Brief IDEA In India , Excise duty is a tax on the manufactured goods that is levied when goods leave the place of manufacturer . Manufacturer can set off the duty paid on input materials against their output duty , this procedure is known as central value added tax [CENVAT ] . General ledger for excise duty updation will be assigned in CIN [ IMG ] under Accounting customization .When ever goods are received , Excise G/L will be updated for Modvat credit on inputs , RG 23 A part 1 for quantity and part 2 for Modvat credit amount . This register is used for material other then Capital Items . For Capital Items RG 23 C Part 1 and Part 2 will be Updated . For Depot receipts and sales RG 23 D Part 1 and Part 2 will be updated .
SAP Easy Access India Localization Menu Go To Address Bar and Type Transaction Code J1ILN You get the SAP India Localisation Menu
J1ID - Master Data Screen Follow the Menu Path for Excise Master Data
You get the Master Data Screen Create Chapter-id
Chapter ID: The number given to a material in the schedules of materials published by the government of India. The schedule lists all materials involved in manufacturing, input materials and output materials alike. It shows how much excise duty is levied on each material.Each material in the schedule is assigned its own identification code, called "chapter ID.” We Create Chapter ID for Material Master . All Chapter ID where Cenvat determination Is Applicable should be Maintained First .
Here we maintain Excise Indicator for the Plant in a combination of Co Code--Plants—First Month of Excise Year—No. Range—Excise Indicator Excise Indictor for all Manufacturing Plants in a Company Code will be “1”
This table will be maintained if there is any excise rate other then Excise rates based on Material Chapter ID and Final Excise Indicator . ( e.g.- S.S .I Vendors , Qty based excise amount ) .In purchase order first Excise rates will be searched in exceptional table and then in table based on Final excise indicator and material chapter ID . The exceptional rates will be maintained with combination of Material number and vendor Code as follows
You Create Purchase Order via ME21N or a Schedule Agreement via ME31L with Pricing which includes Excise Duty.
When the goods arrives, the warehouseman enters the goods receipt via MIGO . Here The System Creates:
Material Document to Record Goods Receipt
Creates an Accounting Document to debit the inventory account and credit the GR/IR clearing account
Creates Part I Entry in Register RG23A or RG23C
3 The Excise Clerk Captures the Vendor’s Excise Invoice with reference PO/GR Document via J1IEX-Capture .
The Excise Supervisor checks the excise invoice captured by the clerk & Posts the CENVAT via J1IEX-Post . The System Creates PART II Entry in Register RG23A or RG23C and a Accounting Document to debit MODVAT Accounts and Credits GR/IR Liability CENVAT.
You enter the Vendor Invoice in the system via MIRO . The system creates an accounting document crediting the Vendor and debiting the GR/IR Document. By this your GR/IR Documents gets Cleared off.
Eg: PO Conditions System determine Excise Duty as per TAX Code & Master Data maintained J1ID.
Eg: Goods Receipt & Capture Excise Invoice Here we can Capture or Capture & Post Excise Invoice while doing Goods Receipt
You Create Purchase Order with all conditions applicable for Imports via ME21N .
You Create Shipping Notification via VL31N .
You do Goods Receipt w.r.f. to Shipping Notification via MIGO . The System Create PART I Entry in Register RG23A or RG23C and an Accounting Document.
You Capture & Post Vendor’s Excise Invoice via J1IEX or together with MIGO . The System Creates PART II Entry in Register RG23A or RG23C and creates the Accounting Document.
You Enter the Vendor Invoice via MIRO . The system created accounting Entries crediting your Vendor & debiting the GR/IR Account.
Procurement of Capital Goods **Capital Goods in SAP – CIN is classified into Assets, Consumables & Tools** Procurement of Capital Goods is same as Procurement of Raw material. The Difference is: As per Excise Law you can take MODVAT 50% in the year of Purchase and 50% in the next year. SAP Supports this feature. What you do is you define All such materials as Capital Goods in Excise Master Data – J1ID as earlier discussed. So, When you Post your CENVAT via J1IEX, The System creates an Accounting Entries by posting 50% in MODVAT Accounts and 50% in MODVAT on HOLD Account.
