CIN User Manual

COUNTRY INDIA VERSION - SAP R/3 4.7
IMPLEMENTATION
AT
BHARAT ALUMINUM CO. LTD.
USER MANUAL
PREPARED BY : KALLOL SENGUPTA
18TH DECEMBER 2003

CIN 4.7 – SAP R/3
implementation at BALCO
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PREPARED BY KALLOL SENGUPTA
CONTENTS
1 Organisational unit in SAP CIN version .....................................................................................3
2. Essential master data for excise ...............................................................................................5
3. Role : Goods Receiver at stores ..............................................................................................11
4. Role : Excise supervisor for Part II Posting ...............................................................................13
5. Cenvat credit against capital goods & spares .....................................................................17
6. Special cases : Excise JV ........................................................................................................20
7. Capturing excise invoices without PO ...................................................................................27
8. Cenvat against imported materials..........................................................................................30
9. Rejection of excise invoices.....................................................................................................37
10. Entering GR for non excisable cases........................................................................................41
11. Goods issue to another plant on payment of duty............................................................... 42
12. Multiple GR for single excise invoice..................................................................................... 43
13. Excise Registers & reports.........................................................................................................44
14. Cenvat utilization......................................................................................................................55
15. Roles & responsibilities..............................................................................................................61
16. Accounting entries....................................................................................................................62
17. Helpdesk manual......................................................................................................................63

CIN 4.7 SAP R/3 USER MANUAL
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1 ORGANISATIONAL UNIT IN SAP CIN VERSION FOR EXCISE
THE COUNTRY INDIA (CIN) VERSION IS AN ADD-ON COMPONENT OF SAP R/3
CIN facilitates handling of tax implications during the Purchase and Sales cycles.
This country version is designed for use by businesses with operations in India as well as the generic
SAP System functions. It comprises functions designed for laws and business practices particular to
India, and a country template to help you customize the system according to local requirements.
Most of the country-specific functions for India relate to Financials and Logistics. The main areas are as
follows:
• Excise duty and the central value-added tax system (CENVAT)
• Withholding tax (also known as tax deducted at source)
• Sales tax
• Maintenance and printing of statutory excise registers
EXCISE REGISTRATION
Each entity is assigned its own excise registration number. Every factory that manufactures excisable goods is
required to register separately, so that a business with seven factories requires seven registrations.
As per the existing Excise registration, one single excise registration number has been created for the
entire BALCO covering the following SAP plant codes
1000 – BALCO
2000 – CPP (Captive Power Plant)
3001 – Smelter Project
3002 – Captive Power Plant Project
EXCISE GROUP
This is a unit within an excise registration, in India, which keeps its own set of excise records.
Whereas the excise registration reports to the excise authorities, the excise group is a purely internal organizational
unit. Each excise group keeps records of all transactions that have to be reported to the excise authorities. When the
time comes to present these records to the authorities, the excise registration compiles the information from all of its
excise groups.
Excise Group determines Excise Register number range
All excise Reports (RT-12, PLA, RG23A Part I & II , RG23C Part I & II) will be generated based on
this Excise Group.
An Excise Group can be defined for a Company Code & Plant combination
All the Sales Offices & Plants outside Korba having different Excise Registrations have been
updated with different Excise Group having separate excise registrations.

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EXCISE GROUP
BALCO Ltd.
E0 (BALCO, Korba) E2 (Jaipur Sales Depot) E3 (Faridabad depot) Others…
SERIES GROUP
Series Group determines number range for outgoing excise invoice / challan ( e.g. 57AC5
challan etc.)
SERIES GROUP
Excise Invoices Rejected materials Subcontracting
invoices Challans 57AC5

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2 ESSENTIAL MASTER DATA FOR EXCISE
Use J1ILN transaction code for Excise Menu
Double click on J1ID
Click on Maintain tab to
select / update (F5)

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1. Enter the Excise Chapter Ids
--- As a one time measure, enter all the chapter Ids in the system.
---- In case of a new chapter Id, click on New Entries
2. Update the material & chapter ID combination
Here update the material no., plant code,material type etc. As follows:
Material Type :
For Cenvatable Input materials : Blank This will be updated in RG23A Part I & Part II
For Cenvatable Capital Goods (under Excise Rules) , select Consumables.

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However all the following types will also be updated in RG23C
Assets
Tools
All outgoing materials (for SALES) are to be updated as `RG1’
All non-cenvatable materials will be updated as `Non-cenvatable’ type. Such cases will not be updated in
RG23 A or C.
NUMBER OF GOODS RECEIPTS PER EXCISE INVOICE
Specifies whether you are allowed to receive more than one delivery per excise invoice, and if so, whether you can
take the CENVAT credit immediately (Multiple Credits) or have to wait until the delivery has been made in full (Single
Credit).
You can use `multiple goods receipt, multiple credits’
Declared & Declaration dates are no longer required.
3. CENVAT DETERMINATION
Here you maintain Plant wise input & output materials which are Cenvatable.
Non-cenvatable materials are not required to be maintained.
The Input Material for cenvat describes the excisable input materials that will be used for Production.
We suggest to update the same material number both as `Input’ as well as `output’

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4. VENDOR EXCISE DETAILS
The ECC Code, Excise Registration number,Excise Range, Excise Division, Excise
Commissionerate,Excise Indicator , Type of Vendor etc. Are required to be updated for ALL SAP
VENDORS.
Excise Indicator should be updated with `1’ for all excisable vendors. If you don’t update all
the information as mentioned above, Excise Duty % will not come in Purchase Order.
Move the cursor rightwards......

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5. CUSTOMER EXCISE DETAILS
Here you enter BALCO’s Customer excise details to be printed in the Excise Invoice
6. EXCISE INDICATOR FOR THE PLANT
Here you enter the Plant wise Excise Registration details
Excise indicator (at the last column) is ’1’ for plants producing excisable materials.
6. EXCISE TAX RATES
Here you enter the excise tax rates as confirmed in the last Budget. If there is any change in the
Excise Rates, please change the rate in this table.
Here the Final Excise indicator is maintained. The final excise indicator for excise duty
is maintained based on the excise classification of the company and vendor, company and
customer. For each of the final indicators, the excise duty rates are maintained.
By default it is ’1’ i.e. full excise duty (16%)

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7. EXCEPTIONAL MATERIALS EXCISE RATES
Use this transaction to update the excise rates (say 8% or 4% ) for the following combinations
(a) Plant
(b) Vendor
(c) Material
(d) Chapter Id

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3. ROLE : GOODS RECEIVER AT STORES
On receipt of materials , the Goods Receiver at Stores will enter the transaction code MIGO for goods
receipt. If the item is cenvatable and all the excise master data are already updated, the excise tab will
come automatically ( after making the item OK).
The Goods Receiver can change the following at the time of GR
(1) Chapter ID
(2) Excise invoice quantity
(3) Base Value
(4) Description of the material as per Excise Invoice
Automatically system will recalculate the excise duty based on this excise Base value and excise rate.

