Post on 01-Nov-2014
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Accounting Entries
In this chapter, the accounting entries created for accounting localization taxes are discussed. In the general ledger proper accounts need to be defined for accounting localization taxes. Accounting entries will be created on completion of the respective transaction and the same can be imported to General Journal.
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Accounting entries in India Local Inventory The following Accounting Entries are passed in India Local Inventory.
On Receipt of Material Account Debit Credit
Inventory Receiving A/c PO price AP Accrual A/c PO price
On Claiming CENVAT credit Account Debit Credit
Inventory Receiving A/c Total tax amount AP Accrual A/c Taxes other than customs
duty & CVD BOE/ customs duty paid a/c Only customs duty and
CVD amount CENVATable tax amount * CENVAT percentage
Inventory Receiving A/c CENVATable tax amount * CENVAT percentage
CENVAT A/c
Creation of Invoice for accounting III rd party taxes Account Debit Credit
AP Accruals Tax amount of the respective tax
Tax amount of the respective tax
Supplier a/c
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Delivery of Material For Average Costing Organization ( Bonded Warehouse Sub Inventory)
Account Debit Credit Sub inventory A/c All non-CENVATable taxes
+ Amount not loaded in CENVATable taxes
Inventory Receiving A/c All non-CENVATable taxes + Amount not loaded in CENVATable taxes
* In addition to passing these accounting entries, Item cost gets increased by the amount that is additionally loaded on to the inventory.
Delivery of Material For Standard Costing Organization ( Bonded Warehouse Sub Inventory)
Account Debit Credit Purchase Price Variance (PPV) A/c All non-CENVATable taxes
+ Amount not loaded in CENVATable taxes
Inventory Receiving A/c All non-CENVATable taxes + Amount not loaded in CENVATable taxes
Delivery of Material (Duty paid Sub Inventory-non bonded) For Average Costing Organization
Account Debit Credit All tax amounts both CENVATable/ non-CENVATable taxes except Individual taxes
All tax amounts both CENVATable/ non-CENVATable taxes except Individual taxes
Sub inventory A/c
Inventory Receiving A/c
* In addition to passing these accounting entries, Item cost gets increased by the amount that is additionally loaded on to the inventory.
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For Standard Costing Organization Account Debit Credit
Purchase Price Variance (PPV) A/c All tax amounts both CENVATable/ non-CENVATable taxes except Individual taxes
Inventory Receiving A/c All tax amounts both CENVATable/ non-CENVATable taxes except Individual taxes
Delivery of Material (Bonded/Duty paid Sub Inventory) For All Other Taxes
Account Debit Credit Respective Tax A/c Tax amount * Tax credit
percentage
Inventory Receiving A/c Tax amount * Tax credit percentage
Delivery of expense item to Bonded/Duty paid Sub Inventory (Both Average and Standard Costing)
Account Debit Credit Expense A/c Note 1 Total Tax amount Inventory Receiving A/c Total Tax amount Note: 1. Where the delivery of an Inventory Item is made to an Expense Subinventory, the Expense Account is picked up from the Subinventory setup. Similarly, the same account would be considered for reversal entries created on Return to receiving.
Return to Vendors
Return to Receiving(Bonded Sub Inventory) On Return from Inventory to Receiving Inspection (By Base product)
Account Debit CreditReceiving Inspection A/c Item Purchase Price
Item Purchase Price
Inventory Receiving A/c
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On Return from Inventory to Receiving Inspection (Localization entries)
Return to receiving for Average Costing Organization Account Debit Credit
Inventory Receiving A/c All Non-CENVATable taxes loaded to inventory for the delivery
Sub Inventory A/c All Non-CENVATable taxes loaded to inventory for the delivery
Return to receiving for Standard Costing Organization Account Debit Credit
Inventory Receiving A/c All Non-CENVATable taxes loaded to inventory for the delivery
Purchase Price Variance (PPV) A/c All Non-CENVATable taxes loaded to inventory for the delivery
Return to Receiving (Duty paid Sub Inventory) For Average Costing Organization
Account Debit Credit Inventory Receiving A/c All tax amounts both
CENVATable/ non-CENVATable taxes except Individual taxes
Sub Inventory A/c All tax amounts both CENVATable/ non-CENVATable taxes except Individual taxes
* In addition to passing these accounting entries, Item cost gets increased by the amount that is additionally loaded on to the inventory.
