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.
Click
under 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
Hi
If you go to the Table BSET, check the tax base amount for the vat condition,
it will show 125 Rs, but ideally it should be (125+15) Rs= 140 Rs
Can you please elaborate on the above issue, how the tax base amount fills in table
Thanks
Yes, VAT base will show 125Rs in BSET, but we are inputing the VAT value manually as Rs 7 and remove the calculate Tax tick. So correct value will be posted to Tax G/L.even though Tax base will be 125. Our final objective of adding 125 to material cost and keeping ED & VAT value set off (under different G/L) is achieved.
Pls comment,any other unforseen impact?
Thanks
Nireesh
Tax base amount will be different than the actual on which tax calculated,
It doesn’t matter whether you have filled tax manually or by clicking the calculate tax option,
I did came across to this cases with my client Wrong Tax Base Amount in BSET table
I need to prepare one Zreport in which I have to fill this Tax base amount in front of tax code, to get the value of tax calculated for document, which mismatches the actual
can you help on this matter is it the standard behavior or we are missing something
Thanks
In Dealer scenario- We cant control / validate the excise number to post. Also the numbers needed to be added manually.Is that correct or nay best practices adopted ?
HI,
Keep it up…
Hi Nireesh,
If you can add on the Tax Code VB condition type whether JMOP is made with 0% and further add how to maintain J1ID for the Vendor – as a dealer. This doc will look good.
Regards,
Lakhya
Hi Lakshya,
Tax code details-VB in FTXP
J1ID- Vendor Excise Details
Hope this is fine
Regards
Nireesh.P.H
Thanks Nireesh,
Also the tax code are different in each screen.
In PO – VB
In Excise Posting Screen – V0
In MIRO – VB, EB & VF.
I think you will need to rework on it a bit.
Don’t mind buddy.
lakhya….
Dear Lakhya,
Here I have explained two scenarios and relevant strategy for Tax code was explained in the document, however I am consolidating it once again
Scenario1: ED Set off & VAT inventory
Scenario2: ED Set off & VAT set off
Regards
Nireesh