Standard Import Procurement Process (India Localization) in SAP S/4 HANA Cloud

This Blog aims to Highlight The Process of Import Material Procurement in SAP S4HANA Cloud as part of Indian Localization

Target Audience

Business Users, Key Users, Consultants

Target Industry

All

In below example of Import Scenario, Tax conditions with below combination are used

JCDB – IN Basic Customs (Maintained in Material pricing procedure A18001-Service/Material)

JSWC – IN: Social Welfare C (Maintained in Material pricing procedure A18001-Service/Material)

JIMD – IN: Import GST Deduct (Maintained in Tax pricing procedure 0TXIN – Sales Tax India)

Sample Tax Computation – Only to Understand How Tax Conditions Are Calculated

Test Scenario For Import Material with IGST (Deductible)

Below Roles are used to simulate the system example

Step – 1 Create Purchase Order (Import)

Role – PURCHASER

Fiori App – Create Purchase Order – Advance

Let’s assume product SP001- Bearing is purchased from International Market

All the required details are entered in PO during creation step.At PO item level, Click on Invoice tab and maintain Tax code K1 – GST 18% Deductible

In Condition Tab at PO item level, Ensure Custom Vendor is maintained for the Condition type

JCDB – IN: Basic Custom

JSWC – IN: Social Welfare C

Save the Purchase Order after validating all the required entries. PO reference here is 4500020117

Step 2 – PO Approval

For this example, Purchase Order is subjected to automatic approval

Step 3- Book Custom Supplier Invoice

Role – AP_ACCOUNTANT

Fiori App – Create Supplier Invoice – Advance

After entering all the details system calculates IGST as follows

Below table shows calculation done in excel, just to ensure all the values are correct. In this example exchange rate for EUR is taken as 100 INR = 78 EUR

After validating all the entries, post the custom invoice. As result below FI accounting entries are generated

Step 4 – Delivery of Goods

After custom clearance, next step is receive the goods in plant

Role: WAREHOUSE_CLERK

Fiori App – Post Goods Movement

Accounting Entries – Custom clearing account can be set off against the inventory account or Price difference depending on Material Price Indicator

Step 5 – Book Supplier Invoice – Material Vendor

Role – AP_ACCOUNTANT

Fiori App – Create Supplier Invoice – Advance

Last step after posting the Custom invoice & Goods receipt is to post the invoice of material vendor

In case of foreign supplier invoice, tax code with zero value is selected

Below Accounting Entries are triggered after posting the material supplier invoice

Conclusion – We are able to understand role of Custom Duty, Social Welfare & IGST condition type in Import Material Procurement Scenario

Additional Learning – SNOTE – 2458404 – GST Import