There are two ways of handling the excise invoice on the goods that you provide them with:
Subcontracting without payment of Excise Duty:
The Process Flow is:
You Create a subcontract order via ME21N with “NIL TAX CODE”.
You Create a Transfer Posting Document via MB1B w.r.f. to Subcontract Order.
You Create a Subcontracting Challan widely called as 57F4 Challan via J1IF01 .
You do Goods Receipt with that Challan Reference via MIGO .
You Reconcile received Qty. with Challan Qty. via J1IFQ .
Under excise law 57AC, when you send materials to a subcontractor for processing, you are not required to pay any excise duty, even though the materials have left your premises. However, if the materials have not been returned to you within a given length of time specified by the law (in 2000, 180 days), you will have to reverse any excise credit that you posted when you purchased the materials. In the case of materials that you have manufactured in-house, you will have to post credit entries to the extent of the CENVAT rate of the assessable value of the materials.
This is the Stock Transfer of our Finished Goods from one Plant to Other. This Stock Transfer follows SD Route.
Process Flow: At Issuing Plant :
You Create Stock Transfer Order via ME21N or ME27 .
You Create an Outbound Delivery and w.r.f. Purchase Order via VL04 .
You do the Post Goods Issue via VL02N
You Create Billing Document w.r.f. Outbound Delivery via VF01 and Excise Invoice is created in Background.
At Receiving Plant :
You do Goods Receipt w.r.f. to Purchase Order via MIGO .
You Capture Excise Invoice w.r.f. GR Document via J1IEX or the same can be done in one step via MIGO .
You Post CENVAT via J1IEX .
Accounting Entries MODVAT Entry When making Goods Receipt for Non-Capital Goods ( Coded and Non-coded done through SAP MM Module). Excise duty –RG23A Part 2 – Input Dr To GR/IR Liability - Cenvat Cr CENVAT entry – Capital Goods Excise duty – RG23C – CAPITAL Dr (50%) Cenvat In abeyance – CAPITAL Dr (50%) To GR/IR Liability - Cenvat Cr Sale of Goods Only excise entry through India version Excise duty paid Dr To Excise duty – payable account Cr
Accounting Entries TR6 Payment Excise Duty – PLA Dr To XXXX – Intermediate TR6 A/c Cr If the payment is made on account of some expenditure such as Interest, Stationary and overtime account. XXXX- Expenditure A/c Dr To Excise Duty – PLA Cr This is manual JV. Monthly Adjustment When monthly or fortnightly payment is made to Excise dept . Excise Duty Payable a/c Dr. To Excise Duty – RG23A-Input Cr To Excise Duty – RG23C-CAPITAL Cr. To Excise Duty – PLA Cr. ( This is to be done with outgoing payment and clearing only).
Accounting Entries Return of Excise goods where payment is required to be done immediately. ( Purchase Return ) GR/IR Liability - Cenvat Dr To Excise Duty – RG23A-Input Cr } Any one a/c To Excise Duty – RG23C-CAPITAL Cr. } To Excise Duty – Payable Cr. } ( All LRN entries will be discussed separately). JV every year end to be passed in the subsequent year after the asset is put to use in the subsequent year. Excise Duty – RG23C- Capital Dr To Cenvat In abeyance – CAPITAL Cr.
Accounting Entries Manual JV for Cancellation RCIA GR/IR Liability – Cenvat Dr To Excise duty –RG23A Part 2 – Input Cr Sales Return Excise duty –RG23A Part 2 – Input Dr To Excise Duty Paid Cr
FORT NIGHT UTILISATION TRAN:J2IU TYPE THE COMPANY CODE,PLANT, EXCISE GROUP,PAYMENT DATEAND PERIOD FROM AND TO. SELECT PAY SED FM BED AND PRESS F8
TYPE THE AMOUNT FOR WHICH ACCOUNT TO BE PAID. AND PRESS ENTER. IF THERE IS NO ERROR SAVE The System Creates following Accounting Entries: Dr. Excise Duty Payable Account Cr. RG23A BEDA/c. Cr. PLA
RG23A PART I : This Register has now become Obsolete and not required now a days. This Register shows the quantities of the materials.
