sap cin overview
DESCRIPTION
Sap Cin OverviewTRANSCRIPT
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Country India Version (CIN) Overview
Presented By
K V Ramesh Babu
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India Localization
1.1. India Legal Requirements OverviewIndia Legal Requirements Overview
2. Logistics Process Overview ( Procurement & Sales )
3. Utilization
4. Extended Withholding Tax
Contents
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India Localization Requirements - Overview
CENVAT (Excise)
VAT / LST / CST
Service Tax
Cenvat Credit
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India Localization Requirements - Overview
Central Value Added Tax (Excise)
VAT (LST) / Central Sales Tax
Service Tax
Cenvat Credit
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Central Value Added Tax (Excise)
What is Cenvat?
Tax on manufacturing or production of goods in India
Goods having 4M Characteristics are covered under this
- Movable (No duty on Immovable Goods)
- Marketable (Bought and Sold)
- Manufactured (Come up out of a process)
- Mentioned (Central Excise Tariff)
Every legal entity that manufactures or produces excisable goods
shall pay the duty leviable on such goods
Materials are classified under various tariff headings (Chapter Ids).
This will be subject to change in every financial budget.
Goods consumed in-house also liable for payment of duty
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Central Value Added Tax (Excise)
What is the basis of charge? Tax Rates Provided by GOI and are subject to change after each
year based on the budget
Exemption to pay duty on intermediate products in the
following cases
- used for manufacturing capital goods
- used for manufacturing final goods which are eligible for
Cenvat credit
Duty shall be paid when the goods are removed from the
place of production or place of storage
Excise duty not payable on goods manufactured for
exports or deemed exports
Goods manufactured in factory for use within the factory
for repairs of machinery installed within the factory are exempt from
excise.
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Central Value Added Tax (Excise)
Types of Excise Duty
Basic Excise Duty (BED)
Additional Excise Duty (AED)
Special Excise Duty (SED)
Education Cess on Excise
Secondary and Higher education Cess
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Central Value Added Tax (Excise)
Duty Calculation
Specific duty – It is calculated on the basis of certain unit,
length, weight etc. Eg. cigarette
Ad valorem duty – It is based on the value of the goods
Duty based on tariff value – The Govt. may fix tariff value from
time to time. The duty will be calculated as percentage of tariff
value fixed by the Govt. and not on assessable value
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Central Value Added Tax (Excise)
Duty Calculation Considerations
Transaction value is the price actually paid or payable for the
goods and includes any other amount that the buyer is liable
to pay in connection with such sale
Any additional consideration flowing directly or indirectly to
the seller from the buyer should be added to the transaction
value.
Cost of production is not relevant for the purpose of
determining assessable value.
Assessable value may be lower than the cost price of the
goods.
Goods should be assessed in the form in which they are
removed.
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Excise Payment Overview
Vendor Plant Customer
Pays Excise Duty Pays Excise Duty for all outbound goods movement
Claims Cenvat
Pays Excise component to the Vendor
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Central Value Added Tax (Excise)
CENVAT PAYMENT
Duty to be paid by 5th of the following month
Duty deposited in bank using TR 6 challan and credited to PLA
Duty is paid by debiting PLA
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Central Value Added Tax (Excise)
Excise Registers
Statutory Excise Reporting
Excise Registers
(RG23A & C Part I & Part II,RG1, PLA, RG23D)
Excise Monthly Returns
Bond Registers
License Registers
Running Bond Registers
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India Localization Requirements - Overview
CENVAT (Excise)
VAT / LST / CST
Service Tax
Cenvat Credit
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VAT / Central Sales Tax
How is Sales tax treated in India ?
This is a tax on sale
VAT / LST is charged on sales within the state
Central Sales Tax (CST) is charged on inter-state sales
Any sale would be charged to either VAT or CST but only to one
of them
Every person carrying on any business is required to charge
VAT / CST, on all sales made by him, and pay it to the
Government
VAT / CST shall be charged at the rate in force as on the date
of sale
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VAT / Central Sales Tax
Tax Impact under VAT System
Rs.