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The Goods Receiver will make one GR for each excise invioce. The Supplier can lateron submit a
separate Commercial invoice for all the supplies & excise Invoices. Invoice verification will be based on
Purchase Order against which several line items will appear based on GR document number.
At the time of GR, the Goods Receiver can select the following options from Excise Tab
(1) Only capture excise invoice : It will capture the excise details & post Part I only
(2) Only refer excise invoice : It will not capture excise invoice, no part I posting
(3) Only Part 1 : This will update the Part 1 only
(4) No Excise Entry : There will be no excise entry
By default, `Only Capture Excise Invoice’ will come
The Goods Receiver cannot post the RG23 Part II as per the system setting.
At the end of the day, the Goods receiver will generate a list of cases where items are cenvatable &
excise invoices are `Captured’. This report will show the Internally generated excise serial numbers . The
goods receiver will send this report attaching all the cenvat documents received during the day.
See the last tab

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4. ROLE : EXCISE SUPERVISOR FOR PART II POSTING
At the end of the day, the Excise Supervisor will receive a list from Stores attaching all the cenvat
documents during the day. Then based on this list, he will enter transaction code J1IEX_P
Menupath : J1ILN -> Indirect taxes -> Procurement -> Excise Invoice -> Incoming excise invoice ->
Individual Processing -> J1IEX_P
Select `POST’ if no change is required. Simulate, if you want to check the FI entry.
Then click on POST button. System will generate Part II serial no.

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However if you want to change the excise details go to the Change mode...
Here you can change the following:
1. Chapter Id
2. Description of material
3. Invoice No.
4. Document date
5. Ship from ( under miscellaneous tab)
6. Base price
7. Excise duty
System will show the RG23 Part 1 serial no., GR no. PO number
You can change the excise vendor ( for example PO placed on Kirloskar, material supplied by SAIL on
the basis of Kirloskar’s instruction), provided the Vendor code of SAIL is available in the system.
Excise details like Range, Division etc. of this alternate vendor will come from J1ID - updation of Vendor
excise details.

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Now you can `POST CENVAT’
System will post the cenvat amount in RG23 Part II based on material type (inputs / Capital Goods).

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To check the status of all the excise invoices created, you can use the transaction code J1I7
Selection criteria can be Excise Group (E0), PO No. (Purchasing Document)
You can select further the following
(1) No posting done
(2) Part I & Part II posted
(3) Part 1 posted, part II not posted
System will show the following report where Internal Excise Serial No. Is displayed.

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5. CENVAT CREDIT AGAINST CAPITAL GOODS (INCLUDING SPARES)
Businesses are allowed to set off excise duty on purchases of capital goods against excise duty on
outputs. However, unlike with raw materials, you can only set off half of the duty in the first year, and the
rest in any year after that.
Prerequisites
In the material master (J1ID) , you have classified the capital goods as such.
Features
When you post an excise invoice that contains capital goods, the system posts half of the excise duty to
your CENVAT account and posts the rest to a G/L account for CENVAT on hold.
In following years, you can use a report to identify the capital goods with excise duty on hold and transfer
the duty to the CENVAT account (see Transfer of CENVAT Credit on Capital Goods).
Steps:
When working with excise invoices that include capital goods, note the following:
• Capturing vendor excise invoices
When you create an excise invoice with capital goods, you have to set the material type to A
(assets), C (consumables), or T (tools).
• Posting excise invoices
When you come to post the excise invoice, the system posts only half of the excise duty to the
CENVAT account. The system does not round the amount off.
Transfer of CENVAT Credit on Capital Goods (Transaction code : J2I8)
Use
You use this report to display a list of the vendor excise invoices where the vendor has levied excise duty
but you have not posted it (in full) to your CENVAT account.
This is particularly useful in the case of capital goods, in order to find out how much credit remains from
previous years.
Features
To access the report, from the SAP Easy Access screen, choose Indirect Taxes → Procurement →
Excise Invoice → Reports → Balance Credit for Capital Goods.

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Selection
On the selection screen, enter:
• Organizational data (plant code say 1000)
• Data of the documents that you want

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Output
The system displays a list of excise invoices with excise duty outstanding. It shows you:
• The total amounts of the various types of excise duties levied on the excise invoice
• How much duty has still to be posted to the CENVAT account
Select the excise invoices that you want and choose Transfer credit. If you want to transfer only a portion
of the remaining amount, enter this amount as the amount to be credited.
The system creates an accounting document to post the duty to the CENVAT account and creates an
entry in the Part II register.
You can select all or select items and then press `Transfer Credit’

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6. SPECIAL CASES (EXCISE JV) TRANSACTION CODE -- J1IH
Cenvat reversals
Cenvat amount will be reversed due to the following reasons:
1. On rejection of material after quality inspection ( Transaction J1IS and J1IV)
2. Shop Floor rejection
3. For issue of material outside Balco Works
4. For material write off
5. For issue of material as a loan
(A) On rejection of material after Quality inspection : On rejection of material ( using 122 movement
type) , the user will use the transaction J1IS to reverse the cenvat credit.
Steps involved:
By the Store Keeper
(a) Enter MIGO
(b) Select Return Delivery & Material Document
(c) Enter the Original material document no. (GR No.)
(d) Enter reason for movement
(e) Select item OK
(f) Post. System will generate a document number.

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For Excise Invoice creation ( to send back the material)
(a) Enter J1IS
(b) Reference Doc. Type MATD
(c) Document No. is the rejected GR No.
(d) Enter Document year ( example 2003)
(e) Enter series group 001
(f) Enter Excise Group E0
(g) Sub transaction type will be blank. Then press
(h) System will display cenvat amount, chapter ID, quantity etc. If everything is OK
(i) Please remember, if the RG23 part II is not posted for this GR, system will not fetch
automatically the Value and excise duty.
(j) Save the GR.
(k) Enter J1IV (Post excise invoice ). System will generate an Excise Invoice Number. Note down
this number.

