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COUNTRY INDIA VERSION (CIN) - MATERIAL MANAGEMENT

Contents
1.1 EXCISE REGISTRATION ..................................................................................................... 3
1.2 EXCISE GROUP .................................................................................................................... 3
1.3 SERIES GROUP .................................................................................................................... 3
2 ESSENTIAL MASTER DATA FOR EXCISE.............................................................................. 4
2.1 Chapter – Id ........................................................................................................................... 4
2.2 Material Chapter ID combination ...................................................................................... 4
2.3 Material Assessable value .................................................................................................. 5
2.4 CENVAT Determination....................................................................................................... 5
2.5 Vendor Excise details.......................................................................................................... 5
3 TAX CONDITION RECORDS ...................................................................................................... 6
3.1 Cenvatable Excise Duties Conditions (%ge) .................................................................. 6
3.2 Cenvatable Excise Duties Conditions (Qty) .................................................................... 6
3.3 Non- Cenvatable Excise Duties Conditions(%ge).......................................................... 7
3.4 Non- Cenvatable Excise Duties Conditions(Qty) ........................................................... 7
3.5 VAT Conditions .................................................................................................................... 7
3.6 CST Conditions ................................................................................................................... 7
3.7 Service Tax Conditions: Non-Inventoried ....................................................................... 8
3.8 Service Tax Conditions: Inventoried ................................................................................ 8
3.9 Tax Conditions to be Maintained ...................................................................................... 8
4.1 Create the Purchase Order ................................................................................................. 9
4.2.1 Option I: Capture Excise Invoice @ Goods Receipt ............................................... 9
4.2.2 Option II: Capture Excise Invoice separately ........................................................ 10
4.3 To check the status of all the excise invoices captured ............................................ 11
4.4 Post Excise Invoice ........................................................................................................... 11
5 Procedure for Claiming CENVAT for Capital Goods .......................................................... 13
6 Procedure for Claiming Duties for Imported Goods .......................................................... 14
9 Procedure for Inventorizing Custom Duties Purchased for a Depot .............................. 18
10.1 Return Delivery (MvT : 122) ............................................................................................ 19
10.2 Cancellation of Material Documents ............................................................................ 20

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10.3 Purchase Order Returns ................................................................................................. 22
10.4 CENVAT Adjustment Postings (J1IH – Excise JV) .................................................... 22
10.4.1 Making Adjustment Postings for Scrap ................................................................ 22
10.4.2 Making Adjustment Postings for Materials Not Used in Production .............. 22
10.4.3 Making Adjustment Postings for Additional Excise Paid to Vendors ............ 23
10.4.4 Making Adjustment Postings for Money Transferred to PLA........................... 24
10.4.5 Canceling Excise Invoices ...................................................................................... 24
10.4.6 Making Adjustment Postings for Other Transactions ....................................... 25
11 Subcontract Challan ............................................................................................................... 27
11.3 Subcontract Process: Return Delivery To Vendor .................................................... 30
11.4 Subcontract Process: Cancellation of Goods Receipt ............................................. 31
11.5 Subcontracting over consumption or under consumption ..................................... 32
11.6 Challan completed 180 days reverse and recredit the challan ............................... 33
12 Frequently Asked Question .................................................................................................. 33

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1 THE COUNTRY INDIA VERSION (CIN)
CIN facilitates handling of tax implications during the Purchase and Sales cycles. This
country version is designed for use by businesses with operations in India as well as the
generic SAP System functions. It comprises functions designed for laws and business
practices particular to India, and a country template to help customize the system
according to local requirements. Most of the country-specific functions for India relate to
Financials and Logistics. The main areas are as follows:

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


• Withholding tax (also known as tax deducted at source)
• Sales tax
• Maintenance and printing of statutory excise registers

1.1 EXCISE REGISTRATION


Each entity is assigned its own excise registration number. Every factory that
manufactures excisable goods is required to register separately.

1.2 EXCISE GROUP


This is a unit within an excise registration, in India, which keeps its own set of excise
records.

Whereas the excise registration reports to the excise authorities, the excise group is a
purely internal organizational unit. Each excise group keeps records of all transactions
that have to be reported to the excise authorities. When the time comes to present
these records to the authorities, the excise registration compiles the information from all
of its excise groups.

Excise Group determines Excise Register number range

All excise Reports (RT-12, PLA, RG23A Part I & II , RG23C Part I & II) will be generated
based on this Excise Group.

1.3 SERIES GROUP

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Series Group determines number range for outgoing excise invoice / challan (e.g. 57AC
challan etc.)

2 ESSENTIAL MASTER DATA FOR EXCISE


Transaction Code: J1ID

- Excise Master.

- Material Chapter Id Combination.

- Material Assessable Value.

- CENVAT Determination

- Vendor Excise Details.

2.1 Chapter – Id
Select Chapter Id Go to New Entries and Enter Chapter Id and Description.

2.2 Material Chapter ID combination


Select material chapter ID combination box and then press icon.

Select Material & Chapter Id

Enter material, plant and chapter ID combination in the respective tabs.

Go to New Entries and Enter the details

If the material can be sent outside for subcontracting purpose then put a tick in the
check box

In the material type tab select appropriate material type.

If it is a input material then select the tab Raw material

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If it is capital item then select Assets.

If it is a in-house produced material then select RG1.

Select GR --X ref to specify whether credit is allowed only for single goods receipt or
multiple goods receipt with single credit or multiple goods receipt with multiple credits.

In the declared column enter X if the material is declared to excise

Also enter the date of declaration.

2.3 Material Assessable value


In this section we enter the assessable value of material which is used for the purpose
to determine how much excise can be credited to CENVAT account when creating a
subcontracting challan and vendor returns.

Enter the combination plant, material number, valid from, currency, Assessable value.