Return to Receiving (Duty paid Sub Inventory For Standard Costing Organization
Account Debit Credit Inventory Receiving A/c All tax amounts both
CENVATable/ non-CENVATable taxes except Individual taxes
Purchase Price Variance (PPV) A/c All tax amounts both CENVATable/ non-CENVATable taxes
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except Individual taxes
On Return to Receiving Inspection to Vendor (by Base Product)
Account Debit Credit AP Accrual A/c Item Purchase Price Receiving Inspection A/c Item Purchase Price
On Return to Receiving Inspection to Vendor Account Debit Credit
AP Accrual A/c Total Tax Amount at the time of Receipt
Receiving Inspection A/c All taxes loaded to inventory for the Receipt
CENVAT A/c Amount of CENVAT Originally Claimed (Only on Generation of Excise Invoice on RTV)
Individual Tax A/c Taxes (except Excise & CVD) with CENVAT
On Return to Vendor in the year of Purchase In case a part of goods received are returned in the year of purchase, then following entries would be passed on RTV Dr. CENVAT Account Cr. CENVAT Receivable Account
For the balance amount (Balance credit for a Quantity returned)
Dr. Inventory Receiving Account Cr. CENVAT Account
100% of the credit for the Quantity Returned
On Return to Vendor a year after Purchase (After claim of 100% CENVAT Credit) Dr. Inventory Receiving Account Cr. CENVAT Account
100% of the credit for the Quantity Returned
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Accounting entries on claiming CENVAT
Accounting entries on Claiming CENVAT on inputs Account Debit Credit
CENVAT Raw material A/c CENVATable tax amount * CENVAT percentage
Inventory Receiving A/c CENVATable tax amount * CENVAT percentage
Accounting entries on Claiming CENVAT on capital goods Account Debit Credit
CENVAT Capital goods A/c CENVATable tax amount * CENVAT percentage
Inventory Receiving A/c CENVATable tax amount * CENVAT percentage
CENVAT receivable Account Percentage of credit deferred for the next financial year
CENVAT Capital goods Account Percentage of credit deferred for the next financial year
Accounting entries on claiming the balance credit on capital goods Account Debit Credit
CENVAT Capital goods Account Amount of credit that is being availed
CENVAT receivable Account Amount of credit that is being availed
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Accounting entries regarding OSP Transaction
While sending the material through 57 F (4) Challan Account Debit Credit
OSP Excise A/c With percentage of duty set up in the additional organization information screen
CENVAT / PLA A/c With percentage of duty set up in the additional organization information screen
On receipt of goods cleared under 57 F (4) Challan Account Debit Credit
CENVAT A/c Duty paid at the time of clearance
OSP Excise A/c Duty paid at the time of clearance
* According the current provisions of Excise Rules there is no need to pay duty while clearing the goods for sub contracting operations. User should take care to record zero percentage for OSP rate in the additional organization information
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RMA Receipts
RMA Receipts into a Bonded Warehouse For the sale price amount with out excise duty.
Account Debit Credit Sub inventory a/c Sales Inventory Cost Cost of goods sold a/c Sales Inventory Cost
RMA Receipts considered as ‘Production Input’ CENVAT Credit For Excise and CVD Taxes
Account Debit Credit CENVAT RM/CG A/c Tax Amount Excise Paid Payable Account Tax Amount
RMA Receipts considered as ‘Finished Goods Return’ Localization accounting entry for Excise Tax treatment
Account Debit Credit CENVAT RM/CG A/c Excise Amount Excise Paid Payable Account Excise Amount
RMA Receipts considered as ‘Scrap’ Account Debit Credit
Scrap Cost a/c Item cost Sub Inventory a/c Item cost Localization accounting entry for Excise Tax treatment
Account Debit Credit Excise Expense a/c Excise Amount Excise Paid Payable Account Excise Amount (Excise duty paid will be written off as an expense account)
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Accounting entries related to AP invoices
On Matching the Payable Invoice with PO/Receipt Localization Entry for Tax amounts
Account Debit Credit AP Accruals a/c Sum of Tax amount of the
respective tax + Line Amount
Vendor a/c Sum of Tax amount of the respective tax + Line Amount
On Creation of Credit Memo at the time of approving the created Regular Invoice for TDS Deduction
Account Debit Credit Vendor a/c Amount debited towards
TDS
TDS a/c Amount debited towards TDS
On Creation of TDS Invoice at the time of approving the created Regular Invoice for TDS deduction
Account Debit Credit TDS a/c Amount debited towards
TDS
TDS Tax Vendor a/c Amount debited towards TDS
*Same accounting entries will be passed for different type of withholding taxes.
