SAP-CIN

 SAP-CIN

 Central excise &Service Tax challans  CIN: General clarifications for RG1 goods  Configure Tax on Sales and Purchases

 Country India Version (CIN) Overview Training  Display Tax Information

 Excise Transaction types

 Procedures in Central Excise and Returns to be filed  Register RG 23A and 23C

 SAP CIN Registers

 Tax Calculation in TAXINN procedure  Tax Procedures – TAXINJ

 User exit for RG23A/C and RG1 registers during J1I5



CIN Accounting Entries

 by Jayanth on January 7, 2013



Accounting entry in procurement

 ~ For Domestic Procurement of Raw Material  During GR

 Material Stock Dr.  GR/IR clearing Cr.  During Excise Invoice Credit  Cenvat Account Dr.

 Cenvat Clearing Cr.  During Invoice Verification

 Cenvat Clearing Dr.  GR/IR Clearing Dr.

 Vendor Payable Cr.  For Domestic proceurement of Capital Goods  During GR

 Material Stock Dr.

 GR/IR clearing Cr.  During Excise Invoice Credit  Cenvat Account Dr. (50%)  Cenvat On-hold Dr. (50%)  Cenvat Clearing Cr.  During Invoice Verification

 Cenvat Clearing Dr.  GR/IR Clearing Dr.  Vendor Payable Cr  Subsequent of Capital Goods

 Cenvat Account Dr. (50%)

 Cenvat On-hold Cr. (50%)  For Import Procurement of Raw Material

 During Customs Duty Clearing invoice  Custom Clearing Dr.

 Custom Payable Cr.  During GR

 Material Stock Dr.

 GR/IR clearing Cr.  During Excise Invoice Credit  Cenvat Account Dr.  Custom Clearing  During Invoice Verification

 GR/IR Clearing Dr.

 Vendor Payable Cr.

 For Excise Duty Credit of Raw Material without PO

 Cenvat Clearing Cr.  For Excise Duty Reversal through Excise JV

 Cenvat Clearing Dr.  Cenvat Account Cr.

 Accounting entry when the goods are issued through MM and Excise invoice is Credited(J1IS &J1IV)

 During Excise Invoice Creation

 Cenvat Suspense Account Dr.

 Cenvat payable Cr.  For TR6C Challan

 PLA Account Dr.

 PLA on hold Account Cr.  During Fortnightly Utilization  Cenvat payable Dr.

 Cenvat Account Cr.  PLA Account Cr.

Note: Cenvat Suspense Account should be cleared apprpiately using FI JV’s.  Accounting Entry in subcontracting reversal/Recredit

 For Subcontracting Challan Reversal Cenvat Reversal Dr.

 Cenvat Account Cr.  For Subcontracting Challan Recredit  Cenvat Account Dr.

 Cenvat Reversal Cr.  Accounting Entry in SD

 For Factory Sale During Billing Document  Customer Account Dr.

 Sales Account Cr.  Cenvat Suspense Account Cr.  During Excise Invoice Creation

 Cenvat Suspense Account Dr.

 Cenvat payable Cr.  For TR6C Challan

 PLA Account Dr.

 PLA on hold Account Cr.  During Fortnightly Utilization  Cenvat payable Dr.

 Cenvat Account Cr.  PLA Account Cr.  For Stock Transfer through SD

 No Accounting entries for Performa Billing Document During Excise Invoice Creation

 Cenvat Suspense Account Dr.

 Cenvat payable Cr.  For TR6C Challan

 PLA Account Dr.

 PLA on hold Account Cr.  During Fortnightly Utilization  Cenvat payable Dr.

 Cenvat Account Cr.  PLA Account Cr.

Note: Cenvat Suspense Account should be cleared appropriately using FI JV’s.

