LOFIN_CIN LO_Overview & New Function Ali Ties

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Vipin ShivashankaranGlobalization Services

India Localization in Logistics

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1. India Localization : An Overview2. Cenvat3. VAT/Sales Tax4. Service Tax5. Others

Agenda

TDS localization

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India Localisation In Logistics : An Overview

Domestic Vendor Import Vendor Domestic Vendor

Mumbai Plant Chennai Plant

Panvel Depot

PondicherryDepot

Domestic Customer

OverseasCustomer

Subcontractor

6854654654

# Procurement of Raw Material# Interplant Stock Transfer# Subcontracting# Movement of Goods from Plant to Depot# Dispatch to Customer from Depot# Dispatch to Customer from Plant

Following Logistics Scenarios are involvedProcurement of Raw Material

Interplant Stock Transfer

Subcontracting

Movement of Goods from Plant to Depot

Dispatch to Customer from Depot

Dispatch to Customer from Plant

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India Localisation In Logistics : LegalFunctionality Supported

CENVAT

VAT

Local and Central Sales Tax

Service Tax



Subcontracting




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Release/Upgrade Strategy

CIN 2.0C

CIN 2.2B

CIN 2.1B

CIN 3.0 A

06/00 06/01 Q1/03

3.0F

3.1H

4.0B

4.6B

4.6C

4.70

CIN 4.0 A

India Localization for Logisticsis part of standard mySAP ERPfrom release SAP R/3Enterprise onwards

Key Benefits:India part of Global Roll-outUnicode CompliantTechnical co-existence with othercountry versions and IS Solutions

R/3 4.7 /ECC 5.0/6.0

All these SAP R/3 Releases can be used as startrelease for an upgrade to SAP R/3Enterprise.

NOTE: A smaller startrelease results into a higher effort of an upgrade project (eg. EnjoySAP from 3.1I to SAP R/3 Enterprise). Additional time for the upgrade project has to becalculated.

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Consulting and Release Notes

InstallationQueries :

Note 899086

Master NoteFor MM FAQs:Note 950976

Master noteFor SD FAQs:Note 950977

General Clarifications for CIN –SD : Note 952441

General Clarifications for CIN– MM : Note 952290

General clarifications for TaxProcedure TAXINN : Note952289

General Clarifications for RG1Goods : Note 951955

FAQ: Country Version India(CIN) General SD queries : Note535616

FAQ: Country Version India(CIN) General MM queries :Note 542862

FAQ: CIN Upgrade andObjects : Note 544471

Functionality not supported inCountry Version India: Note952287

FAQ: CIN Budget /Legal Change:Note 604695

FAQ: CIN Data andAuthorisations: Note544472

FAQ: CINInstallation andSPs: Note 532596

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Agenda

TDS localization

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Procurement of Domestic Materials

Domestic Vendor

GR at FactoryGate

Excise Invoice

Capture and Post

Deposit Rs.160 as Duty tothe Govt.

Price: 1000Qty : 10 PCDuty 16%

- 160

Excise Invoice

Excise Stock/Part I Register

ReceiptQty : 10 PC

CENVAT / Part IIRegister

ED Credit: Rs 160

# Definition of BED, Edn Cess and other duties# Maintenance of Part I and Part II registers forInputs and Capital Goods# Material Classification under various TariffHeadings# CENVAT Duty determination# Assessable Value definition# Facilitates set-off or inventorisation dependingon Material Type# Permits 50% credit for Capital Goods

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Imports Purchase

Import Vendor

GR at FactoryGate

Capture & Post

Commercial Invoice

Pay CVD ofRs. 160 to theCustomsHouse

Price: 1000Qty : 10 PCC Duty 16%

- 160

Commercial Invoice


ReceiptQty : 10 PC


CVD Credit: Rs 160

Supports Additional Duty ofCustoms (ADC) for specified

goods

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SAP Transaction for Excise Invoice

First Line

Header Data

Item Data inTable Control

Detaileditem datafor one lineitem

A single screen SAP Enjoy Transaction is available for Excise Invoice Capture / Change/ Display / Cancel / Post.