Select Material Assessable Value


Go to New Entries and Enter the details

2.4 CENVAT Determination


In this section enter the input and output relationship of the material with combination of
plant, default indicator for Modvat.

Companies are required to file with the Excise authorities, a list containing the excisable
finished products manufactured and the excisable input materials required for such
production, to avail Modvat.

It is possible that an input material may be used in the production of more than one
finished product. However, if such a material is mainly used for the manufacture of a
particular finished product then the input material is identified to be the default material.
The default indicator is marked for such material.

Select Cenvat Determination


Go to New Entries and Enter the details

2.5 Vendor Excise details

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In this section the vendor excise details are maintained.

The vendor number, his excise registration details, ECC no, Excise Range, Excise
Division, Excise Commissionerate, CST no, LST no, Permanent account number,
Excise indicator for vendor, SSI status (if he is a SSI vendor), Type of vendor and
CENVAT (This is applicable for SSI vendor only who has participated in the CENVAT
scheme).

Select Vendor Excise Details


Go to New Entries and Enter the details

NOTE : If the Vendor details are not maintained, then at the time of Vendor Excise
Invoice Capturing, the system will ask for the Vendor Excise Details, which needs
to be provided in the Miscellaneous Tab of Excise sub Icon.

3 TAX CONDITION RECORDS


Tax Conditions to be used:

3.1 Cenvatable Excise Duties Conditions (%ge)


Condition Type Description Setoff Condition Type Setoff Condition Desc
JMOP IN: BED setoff % JMX1 IN: A/P BED setoff
JECS IN ECS inventory % JEX1 IN: A/P ECS setoff
JSEC IN S&HECS invtry % JHX1 IN: A/P S&HEC setoff
JAOP IN: AED setoff % JAX1 IN: A/P AED setoff

3.2 Cenvatable Excise Duties Conditions (Qty)


Condition Type Description Setoff Condition Type Setoff Condition Desc
JMOQ IN: BED setoff Qty JMX1 IN: A/P BED setoff
JEOQ IN: ECS setoff Qty JEX1 IN: A/P ECS setoff
JSHO IN S&HECS setoff Qty JHX1 IN: A/P S&HEC setoff
JAOQ IN: AED setoff Qty JAX1 IN: A/P AED setoff

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3.3 Non- Cenvatable Excise Duties Conditions (%ge)
Condition Type Description Setoff Condition Type Setoff Condition Desc
JMIP IN: BED inventory % JMX2 N: A/P BED inventor
JECO IN A/P ECes setoff % JEX2 IN: A/P ECS inventry
JSEO IN A/P S&H setoff % JHX2 IN: A/P S&HEC invtry
JAIP IN AED inventory % JAX2 IN: A/P AED inventor

3.4 Non- Cenvatable Excise Duties Conditions (Qty)


Condition Setoff Condition Setoff Condition
Description
Type Type Desc
JMIQ IN: BED inventory Qt JMX2 N: A/P BED inventor
JECQ IN ECS inventory Qty JEX2 IN: A/P ECS inventry
IN S&HECS invent
JSHQ JHX2 IN: A/P S&HEC invtry
Qty
JAIQ IN AED inventory Qty JAX2 IN: A/P AED inventor

3.5 VAT Conditions


Deductable Non – Deductable
Description Description
Condition Type Condition Type
A/P VAT RM A/P VAT RM Non
JVRD JVRN
Deductible Deduc.
A/P VAT CG A/P VAT CG Non
JVCD JVCN
Deductible Deduc.

3.6 CST Conditions


Condition Type Description
JVCS A/P CST Non Deductible.

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3.7 Service Tax Conditions: Non-Inventoried
Condition Type Description
JSRT A/P SERVICE TAX
JEC3 A/P ECS for ST
JES3 A/P SECess for ST

3.8 Service Tax Conditions: Inventoried


Condition Type Description
JSRI A/P SERVICE TAX_INV
JEC4 A/P ECS for ST_INV
JES4 A/P SECS for ST_INV

3.9 Tax Conditions to be maintained


Transaction Code: FV11

Specify the Condition Type & select Key Combination


As per the Key combination ( Plant/Vendor / Material), maintain the Values & Save
For E.Duty, the key combination will be as shown below. Select one combination and
maintain values

For VAT, the key combination will be as shown below. Select one combination and
maintain values
For service Tax, the key combination will be only tax classification

4 Procedure for Claiming CENVAT for Raw Materials


Step Description Inputs T.Code Role
Maintain Excise Rate Material, chapter Id, Purchaser / Buyer /
1 J1ID
Maintenance details Assessable Value Excise Personnel
Plant / Material / Vendor
2 Maintain Tax Conditions FV11 Purchaser / Buyer
/ Tax Classification
Vendor / Material / Qty /
3 Create Purchase Order ME21N Purchaser / Buyer
Plant / Price / Tax Code
Goods Receipt (Capture PO No. / Qty / Excise Inv
4 MIGO Stores
Excise Invoice) # / Ex. Invoice Dt

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List of Excise Invoice,
5 where it is captured but not Excise Group J1I7 Excise Personnel
Posted
Change Excise Invoice ( if
6 Vendor Ex. Inv / Date J1IEX Excise Personnel
Required)
7 Post Excise Invoice Vendor Ex. Inv / Date J1IEX Excise Personnel
Excise Group / Start Dt /
8 Updating of Registers J2I5 Excise Personnel
End Dt
Excise Group / Start Dt /
9 Print of Registers ZJ2I6 Excise Personnel
End Dt

4.1 Create the Purchase Order


Purchase Order is created, with Tax code @ line item – Invoice Tab. By selecting the
Tax code, in the Purchase Order, the duty amount is calculated in the Tax Procedure,
as per the Tax Conditions maintained.

The main inputs to create Purchase Order would be Vendor / Material / Quantity / Plant
/ Requestor / Price / Tax code / Delivery Date.