STAGES
I– Manufacturer II – Wholesaler III – Retailer
Selling price (excl. tax)
100.00 Cost price 100.00 Cost price 120.00
VAT @ 12.5% 12.50 Overheads & profit @ 20%
20.00 Overheads & profit @ 20%
24.00
Sale price 112.50 Sale price (excl. tax)
120.00 Sale price (excl. tax)
144.00
Tax paid 12.50 VAT @ 12.5% 15.00 VAT @ 12.5% 18.00
Sale price (incl. Tax)
135.00 Sale price (incl. Tax)
162.00
Tax paid (15-12.50)
2.50 Tax paid (18-15)
3.00
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CENVAT vs. VAT
Cenvat VAT
Central – Value Added Tax State – Value Added Tax
Revenue to Central Government Revenue to State Government
Tax on Manufactured Goods Tax on Sale of goods
Single point tax - paid at the first point of goods movement Multi Point Tax – payable at each stage of value chain
Credit can be availed Credit can be availed except in case of LST
General CENVAT rate @ 16% with exceptions General VAT rate @ 4% or 12.5% with exceptions
Centrally administered –Cenvat Chain cannot be broken on interstate boundaries State administered – Chain broken on interstate transactions
Cenvat credit can be availed on Services Cenvat credit cannot be availed on Services
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India Localization Requirements - Overview
CENVAT (Excise)
VAT (LST) / Central Sales Tax
Service Tax
Cenvat Credit
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Service Tax
Tax on services rendered
Applicable only on those services which have been notified
by the Government
Tax is payable @ 12 % plus education cess & Higher and
Secondary education cess
Exemptions to persons rendering taxable service below
400,000 INR
Tax to be paid by 5th of the next month
Service tax is payable on advances
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Service Tax
Service Tax Considerations
Service tax is payable on value of services
Value of service is the gross amount charged by the service
provider for the taxable service provided
Any discount/rebate given to customer before accepting the
payment would be deducted from the gross amount
In most of the cases person providing the taxable service is
liable to pay tax
Reimbursement of expenses incurred on behalf of customer
is not taxable
No tax on services which are exported or used for providing
services which are being exported
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Service Tax
Export of Service
Should be at least partly performed outside India
It is delivered outside India and used outside India
Payment for such services is received in foreign exchange
No tax on services which are exported
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Service Tax
Import of Service
Should be provided from outside India to a person in India
Service provider does not have a place of business in India
Person receiving such service has a place of business in India
Person receiving such services is liable to pay service tax
Cenvat credit can be utilized for tax payment
Tax paid can be used for availing credit
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Service Tax
CENVAT Credit on Input Services
Service provider is entitled to take credit of service tax paid on input services
Credit can be taken only when full payment has been made for the service
Credit may be taken for service tax and also for education Cess , Secondary and Higher Education Cess paid
In case the service provider is engaged in exporting services, he shall be granted refund of CENVAT on input services
In many cases, various input services will be consumed in the
headquarters/administrative offices of manufacturers and OSPs. In
such cases, the invoices indicating the payment of service tax will be in
the name of such headquarters/ administrative offices. Provision can be
made for availing credit of such service tax, in the premises where
manufacturing activity is undertaken or the premises where the output
services are rendered.
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Service Tax
Reporting
Half yearly return in form ST-3 to be filed within 25 days from
the end of the half year
Return needs to be accompanied by TR -6 challan evidencing
duty payment
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India Localization Requirements - Overview
CENVAT (Excise)
VAT / LST / CST
Service Tax
Cenvat Credit
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CENVAT Credit
A manufacturer or producer of the final product or provider of taxable services is entitled to take credit of –
Cenvat (Excise)
Education Cess
Secondary and Higher Education Cess
Secondary and Higher Education Cess
Service tax paid on input services
Countervailing Duty
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CENVAT Credit
What items can be considered for taking Credit?