Transaction ‘J1IEX’ is used to capture both Local Purchases as well as ImportPurchase, the difference being CVD duty instead of Excise duty.

The transaction has been segregated into four distinct operational areas.First Line : Available as dropdowns for selection of type of action for a reference document.

Header Data: The excise invoice header data is available in the form of easily navigable tabstripsnamely Excise Invoice, Total Duties, Miscellaneous, Additional Data, Part II

Item Data (Table Control): The user can enter the item data in a tabular form for ease of entry. All thefields of the table control are also available in the item detail tabstrip.

Item Data (Tabstrips): This is a detailed view of a single selected line item in the form of easilynavigable tabstrips with additional features that are not available in the table control. The availabletabstrips are Item, Quantities, Duty Rates, Duty Values, Reference Documents, Additional Data, Part I,Part II.

The Header data and the item data tabstrips can be collapsed for entry of data directly inthe table control only.

The correctness of the Excise Invoice can be checked by using the Check functionality.The error/warning messages are issued in the form of message logs.

There is now the possibility of field selection for certain fields via CIN customizing.Please refer to IMG document for further details.

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Subcontracting

Input

Annexure IVAnnexure V

Output

Challan

FACTORYSub contractor

# Quantity Re-conciliation of Materialissued to Subcontractor# Credit reversal on non-receipt of goodswithin specified period# Re-credit of credit reversed onsubsequent receipt

Challan FeaturesMultiple Challans w.r.t Onetransfer documentFiltering of non-excisablematerials during ChallanCreationFacility to capture additionalinformation such asIdentification marks etc inChallanPrinting of Challan on creation

Listing of challans provided giving details such as challans:due for reversal for a given period

that can be reaccredited

have been captured at the goods receipt but have not been reconciled

whose reference documents have been deleted or cancelled

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Stock Transports

GR at Recv.Plant

Excise Invoice

Capture and Post


ReceiptQty : 10 PC


ED Credit: Rs 160

Supplying Plant

Deposit Rs.160 as Duty tothe Govt.


- 160

Excise Invoice

# Proforma Excise Reference createdwith respect to delivery# Excise computation at SupplyingPlant# Applicability of Excise for StockTransfer determined by whether Plantsare under different Excise Registrationand materials transported areExcisable

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Sale from Factory

Supplying Plant


+ 160

Excise InvoiceDispatch

Monthly utilization

CENVAT/Part II RegisterPLA Register

Debit:Rs. 160

ExciseDuty

PayableA/C

# Excise Invoice creation in the backgroundduring Billing# Provides for posting of Excise Invoice toprofitability segment# CENVAT Utilization:

# Immediate during Excise Invoice creation# Periodic Utilization

# Batch Creation of Excise Invoices supported

Separate Commercial Invoice and Excise invoiceProforma Excise invoice can be prepared and sent along with the goods.

The Proforma Excise Invoice serves as the basis for MODVAT utilization.

Single Commercial and Excise Invoice

The separation of excise invoice and commercial invoice allows for multiple excise invoices (throughsplit criteria) while invoicing the customer with a single commercial invoice.

Provision for concessional taxes based on tax classification fields

Supports Free SuppliesCan be combined with a normal order

Excise calculated and paid at the time of delivery but it is not charged to the customer.