RG23A PART II : Part II shows the amounts of excise duty on the materials, and how much you have transferred to the CENVAT accounts
RG23C PART I : This Register has now become Obsolete and not required now a days. This Register shows the quantities of the materials.
RG23C PART II : Part II shows the amounts of excise duty on the materials, and how much you have transferred to the CENVAT accounts
PLA : These is Personal Ledger Account for Excise.
RG23D : It records the receipts & issues of excisable materials at Depot.
RG1 : A register of excisable finished goods kept by manufacturing plants. The register shows goods movements from the factory to a store specifically for excisable finished goods.
RG1 Register Follow the Process: 1. Update Register via T. Code J1I5 2. Extract Register via T. Code J2I5 3. Print RG1 Register via T. Code J2I6
UPDATION OF RG1 REGISTER T.CODE: J1I5 RECEIPTS Enter : Posting date Movement Type for Receipts Classification as “ROP” Select RG1 and press f8
You get the List of Material Documents for Receipts Select all & Simulate. Traffic Lights goes Green. Again Select All and Click on “Create Register Entry”. System will update your RG1 Register. This is called Traffic Lights
RG1 Updation for Dispatches Repeat the Procedure : Enter Posting date Movement Type Classification as IDH Select RG1 and press f8
RG1 Updation for Dispatches If Traffic lights goes Green, it means system will update the material Documents but if it goes Red then it means that there is no stock Select all and click on “Create Register Entries”. The System updates the RG1 Register
REGISTER EXTRACTION T.CODE J2I5 Enter : Excise Group Start & End Date Select Register Execute
REGISTER PRINTING T.CODE: J2I6 Select Register and Execute
Report: Monthly Return Under Rule 57AE T.CODE:J2I9 Enter: Company code Excise Group Posting Date Select the Annexure for Transaction details & Abstract for Total Credits and Total Debits
CENVAT AVAILMENT OF CAPITAL GOODS IN NEXT FINANCIAL YEAR T.CODE: J2I8 ENTER: COMANY CODE PLANT EXCISE GROUP POSTING DATE
SELECT ALL AND SELECT TRANSFER OF CREDIT You get the List of Excise Invoices for which you have to avail CENVAT Select the Excise Invoice(s) and Click on Transfer Credit. System Creates an Accounting Entry: Dr. CENVAT on HOLD A/c. Cr. MODVAT Clearing A/c.
Report: CENVAT not availed T.CODE J1I7 Enter Document Year Excise Group Select No posting or Part1 posted, Part2 not posted Click on Execute or Press F8
SYSTEM DISPLAYS THE LIST OF EXCISE INVOICE FOR WHICH CENVAT IS NOT AVAIED
DAY TO DAY ACTIVITIES J1IEX_C – Capture Excise Invoice J1IEX_P – Post CENVAT J1IIN – Create an Outgoing Excise Invoice J1IF01 – Create Subcontracting Challan J1IS – Create an Excise Invoice for other Movements J1IH – CENVAT Adjustment J1I7 – CENVAT not availed J1IFQ – Subcontracting Challan reconciliation J1I5 – Finished Goods receipts & Issues updation J2I5 - Register Extraction J2I6 – Register Printing
MONTHLY ACTIVITIES J2IU - PLANING TR6 AMOUNT DEPOSIT BY SIMULATE J1IH - UPDATION OF TR6 CHALLAN AMOUNT IN PLA REGISTER J2IU - UTILIZE THE CENVAT AMOUNT J2I6 - PRINTOUT OF E1 MONTHLY RETURN
YEARLY ACTIVITIES On Union Budget Check any Tariff ED % changes update if any Close all Pending Excise Transaction J1IH – CENVAT Adjustment