A manufacturer or producer of the final product or provider of
taxable services is entitled to take credit of CENVAT paid on the
INPUTS used in the manufacturing process
INPUTS include inputs in capital goods manufacture which would
be used further in manufacturing process
Inputs need not be contained in the final product. It should have
been used in the process
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CENVAT Credit
What items can be considered for taking Credit?
CENVAT paid on the CAPITAL GOODS used in the
manufacturing process
Capital goods should be used in manufacturing process and
not in any office
Service tax and education cess paid on any input service used
in relation to manufacturing process
When capital or inputs are removed as such (i.e. without using),
only the credit availed originally needs to be paid
Inputs are eligible for Cenvat credit even if the intermediate
products are exempt
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CENVAT Credit
When the Credit may be taken?
Cenvat credit in respect of inputs may be taken immediately on
receipt of the inputs
Input includes all goods, except diesel and petrol / gasoline,
used in relation to the manufacturing whether directly or
indirectly and whether contained in the final product or not
Credit in respect of inputs shall be available whether such inputs
are lying in stock or used in the manufacturing process
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CENVAT Credit
When the Credit may be taken?
Cenvat credit in respect of capital goods may be taken for an
amount not exceeding 50 % of the duty paid on such capital
goods in the year in which such goods are received and balance
in any subsequent financial year
Cenvat credit in respect of the capital goods shall be allowed
even if such goods have been acquired on lease, hire purchase
or loan agreement
No Cenvat credit shall be allowed on any input or capital good
which is used in the manufacture of exempted goods or in
providing exempted services
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CENVAT Credit
When the Credit may be taken?
No time limit for availing CENVAT credit
Unutilized Cenvat credit at the year end should be shown
under “Loans & Advances” in Balance Sheet
Cenvat credit balance should be reviewed at the year end
and any non-utilizable portion should be added to purchase
cost
SSI units ( turnover below 10 million INR) cannot avail Cenvat
credit on inputs but can avail Cenvat credit on Capital goods.
But this credit can be utilized only when SSI unit becomes
liable to pay excise.
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CENVAT Credit
How the CENVAT credit may be Utilized?
Cenvat credit may be utilized towards payment of –
Excise duty on any final product
An amount equal to Cenvat credit taken on inputs if such inputs
are removed as such
An amount equal to Cenvat credit taken on capital goods if
such capital goods are removed as such
Service tax on any output service
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CENVAT Credit
How the CENVAT credit may be Utilized?
Towards payment of Education cess on excisable goods or on
taxable services
Where any input or input service is used in final product which is
cleared for export, the Cenvat credit in respect of input or input
service so used shall be utilized towards payment of excise duty
on domestic consumption or towards payment of service tax on
output service
Where the adjustment mentioned above is not possible, the
manufacturer shall be allowed a refund of such an amount
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CENVAT Availment & Utilization Overview
CENVAT on holdfor Cap Goods
CENVAT Account
VENDOR EXCISEINVOICE PROCESS
GOODS RECEIPT
DESPATCH
SALES EXCISEINVOICE PROCESS
Excise Duty Payable A/C
PLA A/C
DEPOSIT FUNDSIN PLA ACCOUNT
Debit PLA Account
SELECTREGISTER Excise duty
Utilization Transaction
ON-LINE TRANSACTIONS
MONTHLY TRANSACTIONSDebit ED Payable A/c
(Consolidated Entry)
Credit ED Payable A/c
Credit PLA A/c
Credit CENVAT A/c
Debit CENVAT A/c
Debit CENVAT on-hold A/c
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India Localization
1. India Legal Requirements Overview
2.2. Logistics Process Overview ( Procurement & Sales )Logistics Process Overview ( Procurement & Sales )
3. Utilization
4. Extended Withholding Tax
Contents
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Logistics Process Overview
OverseasCustomer
Domestic Vendor Import Vendor Domestic Vendor
Domestic Customer
Subcontractor
Plant X Plant Y
Depot A Depot B
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Excise Procurement Scenarios
Domestic Procurement Process
Subcontracting Process
Stock Transport Process
Imports Purchase
Service Procurement Process
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Typical Procurement Cycle
Invoice Verification
Payment Processing Requirement Determination
Goods Receipt
Purchase Order Monitoring
Order Processing
Vendor Selection
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Excise Procurement Scenarios
Domestic Procurement Process
Subcontracting Process
Stock Transport Process
Imports Purchase
Service Procurement Process
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Domestic Procurement of Raw Materials
Vendor liable to pay
excise to Govt.