CIN -SAP T CODES

by Jayanth on December 20, 2012

Transaction Action

J1I2 Prepare a sales tax register

J1I3 Create outgoing excise invoices in batches

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

J2I6 Print excise registers

SAP Country India Version (CIN) Overview

Training Presentation

by Jayanth on September 15, 2012

In this presentation, you will find well noted instructions related to India localization, which is knowns as CIN, in SAP. After reading this document, you will get fair knowledge about:

 India Legal Requirements Overview: CENVAT (Excise), VAT (Central Sales Tax), Service Tax, Cenvat Credit

Lets start Step by step

India Localization

◘ India Legal Requirements overview  CENVAT (Excise)

 VAT / LST / CST

 Service Tax

 Cenvat Credit

☼ Cenvat (Central Value Added Tax): What is Cenvat?

 Tax on manufacturing or production of goods in India

 Goods having 4M Characteristics are covered under this – Movable (No duty on Immovable Goods)

– Marketable (Bought and Sold)

– Manufactured (Come up out of a process) – Mentioned (Central Excise Tariff)

 Every legal entity that manufactures or produces excisable goods shall pay the duty leviable on such goods

 Materials are classified under various tariff headings (Chapter Ids).This will be subject to change in every financial budget.

 Goods consumed in-house also liable for payment of duty. What is the basis of charge?

 Tax Rates Provided by GOI and are subject to change after eachyear based on the budget

 Exemption to pay duty on intermediate products in thefollowing cases

– used for manufacturing capital goods

-used for manufacturing final goods which are eligible forCenvat credit

 Duty shall be paid when the goods are removed from the place of production or place of storage

 Excise duty not payable on goods manufactured forexports or deemed exports

 Goods manufactured in factory for use within the factoryfor repairs of machinery installed within the factory are exempt from excise.

Types of Excise Duty

◘ Basic Excise Duty (BED) ◘ Additional Excise Duty (AED) ◘ Special Excise Duty (SED) ◘ Education Cess on Excise

◘ Secondary and Higher education Cess

Duty Calculation

 Specific duty – It is calculated on the basis of certain unit, length, weight etc. Eg. cigarette

 Ad valorem duty – It is based on the value of the goods

 Duty based on tariff value – The Govt. may fix tariff value from time to time. The duty will be calculated as percentage of tariff value fixed by the Govt. and not on assessable value.

 Transaction value is the price actually paid or payable for the goods and includes any other amount that the buyer is liable to pay in connection with such sale

 Any additional consideration flowing directly or indirectly tothe seller from the buyer should be added to the transaction value.

 Cost of production is not relevant for the purpose of determining assessable value.

 Assessable value may be lower than the cost price of the goods.

 Goods should be assessed in the form in which they areremoved.

CENVAT PAYMENT :

☼ Duty to be paid by 5th _{of the following month.}

☼ Duty deposited in bank using TR 6 challan and credited to PLA. ☼ Duty is paid by debiting PLA.

Excise Registers:

Statutory Excise Reporting

• Excise Registers(RG23A & C Part I & Part II,RG1, PLA, RG23D) • Excise Monthly Returns

• Bond Registers • License Registers

• Running Bond Registers////////////////////////////////////////////////////////////

——————————————————————————————————————— ———————————————————————–

◘ India Legal Requirements overview  CENVAT (Excise)

 VAT / LST / CST

 Service Tax

 Cenvat Credit

☼ VAT / LST / CST

How is Sales tax treated in India ?  This is a tax on sale

 VAT / LST is charged on sales within the state

 Central Sales Tax (CST) is charged on inter-state sales

 Any sale would be charged to either VAT or CST but only to one of them

 Every person carrying on any business is required to charge VAT / CST, on all sales made by him, and pay it to the Government

 VAT / CST shall be charged at the rate in force as on the date of sale Tax Impact under VAT System

Rs

STAGES

I– Manufacturer II – Wholesaler III – Retailer

Selling price (excl. tax)

100.00 Cost price 100.00 Cost price 120.00

VAT @ 14% 14.00 Overheads & profit @ 20%20.00 Overheads & profit @ 20%

24.00 Sale price 114.00 Sale price(excl. tax) 120.00 Sale price(excl. tax) 144.00

Tax paid 14.00 VAT @ 14% 16.80 VAT @ 14% 20.16

Sale price(incl. Tax) 136.80 Sale price(incl. Tax) 164.16 Tax paid(16.80-14.00) 2.80 Tax paid(20-16.14) 6.16

