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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

/wp-content/uploads/2014/05/pic1_446817.png















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%

/wp-content/uploads/2014/05/pic2_446825.png

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

/wp-content/uploads/2014/05/pic4_446826.png

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/wp-content/uploads/2014/05/pic6_446871.pngunder Excise Invoice Tab


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

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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

/wp-content/uploads/2014/05/pic9_447417.png/wp-content/uploads/2014/05/pic10_447418.png/wp-content/uploads/2014/05/pic11_447419.png

Post the document

Account Posting:

/wp-content/uploads/2014/05/pic12_447420.png

Excise Posting:

/wp-content/uploads/2014/05/pic13_447421.png

3.       Invoice verification  MIRO

Carry out invoice verification with reference to the PO

/wp-content/uploads/2014/05/pic14_447425.png

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.

/wp-content/uploads/2014/05/pic15_447426.png

Simulate & Save

Accounting document will be:

/wp-content/uploads/2014/05/pic16_447427.png

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:

/wp-content/uploads/2014/05/pic18_447431.png

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.

/wp-content/uploads/2014/05/pic20_447432.png

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)

/wp-content/uploads/2014/05/pic21_447433.png

Click the TAX Base tab and put the same value of tax   amount in that column/wp-content/uploads/2014/05/pic22_447437.png

Simulate and save

Account Posting:

/wp-content/uploads/2014/05/pic23_447438.png

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

Nireesh.P.H

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9 Comments

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  1. k j

    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

    (0) 
    1. NIREESH PH Post author

      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

      (0) 
      1. k j

        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

        (0) 
  2. manu m

    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 ?

    (0) 
  3. Lakhya Pratim Baruah

    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

    (0) 
      1. Lakhya Pratim Baruah

        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….

        (0) 
        1. NIREESH PH Post author

          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

          •   PO-Input applicable VAT tax code (inventory )under invoice tab.Tax code VB= VAT 5%
          • Excise Posting screen : We are inputting the value manually in MIGO, no relevance for tax         code, Tax code seen is the default tax code assigned to company code
          • MIRO –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. ie E8

          Scenario2: ED Set off & VAT set off

          • PO -with VAT set off Tax code VF= VAT 5%
          • MIRO –select any VAT set off Tax code, input total amount(Rs147) under Amount, VAT      value(Rs 7) under Tax amount. Input same Tax code(VF) in item level also.
          • MIRO-Select GL account Tab and put the GL code of ED(Centvat Clearing) and put any ED set  off tax code(E8) and input the the ED value (Rs15)

          Regards

          Nireesh

          (0) 

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