Vendor Excise Invoice
accompanies Goods
GR at Factory Gate
Excise Invoice Capture
Excise Invoice Post
(Optional)
Excise Stock – Part I Register entry
Excise Invoice Post
CENVAT – Part II Register entry
Vendor Delivery Goods Receipt Excise Invoice
Liability to Vendor
- Price
- Excise
- Other Taxes
- Other Costs
Vendor Invoice
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Domestic Procurement of Raw Materials
Accounting Entries
GR Posting
Inventory Account Dr.
GR/IR Clearing Account Cr.
Excise Invoice Posting
Excise Duty A/C Dr.
CENVAT Clearing Account Cr.
CENVAT Onhold A/C ( For Capital Goods) Dr.
Vendor Invoice Posting
CENVAT Clearing A/C Dr.
GR/IR Clearing A/C Dr.
Accounts Payable Cr.
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Procurement: Cancellation of CENVAT Credit
It is possible to cancel the CENVAT credit after it has been
availed.
In the first step, the material document has to be cancelled.
This is followed by canceling the CENVAT credit.
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Procurement: Vendor Returns
Vendor returns possible by creating an excise invoice for Other
movements
Avail the credit for the materials/goods that are received.
Create an excise invoice for the materials/goods returned to the
vendor and pay excise duty by posting this invoice.
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Procurement: Additional Adjustments
A supplementary excise invoice for extra excise duty sent by a vendor can be captured and credit availed
CENVAT credit for Materials destroyed, lost, etc. can be written off
Surrender of credit for the excisable materials which are used for non-productive purposes
All these are taken care by Excise JV Transaction
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Procurement: Adjustments & Reversals Highlights
Flexibility for 100% ComplianceFlexibility for 100% Compliance
Management of CENVAT Credit for Capital Goods
CENVAT Reversals and Adjustments
One-Step Reversal of Excise Invoice
Scrap
Non-production use
Additional Excise Paid by Vendor
Deposit into PLA through TR6
Cancel Excise Invoice
W ith Reference to External Docum ent
CENVAT Adjustm ent
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Excise Procurement Scenarios
Domestic Procurement Process
Subcontracting Process
Stock Transport Process
Imports Purchase
Service Procurement Process
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Subcontracting Process
Input
Output
Challan
FACTORYSub contractor
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Subcontracting Process
A. With out Payment of Duty: Removal of Materials from Factory
Note: Print Immediate Option to be used
Subcon Order
Transfer Posting
SubconChallan
Challan Printing
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Subcontracting Process
A. With out Payment of Duty : Receipt of materials from subcontractor
Note: Challans on which quantities are not completely returned have the status assigned
Goods ReceiptSubcon challan Reconciliation
Complete Challan
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Subcontracting Process
A. With out Payment of Duty : Reversals
Note: Listing Transaction gives list of Challans due for Reversal
Run Listing Transaction
Get Material Qty not returned on Challan
Reverse Credit availed on Input
Material
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Subcontracting Process
A. With out Payment of Duty : Recredit
Note: Listing Transaction gives list of Challans due for Recredit
Run Listing Transaction
Get Material Qty subsequently returned
on Challan
Recredit Reversed Credit
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Subcontracting Process
B. Under Full Payment of Duty : Transfer Posting of Input Material to Subcon
Note: Excise Invoice created and Posted under other Movements
Subcon Order
Transfer Posting
Excise Invoice Creation
Excise Invoice Posting
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Subcontracting Process
B. Under Full Payment of Duty : Receipt of Material from Subcon
Goods ReceiptExcise Invoice
CaptureExcise Invoice
PostInvoice
Verification
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Excise Procurement Scenarios
Domestic Procurement Process
Subcontracting Process
Stock Transport Process
Imports Purchase
Service Procurement Process
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Stock Transport Process
Plant liable to pay
excise to Govt.
