SAP-CIN

Central excise &Service Tax challans

CIN: General clarifications for RG1 goods

Configure Tax on Sales and Purchases

Country India Version (CIN) Overview Training

Display Tax Information

Excise Transaction types

Procedures in Central Excise and Returns to be filed

Register RG 23A and 23C

SAP CIN Registers

Tax Calculation in TAXINN procedure

Tax Procedures TAXINJ

User exit for RG23A/C and RG1 registers during J1I5

CIN Accounting Entries

by Jayanth on January 7, 2013

Accounting entry in procurement

~ For Domestic Procurement of Raw Material

During GR

Material Stock

Dr.

GR/IR clearing

Cr.

During Excise Invoice Credit

Cenvat Account

Cenvat Clearing

Dr.
Cr.

During Invoice Verification

Cenvat Clearing

Dr.

GR/IR Clearing

Dr.

Vendor Payable

Cr.

For Domestic proceurement of Capital Goods

During GR

Material Stock

GR/IR clearing

Dr.
Cr.

During Excise Invoice Credit

Cenvat Account

Dr.

(50%)

Cenvat On-hold

Dr.

(50%)

Cenvat Clearing

During Invoice Verification

Cenvat Clearing

GR/IR Clearing

Vendor Payable

Cr.

Dr.
Dr.
Cr

Subsequent of Capital Goods

Cenvat Account

Cenvat On-hold

Dr.

(50%)
Cr.

For Import Procurement of Raw Material

During Customs Duty Clearing invoice

Custom Clearing

Custom Payable

Material Stock

GR/IR clearing

Cenvat Account

Custom Clearing

During Invoice Verification

GR/IR Clearing

Vendor Payable

Cr.

Dr.
Cr.

During Excise Invoice Credit

Dr.

During GR

(50%)

Dr.

Dr.
Cr.

For Excise Duty Credit of Raw Material without PO

Cenvat Account

Dr.

Cenvat Clearing

Cr.

For Excise Duty Reversal through Excise JV

Cenvat Clearing

Cenvat Account

Dr.
Cr.

Accounting entry when the goods are issued through MM and Excise invoice is
Credited(J1IS &J1IV)

During Excise Invoice Creation

Cenvat Suspense Account

Cenvat payable

Dr.
Cr.

For TR6C Challan

PLA Account

PLA on hold Account

During Fortnightly Utilization

Cenvat payable

Cenvat Account

PLA Account
Cr.
Note: Cenvat Suspense Account should be cleared apprpiately using FI JVs.

Accounting Entry in subcontracting reversal/Recredit

For Subcontracting Challan Reversal

Cenvat Reversal
Dr.

Dr.
Cr.

Dr.
Cr.

Cenvat Account

Cr.

For Subcontracting Challan Recredit

Cenvat Account

Cenvat Reversal

Dr.
Cr.

Accounting Entry in SD

For Factory Sale During Billing Document

Customer Account

Dr.

Sales Account

Cr.

Cenvat Suspense Account

Cr.

During Excise Invoice Creation

Cenvat Suspense Account

Dr.

Cenvat payable

For TR6C Challan

PLA Account

PLA on hold Account

During Fortnightly Utilization

Cenvat payable

Cenvat Account

Cr.

PLA Account

Cr.

For Stock Transfer through SD

No Accounting entries for Performa Billing Document

During Excise Invoice Creation

Cr.

Dr.
Cr.

Dr.

Cenvat Suspense Account

Dr.

Cenvat payable

For TR6C Challan

PLA Account

PLA on hold Account

During Fortnightly Utilization

Cenvat payable

Cenvat Account

PLA Account
Cr.
Note: Cenvat Suspense Account should be cleared appropriately using FI JVs.

Cr.

Dr.
Cr.

Dr.
Cr.