4.2 Goods Receipt

4.2.1 Option I: Capture Excise Invoice @ Goods Receipt


The transaction code is MIGO for goods receipt. If the item is cenvatable and all the
excise master data are already updated, the excise tab will come automatically (after
making the item OK).

Enter the PO Number, Vendors Delivery Challan Number. Press Enter – at this point of
time system will copy all the relevant information from PO. Enter received Quantity in
the Quantity Tab – quantity in Unit of Entry Field. Enter receiving storage location in
Where Tab. If some text needs to be added regarding goods receipt for the line item,
then enter the text in the Text Field. Once these are entered, Check the line item as Ok,
and Enter, and a Excise Invoice tab will appear in the Header screen. The following
options are available in Excise Tab

(1) Only capture excise invoice : It will capture the excise details & post Part I only

(2) Capture & Post Excise Invoice: This will update Part1 and Part 2.

(2) Only refer excise invoice : It will not capture excise invoice, no part I posting

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(3) Only Part 1 : This will update the Part 1 only

(4) No Excise Entry : There will be no excise entry

Select “Only Capture Excise Invoice“on this tab and check the Excise group.

Check the excise details related to the line item received material in Excise Tab in Detail
Data Screen as shown below:

The Goods Receiver can change the following at the time of GR

(1) Chapter ID

(2) Excise invoice quantity

(3) Base Value / Excise Rates / Amount

(4) Description of the material as per Excise Invoice

Automatically system will recalculate the excise duty based on this excise Base value
and excise rate.

Once all the data is captured correctly, check Check button in tool bar.

Press Post button to save the Goods receipt, system will generate the Goods receipt
Document. System will automatically update the Part I register as soon as the GR is
made.

4.2.2 Option II: Capture Excise Invoice separately


Transaction code J1IEX_C

Capture the Vendor’s Excise Invoice

Select Capture Excise Invoice and Purchase Order in windows above the Header if the
Excise Invoice is being captured prior to Goods Receipt.

Select Capture Excise Invoice and Goods Receipt in windows above the Header if the
Excise Invoice is being captured after Goods Receipt.

Press Enter, following screen will appear

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The following can be changed at the time of Capturing

(1) Chapter ID

(2) Excise invoice quantity

(3) Base Value

(4) Excise Rates / Amount.

The Goods Receiver will make one GR for each excise invoice. The Supplier can later
on submit a separate Commercial invoice for all the supplies & excise Invoices. Invoice
verification will be based on Purchase Order against which several line items will appear
based on GR document number.

At the end of the day, the Goods receiver will generate a list of cases where items are
cenvatable & excise invoices are `Captured’. This report will show the internally
generated excise serial numbers. The goods receiver will send this report attaching all
the cenvat documents received during the day.

4.3 To check the status of all the excise invoices captured


Transaction code J1I7

Selection criteria can be mainly Excise Group.

select further the following

(1) No posting done

(2) Part I & Part II posted

(3) Part 1 posted, part II not posted.

4.4 Post Excise Invoice

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At the end of the day, the Excise Personnel will receive a list from Stores attaching all
the cenvat documents during the day. Then based on this list, he will enter transaction
code J1IEX / J1IEX_P Select `POST’ if no change is required.

`POST CENVAT’

System will post the cenvat amount in RG23 Part II based on material type (inputs /
Capital Goods).

However if excise details are changed go to the Change mode...

can change the following:

1. Chapter Id

2. Description of material

3. Invoice No.

4. Document date

5. Ship from (under miscellaneous tab)

6. Base price

7. Excise duty (both higher side as well as lower side, then that present)

System will show the RG23 Part 1 serial no., GR no. PO number. Can change the
excise vendor also.

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5 Procedure for Claiming CENVAT for Capital Goods

Step Description Inputs T.Code Role


Material, chapter Id,
Purchaser /
Maintain Excise Rate Assessable Value, declare
1 J1ID Buyer / Excise
Maintenance details material as Asset /
Personnel
Consumable
Maintain Tax Plant / Material / Vendor / Purchaser /
2 FV11
Conditions Tax Classification Buyer
Create Purchase Vendor / Material / Qty / Purchaser /
3 ME21N
Order Plant / Price / Tax Code Buyer
Goods Receipt
PO No. / Qty / Excise Inv # /
4 (Capture Excise MIGO Stores
Ex. Invoice Dt.
Invoice)
List of Excise Invoice,
Excise
5 where it is captured Excise Group J1I7
Personnel
but not Posted
Change Excise Excise
6 Vendor Ex. Inv / Date J1IEX
Invoice ( if Required) Personnel
Excise
7 Post Excise Invoice Vendor Ex. Inv / Date J1IEX
Personnel
Capital Goods
Company code / Excise Excise
8 Transfer of Credit ( J2I8
Grp. / Plant / Personnel
post 50% credit)
Excise Group / Start Dt. / Excise
9 Updating of Registers J2I5
End Dt. Personnel
Excise Group / Start Dt./ Excise
10 Print of Registers ZJ2I6RG23C
End Dt. Personnel

Businesses are allowed to set off excise duty on purchases of capital goods against
excise duty on outputs. However, unlike with raw materials, 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 (J1ID), have classified the capital goods as such.

Features: When post an excise invoice that contains capital goods, the system posts
half of the excise duty to CENVAT account and post the rest to a G/L account for
CENVAT on hold. In following years, 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).
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Steps: When working with excise invoices that include capital goods, note the
following:

• Capturing vendor excise invoices

When create an excise invoice with capital goods, have to set the material type to A
(assets), C (consumables), or T (tools).

• Posting excise invoices

When to post the excise invoice, the system posts only half of the excise duty to the
CENVAT account.

Transfer of CENVAT Credit on Capital Goods (Transaction code: J2I8)

* *Use this report to display a list of the vendor excise invoices where the vendor has
levied excise duty but have not posted it (in full) to CENVAT account. This is particularly
useful in the case of capital goods, in order to find out how much credit remains from
previous years.