Excise Invoice
accompanies Goods
GR at Plant Gate
Excise Invoice Capture
Excise Invoice Post
(Optional)
Excise Stock – Part I Register entry
Excise Invoice Post
CENVAT – Part II Register entry
Supplying Plant Delivery
Goods Receipt – Receiving Plant
Excise Invoice
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Stock Transport Process
FEATURES
Applicable for Plants in different registration Ids
Assessable value in excise master used for duty computation
EI capture in receiving plant w.r.t
- STO
- GR
Excise Values copied from supplying plant invoice during EI capture
No Inter Plant BillingDelivery through MM
Stock TransferExcise Invoice –
Other Movements
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Excise Procurement Scenarios
Domestic Procurement Process
Subcontracting Process
Stock Transport Process
Imports Purchase
Service Procurement Process
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57
Imports Purchase
Vendor Outside India
Duties to be paid to
Customs
Credit can be claimed on CVD
Liability to Customs in India
CD & CVD
GR at Factory Gate
Excise Invoice Capture
Excise Invoice Post
Excise Stock – Part I Register entry
CENVAT – Part 2 Register
Vendor Invoicing
- Price
- Other Costs
Imports PO Commercial InvoiceGoods Receipt & Excise Invoicing
Invoice Verification
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58
Imports Purchase
Accounting Entries
Commercial Invoice Posting
Customs Clearing Dr.
Customs Payable (Commissioner) Cr.
GR Posting
Inventory Account Dr.
GR/IR Clearing Account Cr.
Excise Invoice Posting
Excise Duty A/C Dr.
Customs Clearing Account Cr.
Vendor Invoice Posting
GR/IR Clearing A/C Dr.
Accounts Payable (Vendor) Cr.
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59
Excise Procurement Scenarios
Domestic Procurement Process
Subcontracting Process
Stock Transport Process
Imports Purchase
Service Procurement Process
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60
Service Procurement
Service POService Entry &
AcceptanceInvoice Verification
PO for Services
Service Tax, Ecess and SECESS
Service Provider liable to Pay ST to Govt.
Additional Detailing of Individual Services Performed
Additional Control of
acceptance
Vendor Invoicing
Inclusive of Service Tax
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61
Service Procurement
Vendor Payment FI - JV Utilization
Payment Inclusive of Service Tax
Transfer to Service Tax availed accounts
Credit Taken on availed accounts
Utilization Service Tax availed against Service Tax Payable
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62
Service Procurement
Accounting Entries
Accounting Entry after Vendor Invoice Verification
Accounts Payable (Vendor) Cr.
GR/IR Clearing Account Dr.
Service Tax Receivable Account Dr.
Education Cess on Service Tax Receivable Account Dr.
Sec.Education Cess on Service Tax Receivable Account Dr.
FI-JV after Vendor Payment to avail Service Tax Credit
Service Tax Availed Account Dr.
Education Cess on Service Tax Availed Account Dr.
Sec.Education Cess on Service Tax Availed Account Dr.
Service Tax Receivable Account Cr.
Education Cess on Service Tax Receivable Account Cr.
