India Localization is complying with the India Specific Tax Requirements.
India Localization Patch set has to be applied for India Localization over and above the standard R12 implementation.
India Localization Provides some seeded responsibilities like India Local Purchasing, India Local Inventory, India Local Order Management, India Local Payables, India Local Receivables etc. Also it provides India related menus, functions, reports etc.
Localization provides provision for defining of taxes, defaulting of taxes, recording of taxes, calculation of taxes, and reporting of taxes.
Value Added Tax (VAT) is a tax levied on the value added to a product at different stages.
VAT is a tax levied at each of the stages in a multi point entry in the supply chain with the facility of set-off of input tax. It is levied by States in the place of Sales Tax.
A manufacturer may pay VAT on input raw materials and recovers that tax when he sells the finished goods to a dealer. The difference of tax collected from the dealer and the tax paid for the raw materials is paid to the tax authority.
Similarly, a dealer may pay VAT on the finished Goods and recovers that tax when he sells it to a retailer. The tax after recovery is paid to the tax authority.
Finally the end customer pays the VAT to the retailer. The retailer recovers his portion of the tax he paid and pays the balance to the tax authorities.
CENVAT is a Central VAT. You have the provision to claim this tax at the time of receipt. The RG registers are updated with the CENVAT entries at the time of receipt.
Provide the Excise information under trading info tab for the trading organization
Checking Excise in RG23D option will create entries in the RG23D register. If this is not selected, then the excise amount will be added to the inventory cost on receipt
Order Price Inclusive Option includes the Excise tax in the order price. If the option is checked, then excise duty is not added to the receivables account. If it is unchecked, then the excise tax is added to the receivables account
Associate Sub Inventories with India Localization
Associate sub inventories for India Localization
Check the Bonded flag for the Excise related Sub Inventories. Then only Excise related transactions will be recorded.
Check the trading flag for trading Organizations.
Setup item templates for India Localization and apply the templates to Items
Apply these Item templates to Items for each Inventory Org
You can override the attribute values derived from the template
You can define Item Templates for Excise and VAT and apply the template attributes to the items. Template Attributes
Template attributes for items under VAT and Excise Yes RECOVERABLE Finished Goods ITEM CLASS Yes APPLICABLE Value Added Tax No RECOVERABLE Finished Goods ITEM CLASS Yes APPLICABLE Vat Not Recoverable VAT Attribute Value Attributes Template Name Type Yes EXCISABLE No MODVATABLE Finished Goods India ITEM CLASS Yes TRADABLE Excise Tradable EXCISE
You specify the registration numbers, Tax Types and the inventory Orgs for which it is applicable
Also you specify the tax account details like Liability Account, Recovery Account etc.
The Regime would be used to define the rules that are applicable to all the taxes assigned to it. Taxes defined under the regime would default only for those organizations assigned to it. You can over ride them at the org level.
Flow of Customs Duty on a PO in a trading Org Create a Tax Category Create PO and Apply Tax Category to PO and submit PO for approval Enter BOE Invoice Interface BOE with AP And generate AP Invoice Create a Receipt Apply the BOE amount to the receipt Verify the Registry Entry And accounting
Flow of transactions on a SO in a trading Org Create a Tax Category for SO Enter SO and Apply Tax Category to a SO and Book Pick Release Match the delivery with Receipt Ship Confirm Generate Excise Invoice
Tax is calculated based on the tax category and the line amount.
If the tax is based on a different price than the line price, a separate assessable price list can be created and attached at the customer or customer site level. System will use the price on the assessable price list instead of the line price.
You can choose excise exemptions and vat exemptions on the header on a sales order.
Changes made to the base order line quantities, cancellations and splitting of the lines are automatically reflected on the localization lines.
Taxes are automatically copied when new sales orders are created using the copy functionality
RMAs can be created and taxes will be copied from the original sales order that is referred.
Match the delivery with the receipt and Ship Confirm
Pick Release the Sales order
Match the delivery with the receipt
The Match Receipts functionality allows to pass on excise credit to your customers.
The excise duty is tracked while receiving the goods in a trading organization and it can be allowed as CENVAT credit to customers.
Before confirming the shipment, the organization needs to allocate the excise duty involved during receipt of the excisable goods.
While shipping from the trading org, you are required to track the exact amount of the duty paid by the original manufacturer for passing down the credit under CENVAT procedures
You can see the tax details from the ship confirm screen