Excise Duty Pass on Scenario – By Nireesh.P.H

Introduction:

Below depicts a typical dealer invoice scenario in India.

B is a dealer and purchase materials from its principal A by paying Base amount (say Rs 100 ) & Excise duty (say BED 12%, Ecess 2% & SEcess 1%), comes to Rs 115 and  applicable VAT (say 5%)on it . Thus landed value comes to Rs 120.75. Again B sells this material to a manufacturer C for a base amount (say Rs 125) and pass on the excise value he paid to A (Rs 15,ie Rs 125 + 15 =140) and applicable VAT (say 5%) on it. Thus landed value comes to (Rs 140 + Rs 7 =147).

This document explains how C (manufacturer) can handle this scenario in SAP:

Scenario1: ED Set off & VAT   inventory

1. Create a PO using T code ME21N

In the Gross price field input the value (Base amount (125) + Passed on ED value (15) = Rs 140). Input applicable VAT tax code (inventory )under invoice tab.Tax code VB= VAT 5%

Total landed value of the PO will be ( Gross price (Rs140) + VAT value( Rs 7) = Rs147)

2. Goods receipt  using T code MIGO

Create Goods Receipt with reference to the PO, input details like, QTY, Storage location, Delivery note details, Batch etc. Then click on Excise Tab and input, Excise invoice details and date.

If going for single step posting select Capture & Post. Otherwise select the option Capture and do the posting in J1iex.

Clickunder Excise Invoice Tab

You will get the following screen and click on “Miscellaneous” tab and check the MRP indicator

Under item details click on Excise item and

Base value will be populated from the PO.

Edit the base value manually as per the Excise invoice and input values against BED, ECS & SEcess accordingly

Post the document

Account Posting:

Excise Posting:

3.       Invoice verification  MIRO

Carry out invoice verification with reference to the PO

Base amount (Rs  140 ) will be populated from PO, edit the value manually to value booked under stock of materials during GR (Rs132, ie 125 +7). In header under Basic data, select any ED set off Tax code, input total amount(Rs147) under Amount, ED value(Rs 15) under Tax amount. Input same Tax code in item level also.

Simulate & Save

Accounting document will be:

Scenario2: If both Excise duty and VAT is set off then following method needs to be adopted:

  Create PO with VAT set off Tax code

During MIGO edit the base value and input appropriate values against  BED, ECS & SEcess

Account Posting will be:

Here VAT value (Rs7) is not added to Stock value as it is SET OFF. Excise posting will be same :

During Invoice verification MIRO:

Edit the value manually to value booked under stock of materials during GR (Rs 125) In header under Basic data,  select any VAT set off Tax code, input total amount(Rs147) under Amount, VAT value(Rs 7) under Tax amount. Input same Tax code in item level also.

Select GL account Tab and put the GL code of ED(Centvat Clearing) and put any ED set off tax code and input the the ED value (Rs15)

Click the TAX Base tab and put the same value of tax   amount in that column

Simulate and save

Account Posting:

Looking Forward for your feedback and suggestions………..

Nireesh.P.H