CIN -SAP T CODES

by Jayanth on December 20, 2012
Transaction

Action

J1I2

Prepare a sales tax register

J1I3

Create outgoing excise invoices in batches

J1I5

Update the RG 1 and Part I registers

J1IEX

Incoming Excise Invoices (central transaction)

J1IEX_C

Capture an incoming excise invoice (excise clerk)

J1IEX_P

Post an incoming excise invoice (excise supervisor)

J1IF01

Create a subcontracting challan

J1IF11

Change a subcontracting challan

J1IF12

Display a subcontracting challan

J1IF13

Complete, reverse, or recredit a subcontracting challan

J1IFQ

Reconcile quantities for subcontracting challans

J1IFR

List subcontracting challans

J1IH

Make a CENVAT adjustment posting

J1IIN

Create an outgoing excise invoice

J1IJ

Assign excise invoices to a delivery for sales from depots

J1INJV

Adjust withholding tax Item

J1INREP

Reprint a withholding tax certificate for a vendor

J1IQ

Year-End Income Tax Depreciation Report

J1IR

Download register data

J1IS

Process an excise invoice (outgoing) for other movements

J1IU

Process exemption forms

J1IW

Verify and post an incoming excise invoice

J1IX

Create an incoming excise invoice (without reference to

purchase order)

J2I8

Transfer excise duty to CENVAT account

J2IU

Remit excise duty fortnightly

J2I9

Monthly CENVAT return

J1IG

Excise invoice entry at depot

J1IGA

Create additional excise entry at depot

J2I5

Extract data for excise registers

J2I6

Print excise registers

SAP Country India Version (CIN) Overview

Training Presentation
by Jayanth on September 15, 2012

In this presentation, you will find well noted instructions related to India localization, which is
knowns as CIN, in SAP. After reading this document, you will get fair knowledge about:

India Legal Requirements Overview: CENVAT (Excise), VAT (Central Sales

Tax), Service Tax, Cenvat Credit

Lets start Step by step

India Localization
India Legal Requirements overview

CENVAT (Excise)
VAT / LST / CST

Service Tax

Cenvat Credit

Cenvat (Central Value Added Tax):

What is Cenvat?

Tax on manufacturing or production of goods in India

Goods having 4M Characteristics are covered under this

Movable (No duty on Immovable Goods)

Marketable (Bought and Sold)
Manufactured (Come up out of a process)
Mentioned (Central Excise Tariff)

Every legal entity that manufactures or produces excisable goods shall pay
the duty leviable on such goods

Materials are classified under various tariff headings (Chapter Ids).This will
be subject to change in every financial budget.

Goods consumed in-house also liable for payment of duty.

What is the basis of charge?

Tax Rates Provided by GOI and are subject to change after eachyear based
on the budget
Exemption to pay duty on intermediate products in thefollowing cases

used for manufacturing capital goods

-used for manufacturing final goods which are eligible forCenvat credit

Duty shall be paid when the goods are removed from the place of
production or place of storage
Excise duty not payable on goods manufactured forexports or deemed
exports
Goods manufactured in factory for use within the factoryfor repairs of
machinery installed within the factory are exempt from excise.

Types of Excise Duty

Basic Excise Duty (BED)
Additional Excise Duty (AED)
Special Excise Duty (SED)
Education Cess on Excise
Secondary and Higher education Cess
Duty Calculation

Specific duty It is calculated on the basis of certain unit, length, weight

etc. Eg. cigarette
Ad valorem duty It is based on the value of the goods
Duty based on tariff value The Govt. may fix tariff value from time to time.
The duty will be calculated as percentage of tariff value fixed by the Govt.
and not on assessable value.

Duty Calculation Considerations

Transaction value is the price actually paid or payable for the goods and
includes any other amount that the buyer is liable to pay in connection with
such sale
Any additional consideration flowing directly or indirectly tothe seller from
the buyer should be added to the transaction value.
Cost of production is not relevant for the purpose of determining assessable
value.

Assessable value may be lower than the cost price of the goods.

Goods should be assessed in the form in which they areremoved.