Output

The system displays a list of excise invoices with excise duty outstanding. It shows :

• 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 want and choose Transfer credit. If 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.

can select all or select items and then press `Transfer Credit’

6 Procedure for Claiming Duties for Imported Goods


Step Description Inputs T.Code Role
1 Maintain Excise Rate Material, chapter Id, J1ID Purchaser /

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Maintenance details Assessable Value Buyer / Excise
Personnel
Vendor / Material /
Purchaser /
2 Create Purchase Order Qty / Plant / Price / ME21N
Buyer
Zero Tax Code(VI)
Custom duty
Conditions:
JCDB - IN Basic
Customs
JCV1 - IN CVD -
Foreign Vend.
Amend Purchase Order with JECV - IN ECS-
the Customs Duties CVD: For Vend Purchaser /
3 ME22N
conditions (for domestic J1CV- IN HECS- Buyer
custom vendor) CVD: For Vend.
JEDB- IN ECS on
Cust. Duty
JSDB - IN SH ECS
on BCD
JADC - IN Ad Duty
Cus:For V
PO / Vendor code :
Post Invoice for Custom
4 Planned Delivery MIRO Accounts
Vendor and Foreign Vendor.
Costs
PO No. / Qty /
Goods Receipt (Capture
5 Excise Inv # / Ex. MIGO Stores
Excise Invoice)
Invoice Dt.
List of Excise Invoice, where Excise
6 Excise Group J1I7
it is captured but not Posted Personnel
Change Excise Invoice ( if Vendor Ex. Inv / Excise
7 J1IEX
Required) Date Personnel
Vendor Ex. Inv / Excise
8 Post Excise Invoice J1IEX
Date Personnel
Excise Group / Start Excise
9 Updating of Registers J2I5
Dt. / End Dt. Personnel
Excise Group / Start ZJ2I6 / Excise
10 Print of Registers
Dt. / End Dt. ZJ2I6RG23C Personnel

7 Procedure for Claiming CENVAT for Raw Materials


without Material ID

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Step Description Inputs T.Code Role
Maintain Excise Rate Purchaser /
1 Maintenance details Chapter Id J1ID Buyer / Excise
the Chapter Id. Personnel
Maintain Tax Maintain tax conditions for Purchaser /
2 FV11
Conditions Plant/Material Group combination. Buyer
Create Purchase Vendor / Material / Qty / Plant / Purchaser /
3 ME21N
Order Price / Tax Code Buyer
PO No. / Qty / Excise Inv # / Ex.
Goods Receipt
Invoice Dt. Also in the line item of
4 (Capture Excise MIGO Stores
Excise Tab, specify the Chapter Id
Invoice)
& Matrl. Type.
List of Excise Invoice,
Excise
5 where it is captured Excise Group J1I7
Personnel
but not Posted
Change Excise Excise
6 Vendor Ex. Inv / Date J1IEX
Invoice ( if Required) Personnel
Excise
7 Post Excise Invoice Vendor Ex. Inv / Date J1IEX
Personnel
Excise
8 Updating of Registers Excise Group / Start Dt. / End Dt. J2I5
Personnel
Excise
9 Print of Registers Excise Group / Start Dt. / End Dt. ZJ2I6
Personnel

8 Claiming Custom Duties Purchased from Dealer (who


has imported the Matrl.)

Use : The materials are procured from a domestic vendor who imports the material.
This domestic Vendor passes on the CVD and SAD duties, which have to be captured
as BED and AED.

Step Description Inputs T.Code Role


Purchaser /
Maintain Excise Rate Material, chapter Id, Buyer /
1 J1ID
Maintenance details Assessable Value Excise
Personnel
Maintain tax conditions with
Purchaser /
BED / AED conditions as 0%,
Maintain Tax Buyer /
2 as this is going to be FV11
conditions Excise
replaced by CVD and SAD
Personnel
values from the pricing

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procedure.
Create Purchase Vendor / Material / Qty / Purchaser /
3 ME21N
Order Plant / Price / Tax Code Buyer
Maintain CVD and PO – Line Item Condition tab
SAD values in the – specifies CVD Amt for the Purchaser /
NOTE ME21N
pricing procedure – cond’n type “JEXC” and SAD Buyer
PO Condition Tab. for cond’n type “ZADC”.
Post Invoice for
PO / Vendor code : Planned
3 Custom Vendor and MIRO Accounts
Delivery Costs
Foreign Vendor.
Goods Receipt
PO No. / Qty / Excise Inv # /
4 (Capture Excise MIGO Stores
Ex. Invoice Dt.
Invoice)
List of Excise
Invoice, where it is Excise
5 Excise Group J1I7
captured but not Personnel
Posted
Change Excise Excise
6 Vendor Ex. Inv / Date J1IEX
Invoice ( if Required) Personnel
Excise
7 Post Excise Invoice Vendor Ex. Inv / Date J1IEX
Personnel
Updating of Excise Group / Start Dt./ End Excise
8 J1I5
Registers Dt. Personnel
Excise Group / Start Dt. / ZJ2I6 / Excise
9 Print of Registers
End Dt. ZJ2I6RG23C Personnel

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9 Procedure for Inventorying Custom Duties Purchased for
a Depot
Use: The materials are procured for a depot, where, the Custom Duties get inventoried,
captured in transaction J1IG and then the same duties are picked in sales invoice for
passing on to Customer.

