cess Payable
CL04 VAT Payable
CL05 CST Payable
CL06 Customs Duty Payable
Note: CS – Input Tax, CL – Output Tax T Code: OBQ1
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CL2 Education Cess Payable Output Tax 2
CL3 SH Education Cess Payable Output Tax 2
A calculation procedure is defined for each country INDIA, containing the specifications required to calculate and post tax on sales/purchases. Calculation procedure contains tax types, which are called condition types in the procedure.
The system defaults condition types when you define a tax code. The condition type (such as input or output tax) specifies the base amount on which the tax is calculated and the account key that is used to post the tax. The specifications necessary for calculating and posting tax have been defined for the condition type and account key.
Tax Procedure – CSCL Step Conditi
210 CL02 Education Cess Payable-Output Tax 200 200 CL2 220 CL03 SH E Cess Payable-Output Tax 200 200 CL3
230 CL04 VAT Payable-Output Tax 10 220 CL4
240 CL05 CST Payable – Output Tax 10 220 CL5
250 CL06 Customs Duty Payable – Output Tax 10 CL6
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T Code: OBBG Tax Codes
The tax code represents a tax category, which must be taken into consideration when making a tax return to the tax authorities. Tax codes are unique per country.
The tax rate calculation rules and further features are stored in a table for each tax code.
Tax Code Description Tax Type
I0 Input Tax Exempted V
I1 Customs Duty V
I2 Excise + Cess + VAT V
I3 Excise + Cess + CST V
I4 Customs + Excise + Cess V
O0 Output Tax Exempted A
O1 Customs Duty A
O2 Excise + Cess + VAT A
O3 Excise + Cess + CST A
O4 Customs + Excise + Cess A
Maintain tax codes T Code: FTXP
Rates of Tax
Tax Rate of Tax (Percentage)
Customs Duty 8
Excise Duty 16
Education Cess 2
SH Education Cess 1
VAT 12.5
CST 3
12.2 Withholding Tax
As per the Income Tax Act 1961, TDS is deducted on service related payments under the following categories.
Salaries, Dividends,
Interest payments, Contract payments, Rent,
Professional & Technical fees
Quarterly Returns are submitted to the Tax Department
At the Year End, TDS certificates are issued to the concerned parties from whom the TDS is made.
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When customer makes TDS, it is not accounted until receipt of certificate. Up to that time it is shown as outstanding against certificate.
In the year-end TDS certificates are obtained from the customers.
Withholding Tax types and Withholding Tax codes are maintained for each category of Withholding Tax.
Withholding tax types
01: TDS on Payment posting 02: Surcharge on TDS 03: Cess on TDS
04: Higher Education Cess on TDS 05: Cess on Surcharge
06: Higher Education Cess on Surcharge Withholding tax codes
Remittance challans are created in
T Code: J1INCHLN
Withholding Tax certificates are created in T Code: J1INCERT
12.ASSET ACCOUNTING
Asset Accounting is utilized for managing companies fixed assets, we can categorize assets and to the said values for depreciation for each fixed asset. Fixed Asset having a useful life and are utilized for business process. In the course of process some wear & tear will occur, for that reason we calculate depreciation. An Asset Management Team is sitting in every Manufacturing Unit and at the Corporate Office, which is responsible for
Asset Account Maintenance and Disclosure in the Financial Statements as per Accounting Standard 10 of ICAI
Acquisition of assets
Retirement of assets
Calculation of Depreciation on assets
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A chart of depreciation is used in order to manage various legal requirements for the depreciation and valuation of assets.
Chart of Depreciation code: CSCL
T Code: EC08 Depreciation areas: Book depreciation
Chart of depreciation CSCL is used for company code CSCL to country India
T Code: OAOB Tax codes to assigned to non-taxable transactions
Input Tax: I0 – exempted Output Tax: O0 – exempted
Assets are grouped under the following heads
Plant and Machinery, land and Buildings, Furniture and fixtures and Vehicles.
12.1 Asset Classes
Asset classes are used to structure fixed assets. Asset classes are applied to all Company Codes. Asset classes provide default values for all asset master records.
Asset classes consists of account determination, screen layouts and number ranges.
Account Determination
GL accounts for acquisition, retirement, profit or loss on sale of assets, accumulated depreciation; depreciation and special reserve are specified in account determination.
Account Determination number
Description
200000 Land & Buildings
201000 Plant & Machinery
202000 Vehicles
203000 Furniture & Fixtures
204000 Low Value Assets
205000 Asset Under Construction
CHART OF DEPRECIATION
COMPANY CODE CSCL
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Number interval for asset numbers in asset class.
Number
Class Description Account
Determination
203000 Furniture & Fixtures 203000 3000 04
204000 Low Value Assets 204000 3300 05
205000 Asset Under Const 205000 4000 06
12.2 Depreciation Keys
Depreciation method – The Company follows Written down value method for depreciation Rates of depreciation
Company is following the Depreciation rates prescribed by Schedule 14 of the Companies Act 1956.
For each rate of depreciation, a Depreciation Key is maintained.
T Code: AFAMA