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Accounting entries related to Bill of Entry
On Approval of BOE Invoice
Account Debit Credit BOE/ customs duty paid A/c BOE Amount Customs authority - Vendor BOE Amount
On Payment of the BOE Invoice Account Debit Credit
Customs authority - Vendor BOE Amount Bank A/c BOE Amount
On writing of the customs duty paid
Account Debit Credit BOE & Customs duty written off a/c Write off Amount BOE & Customs duty paid a/c Write off Amount
Accounting entries for PLA Payments
On Approval of PLA Invoice Account Debit Credit
PLA A/c PLA invoice amount Excise authority - Vendor PLA invoice amount
On Payment of PLA Invoice Account Debit Credit
Excise authority - Vendor PLA payment amount Bank A/c PLA payment amount
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Ship Confirmation Accounting entries on Ship Confirmation Base Application Accounting entries
Account Debit Credit Cost of Goods Sold a/c Sales Inventory Cost Sub Inventory a/c Sales Inventory Cost Accounting entries for updating the excise accounts
Account Debit Credit Excise Paid Payable a/c Total Excise Duty Payable CENVAT/ PLA a/c Total Excise Duty Payable
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Accounting entries in AR
On Invoicing in AR Accounting entries for raising invoices for dispatches made from both a duty paid or Bonded warehouse (After running Receivable Interfaces in OM and moved to AR module)
Account Debit Credit Receivables a/c Sales Inventory Cost +
Total of all taxes
Revenue a/c Sales Inventory Cost Individual Excise Tax a/c Individual Excise Amounts Other Individual Tax a/c Individual Tax Amounts
On saving AR Transactions Account Debit Credit
Receivables a/c Sales Inventory Cost + Total of all taxes
Revenue a/c Sales Inventory Cost Individual Excise Tax a/c Individual Excise Amounts Other Individual Tax a/c Individual Tax Amounts
On completion of an AR Transaction Account Debit Credit
Excise Paid Payable a/c Total Excise Duty Payable CENVAT/ PLA a/c Total Excise Duty Payable
Raising Credit Memo from AR Transactions Account Debit Credit
Revenue a/c Sales Inventory Cost Excise Paid Payable a/c Excise Duty Paid Other Individual Tax a/c Individual Tax Amounts Receivables a/c Sales Inventory Cost +
Total of all taxes
For debiting duty under Rule 6 of The CENVAT Credit Rules (Old Rule 57 CC)
Account Debit Credit CENVAT Recovered a/c 8% on Selling Price (based
on Organization.
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Parameters) CENVAT a/c-RG23A-Part II 8% on Selling Price (based
on Organization. Parameters)
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Accounting entries for RG consolidation Transactions
On setting off the CENVAT credit with PLA Debits
Account Debit Credit PLA Account Total transfer amount from
CENVAT registers
CENVAT RM Account Amount set off from the CENVAT on input Account
CENVAT on Capital goods A/c Amount set off from the CENVAT on capital goods
On payment of excise duty (On approval of the PLA Invoice) Account Debit Credit
PLA Account Amount of the PLA invoice Excise Authority Account Amount of the PLA invoice
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Accounting entries for Internal Sales Order Transactions The following Accounting Entries passed during an Internal Sales Order Transaction. .
Excise Invoice Generation Account Organization Debit Credit
Excise Paid/Payable account Sending EXCISE AMOUNT RG23 Register/ PLA Account Sending EXCISE AMOUNT
Issue Transaction (In Transit Transfer) FOB Point is set to Receipt:
Account Organization Debit Credit In-transit inventory account Sending EXCISE AMOUNT Excise Paid/Payable account Sending EXCISE AMOUNT FOB Point is set to Shipment:
Account Organization Debit Credit Inter-Organization Receivable Sending EXCISE AMOUNT Excise Paid/Payable account Sending EXCISE AMOUNT In-transit Inventory account Receiving EXCISE AMOUNT Inter-Organization Payable Receiving EXCISE AMOUNT
Receipt Transaction (In Transit Transfer) FOB Point is set to Receipt:
Account Organization Debit Credit Inter-Organization Receivable Sending EXCISE AMOUNT In-transit Inventory account Sending EXCISE AMOUNT Inventory Receiving account Receiving EXCISE AMOUNT Inter-Organization Payable Receiving EXCISE AMOUNT
FOB Point is set to Shipment: Account Organization Debit Credit
Inventory Receiving account Receiving EXCISE AMOUNT In-transit Inventory account Receiving EXCISE AMOUNT
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Direct Transfer Account Organization Debit Credit
Inter-Organization Receivable Sending EXCISE AMOUNT Excise Paid/Payable account Sending EXCISE AMOUNT Inventory Receiving account Receiving EXCISE AMOUNT Inter-Organization Payable Receiving EXCISE AMOUNT
CENVAT Entries (If the Receiving Unit is Bonded) Account Organization Debit Credit
CENVAT Account Receiving EXCISE AMOUNT Receiving EXCISE AMOUNT Inventory Receiving Account
Delivery (If the Receiving Unit is Non-Bonded/ Trading)
Account Organization Debit Credit Inventory Valuation Account Receiving EXCISE AMOUNT
Receiving EXCISE AMOUNT Inventory Receiving Account
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Process flow
To update the chapter number, press ALT F9. Update the sequence number as appropriate, for example 1, 2, etc. and press ALT F9 again. Highlight the chapter number and press F9 to update the number. This chapter contains a diagrammatic presentation of certain activities on how India Localization on Oracle Applications -Release11 addresses your business needs under Indian Laws.