Sec.Education Cess on Service Tax Receivable Account Cr
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Excise Sales Overview
Full Compliance across the Distribution Process Full Compliance across the Distribution Process
Removal of Goods
From Factory From Depot
Sale Transfer to Factory
Return to Vendor Transfer to Depot
Return to Customer Transfer to Subcontractor
Sale Transfer to Factory
Return to Vendor Transfer to Depot
Return to Customer Transfer to Subcontractor
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Excise Sales Scenarios
Sale from Factory
Transfers to Depot
Sale from Depot
Export Sale
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65
Excise Sales Scenarios
Sale from Factory
Transfers to Depot
Sale from Depot
Export Sale
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66
Sale from Factory
Supplying Plant
Price: 1000Qty : 10 PCDuty 16%
+ 160
Excise Invoice
Dispatch
Fortnightly utilization
CENVAT/Part II RegisterPLA Register
Debit:Rs. 160
Excise Duty
Payable A/C
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67
Sale from Factory
Delivery
Goods Issue
Excise Invoice
No CIN related updates
Update Registers and batch utilization
ED Payable Utilization
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Sale from Factory
Posting to Excise duty payable account Posting to CENVAT accounts for Utilization
Separate Commercial and Excise Invoice
Sales Order DeliveryProforma
InvoiceExcise Invoice
Printing Excise Invoice
Commercial Invoice
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69
Sale from Factory
Single Commercial and Excise Invoice
Sales Order DeliveryCommercial
InvoiceExcise Invoice
Printing Excise Invoice
Posting to Excise duty payable account Posting to CENVAT accounts for Utilization
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70
Sale from Factory
Excise Document Flow
Sales OrderSold to : 2300Material: 400Quantity: 5
DeliveryShip to: 2300Material: 400Quantity: 5
BillingBill to: 2300Material: 400Quantity: 5
Excise Invoice
Sold to : 2300Material: 400Quantity: 5
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71
Sale from Factory
Excise Invoice Features
Excise invoice created automatically in background during
creation of billing document
Feature made optional and triggered based on customization
settings
Excise group and Series group automatically determined
based on customization
Provision to print excise invoice immediately after automatic
creation of excise invoice
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72
Sale from Factory
Utilization Due List
Listing of all billing documents due for utilization provided
Also includes ability to view,
- Account balances- Total duty amount needed to utilize the displayed billing
documents
- Deficit, if any
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Sale from Factory
Batch Utilization
Excise Invoices can be created in Batches
Provision of additional fields in selection screen like,
- Billing Date- SD Document Category
- Billing Document Category
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74
Excise Sales Scenarios
Sale from Factory
Transfers to Depot
Sale from Depot
Export Sale
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75
Transfers to Depot
Stock Transfer
Order
ReplishmentDelivery
Proforma Invoice
Excise Invoice
Printing Excise Invoice
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Transfers to Depot
Depot Excise Requirements
Distribution of Excisable goods at depot involves maintenance of
RG23D registers.
Incoming Excise Invoice reference is required to be mentioned
on depot Sales Invoice
At the Factory gate, Excise is paid on the declared value of the
goods to be sold at depot.
Depot should charge from the customer the same Excise duty
from that was paid at factory/source.
In case of price escalations at depot the difference needs to be
paid at the factory.
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Transfers to Depot
Depot Receipts for Stock Transfer
GR made against the delivery note / stock transfer
Excise invoice details directly copied from factory invoice
Loss in transit taken care of
Ship-from can be captured at Excise Invoice for depot.
Multiple P.O.s can be combined in one receipt
Folio number generation can be switched on through
customization
Item details are proposed for stock returns
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Transfers to Depot
Depot Receipts for Direct Purchases
GR made against the POIndividual excise invoice details copied from PO item or can
be entered at item level
For imports CVD can be marked
Ship-from can be captured at Excise Invoice for depot.