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Note:
(1) System will generate a material document with transaction type OTHR (Check MB51)
(2) Plant code will appear automatically based on original GR.
(3) System will display the message Excise invoice No. 0000000xxx generated. FI document no.
xxxxxxxx generated.

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ALTERNATIVE METHOD
Reversal of CENVAT Postings
Purpose
Assume you have posted a goods receipt and then posted the CENVAT on the excise invoice
accordingly. Then it transpires there is a problem with the goods and the goods receipt has to be
reversed. Under excise laws that means you are no longer entitled to the CENVAT credit.
In the SAP System, therefore, you have to reverse CENVAT posting correspondingly.
Process Flow
1. You reverse the goods receipt.
(a) From the SAP Easy Access screen, choose Logistics → Materials Management →
Inventory Management → Goods Movement → Goods Movement (MIGO).
(b) In the top line:
(c) Select Cancellation.
(d) Select Material document.
(e) Enter the number of the goods receipt that you want to cancel
(f) Choose
(g) Flag all of the line items as OK.
(h) Save the reversal document.
The system:
o Creates a reversal document to cancel the goods receipt
o Creates additional entries in Part I of the appropriate excise register to reverse the
original entries
o Changes the excise invoice document status to In process.
2. You reverse the CENVAT posting on the excise invoice.
(a) From the SAP Easy Access screen, choose Indirect Taxes → Procurement → Excise
Invoice → Incoming Excise Invoices → Individual Processing →
Change/Display/Post/Cancel.
(b) In the top line:
1. Select Post CENVAT.
2. Select Vendor Excise Invoice.
3. Enter the excise invoice number.

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4. Choose
5. Choose Simulate CENVAT.
A dialog box appears, showing which postings the system will make to reverse the CENVAT.
To close the dialog box, choose .
Choose Post CENVAT.
The system:
o Creates an accounting document to reverse the CENVAT postings
o Creates a corresponding entry in Part II of the appropriate excise register
3. If your plant does not allow multiple goods receipts per excise invoice, you must also cancel the
excise invoice.
The system changes the excise invoice status to Canceled.
If, however, you do allow multiple goods receipts per excise invoice, you do not have to cancel it.
If you want, you can leave the excise invoice as it stands. Then, if you receive another delivery of
goods for this excise invoice, enter the excise invoice number when you post the goods receipt.
Canceling Excise Invoices
1. From the SAP Easy Access screen, choose Indirect Taxes → Procurement → Excise Invoice →
Incoming Excise Invoices → Individual Processing → Change/Display/Post/Cancel.
2. In the top line:
a. Select Cancel.
b. Select Vendor Excise Invoice.
c. Enter the excise invoice number.
d. Choose .
3. Save the excise invoice.

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(B) Shop Floor Rejection : In case of shop floor rejection also, the same procedure as mentioned
above will be followed.
(C) Reversal for issue of Cenvatable material outside :
Steps involved are as follows:
(a) Here an issue document will be created for issuing the material using 201 movement type.
(b) Excise Section will reverse a consolidated amount against all those issues using transaction code
J1IH ( Material Non-Prod.) . Here the user will enter the following :
• Material Doc. No. – Enter any reference Issue doc. Number.
• Document year – (example 2003)
• Company Code 1000 for Balco, For Projects 3000
• Plant : Enter plant code of the issuing plant
• Enter Excise Group ( example E0 )
• Enter where to adjust this amount….against RG23A or RG23C or PLA or Fortnightly
adjustment.
• Enter the Excise duty in BED Amount field.
• Adjust the excise duty for each line item either: (i) Manually or , (ii) By assigning the line
item to an excise invoice
• Specify which G/L accounts are to be posted to.
• Save the adjustment posting.

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(D) Write Off cases :
The respective plant will communicate the details of materials written off to the Excise Section .
Steps are as follows:
• The respective plant will communicate the details of such write off cases to Excise
Department mentioning Material no., year/ month of purchase, plant code, quantity,
issued to cost center etc.
• Excise Department of BALCO will check once again all such cases and the
corresponding excise duty to be reversed.
• Once the amount to be reversed is determined, use J1IV ( material write off) to reverse
the cenvat credit.
• The same procedure as mentioned above will be followed.
(E) CENVAT REVERSAL without any reference
(1) Select J1IH (Other adjustment)
(2) Enter any document reference No. ( say SC 501 for Showcause Notice No. 501)
(3) Enter Document year = 2003
(4) Enter Company Code = 1000 Plant Code = 1000 for 1000 plant
(5) Select Determine GL Accounts & Check the FI Entry
(6) Post the Document
(F) DIFFERENTIAL EXCISE INVOICE
(1) Select J1IH (Additional Excise )
(2) Enter the original PO Number as reference
(3) Select the Register type RG23A / C
(4) If you want to enter material wise details press F5, otherwise ignore
(5) Enter the Cenvat amount as per the document
(6) Press on Determine GL Accounts, check & click on green tick
(7) Post. System will post the amount directly to RG23 Part II
Note : Here there will be no RG23 Part 1 entry.

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7. CAPTURING EXCISE INVOICES WITHOUT REFERENCE (PO)
Use
This procedure shows you how to capture an incoming excise invoice if you do not have any reference
documents.
You can also follow this procedure if you do have a material document that you want to use as a
reference document, but you want the system to cross-check the excise invoice data against other master
data or transaction data less stringently than it normally would
You are executing a new project. The executing company purchases all the materials it needs to build the
plant, deals with all of the invoices and most of the other paperwork, with the exception of the incoming
excise invoices, which the law requires you to deal with yourself. The subcontractor sends you all excise
invoices accordingly and you capture them in the system without any reference documents.
Procedure
1. From the SAP Easy Access screen, choose SAP Easy Access screen, choose Indirect Taxes →
Procurement → Excise Invoice → Incoming Excise Invoices → Individual Processing →
Capture/Display. (TRANSACTION CODE :: J1IEX_C )
2. In the top line:
a. Select Capture Excise Invoice.
b. Select Without Purchase Order.
c. If you have a material document, enter the material document number and choose .
If you do not have any reference documents, leave the field blank.
3. Enter the header data.
4. Enter the line items.
5. Save the excise invoice.
Entering Header Data
1. On the Excise invoice tab:
o Copy the information from the vendor’s excise invoice into the following fields:
Excise invoice number
Excise invoice date
Vendor
o Fill out the Excise group field.