Excise posting done

Cancellation of excise invoice made simple

Reversal of excise invoice without marking it for cancellation

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Sale from DepotDepot


+ 160

RG23D Register

Debit: Rs. 160Reduce qty by 10

InvoiceDispatch

Stock Transfer• Excise Invoice details fromFactory Invoice• Handles Loss in Transit• Multiple POs to one receipt• Item Details proposed forstock returns•Customizable Folio NumberGeneration

Depot Receipts

Direct Purchase• Individual Excise Invoicedetails from PO item• CVD Identification forImports• Multiple POs to one receipt• Customizable FolioNumber Generation

Supports A-Certificate ProcessSupplementary Receipts

Depot Sales• Provides for ExciseInvoice Selection fromavailable Invoices• No separate ExciseInvoice at Depot• Consolidation of ExciseValue (from selectedExcise Invoices) in theCommercial Invoice• Provision to create DepotInvoice based on Deliverydocument• Option to restrictincoming invoice selectionfrom same source ofsupply

Sales at DepotProvides for Excise invoice selection at depot to choose the lot from which to make the delivery.

There is no separate excise invoice at depot

Commercial invoice at depot picks total excise value from all selected excise invoices

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.

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Export Sale

Supplying Plant


+ 160

Invoice

Dispatch

Update Excisedatabase

Under Bond

Debit:Rs. 160

ExciseDuty

PayableA/C

No Bond

Monthly Utilization

CENVAT/Part II Register PLA Register

• Identification by Customer Country andCurrency• Proforma Excise Reference made againstDelivery• Optional tax calculation based on excisecalculation formula• Sales under bond identified for downloadof bond register• Supports Deemed Exports

Export SalesIdentified by Customer country and currency of order

Exchange rate for foreign currency will be as on date of transaction

Separate excise indicator to be maintained for export customers

Proforma Excise Reference made against Delivery

Optional Tax calculation based on excise calculation formula

CENVAT utilization done for sales under no-bond

Sales under bond identified for download of bond-register

Commercial invoice picks excise value from Proforma Excise Reference

Deemed Export SalesNo Amount utilization

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New Functionalities : Cenvat

Excise Invoice Capture wrt Inbound DeliveryBatch Split supported during Invoice CaptureAdditional Duty for Customs : ImportsDepot to Depot transfer : J1IG with respect to Depot Excise NumberNegative Balance in PLA allowed at the time of Immediate UtilizationExports : ARE1, ARE3 , Reversal, Bond Summary and Print LayoutData Archiving



Subcontracting




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Inbound Delivery : Note 1050025

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Additional Duty on Customs : Note 910681

1. Create Condition Type and Modify pricing procedure.

*AED should be active in Tax Code.

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Additional Duty on Customs (Cont’d)

2. Purchase Order Pricing and TAX Schemas.

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Additional Duty on Customs (Cont’d)

Subtransaction Type IP should be selected for ADC transactions.

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Depot To Depot STO

• Outgoing EI AgainstMultiple STO Delivery

• Referencing MultipleMother Invoices.

• Refer Outgoing ExciseInvoice at receiving Depot

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Exports : ARE1 and ARE3

• Bond/License maintenance

• ARE1/3 reversal

• Running Bond Summary

• Bond Summary Report

• License Summary Report

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Data Archiving : Note 850902

The Following CIN Tables are archived.

Opening/Closing balance table for RG1J_2IRG1BAL14

Opening/Closing balance table for Raw & Capital goodsJ_2IREGBAL13

Register Extraction DatesJ_2IEXDATE12

Opening/Closing a/c balance tableJ_2IACCBAL11

Data Extract table for Excise RegistersJ_2IEXTRCT10

Subcontracting Challans Cross ReferenceJ_1IGRXSUB9

Excise RG1 detailsJ_1IRG18

RG23 Summary of receipts and issuesJ_1IRGSUM7

RG23D register for the depotJ_1IRG23D6

Excise Part II detailsJ_1IPART25

Excise part I detailsJ_1IPART14

Goods Receipt to Excise Invoice Cross ReferenceJ_1IGRXREF3

Excise invoice line item detailsJ_1IEXCDTL2

Excise invoice header detailJ_1IEXCHDR1

Table DescriptionTable NameSL

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Data Archiving : Note 850902

There are 5 Archiving Objects created for CIN. Following is the order in which theyhave to be executed.