Multiple P.O.s can be combined in one receipt
Folio number generated based on customization
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79
Excise Sales Scenarios
Sale from Factory
Transfers to Depot
Sale from Depot
Export Sale
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80
Sale from Depot
Sales OrderDelivery &
PGIExcise Invoice
CaptureCommercial
Invoice
Selling Price 1000 , Quantity 10, ED @ 16% = 160 RG23D – Reduce quantity by 10, Debit 160
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Sale from Depot
Depot Sales
Separate steps for Excise Invoice create and verification
Option for Single step creation and verification through
customization
Option to cancel excise invoice before verification
Provision to create depot invoice before post goods issue based on
delivery document
Option to restrict incoming excise invoice selection from the same
source of supply
User-exits for unit conversion and Excise / Series group
determination
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Sale from Depot
Depot Sales: A-Certificate Selection
Pick up the A-certificates relevant for the current removal
A-certificate can be selected along with the corresponding excise
invoice
Multiple A-certificates can be picked up
Splitting of the A-certificate amount across removals not allowed
Separate RG23D entries in the same folio for better tracking
Value gets added up and cumulative excise proposed during Billing
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RG23D Register
Material Receipt in
Depot
Movement / sale from
depot
Text
Text– Text
Receipt update the quantity and the value in RG23D The reference / mother invoice details in terms of batches etc captured
Reference to the mother invoice is made Update goods issue quantity
Excise amount cannot differ from that paid at the first point of goods movement
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Depot Operations
Comprehensive solution for Depot functionality
RG23D Maintenance and Printing functionality is available
Provision to receive Internal as well as External Excise
Invoice at Depot.
Close integration with MM and SD processes
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85
Excise Sales Scenarios
Sale from Factory
Transfers to Depot
Sale from Depot
Export Sale
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Export Sale
Supplying Plant Excise
Invoice
If Exported under bond
If not exported under bond
Price 1000, Quantity 10, Duty@ 16% = 160
Update Registers
Debit ED payable a/c 160 Update Cenvat Part II register and PLA register Fortnightly utilization
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Export Sale
Excise Bonding Document Flow
Sales OrderSold to : 2300Material: 400Quantity: 5
DeliveryShip to: 2300Material: 400Quantity: 5
BillingBill to: 2300Material: 400Quantity: 5
Excise Invoice
Sold to : 2300Material: 400Quantity: 5
Bond Register
Sold to : 2300Material: 400Quantity: 5
CaptureLicence
Sold to : 2300Material: 400Quantity: 5
Bonds / LOUT / Licence as applicable in the Business process
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Export Sale
Deemed Export Sales
Sale is marked as Deemed
Excise status of customer gives complete concession
No amount utilization
Use of local excise invoice range based on series group
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89
India Localization
1. India Legal Requirements Overview
2. Logistics Process Overview ( Procurement & Sales )
3.3. UtilizationUtilization
4. Extended Withholding Tax
Contents
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Utilization
Monthly Utilization
Facilitates payment of duty accumulated for each month
Features include
Display of pending invoices
Option for Posting date
Posting to a Business area
Selection based on a range of dates
Optionally, Selection based on a range of invoices
Utilization strategy based on customization settings
Posting of TR6 Challan entry to PLA account
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91
Utilization
Utilization Due List
Feature to view list of all billing documents due for utilization
Other features include ability to view
- Account balances
- Total duty amount needed to utilize the displayed billing documents
- Deficit, if any
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TR6 Challan Posting with PLA Register Updation
House Bank Own
Create Excise JV - PLA updationTR6 Challan (J1IH )
PLA Register for Value
Post Accounting document in FI
to post the paymentExcise PLA hold A/c Dr House Bank A/c Cr
Prepare Cheque & TR 6 Chllan