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2. On the Miscellaneous tab, enter the following data:
o If the vendor who sent you the excise did not manufacture the goods itself, but obtained
them from a different manufacturer, enter the manufacturer in the Ship-from field and
choose Enter.
o Change the excise range, excise division, and ECC number if they are incorrect.
3. Choose Check to check the header data.
o If the data is in incomplete or incorrect, the system displays a list of the problems.
o If the data is all right, the traffic light on the Excise invoice tab turns green.
Result
Once you have saved the excise invoice, you treat it as you would any other excise invoice.
Save the Document
System will show : Excise Invoice has been captured

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POST THE INVOICE
Use J_1iEX_P
Enter the Internal Excise Serial No.
Check the Excise duty, Invoice No., Chapter Id
Post the document

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8. CENVAT AGAINST IMPORTED MATERIALS AGAINST IMPORT PO
FOR STORES (Other than Projects )
1. Create Purchase Order – ME21N
a. In the Item conditions enter the Customs duty ,CVD & SAD – change the vendor for both
these to ‘Customs’
c.b.Add other charges – In case it is not paid to the main vendor, change the vendor.
2. Make Down Payment to the Customs – F-48
a. In the selection screen enter the vendor code, bank account no. and special G/L
indicator (A).
b. Enter amount, which you want to deposit to customs.
d.c.Post the doc.
3. Make down payment to the main vendor – F-48
a. Same as above
4. Invoice Verification for payment to Customs Authorities (Customs Duty,CVD & SAD) – MIRO
a. In the selection screen enter the PO no. and select ‘Planned Delivery cost’
b. Enter the currency as ‘INR’
b.c.Select Customs duty and CVD – Enter the quantity and amount.
c.d.Simulate and post.
6.5. Goods Receipt – MIGO
a. Movement type = 101.
b. Enter the PO No.,
c. Enter the Bill of Entry No. & Date (in the vendor’s excise inv field).
c.d.Select ‘Only Capture Excise Invoice’
e. Change the BED(Basic Excise duty amount if required)
f. Enter the quantity received
g. Enter the Storage location
d.h.Check & Post the document.

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7.6. Verify / Post the Excise Invoice created – J1IEX
a. Enter the excise invoice no. created.
b. Verify the amount and quantity.
c. Post the document.
d. Check the accounting document.
8.7. Invoice Verification for the main vendor – MIRO
a. In the selection screen enter the PO no. and select ‘Goods / Service Items + Planned
Delivery cost’
b. Select Items and any other charges paid to the main vendor – Enter the quantity and
amount.
c. Simulate and post.
10.8. Check vendor balance – Fbl1n
a. Select the special / GL indicator in the selection screen.

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b. See the vendor balances for main vendor and customs.
11.9. Down Payment clearing for Customs – F-44
a. In the selection screen enter the vendor code and Special GL indicator (A).
b. Select the items to be adjusted against the down payment (double click on the items to
select)
c. Post the document.
12.10. Down Payment clearing for the main vendor – F-44
a. Same as above.
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FOR PROJECT STORES (COMPANY CODE 3000)
1. Create Purchase Order – ME21N
(a) In the Item conditions enter the Gross Price , ‘YEPC’ for EPCG
(b) Change the vendor for YEPC to ‘Customs’
(c) Enter Tax Code ‘P0’ eventhough the item is cenvatable
(d) Add other charges – Like Insurance (In case it is not paid to the main vendor,
change the vendor).
2. Make Down Payment to the Customs – F-48
a.(a) In the selection screen enter the vendor code, bank account no. and special G/L
indicator (A).
(b) Enter amount, which you want to deposit to customs.
(c) Post the doc.
3. Make down payment to the main vendor – F-48
a.Same as above
4. Invoice Verification for payment to Customs Authorities (EPCG payment) – MIRO
a.(a) In the selection screen enter the PO no. and select ‘Planned Delivery cost’
(b) Enter the currency as ‘INR’
(c) Select EPCG – Enter the quantity and amount paid to Customs in INR.
(d) Simulate and post.
6.5. Goods Receipt – MIGO
a.(a) Movement type = 101.
(b) Enter the PO No.,
(c) Enter the Bill of Entry No. & Date (in the vendor’s excise inv field).
(d) Select ‘Only Capture Excise Invoice’

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(e) Change the BED(Basic Excise duty amount if required)
(f) Enter the quantity received
(g) Enter the Storage location
d.6. Check & Post the document for cenvat availment
7.Verify / Post the Excise Invoice created – J1IEX
a.(a) Enter the excise invoice no. created.
(b) Verify the amount and quantity.
(c) Post the document.
(d) Check the accounting document.
8.7. Invoice Verification for the main vendor – MIRO
a.(a) In the selection screen enter the PO no. and select ‘Goods / Service
Items + Planned Delivery cost’
(b) Select Items and any other charges paid to the main vendor – Enter the
quantity and amount.
(c) Simulate and post.

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10.8. Check vendor balance – Fbl1n
a.(a) Select the special / GL indicator in the selection screen.
(b) See the vendor balances for main vendor and customs.
11.9. Down Payment clearing for Customs – F-44
a.(a) In the selection screen enter the vendor code and Special GL indicator (A).
(b) Select the items to be adjusted against the down payment (double click on the
items to select)
(c) Post the document.
12.10. Down Payment clearing for the main vendor – F-44
a.Same as above.
DETAILED INFORMATION
This process shows you how to handle the countervailing duty (CVD) on imports, which is levied in place
of excise duty. Unlike other forms of customs duties, such as basic customs duty or special customs duty,
you can credit CVD paid on imports to your CENVAT account.
Prerequisites
Vendor Master Record for Customs Office
Create a vendor master record for the customs office, so that you can create liabilities for the CVD (see
step 3 in the process flow).
Condition Type for CVD
The system handles CVD using a condition type for planned delivery costs. Specify which condition type
you use in Customizing for Logistics – General, by choosing Taxes on Goods Movements → India →
Basic Settings → Determination of Excise Duty → Excise Defaults.
CVD Clearing Account
When you post CVD to a CENVAT account (see step 5 below), the system debits the CVD to the BED
account and credits it to a CVD clearing account.
Specify which G/L account you want to use as the CVD clearing account, in Customizing for Logistics –
General, by choosing Taxes on Goods Movements → India → Basic Settings → Maintain Company Code
Settings.
Creating Purchase Orders