CENVAT vs VAT

Cenvat VAT

Central – Value Added Tax State – Value Added Tax

Revenue to Central Government Revenue to State Government Tax on Manufactured Goods Tax on Sale of goods

Single point tax – paid at the first

point of goods movement Multi Point Tax – payable at each stage of value chain Credit can be availed Credit can be availed except in case of LST

General CENVAT rate @ 10% with

exceptions General VAT rate @ 5% or 14% with exceptions

Centrally administered –Cenvat Chain cannot be broken on interstate boundaries

State administered – Chain broken on interstate transactions

Cenvat credit can be availed on

Services Cenvat credit cannot be availed on Services

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◘ India Legal Requirements overview  CENVAT (Excise)

 VAT / LST / CST

 Service Tax

 Cenvat Credit

☼ Service Tax

 Tax on services rendered

 Applicable only on those services which have been notified by the Government

 Service Tax is payable @ 12 % plus education cess @0.24% & Higher and Secondary education cess @ 0.12%

 Exemptions to persons rendering taxable service below 10Lakhs INR

 Tax to be paid by 5th _{of the next month}

 Half Yearly return for form ST-3 : April to Sep – Oct 25th_{, Oct to Mar- Apr25th}

 Revision of Form ST-3: ST-3 form can be revised and submitted again within 90days from the date of filling original return

Service Tax Considerations

 Service tax is payable on value of services

 Value of service is the gross amount charged by the service provider for the taxable service provided

 Any discount/rebate given to customer before accepting the payment would be deducted from the gross amount

 In most of the cases person providing the taxable service is liable to pay tax

 Reimbursement of expenses incurred on behalf of customer is not taxable

 No tax on services which are exported or used for providing services which are being exported

Export of Service

 Should be at least partly performed outside India

 It is delivered outside India and used outside India

 Payment for such services is received in foreign exchange

 No tax on services which are exported Import of Service

 Should be provided from outside India to a person in India

 Service provider does not have a place of business in India

 Person receiving such service has a place of business in India

 Person receiving such services is liable to pay service tax

 Cenvat credit can be utilized for tax payment

 Tax paid can be used for availing credit CENVAT Credit on Input Services

 Service provider is entitled to take credit of service tax paid on input services

 Credit can be taken only when full payment has been made for the service

 Credit may be taken for service tax and also for education Cess , Secondary and Higher Education Cess paid

 In case the service provider is engaged in exporting services, he shall be granted refund of CENVAT on input services

 In many cases, various input services will be consumed in

theheadquarters/administrative offices of manufacturers and OSPs. In such cases, the invoices indicating the payment of service tax will be in the name of such headquarters/ administrative offices. Provision can be made for availing credit of such service tax, in the premises where manufacturing activity is undertaken or the premises where the output services are rendered.

Reporting

 Half yearly return in form ST-3 to be filed within 25 days from the end of the half year

 Return needs to be accompanied by TR -6 challan evidencing duty payment

Excise Transaction types

by Jayanth on June 21, 2013

Excise Transaction types:

So Many people asks what is the excise invoice document types in SAP there is no document types for Excise & we have on ly Excise Transaction Types as below.

57CM – 57F CHALLAN COMPLETION 57FC – 57F CHALLAN CAPTURE/CHANGE 57NR – 57F NON RECEIPT

ARE1 – EXPORT PROCESSING UNDER ARE1 ARE3 – DEEMED EXPORTS UNDER ARE3 CAGI – CAPITAL GOODS ISSUES

CAPE – CAPITAL GOODS

CEIV – CANCELLATION OF EXCISE INVOICE DIEX- DIFFERENTIAL EXCISE THROUGH JV DLFC – GOODS REMOVAL THROUGH SALES EWPO – EXCISE INVOICE WITHOUT PO