1. J_1I_P1GRX2. J_1I_RG23D3. J_1I_RG14. J_1I_EXDC5. J_1I_EXBL

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AchievementSmooth implementation of the legal change by amajority of our customersCertain customers were live on their majortransactions from day 1

Legal Change

New Cess introduced onFeb 28,2007Applicable on all taxesSHECess on Exciseapplicable with immediateeffect i.e. from Mar 1,2007Impact on all businesstransactions

Challenges

Finer details of law becameavailable only by eveningof Feb 28,2007All despatches from Mar1,2007 to account for thisnew cessNot all customers hadimplemented earlierreleased structure changes

Project Decision

Customers advised on Feb28,2007 to update systemswith structure changesCorrection instructionsreleased overnight fordespatch processSubsequent processchanges releasedsequentially24/7 support by SAP ActiveGlobal Support andDevelopment teams

Legal Change Handling for Secondary and HigherEducation Cess

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Agenda

TDS localization

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Procurement Processes and VAT

Input Tax CreditPosting

Tax code canbe edited ifrequired

mySAP ERP

Purchasing

InvoiceVerification

Good Receipt

Capital GoodsCredit

Utilization &Tax Payment

Master Data

Utilization ofInput Creditfor clearingOutput Taxliabilities atPeriod End

Input Creditof CG after“Put in Use”and as perState Act

Inventory Valuationbased on VAT ability ofMaterial (Tax codefrom Purchase Order)

Tax code %Tax and VATability

Plant Master

Material Master

Vendor Master

G/L Accounts

Condition Record

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VAT Implication in Sales Processes

mySAP ERP

Purchasing

InvoiceVerification

InventoryValuation

Delivery

VATAccounting

Sales OrderBilling

Utilization &Tax Payment

VATimpact

• Support of LST, CST and VAT where applicable• Configurable Determination of VAT/ Sales Tax• Smooth transition to a VAT Regime• Alternate method provided for G/L Accountdetermination• Support of Official Document Numbering• Flexible to handle state variances• Template report provided

The areas getting affected by VAT are the sales order in which the VAT taxesappear and the billing document where the accounts get posted. We are not coveringthe VAT utilization.

Alternate G/L account can be maintained based on:

Chart of accounts

Business Place

Transaction Key

Tax Code

Alternate G/L account can be used in the following business processes

Determination of Separate G/L Account for VAT and Non VAT States

Determination of Separate G/L Account for Deferral & Non-Deferral Plants by using BusinessPlace

Determination of Separate G/L Account for Standard and Sub-contracting Purchases

Any other Business requirements

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VAT Invoice : Official Document Numbering

Identify the countryof the customer. IN Export -BOSNo

YesDeemedExport - BOS

ExemptedSales - BOS

No

Check the VATRegistration No inthe CustomerMaster Tax codeField

No

Un Registeredcustomer’sSales - BOS

UnregisteredCustomer

Registeredcustomer’sSales – VATInvoice

Yes

Check forDeemed Export

Yes

Check forExempted Sales

Yes

C1

All the Logic for Determining the VAT or BOS has been written in the Data transfer routine 350 assigned tothe item category.The Tax code will be determined in UTXJ condition type.The Deemed Export tax code should be maintained in the Excise default table J_1iexcdef table. If thedetermined tax code is similar in the default table then it is a Deemed export sales and the Bill of Salesdocument class will be used.The Exempted tax code can be maintained in the view J_1iexmptcode. When the system find thedetermined tax code in this table then this sales will be treated as Exempted sales and Bill Of SalesDocument class will be determined.The VAT Registration number should be maintained in the Tax code 2 field of the customer master. Pleasenote that the VAT Registration number provided in the standard can not be used for CIN.For some of the state for the Unregistered Customer also the VAT Invoice should be issued. To handledthis the User exit J_1I7_CHECK_CUSTOMER_VAT can be used to change the document class as VAT.When the Customer country is in India and the tax code determined is not Deemed export Tax code andthe tax code is not Exempted sales and the customer is Registered then VAT Document class will bedetermined.All the VAT / BOS document class for the Plant Region and Document type of the Billing and Sales areawill be maintained in the view J_1IDCLSDET.