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You follow this procedure to create a purchase order for imports.
Country Version India contains a sample pricing procedure for imports, JIMPOR.
Procedure
Create a purchase order for the materials that you want to order using the standard procedure, but when
you fill out the item information, make sure that you observe the following:
• Invoice tab
o Enter a zero-rate tax code P0
o Deselect GR-based IV
• Conditions tab
a. Select the countervailing duty (CVD) condition and choose .
b. In the Rate field, enter the rate of CVD that will be levied on the material when it arrives
at customs.
c. In the vendor field, enter the vendor master record that you have created for the customs
office.
Then, once the vendor has delivered the goods and you enter the invoice, the system will
automatically credit the CVD liability to the customs office.
Entering Invoices for Bills of Entry
To enter an invoice for a bill of entry, you follow the standard invoice verification procedure, but make
sure you observe the following:
Header Data
• Basic data tab
o In the Amount field, enter the amount of countervailing duty (CVD) stated on the bill of
entry in rupees.
o Do not enter any other taxes.
• Details tab
o Assuming you specified in the purchase order that the CVD was to be paid to the
customs office, the system shows the customs office as the vendor. If not, enter the
customs office’s vendor master record in the Inv. party (Invoicing party) field.
Line Items
On the PO reference tab, enter data as follows:
1. Enter the number of the purchase order related to this delivery.

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o If you only created one purchase order for the goods, enter the purchase order number
and select Planned delivery costs.
o If you sent more than one purchase order to the vendor and it sent you all of the
ordered materials together in one shipment:
i. Choose .
ii. Enter all of the purchase order numbers in the table.
iii. Select Planned delivery costs.
iv. Select Deliveries and deselect Returns.
v. Choose Adopt.
In both cases, the system displays the line items in the line item overview.
2. For each line item:
o In the Amount field, enter the amount of CVD on the item (if you have more than one
item, you may have to work the amount out manually).
o In the Quantity field, enter the quantity of goods on the invoice.
o Enter a zero-rated tax code.
3. Choose Simulate.
A dialog box appears with a list of the postings that will be made to Financial Accounting (FI).
4. Choose Post.

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9. REJECTION OF EXCISE INVOICES
If a vendor sends you an excise invoice that as it stands is unacceptable – for example, if it is illegible or
some of the data is missing – you still post the excise invoice, but you assign it a rejection code.
If you only capture an excise invoice, the rejection code does not have any effect on the excise invoice
other than to denote it as rejected in some way.
However, if you post an excise invoice, the rejection code controls whether the system creates a normal
CENVAT document or if it posts the excise duty to the CENVAT on hold account pending clarification of
the invoice.
Day-to-Day Activities
To reject an excise invoice, set the appropriate rejection code.
If you want, the system puts the excise duty on hold. Then, once you have checked the excise invoice,
you can post the excise duty from the CENVAT on hold account to the excise duty accounts.
Rejecting Excise Invoices
Follow this procedure to reject an excise invoice, if you still want to post the excise duty to the normal
accounts.
Procedure
1. From the SAP Easy Access screen J1ILN, choose Indirect Taxes → Procurement → Excise
Invoice → Incoming Excise Invoices → Individual Processing → Change/Display/Post/Cancel.
2. In the top line:
a. Select Post CENVAT.
b. Select Excise Invoice Number.
3. Choose .
4. On the Miscellaneous tab, enter a rejection code that posts the excise duty to the normal
accounts.
A dialog box appears, showing you that the system will debit the excise duty to the excise duty
accounts and credit it to the CENVAT clearing account.

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6. Choose Post CENVAT.
Result
The system posts the excise invoice as normal. It:
• Posts the excise duty to the appropriate accounts
• Creates the appropriate entries in Part II of register RG 23A or RG 23C
• Changes the document status (on the Excise invoice tab) to Posted
Rejecting Excise Invoices with CENVAT on Hold
Follow this procedure to reject an excise invoice and post the excise duty to a CENVAT on hold account,
pending the receipt of more information.
Procedure
2. In the top line:
3. Choose .
4. On the Miscellaneous tab, enter a rejection code that posts the excise duty to a CENVAT on hold
account.
A dialog box appears, showing you that the system will debit the excise duty to the CENVAT on
hold account and credit it to the CENVAT clearing account.
Result
The system creates an accounting document to posts the excise to the appropriate accounts, but does
not create any entries in Part II of registers RG 23A or RG 23C.
If you display the excise invoice, you see:
• On the Excise invoice tab, the document status is In process
• On the Miscellaneous tab, there is a link to the accounting document

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Once the vendor has provided you with the information you need, you can post the CENVAT on the
rejected excise invoice.
Rejection Accounting Document
Definition
An accounting document that the system creates when you reject an excise invoice with CENVAT on
hold.
Use
When you reject an excise invoice with CENVAT on hold, the system creates an accounting document to
debit the excise duty to the CENVAT on hold account and credit it to the CENVAT clearing account:
Posting CENVAT on Rejected Excise Invoices
Use
Follow this procedure if you have an excise invoice that you have rejected, with the CENVAT credit on
hold, and you now want to take the CENVAT credit.
Procedure
2. In the top line:
3. Choose .
4. On the Miscellaneous tab, delete the rejection code.
A dialog box appears, showing you what CENVAT postings will be made.
The system will credit the CENVAT on hold account, and debit the appropriate excise duty
accounts.