Process:

Step Description Inputs T.Code Role


Purchaser /
Maintain Excise Rate Material, chapter Id,
1 J1ID Buyer / Excise
Maintenance details Assessable Value
Personnel
Purchaser /
Maintain Zero Tax
2 Maintain Zero Tax conditions FV11 Buyer / Excise
conditions
Personnel
Vendor / Material / Qty /
Purchaser /
3 Create Purchase Order Plant / Price / Zero Tax ME21N
Buyer
Code
The following Condition
types needs to be
selected for inventorying
the Custom Duties:
JCDB - IN Basic Customs
JCV3- IN CVD – Inventory
Maintain all the Custom Duties JECI- IN ECS-
in PO – Line item – condition CVD:Inventory Purchaser /
NOTE ME21N
tab For External Vendors and J1CI- IN HECS-CVD: Buyer
also Inter Company purchases Inventory
JEDB- IN ECS on
Custs.Duty
JSDB- IN SH ECS on
BCD
JADI- IN Ad Duty
Cus:Inven
Goods Receipt (Do not
4 PO No. / Qty MIGO Stores
capture Excise Invoice)
Material Doc # (GR),
Capture Excise Invoice for Excise
5 Excise Group, Excise Inv J1IG
Depot Personnel
# / Dt.

10 Procedure for CENVAT Reversals

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Cenvat reversals due to:

1. Return delivery.
2. Cancellation of Material Document.
3. Purchase Order Returns.
4. CENVAT Adjustments.

10.1 Return Delivery (mvt type: 122)


Step Description Inputs T.Code Role
Goods Receipt (Return
GR Material Doc No. / Qty /
1 Delivery / Material MIGO Stores
Reason for mvt. Typ.
Document)
Ref Doc Type: MATD / Rej Mat
Excise
2 Create Excise Invoice Doc No. / Series Grp. / Excise J1IS
Personnel
Grp
Excise
3 Print Excise Invoice Ex Inv # / Year J1IV
Personnel

On rejection of material (Return Delivery: using 122 movement type), the user will use
the transaction J1IS to generate an outgoing Excise Invoice which will reverse the
cenvat credit.

Steps involved:

(a) Enter MIGO

(b) Select Return Delivery & Material Document

(c) Enter the Original material document no. (GR No.)

(d) Enter reason for movement

(e) Check & Post. System will generate a document number.

For Excise Invoice creation ( to send back the material)

(a) Transaction Code: J1IS

(b) Reference Doc. Type MATD

(c) Document No. is the rejected GR No.

(d) Enter Document year, Series Group and Excise Group.

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(g) Sub transaction type will be blank. Then press

h) System will display cenvat amount, chapter ID, quantity etc. If everything is OK

(i) Please remember, if the RG23 part II is not posted for this GR, system will not fetch
automatically the Value and excise duty.

(j) Save. System will generate an Excise Invoice Number. Note down this number.

(k) Enter J1IV (Print excise invoice).

Note: for those material without Material ID, a dummy material ID needs to be created
and assigned during Excise Invoice Creation in J1IS. The Description of the Material
can then be changed to the original material description that is being sent out.

10.2 Cancellation of Material Documents


Purpose: Assume having 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 are no longer entitled to the
CENVAT credit.

In the SAP System, therefore, have to reverse CENVAT posting correspondingly.

Process Flow:

Step Description Inputs T.Code Role


Cancellation / Material GR Material Doc No. / Qty /
1 MIGO Stores
Document mvt type: 102
Excise
2 Post Excise Invoice Vendor Excise Invoice J1IEX
Personnel
Cancel Excise Invoice (if Excise
3 Vendor Excise Invoice J1IEX
required) Personnel

1. Reverse the goods receipt:

1. Go to Transaction Code - MIGO and select: Cancellation and Material Document


2. Enter the number of the goods receipt that is to be cancelled
3. Choose the line item and Flag the line items as OK
4. Save the reversal document
5. The system:

- Creates a reversal document to cancel the goods receipt.

20
- Creates additional entries in Part I of the appropriate excise register to reverse the
original entries.

- Changes the excise invoice document status to In process.

2. Reverse the CENVAT posting on the excise invoice:

1. 6. Go to Transaction Code - J1IEX.


2. Select : Post CENVAT and Vendor Excise Invoice
3. Enter the Vendors Excise Invoice Number.
4. Choose Simulate.
5. A dialog box appears, showing which postings the system will make to reverse
the CENVAT.
6. Choose Post CENVAT.

- The System :

- Creates an accounting document to reverse the CENVAT postings

- Creates a corresponding entry in Part II of the appropriate excise register

3. If plant does not allow multiple goods receipts per excise invoice, must also
cancel the excise invoice:

The system changes the excise invoice status to Canceled.

If, however, do allow multiple goods receipts per excise invoice, do not have to
cancel it.

can leave the excise invoice as it stands. Then, if another delivery of goods is received
for this excise invoice, enter the excise invoice number when goods receipt is posted .

1. Go to Transaction Code - J1IEX.


2. Select : CANCEL and Vendor Excise Invoice
3. Enter Vendor Excise Invoice.
4. Save the Excise Invoice.

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10.3 Purchase Order Returns
Process Flow :

Step Description Inputs T.Code Role


Doc Type: ZRTN / Vendor /
Create Purchase Order Purchaser /
1 Material / Qty / Plant / Price / ME21N
with Returns Indicator. Buyer
Tax Code
Create Outbound Delivery Purchase Order #, Select the
2 VL10B Stores
w.r.t Purchase Order proper variant.
Do PGI with proper Reason for
3 Post goods Issues VL02N Stores
MvT
Excise
4 Create Excise Invoice Goods Issue Mat Doc # J1IS
Personnel
Excise Invoice #, Output Type : Excise
5 Print Excise Invoice J1IV
JREC Personnel

10.4 CENVAT Adjustment Postings (J1IH – Excise JV)


Use: - use these functions to make an adjustment posting to any of CENVAT accounts.

10.4.1 Making Adjustment Postings for Scrap

Use: - follow this procedure if scrapped a material and want to reverse the excise duty
debited to CENVAT account.