Slide 29

C1 OptionalC5029264, 03/Jan/07

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Agenda

TDS localization

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Service Tax

Service Provider(SP)

• Computation of Service tax andEducation Cess on services received andrendered• Cross utilization between Goods andServices• Transfer of Service Tax Credit from ISDto Other Plants through FI JVs• Transfer to Credit / Payable accountsubject to Payment/ Receipt respectively*

Customer

Value : 1000Ser. Tax:12%

+ 120


+ 24

Ser. Tax:20

Ser. Tax:100


+ 240

Input Service Distributor (ISD)*

Mfg. Plant withO/p Services

Mfg Plant

Periodic Utilization and TaxPayment

Since service tax is to be used for availment of service tax or cenvat credit the serviceentry sheet/GR will not have any impact of these taxes. They will eventually be seen inLIV where it will be posted to the appropriate interim account till such time as the vendorpayment has been made. The transfer from interim to the final service tax credit accountwill then need to be done.

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Service Tax


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Service Tax Solution : NOTE 921634

1. Create Condition Types for Service tax.

2. Use Access Sequence MWST for the Condition types (TAXINN)

3. Define Account Keys

4. Maintain Tax Procedure


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TAX Customizing

For each deferred tax code “target”tax code should be defined(transaction ftpx). In my example fordeferred tax code P2 target tax codePC is defined


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It is necessary to activate the following BTEs in 46c-ERP2004

• 00001025 IN J_1I_CREATE_DEFTAX_ITEM• 00001030 IN J_1I_SET_DEFTAX_ITEM• 00001040 IN J_1I_CREATE_DEFTAX_ITEM_REVERS• 00001050 IN J_1I_CREATE_DEFTAX_ITEM_MR1M

In releases higher than ERP2005 it is necessary to check that the following BTEsare active

• 00001025 CREATE_DEFTAX_ITEM• 00001030 SET_DEFTAX_ITEM• 00001040 CREATE_DEFTAX_ITEM_REVERS• 00001050 CREATE_DEFTAX_ITEM_MR1M

You can use for example the following tranasaction:FIBF->Settings->Process Modules-> ... of a customer


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Process :

• Post an invoice using deferred tax code.• Post a payment for the invoice using posting key with active check box "Paymenttransaction"• Run report J_1I_RFUMSV50 .

The report J_1I_RFUMSV50creates so-called tax transferdocuments. This document hastwo line items. The documentposts tax amount from deferredtax account to target tax account.The tax transfer document hasreference to the original invoice inthe header field Reference andreference to the payment in thesecond line item in the fieldAssignment


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Agenda

TDS localization

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Other Features

Supports both Condition Based as well as Formula Based Tax ProcedureConfigurable Number Ranges for documents as per CENVAT rulesRG register maintenance and ReportingProvides for Credit Utilization as given below:

YYYYYYYYADC

YYS & H educ. Cess-ST

YYECESS ST

YYYYYYYYYYYService Tax

YYYYYYYYYYYCVD

YYS & H educ. Cess-GD

YYECESS-GD

YNCCD

YAED

YYYYYYYYYYYSED

YYYYYYYYYYYBED

Credit Utilization

ADC (4%)

S & Heduc.Cess-

ST

ECESS ST

Service Tax

CVDS & Heduc.Cess-GD

ECESS-GD

NCCDAEDSEDBEDDuty Payable-->

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Other Features (Cont’d)

Reporting Capabilities:RG23 A Part I and Part IIRG23 C Part I and Part IIRG 23DRG1ER 1Running Bond RegisterAnnexure IV

Detailed Documentation available at http://help.sap.com

http://help.sap.com/

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Thank you!

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