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Result
The system:
• Posts the CENVAT credit as normal
• Creates the corresponding entries in Part II of the appropriate excise registers.
Reversal Rejection Accounting Document
Definition
An accounting document that the system creates when you post the CENVAT on a rejected excise
invoice, to reverse the posting to the CENVAT on hold account.
Use
When you post the CENVAT, the system creates an accounting document to debit the excise duty to the
excise duty accounts and credit it to the CENVAT on hold account:

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10.ENTERING GOODS RECEIPTS FOR NON EXCISABLE GOODS
This procedure describes how warehousemen at manufacturing plants enter the receipt of non-excisable
goods.
Create purchase order with Tax Code P0
You enter the goods receipt, following the standard procedure, and in addition, you also set the excise
action as appropriate.
Procedure
1. From the SAP Easy Access screen, choose Logistics → Materials Management → Inventory
Management → Goods Movement → Goods Receipt → For Purchase Order → GR for Purchase
Order.
2. In the top line, enter the purchase order number and choose .
3. Enter header data as required, following the standard procedure.
In addition, on the Excise Invoice tab, set the excise action to No Excise Entry.
4. Enter line item data as required, again, following the standard procedure.
5. Save the goods receipt.
Result
The system creates:
• A material document to record the goods receipt
• An accounting document to debit the inventory account and credit the GR/IR clearing account
That is the end of the procedure for non excisable goods.

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11.GOODS ISSUE TO ANOTHER PLANT ON PAYMENT OF DUTY
This procedure describes how Store Keeper at manufacturing plants issue goods for a stock transport
order placed by another manufacturing plant or depot.
You enter the goods issue, following the standard procedure, and in addition, you also enter the excise
invoice details at header level and item level.
Procedure
1. From the SAP Easy Access screen, choose Logistics → Materials Management → Inventory
Management → Goods Movement → Goods Issue (MIGO).
2. In the top line, enter the purchase order number and choose .
3. Enter header data as required, following the standard procedure.
In addition, on the Excise Invoice tab:
a. Set the excise action to Create Excise Invoice or Create & Post Excise Invoice.
b. Enter any other data required.
c. If you have activated Immediate Utilization for the series group, choose . On the
CENVAT Utilization tab, specify which accounts you want to pay the excise duty from.
Choose to close the dialog box.
4. Enter line item data as required, again, following the standard procedure.
In addition, check the data on the Excise Item tab, and change it if necessary.
5. Save the goods issue.
Result
If you set the excise activity to Create Excise Invoice, the system creates:
• A material document to record the goods issue to stock in transfer
• An accounting document to debit the manufactured components in stock account at the issuing plant and
credit the same account at the receiving plant
• A Part I entry in register RG 23A or 23C
• An entry in register RG 1 (if you have customized the excise group accordingly, and if the goods are finished
goods)
The next step is to post and print the excise invoice.
If you set the excise activity to Create & Post Excise Invoice, the system also creates:
• A Part II entry in register RG 23A or 23C
• A CENVAT accounting document
The next step is to print the excise invoice.

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12.MULTIPLE GOODS RECEIPTS FOR A SINGLE EXCISE INVOICE
Under normal circumstances, your vendors send you one excise invoice per delivery. Sometimes one
excise invoice covers more than one delivery, for example, if you order a large quantity of oil and the
vendor requires several trips to complete the delivery.
Prerequisites
You have specified the maximum number of goods receipts per excise invoice per excise group, and
whether you want multiple goods receipts with single or multiple CENVAT credits. You do so in
Customizing for Logistics – General, by choosing Taxes on Goods Movements → India → Basic
Settings → Maintain Excise Groups.
You have also specified which materials multiple goods receipts are allowed for. If you do not, the system
will display a warning for each material when you come to post the excise invoice
Features
The R/3 System allows you to control:
• Which of your excise groups allow multiple goods receipts (see above)
• Which materials you allow multiple goods receipts for (see above)
• When to credit the excise duty on the goods to your CENVAT account, either:
o As soon as the accounts supervisor has verified and posted the excise invoice,
irrespective of whether the delivery has been made in full
o Whether to wait until the full quantity has been delivered
You have ordered a consignment of INR 800,000 worth of fuel from a vendor with excise duty at
INR 80,000. The vendor sends the fuel in two batches. When the first batch arrives, the store person
posts the goods receipt for INR 400,000 (plus INR 40,000 of duty); the excise supervisor does not post
the excise invoice for the quantity delivered. When the second batch arrives, you can credit INR 80,000 to
your CENVAT account.
Activities
Working with multiple goods receipts entails the following activities:
• Posting goods receipts
When you post a second (or third, or fourth) goods receipt for an excise invoice, the system
prompts you to confirm that this is correct.
• Posting excise invoices
When you come to post an excise invoice, the system displays all the receipts created for the
invoice. If at material level multiple credit is disallowed, the system prompts you to confirm that
you want to accept the credit. Otherwise, you can credit the CENVAT account for each receipt
separately.

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13.EXCISE REGISTERS & REPORTS
The excise authorities require you to maintain a number of registers relating to excise duty. They have to
be printed out monthly and shown to the authorities in the event of an audit. The R/3 System makes all
the entries for these registers automatically, and you can prepare copies of them as and when necessary.
Alternatively, you can download the data for processing by non-SAP software.
Features
The SAP System handles the following excise registers:
• Register RG 1
• Register RG 23A and 23C, Parts I and II
• Register RG 23D
• Personal Ledger Account (PLA)
This is the bank account from which you transfer any money owing to the excise authorities.
• Register RT-12
This is a monthly report that summarizes the CENVAT and PLA information from the other
registers.
Purpose
You follow this procedure to create the excise registers.
Process Flow
1. You update register RG 1 and the Part I registers daily.
This report updates any missing data for the RG 1 register, and Part I of the RG 23A and RG 23C
registers. Its main purpose is to update the issue information in the Part I register, which is not
otherwise tracked by the system.
2. When you need to submit the registers, you run the Data Extraction report, and the system
saves the data to an internal table.
3. You run the Register Printout report, which reads the data from this table and prints it out.