10.4.2 Making Adjustment Postings for Materials Not Used in


Production

Use: - follow this procedure if have not used a material in the production process and
want to reverse the excise duty debited to CENVAT account.

Procedure: -

1. J1IH - Excise JV / Create / Matl write-off.

2. Enter data as required, including:

• Document number (This Document is of Movement Type – 551 i.e. GI for Scrap)

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• CENVAT account selection group box. Specify which account is affected by the
adjustment posting is for. If the posting does not have to be remitted immediately, select
Fortnightly payment.

3. Click on “Enter” button. The system displays the information from the material
document.

4. Adjust the posting date as necessary.

5. Adjust the excise duty for each line item either: • Manually or • By assigning the line
item to an excise invoice

6. Specify which G/L accounts are to be posted to. Here can change Debit A/c as per
requirement.

7. Save the adjustment posting. System will post Excise JV Document, Accounting
Document Part2 Serial No.

10.4.3 Making Adjustment Postings for Additional Excise Paid to


Vendors

Use: - follow this procedure if a vendor has increased the amount of excise duty that it
originally charged want to debit the difference to CENVAT account.

Procedure: -

1. J1IH / Excise JV / Additional excise.

2. Enter data as required. In the Document number field, enter then number of the
document sent by the vendor. Click on “Enter” button.

3. Adjust the posting date as necessary and Enter Vendor Name.

4. Enter the amount of excise duty in either of the following ways:

• To enter line items for different materials and the excise duty accordingly, choose
“Details” button and enter the line items in the table. Here Enter Material code, quantity
as per excise invoice, reference document (i.e. GRN Document), batch no., BED and
Ed Cess Amount to be posted.

• To enter the excise duty only, choose “Header” button and enter the excise duty in the
totals fields at the foot of the screen.

5. If the duty qualifies as countervailing duty (CVD): a. Select CVD applicable. b. Enter
the CVD amount in the BED amount field.

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6. Specify which G/L accounts are to be posted to and Save the adjustment posting.
System will post Excise JV Document; Accounting Document with Part 2 Serial No.

10.4.4 Making Adjustment Postings for Money Transferred to PLA

Use: - follow this procedure to make an adjustment posting when transfer money to
personal ledger account (PLA).

Prerequisites: - have already transferred the money to PLA at the bank, using a TR6
challan, and have posted the corresponding accounting document.

Procedure: -

1. J1IH / Excise JV / TR6 challan.

2. Enter data as required, including the document number.Can enter either the challan
number OR the number of the accounting document (This document is to be first
created through T. Code – FB50. In this Document Debit PLA on Hold A/c and Credit
Bank A/c with the Amount to be transferred in PLA CENVAT Accounts)

3. Click on “Enter” button. If entered the accounting document number, the system
displays the information from it.

4. Enter the amounts against the accounts that is required.

5. Save the adjustment posting.

6. System will post Excise JV Document; Accounting Document with Part2 Serial No.

10.4.5 Canceling Excise Invoices

Use: - follow this procedure in order to cancel an outgoing excise invoice. It reverses
any excise duty accounted for.

Procedure: -

1. J1IH / Excise JV / Cancel exc. inv.

2. Enter the number, year, and series group of the excise invoice that is to be cancelled.
A dialog box appears.Choose Yes.

3. Before posting the document check the Accounting document going to be generated.
Here click on “Determine G/L Accounts” button.

4. Save the adjustment posting. System will post Excise JV Document; Accounting
Document with Part2 Serial No.

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10.4.6 Making Adjustment Postings for Other Transactions

Use: - follow this procedure if want to make an adjustment posting that does not fall into
any of the other categories of adjustment offered by this function. External document
can be used as reference document.

Procedure: -

1. J1IH / Excise JV / Other adj.

2. Enter data as required, including: • Document number Enter the number of the
external document that is to reffered to. • CENVAT account selection group box Specify
which account is affected by the adjustment posting is for. If the posting does not have
to be remitted immediately, select Fortnightly payment.

3. Click on “Enter” button. The system displays the information from the material
document.

4. Adjust the posting date as necessary and enter Vendor code as per requirement.

5. Enter the amount of excise duty in either of the following ways: • To enter line items
for different materials and the excise duty accordingly, choose “Details” button and enter
the line items in the table. Here fill details like Material Code, Quantity as per Excise
Invoice, Batch No, Reference (i.e. GRN Document), BED and Ed Cess Amount
manually. If want system to propose the BED and Ed Cess Amount, Click on “Get
Excise Invoice” button and select the proper Excise Invoice from which the
proportionate amount is to be copied. Select the “Excise Invoice” and click on
“Continue” button. It will copy BED and Ed Cess and SECess amount as per the
quantity mentioned here. It will be proposed in proportion of selected Excise Invoice
quantity and value. • To enter the excise duty only, choose “Header” button and enter
the excise duty in the totals fields at the foot of the screen.

6. Specify which G/L accounts are to be posted to.

7. Save the adjustment posting. System will post Excise JV Document; Accounting
Document with Part2 Serial No.

TIPS to simplify Excise JV transactions: - (J1IH)

1. Assigning Excise Invoices to Line Items

Use: -make an adjustment posting; follow this procedure if want to specify the original
excise invoice associated with a line item.

Procedure: -

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1. Select the line item and choose Get excise invoice. The system displays a list of all
the excise invoices that have to be posted for this vendor for this particular material.

2. Select the excise invoice and click on “Enter” button. The system: • Enters the excise
invoice document number in the Ref. doc. field (Reference document). • Calculates how
much of the excise duty from the excise invoice should be apportioned to the line item
and enters it in the excise duty fields. Then overwrite these amounts, should also
overwrite the reference document number with an explanatory text, since there is no
point in maintaining the link to the reference document anymore.

2. Specifying Which CENVAT Accounts to Adjust

Use: - When make an adjustment posting, have to specify which CENVAT accounts are
to be adjusted.