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Deduction of Tax at Source (TDS) Process
Enter IT registration Details and TDS Section & limit for Suppliers and at Supplier Site in Additional Vendor Info.
Define Tax with TDS type
Enter Invoice with applicable TDS Tax type matching with PO Approve
Enter Prepayment invoice with applicable TDS tax Approve Pay
Approve related TDS Invoices and pay in batch in batch
Apply Prepayment amount net of Tax
system will adjust proportionate TDS
Enter TDS tax Names and specify TDS section to which it belongs.
Define Income Tax as supplier of type Tax Authority
Enter IT registration Details For Organization
Generate TDS Certificate Print Original
Review Print Status of certificate to print Original again
Print reports on TDS at Concessional rates
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Duty Drawback Process
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Process
Material in Oracle BOM
Enter Bill Of Material in India Localization Inventory
Attach Order source or AR Invoice type to bond register or indicate it as for Export type
Invoice of Export Type
AR Invoice
Invoice created by Auto invoice Program Enter Proof of
Export
Manual Duty Drawback Process Specify the receipt selection method i.e. LIFO/FIFO
Automatic Duty Drawback Process Specify the receipt selection method i.e. LIFO/FIFO
Setup or Enter Bill Of
Oracle India Localization
Process continued …..
Automatic Duty Drawback Process Specify the receipt selection method i.e. LIFO/FIFO
If Bill Of Material defined in Oracle BOM module process will consider latest wrt. Removal date else latest Bill Of Material defined in Oracle Inventory module process will be considered.
Selected BOM will be exploded to the lowest level
Receipts will get selected based on receipt selection method selected
Process will calculate the claim amount for each receipt till amount against entire quantity is claimed
If MODVAT is claimed against selected receipt Process will reverse the MODVAT credit in RG 23 A part II and corresponding GL entry will be passed. If the balance in register is insufficient then process will stop.
Print Duty Drawback Claim Report
Manual Duty Drawback Process Specify the receipt selection method i.e. LIFO/FIFO
If Bill Of Material defined in Oracle BOM module process will consider latest wrt. Removal date else latest Bill Of Material defined in Oracle Inventory module process will be considered.
Selected BOM will be exploded to the lowest level and you can view that in Components Window
Receipts will get listed based on receipt selection method selected. Select Receipts against which Duty Drawback to be claimed
Process will calculate the claim amount for each selected receipt till amount against entire quantity is claimed
If MODVAT is claimed against selected receipt Process will reverse the MODVAT credit in RG 23 A part II and corresponding GL entry will be passed. If the balance in register is insufficient then process will stop.
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Support for Trading Process
Define Trading Item by enabling Trading Flag to ‘Y’ in Item Definition
Enter Purchase Order for Trading Item with Ship to Organization being ‘Trading’
Report RG23D
Match Receipt While matching receipt for an invoice Excise Duty per unit will be defaulted from the receipt line. Excise Duty will be made Zero for a delivery to duty exempted customer.
Enter Receipt for Purchase Order and deliver them to Trading Sub Inventory
RG23D Register Updated during Receipts, Invoice, RTV and RMA
Enter Trading registration Details For Organization / Location (Additional organization information)
Sales Order For Trading Item
AR Transaction
for Trading Item
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RMA Process
Enter Sales OrderIndia Localized &
Click On Open
Enter theBase Sales
OrderHeader
Enter LineDetails
Prepare RMA With orWithout Reference
RMA withReference
RMA withoutReference
LocalizationDFF with
India Invoice
LocalizationDFF NotRequired
Reference toOrder or Invoice
Invoice Order
LocalizationDFF with
India SalesOrder
AutomaticPopulation of
Delivery Detailid
Save RMA Order Save RMA Order
Return to IndiaLocalized SalesOrder Screen
Return to IndiaLocalized SalesOrder Screen
Taxes aredisplay modeonly based onthe Delivery
Detail id
Taxes aredefaultedbased on
setup & canbe modified
Return toBase AppsSales Order
Form
Book RMA Order
Book RMA Order withIndia Localization
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Descriptive Flex fields used in India Localization
This document details Descriptive Flex fields being used/reserved for India Localization. The users are advised not to use these attributes while doing their In-house Customization. Any data present in these fields has to be migrated to attributes other than those used by Localization, failing which the data will be lost on application of Localization patch..