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RG 1 Register
The system does not automatically generate entries for goods receipts from production orders. You
have to generate these yourself.
Periodic Processing
Generate the entries once a day using the Register Update program.
Update of Registers RG 1
Precondition
1) The initial opening balance against each SAP material must be uploaded in CIN.
2) The material must be updated in CIN material master as – RG1 type.
3) The same movement type is updated in Customizing
Menupath: SPRO-> Logistics General -> Taxes on Goods Movement -> India-> Business Transactions ->
Specify which movement type involve excise invoice. This is a one time activity

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RG1 Columns vs. SAP quantity update based
on movement types
Movement
types
Remarks
Opening Balance 961, 962 One time Op. Balance update
Quantity manufactured 321
322
101
102
TF quality to unrest
TR quality to unrestricted
GR goods receipt
GR reversal
Quantity Issued / dispatched on pmt of duty 601
602
641
642
651
201
202
Goods Issue delivery
Return Delivery
Stock in Transit
Return – Stock in Transit
Goods Returns
Goods issue Cost Center
Return from Cost Center
Quantity Issued / dispatched on without pmt of duty
Export, Exemption under Notification
601
602
641
642
651
201
202
Goods Issue delivery
Return Delivery
Stock in Transit
Return – Stock in Transit
Goods Returns
Goods issue Cost Center
Return from Cost Center
Closing balance Derived figure
UPDATE RG1
TRANSACTION CODE: J1I5
This report only creates register entries for goods movements that have not already been entered. It does
not create duplicate entries.
Enter the Company Code = 1000
Enter the plant code = 1000
Enter Excise Group = E0
Enter the posting date: From …. To…
SAP suggests to enter maximum three days as from .. to for better system performance.
However, there is no restriction.
Select Document Posting date
Select RG1
Enter the classification one by one as follows for RG1
For Quantity manufactured:
RMA Receipt from manufacture
ROP Receipt from outside under any other provision
For Updation of issues on payment of duty :
IDH Removal from factory on payment of duty for Home use
IDE Removal on payment of duty for export under no bond

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For removal without payment of duty
IWE Removal without payment of duty for export under bond
IWT Removal without payment of duty for transfers
IWO Removal without payment of duty for other purpose
The following sequence should be strictly maintained
1. Update all quantity manufactured items (RMA)
2. Update quantity removed without payment of duty
(a) Export under Bond
(b) Deemed Export
(c) Captive consumption without excise duty if any
(d) Dispatches without excise duty under different notifications.

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To identify all such documents, use report ZEXPORT
Identify all the material document numbers related to export etc. and update the RG1
register using appropriate classification (e.g. IWE)
Example
Enter J1I5 as above. Select the classification as IWE
System will display list of issue documents.
Select particular issue documents based on ZEXPORT report for export cases.
Post.
Once all such exceptional cases (where excise duty is Nil ) are updated, then update the other
issue documents pertaining to normal dispatches (classification IDH )

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For RG1 updation, in J1I5, select the material documents. ( you can select all also if OK)
Simulate
System will show all eligible cases as Green
Post
All red cases are appearing since the adequate quantity is not available

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One more prerequisite (first time upload)
You have specified in the material master data (J1ID) which materials are to be entered in register RG 1.
For each of these materials, you have to maintain the material form in table J_2IRG1BAL as below. Do
not make any entries in fields that are not listed below:
Field Field entries
EXGRP Material’s excise group
DATUM Date from which RG1 report is required, normally the date of going live
MATNR Material
FORM Enter P (Packed) or L (Loose). Do not leave this field blank.
WERKS Leave this field blank.
OP FN UOM
OP BN UOM
CB FN UOM
Leave these fields blank.
All quantities in this table are updated in the base unit of measure of the material.
USNAM User ID of the person filling out the table.
CPUDT Date of entry
CPUTM Time of entry

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Issues and receipts are handled separately based on the following register and classification code
combinations:
Register Type Goods issues Goods receipts
IIM ROP
IPD
RG 23A
IWD
IIM ROP
IPD
RG 23C
IWD
IDH RMA
IDE ROP
IWE
IWT
RG 1
IWO

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RG23A & C Part I & II , PLA , RT-12
For printing RG23 A & C Part II
STEPS
(A) Enter J2I5 (extract the balances)
Enter from date & To date
Tick RG23A Part II or RG23 C Part II
Execute
(B) Then enter J2I6 Print Utility program
Select the Register
Execute
Enter start date & finish date
Take the printout (Enter Output device LOCL ) , you can also use Print Preview.

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Other reports available:
1) J2I6 : Print Excise Registers ( Rg23A , Rg23C , PLA, RT-12 Return,RG1)
2) J2I9 – Cenvat Register
3) J2I8 - Balance credit of Capital Goods
4) J1IGR – List of GRs without Excise Invoices
5) J1IFR – Subcontracting challan listing
6) J1I7 – List excise invoices
7) ZMMCENVAT - Daily report of Cenvat documents received / Posted

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Here the Reference Doc 2 = GR Number
Quantity of Goods Received = GR Quantity
DN Qty = Total Quantity as per Invoice
The columns can be shifted any time by dragging the respective column. The report can also be
downloaded.
In this report (ZMMCENVAT) Excise Document status blank will fetch all the records. If you make status =
P, then all documents not yet posted will come. If you select status = P, all Rg23 Part II Posted
documents will appear.
Important transactions
1) PO Display : ME23N to check the tax codes
2) Vendor display : XK03
3) Stock Overview : MMBE
4) Goods Receipt : MIGO
5) Display GR / Invoice Receipt : MB5S
6) Project Orders : CNB2
7) List of PO : By Vendor ME2L
8) List of PO : By Material : ME2M
9) Material Description : MM03
10) Invoice Overview MIR6

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14.CENVAT UTILIZATION
Updation of TR6 Challan :
Steps Involved:
1. Create an FI ( Financial entry) Document Transaction Code F-02
Enter proper Document type (SA)
Debit 40 PLA on Hold xxxxxx
Credit 34 Vendor ( xxxxxx) Yourself A/c Excise Commissioner
A FI document number will be generated
2. Then enter the transaction code J1IH ( TR6 challan)
Enter document number as FI document no.
Enter Company Code = 1000
Plant =
Excise Group = ‘E0’
Enter the amount as per TR6 challan
Now excise JV with FI document no. will be created & amount will be posted in PLA.
Cenvat Utilization run :
STEPS :
(1) Using transaction code J2IU, the user at Excise Section can adjust the cenvat credit available against
duty liability. User will enter the following :
(a) Plant 1000 (BALCO), Smelter Project (3001) , Power Project (3002)
(b) Excise Group (example ‘E0’)
(c) Posting date ( example 5th January 2004 for December)
(d) Period say ’01.12.2003’ and ’31.12.2003’
Alternatively, the user can use the ‘variant’ to reduce the data entry.