Procedure: -

1. Choose Determine G/L accounts. A dialog box appears that shows how much will be
posted to which G/L accounts. The accounts that are displayed depend on the excise
group and the CENVAT account that is entered on the selection screen.

2. Add another account, need to, and adjust the other postings so that the credits and
debits match.

3. Enter a business area and cost center, if necessary.

4. To close the dialog box, click on “Enter” button. 3. Displaying CENVAT Account
Balances To display the balances of CENVAT accounts, choose Balances. The system
displays the balances only of the CENVAT accounts that are affected by G/L postings.

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11 Subcontract Challan

11.1 Normal Subcontract Process


Step Description Inputs T.Code Role
Document type(NB) / Pur.org ./
Pur.group / Co.code / Material /
Create Subcontract Purchase Qty. / Price / Plant / Requister / Purchaser
1 ME21N
Order Delivery date / Vendor no ./ / Buyer
Tax code / Item catgory(L) /
Components
Create transfer Posting of
materials sent out for sub- Select the material, and do PGI
2 ME2O Stores
contracting with reference to or create Delivery.
Subcontractor PO.
Materail doc / Fiscal year / Excise
3 Create Subcontracting challan J1IF01
Excise group / Series group Personnel
Go to transaction of Challan Excise
4 Print Subcontract Challan J1IF11
Change – Take print and save. Personnel
PO NO./Delivery Note/Posting
date/Excise Invioce Tab -Refer
5 Post goods receipt (MIGO) MIGO Stores
subcontracting challan /storage
location
Reconcile Subcontracting Material Excise
6 J1IFQ
challan Document/Challan/Fiscal year Personnel
Excise
7 List of subcontracting challans List click on Anexure IV J1IFR
Personnel
Complete/Reverse/Recredit Excise
8 Complete the challan J1IF13
Subcontracting challan Personnel
Excise
9 Display Subcontracting challan Display Subcontracting challan J1IF12
Personnel

Process:

1 Create Subcontract Purchase Order :

Header
Material
Sub-
Component

2 Transfer Posting of Sub-components to Vendor: (ME2O)


Select the Line Item and Create Delivery or Post Goods Issue

27
3 Create Subcontract Challan w.r.t the Transferred Material Document:
(J1IF01)

4 Print of Subcontract Challan (J1IF11)

5 Goods Receipt: (MIGO)


Select – Refer Subcontracting Challan, and in the sub-window, specify the correct
Challan No‘
If the Challan No‘ specified is that of different Vendor, then the following below message
is shown.

If the Challan No‘ specified is that of different PO, then the following below message is
shown.

6 Post Goods Receipt.

7 Next Goods Receipt: (MIGO)

If the Previous Material Document for the Challan is not reconcilled, system will issue a
Warning Message.

If the Previous GR document is not reconcilled with the challan, the system will trigger a
message as shown below:

8 Challan Reconcillation: (J1IFQ)

If the Challan No‘ specified during GR, is wrong, then delete the challan Assignment,
select the function here.
Select this icon, to bring in the Qty from Material Doc, to Assigned Qty in Challan.

Save the Challan.

9 Completion of Challan: (J1IF13)

Save the Challan.


10 List of Subcontracting Challans.

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11.2 Subcontract Process where Scrap is received from
Vendor
Step Description Inputs T.Code Role
Document type(NB) /
Pur.org ./ Pur.group /
Co.code / Material / Qty. /
Create Subcontract Purchase Purchaser
1 Price / Plant / Requister / ME21N
Order / Buyer
Delivery date / Vendor no ./
Tax code / Item catgory(L)
/ Components
Create transfer Posting of
materials sent out for sub- Select the material, and do
2 ME2O Stores
contracting with reference to PGI or create Delivery.
Subcontractor PO.
Materail doc / Fiscal year / Excise
3 Create Subcontracting challan J1IF01
Excise group / Series group Personnel
Go to transaction of
Excise
4 Print Subcontract Challan Challan Change – Take J1IF11
Personnel
print and save.
PO NO./Delivery
Note/Posting date/Excise
5 Post goods receipt (MIGO) Invioce Tab -Refer MIGO Stores
subcontracting challan
/storage location
Receive scrap material from Receipt of Scrap Material MB1B /
6 Stores
Vendor. by MvT – 542. MIGO
Material Document (MvT –
Excise
7 Reconcile Subcontracting challan 101/542) / Challan / Fiscal J1IFQ
Personnel
year
Excise
8 List of subcontracting challans List click on Anexure IV J1IFR
Personnel
Complete/Reverse/Recredit Excise
9 Complete the challan J1IF13
Subcontracting challan Personnel
Display Subcontracting Excise
10 Display Subcontracting challan J1IF12
challan Personnel
Whatever the material
received from Vendor as
MB1A /
11 Scrapping the Material scrap, is to be scrapped Stores
MIGO
with MvT – 551 to a cost
center.

29
11.3 Subcontract Process: Return Delivery To Vendor
Step Description Inputs T.Code Role
Document type(NB) /
Pur.org ./ Pur.group /
Co.code / Material / Qty. /
Purchaser
1 Create Subcontract Purchase Order Price / Plant / Requister / ME21N
/ Buyer
Delivery date / Vendor no
./ Tax code / Item
catgory(L) / Components
Select the material, and
Transfer Posting of sub-component
2 do PGI or create ME2O Stores
material to Vendor.
Delivery.
Materail doc / Fiscal year
Excise
3 Create Subcontracting challan / Excise group / Series J1IF01
Personnel
group
Go to transaction of
Excise
4 Print Subcontract Challan Challan Change – Take J1IF11
Personnel
print and save.
PO NO./Delivery
Note/Posting date/Excise
5 Post goods receipt (MIGO) Invioce Tab -Refer MIGO Stores
subcontracting challan
/storage location
Do the reconcilation of material Material document Excise
6 J1IFQ
document /challan number/year Personnel
If the recived material fails in quality 122 and 544 movement
7 & need to send back to Vendor - type /plant / material MIGO Stores
return delivery docuemt number /
Create new subcontracting challans
for this outgoing materials, as this Material documents
Excise
8 material had come against old number / excise group/ J1IF01
Personnel
challan, and that challan is already series group
reconcilled.
Complete/Reverse/Recredit First Excise
9 Complete the challan J1IF13
Subcontracting challan Personnel
101 and 543 movement
Recive back the return delivery
10 type/ challan number/ MIGO Stores
materialsent by vendor
year
Again Reconcile & complete the Material document/ Excise
11 J1IFQ
return delivery challan. challan no./fiscal year personnel