GRPO – EXCISE INVOICE FOR GOODS RECEIPT AGAINST PO MRDY – REVERSAL WITHOUT REFERENCE

MRRD – REVERSAL INCASE OF COMSUMPTION OTHER THAN PRODUCTI MRWO – CENVAT REVERSALS FOR WRITE OFF

OTHR – INVOICE FOR OTHER MOVEMENTS TR6C – PLA ACCOUNT ADJUSTMENT THROUGH UTLZ – MONTH PAYMENTS

SUBTRANSACTION TYPES:

Normally for a plant which is having excise registration we will maintain one set of registers and GL accounts right ?

There are some situations where we hve to maintain more than one set of registers and respective transactions has to hit different GL accounts. In this case we will assign GL accounts with combination of Excise transaction and sub transaction type. Based on this configuration system will pick the respective GL accounts.

MAINTAIN SUBTRANSACTION TYPES:

IMG > LOGISTIC GENERAL > TAX ON GOODS MOVEMENT > INDIA > BASIC SETTINGS > MAINTAIN SUBTRANSACTION TYPES

So by default, the system records excise duties on the accounts that we have specified in the IMG activityspecify excise accounts per excise transaction.If we want to be able to record some excise duties on other accounts:Create a

subtransaction type in this IMG activity.In the IMG activity specify Excise accounts per Excise Transaction, create a new entry with this subtransaction type and enter the accounts that we want to post to.

tep by Step Reference Guide to SAP (CIN) FI

Excise Duty Procedures

by Jayanth on January 21, 2013

Excise duty in SAP is a special function designed for India according to local requirements under Country India Version (CIN) template. In this document you will read various processes related to Excise of following procedures with screenshots:

TR6 Challan Creation J1IH CENVAT Utilization J2IUN

Registers Updation (RG1, RG23) J1I5 Registers Extraction J2I5

CENVAT Register J2I9 ER1 Report J2IER1

Tax Procedures – TAXINJ vs TAXINN

What is the difference between maintaining tax codes in TAXINJ and TAXINN

Both procedure TAXINJ and TAXINN has thin line difference where as TAXINN procedure is condition based & TAXINJ is fomula based.If you drag down details of TAXINJ is fomula based,where you can find Routine( selection with logic in line of condition type) are play vital role in tax calculation.

If you selected TAXINN procedure , you can maintained tax rate with respective condition types in FTXP during creation of tax code.But you should maintain condition record in FV11 t.code for condition types JMX1 & JMX2 are as 100%. Also you can maintain tax rate for condition

types Basic Excise Duty,Edu cess , H. Edu cess,VAT/CST in FV11 t.code in stead of maintaining tax rate in FTXP.

1. TAXINJ is a tax calculation procedure for country version India and it supports formula-based excise determination. You need to configure this tax calculation procedure Excise Conditions

⇒ JMOD IN: A/R BED ⇒ JNED IN: A/R NCCD ⇒ JAED IN: A/R AED ⇒ JSED IN: A/R SED ⇒ JCES IN: A/R Cess

⇒ JECS A/R Educational CESS LST/CST/VAT Conditions ⇒ JIN1 IN: A/R CST ⇒ JIN2 IN: AR LST

⇒ JIN4 IN: A/R CST Surcharge ⇒ JIN5 IN: AR LST Surcharge ⇒ JIN6 A/R VAT Payable

⇒ JIN7 A/R CST Payable VAT Service Tax Conditions

⇒ JSE4 Service Tax

⇒ JES4 ECS on Service Tax

2. Set up the following Account Key

IMG ⇒Financial Accounting ⇒ Financial Accounting Global Settings ⇒ Tax on Sales/Purchases ⇒ Basic Settings ⇒ Check and Change Settings for Tax Processing.