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(2) Press : Simulate.
If, for any reason, user wants to select an excise invoice individually, you can do so. Any entry in the
Period field will be disregarded. To display a list of all the excise invoices whose excise duty you have
not yet remitted, choose Display pending. invoices.
(3) For each sort of excise duty, the system will show:
• How much you have to remit (Amounts payable group box)
• How much credit you have at your disposal on the appropriate CENVAT account (Available
balances)
This figure is equal to the credits on the CENVAT account less the minimum balance.
• How much credit you have on the CENVAT accounts (G/L account balances)
You now have to specify which accounts can be used to utilize the duty amount. In the Balance Utilization
group box, the system proposes how much money should be taken from which accounts. You can
overwrite these fields if you want, and choose to refresh the display.
When you have finished, save your entries.
The system: Creates an accounting document and updates the Part II register

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ALTERNATIVE 1
Calculate the following
(a) Total duty liability
(b) Total as per RG23 A Part II (Closing balance as on say 31st December)
(c) Total as per RG23C Part II ( Closing balance as on say 31st December)
Run J2IU report for a period ( say 1st December to 15th December). Simulate
Here your RG23A Balance is (say) Rs. 9,590,142.60 and amount payable against despatches
Is (say Rs. 7,619,421.74)
Adjust the full amount against RG23A only. So all invoices posted during this period will be
tagged as `Duty paid against RG23A’
Save
Then take the next period say 16th December to 25th December
Adjust the full amount against RG23C. System will allow so long your RG23C balance is more
than duty liability.
Then post the balance duty liability against PLA. Before that always debit the PLA thro’ payment
(J1IH) and actual payment thro’ TR6 Challan.
ADVANTAGE : Here it is clear that date wise for a particular period, duty has been debited against
Either RG23A or RG23C Or PLA. This will help to show the duty Debit serial No. for an invoice

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ALTERNATIVE 2
Calculate the following
(d) Total duty liability
(e) Total as per RG23 A Part II (Closing balance as on say 31st December)
(f) Total as per RG23C Part II ( Closing balance as on say 31st December)
Run J2IU report for a period ( say 1st December to 31st December). Simulate
For example, total duty laibility is Rs. 17,819,577.30 and RG23 Part II balance is Rs. 9,590,142.60
And RG23C Part II balance is Rs. 75,527.90
So payment has to be made first through PLA (J1IH – TR6 Challan )
If you try to adjust before PLA deposit, system will say ‚Not enough balance for utilisation.
So Deposit the balance Duty first thro’ PLA. Then system will allow.

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System will generate a Excise JV no. with Part II serial number for this PLA Deposit.
Now system in J2IU will show the total PLA balance.
Enter manually the RG23 A Part II amount to be adjusted
Enter manullay the RG23C Part II amount to be adjusted

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Enter the balance amount in PLA as follows
Total Duty liability = A
Amount to be adjusted against RG23A = B
Amount to be adjusted against RG23C = C
Amount to be entered in the PLA Field = (A) – (B) –(C)
Check whether the total amount is matching with total duty liability.
System will generate a message `No errors found, Document can be posted’
Then Save (post) the document.

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15.ROLES AND RESPONSIBILITIES
Based on the discussion with the process owners, the following roles & responsibilities are identified
Roles Responsibility
1 Entering the correct tax code
(since the item is excisable & cenvatable
based on tax code in PO )
Purchase Department
2 Entering the Excise invoice details correctly
at the time of Goods Receipt
Stores
3 Creation of material master Stores
4 Intimation of new creation of material
master to Excise Department
Stores
5 Update the chapter Ids in CIN tables Excise Department
6 Update the cenvat tag in CIN tables against
each material number
Excise Department & Procuring
Department (since it is based on
usage)
7 Sending Duplicate for transporter from
Stores to Excise Department on a daily
basis
Stores Department
8 Availment of Cenvat credit
(RG23 Part II posting)
Excise Department
9 Updation of RG1-Type against material
master (finished materials) in CIN table
Excise Department
10 Updation of RG1 Excise Department
11 Cenvat reversal for any reason Excise Department
12 Payment of TR6 Challan Finance / Accounts
13 Cenvat utilization run Finance / Accounts
14 Printing of RG1, RG23A & C Part II Reg. Excise Department
15 Vendor Excise details updation in J1ID Purchase
16 Rate of Excise Duty changes during Budget Excise Department
17 Excise Doc. Number range changes on 1st
April every year
SAP Centre, BALCO

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16.ACCOUNTING ENTRIES IN EXCISE
1. On receipt of material
DR Inventory
CR GR/IR Clearing Account
2. At the time of availment of Cenvat credit
DR RG23 Part II Posting
CR Cenvat Clearing Account
3. At the time of Invoice Verification
DR GR/IR Clearing Account
DR Cenvat Clearing Account
CR Vendor
4. Excise Duty payable on despatches
DR Excise Duty Account
CR Excise Duty Liability Account
5. Advance payment of Excise Duty (FI Entry)
DR PLA On Hold Account
CR Bank
6. Creation of TR6 Challan (J1IH) after Deposit
DR PLA Account
CR PLA On Hold Account
7. Adjustment of Duty liability thro’ J2IU Fortnightly Utilization
DR Excise Duty Liability Account
CR RG23A Part II
CR RG23C Part II
CR PLA

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17.HELPDESK MANUAL
1. Excise duty is not appearing in the PO ?
Check the following:
- What is the tax code? If it is P0, excise duty will not come
- In J1ID, Material Chapter ID combination, whether updated or not
- In J1ID, Material input output, whether updated or not
- Vendor Excise Details , whether updated or not
2. Customer excise details not coming in outgoing despatches ?
- Update the Customer Excise Details in J1ID
3. PO placed on X vendor, invoice coming from Y vendor?
- Update the Y vendor code in GR as `Shipfrom’
- If GR is already created, update `Shipfrom’ in J1IEX_P (change mode)
in Excise Invoice. Ensure that Vendor Excise Details are updated.
4. Vendor’s / Customers’ ECC Code, Excise Registration no. etc. Are not coming ?
- Update the Vendor excise details in J1ID
5. How to make Cenvat reversal on subsequent rejection?
- Please refer to page no. 20 of this manual
6. Party has submitted a defective Cenvat Document (Duplicate for transporter) ?
- Please refer to page no. 37 of this manual.
7. How to avail cenvat credit against imported goods?
- Please refer to page no. 30 of this manual

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