30
11.4 Subcontract Process: Cancellation of Goods Receipt
Step Description Inputs T.Code Role
PO with sub Purchaser
1 Create Subcontract Purchase Order ME21N
components. / Buyer
Create transfer Posting of materials Select the material,
2 sent out for sub-contracting with and do PGI or create ME2O Stores
reference to Subcontractor PO. Delivery.
Materail doc / Fiscal
Excise
3 Create Subcontracting challan year / Excise group / J1IF01
Personnel
Series group
Go to transaction of
Excise
4 Print Subcontract Challan Challan Change – J1IF11
Personnel
Take print and save.
PO NO./Delivery
Note/Posting
date/Excise Invoice
5 Post goods receipt (MIGO) Tab -Refer MIGO Stores
subcontracting
challan /storage
location
Do the reconciliation of material Material document Excise
6 J1ifQ
document /challan number/year Personnel
Cancellation /material
If the received material is not with good document/102 and
7 quality & Goods Receipt needs to be 544 movement type MIGO Stores
cancelled. /plant / material
document number /
Create new subcontracting challans for
this outgoing materials (as this is Material documents
Excise
8 cancelled/rejected), as this material had number / excise J1IF01
Personnel
come against old challan, and that group/ series group
challan is already reconciled.
Complete/Reverse/Recredit First Excise
9 Complete the challan J1IF13
Subcontracting challan Personnel
Receive back the cancelled delivery 101 and 543
10 material sent by vendor against new movement type/ MIGO Stores
challan. challan number/ year
Material document/ Excise
11 Reconcile the challan J1IFQ
challan no./fiscal year personnel
12 Complete the cahllan Challan number/fiscal J1if13 Excise

31
year personal

11.5 Subcontracting over consumption or under


consumption
Step Description Inputs T.Code Role
Create Subcontract Purchase Purchaser
1 PO with sub components. ME21N
Order / Buyer
Create transfer Posting of
materials sent out for sub- Select the material, and do
2 ME2O Stores
contracting with reference to PGI or create Delivery.
Subcontractor PO.
Material doc / Fiscal year /
Excise
3 Create Subcontracting challan Excise group / Series J1IF01
Personnel
group
Go to transaction of
Excise
4 Print Subcontract Challan Challan Change – Take J1IF11
Personnel
print and save.
PO NO./Delivery
Note/Posting date/Excise
5 Post goods receipt (MIGO) Invoice Tab -Refer MIGO Stores
subcontracting challan
/storage location
Do the reconciliation of material Material document /challan Excise
6 J1IFQ
document number/year Personnel
If the material is over Subsequent adjustment /
7 consumption do subsequent purchase order / 121and MIGO Stores
adjustment 543 movement type/ Qty
Do the reconciliation with this Doc Material document/challan Excise
8 J1IFQ
#. no. personnel
Complete/Reverse/Recredit First Excise
9 Complete the challan J1IF13
Subcontracting challan Personnel
If the material is under 544 movement type will
10 consumption do subsequent get triggered/purchase MIGO Stores
adjustment. order number
Create new challan w.r.t the 544 Create new challan w.r.t Excise
11 J1IF01
MvT Document. the 544 MvT Document. personnel
12 Post goods receipt (MIGO) MIGO – Goods Receipt MIGO
Material document/ challan Excise
12 Reconcile the challan J1IFQ
no./fiscal year personnel
Excise
Complete the challan Challan number/fiscal year J1IF13
13 personnel

32
11.6 Challan completed 180 days reverse and recredit the
challan
Step Description Inputs T.Code Role
Excise
1 Challan Reverse Challan No./Fiscal year J1IF13
Personnel
Option I: Receive the material 542 movement type/
2 MIGO Stores
back. material/ vendor
Material doc / Fiscal year /
Reconcile the challan with 542 Excise
3 challan no/Excise group / J1IFQ
Matrl. Doc. Personnel
Series group
Complete & Recredit the Excise
4 Challan number /fiscal year J1IF13
challan. Personnel
Option II: Receive the Material
5 after 180 days as finished MIGO – Goods Receipt MIGO
goods as per PO.
Materail doc / Fiscal year /
Reconcile the challan with Excise
6 challan no/Excise group / J1IFQ
above GR Doc. Personnel
Series group
Excise
7 Complete& recredit the challan. Challan number /fiscal year J1IF13
Personnel

12 Frequently Asked Question


Question: For capital Goods, in normal posting the AED CENVAT posted for the
present year is 50%, whereas it should be 100%.

Answer : Select Excise Subtransaction type “ IP“ at the time of Posting at Excise
Header Tab, which will post AED as 100%, and BED, Ecess and SHEcess as 50% for
this financial year.

Question: During Post of Excise Invoice, the system doesn’t allow to increase the
Excise Duty Value.

Answer : The change in duty values needs to be done in Change Excise Invoice
transaction @ J1IEX and not during Posting of Excise Invoice.

33
Question : I have to specify BED manually and not through condition records.

Answer : The manual excise amount for BED can be specified in the Pricing Procedure
( PO – Condition tab), wherein it will update the Tax Procedure.

34