⇒ VS6 Input Tax

3. Define the Tax Procedure according to the settings in the figures below.

You can do this in the IMG ⇒ Financial Accounting ⇒ Financial Accounting Global Settings ⇒ Tax on Sales/Purchases ⇒ Basic Settings ⇒ Check Calculation Procedure ⇒ Define

Procedures. Tcode:OBBG

4. Assign Tax Procedure to the country.

You can do this in the IMG ⇒ Financial Accounting ⇒ Financial Accounting Global Settings ⇒ Tax on Sales/Purchases ⇒ Basic Settings ⇒ Assign Country to Calculation

Procedure. Tcode:OBYZ

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 u2013 General, by choosing Taxes on Goods Movements ⇒ India ⇒ Basic Settings ⇒ Excise Duties Using Condition Technique and u2026 ⇒

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.

TAXINN Vs TAXINJ:

Definition: condition-based excise determination

A method that the system uses of determining excise duty in India.

This method requires you to create condition records for each combination of vendor or customer and material (and possibly other conditions).When you create a purchasing document, the system calls the tax procedure assigned to India. The tax procedure finds all of the condition records that you have created for that combination of vendor and material.

When you create a sales document, the excise duties and sales taxes are determined by the pricing procedure (not the tax procedure).

Definition: formula-based excise determination

This method was used in the Country Version India Add-On and requires you to maintain additional data in the Excise Rate Maintenance transaction, J1ID.

When you create a purchasing document, the system calls the tax procedure assigned to India. Each of the excise duties in the tax procedure has its own condition types, and each condition type is assigned to a formula. This formula instructs the system to calculate the excise duty using the data that you have maintained in the Excise Rate Maintenance transaction.

When you create a sales document, the system determines the excise duties and sales taxes using the pricing procedure (not the tax procedure).

Pricing Procedures:

The primary job of a pricing procedure is to define a group of condition types in a particular sequence. The pricing procedure also determines:

 Which sub-totals appear during pricing

 To what extent pricing can be processed manually

 Which method the system uses to calculate percentage discounts and surcharges

 Which requirements for a particular condition type must be fulfilled before the system takes the condition into account

Example of a Pricing Procedure:

If a sales department processes sales orders for a variety of foreign customers, the department can group the customers by country or region. A pricing procedure can then be defined for each group of customers. Each procedure can include condition types that determine, for example, country-specific taxes. In sales order processing, you can specify pricing procedures for specific customers and for sales document types. The system automatically determines which procedure to use.

Choose Basic Functions Pricing Pricing control Define and assign pricing procedures.

Assign Pricing Procedure to Sales Area

Pricing procedure follows below assignment.

Pricing procedure ⇒ condition types(1:N) ⇒ access sequence (1:N) ⇒ accesses(1:N) ⇒ condition tables(1:1) ⇒ condition fields.

During creation you can follow bottom-up sequence.

1. Create condition table with condition fields. CUSXXXXX

2. Create access sequence and maintain accesses assigned with condition table. ZAS ->CUSXXXXX

3. Create condition type and assign access sequence. ZCT->ZAS 4. Create pricing procedure and assign condition types. ZPP->ZCT Determination part.

In order to determine pricing procedure 5 parameters needed.

Sales org + distribution channel + division + customer pricing procedure + document pricing procedure ,SO+DC+DIV+CP+DP = ZPP

and we assign pricing procedure against above 5 parameters in the configuration.

based on condition maintenance we restrict the application where you gonna maintain the condition record.

lets say you restricted it to product and successfully you maintained a condition record for testing.

now I am using this product in a transaction document(example ZAG). you called the transaction type(ZAG) and entered the customer ABC and entered some product XYZ with quantity. now the minute you enter the product and hit on enter.

System searches for relevant pricing procedure to determine. by formulating all 5 parameters from the sources based on org model it brings respective sales area data(SO+DC+DIV) and based on ABC’s customer pricing procedure(you can find it in sales area data a/block under billing area.

based on transaction type it will bring the value document pricing procedure ( ZAG’s transaction category header data).

after forumalting all 5 parameters it determines corresponding pricing procedure from the configuration.

again based on the maintained condition record it will apply the value on to the screen.

based on number of different condition types(diff calculation types) it will show different price element in the output. and all these calculation will be done by IPC.

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