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Details of attributes used / being used in DFF by Release. 11i Localization Sl. No
Title Attribute Application Context Segment Name Remarks
1 Oracle Inventory
Items India Items Attribute1 excise_flag
Attribute2 modvat_flag Attribute3
Attribute4 item_tariff Attribute5 item_folio
Attribute13 Future use Attribute14 Future use Attribute15 trading_flag 2 Oracle
Inventory India Other Transaction
Temp Transaction history
Attribute1 Non-Display
3 Oracle Human
Resources Additional Organization Unit Details
India Org Info Attribute1 Tan No.
Attribute2 Pan No. Attribute3 Ward No. Attribute4 OM Tax Source Attribute5 Future use 4 Oracle
Purchasing Excise Invoice No. Receiving
Transactions India Receipt Attribute1
Attribute2 Excise Invoice Date Attribute3 Claim CENVAT on
Receipt
India Return to Vendor
Attribute4 Generate Excise Invoice
Attribute5 Future use India RMA Receipt
Attribute1 Excise Invoice No
Attribute2 Excise Invoice Date Attribute3 Claim CENVAT on
Receipt
Attribute4 RM_ITEM_NO Attribute5 RMA_Type 5 Oracle
Purchasing RCV_SHIPMENT_HEADERS
India Receipt Attribute1 Excise Invoice No.
Attribute2 Excise Invoice Date Attribute3 Claim CENVAT on
Receipt
Attribute5 Paddr Transaction Type
India RMA Receipt
Attribute1 Excise Invoice No.
Attribute2 Excise Invoice Date
item_class_id
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Attribute3 Claim CENVAT on Receipt
Attribute4 RM_ITEM_NO Attribute5 RMA_Type 6 Oracle
Payables Invoice Distribution
India Distributions
Attribute1 JA_IN_TDS_TAX_NAME_INV
Attribute2 JA_IN_WCT Attribute3 JA_IN_WCT1 Attribute4 Future use Non-
Display Attribute5 Future use Non-
Display 7 Application
Object Library Common Lookups
India Lookup Codes
Attribute1 Classification
Attribute2 TDS Limit Attribute3 Tax Type 8 Oracle Order
Management Additional Line Attribute Information
Invoice India Attribute2 Delivery Detail Id
Attribute3 Allow Excise Credit?
Allow Sales Tax Credit?
Attribute5 Excise Duty Rate per Unit
Excise Duty Rate (%)
Customer PO India
Delivery Detail Id
Attribute3 Allow Excise Credit?
Attribute4 Allow Sales Tax Credit?
Attribute5 Excise Duty Rate per Unit
Attribute14 Excise Duty Rate (%)
Sales Order India
Attribute2 Delivery Detail Id
Attribute3 Allow Excise Credit?
Attribute4 Allow Sales Tax Credit?
Attribute5 Excise Duty Rate per Unit
Attribute14 Excise Duty Rate (%)
9 Oracle
Receivables Line Transaction FlexField
SUPPLEMENT CM
INTERFACE_LINE_ATTRIBUTE2
Value2
Attribute4
Attribute14
Attribute2
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SUPPLEMENT DM
INTERFACE_LINE_ATTRIBUTE2
Value2
SUPPLEMENT INVOICE
INTERFACE_LINE_ATTRIBUTE2
Value2
TDS CREDIT INTERFACE_LINE_ATTRIBUTE2
Value2
10 Oracle Assets Asset Category
India B Of Assets
Attribute1 Date of Acquisitions
Attribute2 Block of Assets 11 Oracle
Payables Payment Information
India Payment Information
Attribute1 Check Deposit date
Attribute2 Bank Name Attribute3 Challan No.
Oracle Payables
India Original Invoice for TDS
Attribute1 Original Invoice-TDS
India VAT Dynamic Registration
VAT Invoice Number
Dynamic Registration
VAT Invoice Date
13 Oracle Assets Mass
Additions India B Of Assets
Attribute1 Date of Acquisitions
Attribute2 Block of Assets 14 Oracle Order
Management Additional Line Return Information
LEGACY None None
12 Invoice
In addition to the above, we intend using First 5 attributes for all the remaining tables/ flex fields, in normal cases and/or Attribute 14,15 in special cases for future development, if required.
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