Enter the Accounting Doct. orTR6 Challan No., FY,
Plant, Excise Group, etc.,
Allocate the TR6 Challan Amount as per TR6C i.e. BED / AED / SED
Banker Transfer the funds toExcise Authorities and
Acknowledge the TR 6 Chllan
Update the PLA Register &Accounting Document Posted
EXCISE PLA A/c DrExcise PLA hold A/c Cr
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Utilization of CENVAT
Total Available Balances RG23A
Input
Debit Balance Credit Balance
Is the BalanceSufficient
NO Yes
Output
RG23A & C Part II
PLA Register
TR6 Challan Payment
Input Credit from VendorMaterial Purchase
Input Credit from Vendor Capital Purchase (50%)
RG23C
PLA Balance
Perform the Excise Utilization
Total Excise duty payable
Excise duty payable on Customer Invoice
Apportion the payable amount between the
Registers RG23A, RG23C & PLA
Post the UtilizationAccounting document generated
& Registers updated based on Amount apportionment
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CENVAT Availment & Utilization Overview
CENVAT on holdfor Cap Goods
CENVAT Account
VENDOR EXCISEINVOICE PROCESS
GOODS RECEIPT
DESPATCH
SALES EXCISEINVOICE PROCESS
Excise Duty Payable A/C
PLA A/C
DEPOSIT FUNDSIN PLA ACCOUNT
Debit PLA Account
SELECTREGISTER Excise duty
Utilization Transaction
ON-LINE TRANSACTIONS
MONTHLY TRANSACTIONSDebit ED Payable A/c
(Consolidated Entry)
Credit ED Payable A/c
Credit PLA A/c
Credit CENVAT A/c
Debit CENVAT A/c
Debit CENVAT on-hold A/c
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95
India Localization
1. India Legal Requirements Overview
2. Logistics Process Overview ( Procurement & Sales )
3. Utilization
4.4. Extended Withholding TaxExtended Withholding Tax
Contents
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EWT: TDS Overview
Pay Tax to Government
Issue Certificates
Deduct Tax from Vendor
Vendor Vendor
Income tax office
Bank
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EWT: TDS (Tax Deducted at Source)
Tax is deducted at source from all payments/provisions which are hit by the TDS provisions of the Act
Some of the above payments/provisions pertain to services that come within the scope of Tax Deducted at Source (‘TDS’) under the Indian Income-tax Act, 1961 (‘Act’).
Tax is not deducted from payment for goods
TDS is required to be deducted at the time of payment or invoice posting whichever is earlier.
The taxes which are so deducted, will then have to be deposited to the credit of the Indian Government on or before 7th of next every month.
The company will have to issue TDS certificates to the vendors for the tax deducted and also file with the tax office, Quarterly & Annual Return‘ of the total taxes deducted during the year under the various sections of the Act.
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EWT: Vendor TDS
ABC Ltd
Mumbai plant
Vendor
Advance
Invoice
Services
Payment/Challan
Certificate
Vendor Payment
BANKIncome Tax Office
Quarterly Returns
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EWT: Vendor Transactions
Down Payment
Reverse Invoice
InvoiceCredit Memo
Clear DP
ChallanUpdate
TDS JV
Bank Challan
Reprint Certificate
PrintCertificate
Cancel Certificate
Quarterly Returns
Cash Journal Postings
Logistics Invoice
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100
EWT: Customer Interest TDS
ABC Ltd
Mumbai plant
BANKIncome Tax Office
Certificate
Advance
Interest Payment
Payment/Challan
Customer
Quarterly Returns
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EWT: Provisions and Adjustments
TDS computed on entries in provisional liability accounts
(GR/IR and SR/IR Accounts)
TDS is computed at each period end on uncleared entries
remaining in the GR/IR and SR/IR accounts
GR/IR and SR/IR accounts relevant for computing TDS on
provisions identified separately
GL accounts to which the provisional TDS is posted identified
and document Type used for provisional TDS postings is
separately identified
JV facility available for carrying out changes to TDS relevant
postings
Accounts to which losses (non-recoverable TDS) is to be
posted and the document type to be used for TDS adjustment
postings is identified separately
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EWT Activities
PostingInvoice, Credit Memo, Down Payment, etc
Challan Update
On payment due date
TDS Certificate
Printing, Reprinting and Cancellation
on appropriate due dates
Quarterly Return
Tax Adjustment
JVWhere required
Periodic ActivitiesDaily Activities
TDS on Provisions
PostingWhere required
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Thank you!
Questions??