CENVAT PAYMENT :
Duty to be paid by 5th of the following month.
Duty deposited in bank using TR 6 challan and credited to PLA.
Duty is paid by debiting PLA.
Excise Registers:
Statutory Excise Reporting
Excise Registers(RG23A & C Part I & Part II,RG1, PLA, RG23D)
Excise Monthly Returns
Bond Registers
License Registers

 Running Bond Registers////////////////////////////////////////////////////////////

India Legal Requirements overview

CENVAT (Excise)
VAT / LST / CST

Service Tax

Cenvat Credit

VAT / LST / CST

How is Sales tax treated in India ?

This is a tax on sale

VAT / LST is charged on sales within the state

Central Sales Tax (CST) is charged on inter-state sales

Any sale would be charged to either VAT or CST but only to one of them

Every person carrying on any business is required to charge VAT / CST, on all
sales made by him, and pay it to the Government

VAT / CST shall be charged at the rate in force as on the date of sale

Tax Impact under VAT System

Rs
STAGES
I Manufacturer

II Wholesaler

III Retailer

Selling price (excl. 100.00

tax)

Cost price

100.00 Cost price

120.00

VAT @ 14%

14.00

Overheads & profit @ 20%20.00

Sale price

114.00

Sale price(excl. tax)

120.00 Sale price(excl. tax)

144.00

Tax paid

14.00

VAT @ 14%

16.80

20.16

Sale price(incl. Tax)

136.80 Sale price(incl. Tax)

164.16

Tax paid(16.80-14.00)

2.80

6.16

Overheads & profit @ 24.00

20%

VAT @ 14%

Tax paid(20-16.14)

CENVAT vs VAT
Cenvat

VAT

Central Value Added Tax

State Value Added Tax

Revenue to Central Government

Revenue to State Government

Tax on Manufactured Goods

Tax on Sale of goods

Single point tax paid at the first

point of goods movement

Multi Point Tax payable at each stage of value chain

Credit can be availed

Credit can be availed except in case of LST

General CENVAT rate @ 10% with

exceptions

General VAT rate @ 5% or 14% with exceptions

Centrally administered Cenvat

Chain cannot be broken on
interstate boundaries

State administered Chain broken on interstate

transactions

Cenvat credit can be availed on

Services

Cenvat credit cannot be availed on Services

India Legal Requirements overview

CENVAT (Excise)

VAT / LST / CST

Service Tax

Cenvat Credit

Service Tax

Tax on services rendered

Applicable only on those services which have been notified by the
Government

Service Tax is payable @ 12 % plus education cess @0.24% & Higher and
Secondary education cess @ 0.12%

Exemptions to persons rendering taxable service below 10Lakhs INR

Tax to be paid by 5th of the next month

Service tax is payable on advances

Half Yearly return for form ST-3 : April to Sep Oct 25 th, Oct to Mar- Apr25th

Revision of Form ST-3: ST-3 form can be revised and submitted again within
90days from the date of filling original return

Service Tax Considerations

Service tax is payable on value of services

Value of service is the gross amount charged by the service
the taxable service provided

Any discount/rebate given to customer before accepting the payment would

be deducted from the gross amount

In most of the cases person providing the taxable service is liable to pay tax

Reimbursement of expenses incurred on behalf of customer is not taxable

provider for

No tax on services which are exported or used for providing services which
are being exported

Export of Service

Should be at least partly performed outside India

It is delivered outside India and used outside India

Payment for such services is received in foreign exchange

No tax on services which are exported

Import of Service

Should be provided from outside India to a person in India

Service provider does not have a place of business in India

Person receiving such service has a place of business in India

Person receiving such services is liable to pay service tax

Cenvat credit can be utilized for tax payment

Tax paid can be used for availing credit

CENVAT Credit on Input Services

Service provider is entitled to take credit of service tax paid on input services
Credit can be taken only when full payment has been made for the service

Credit may be taken for service tax and also for education Cess , Secondary
and Higher Education Cess paid

In case the service provider is engaged in exporting services, he shall be

granted refund of CENVAT on input services

In many cases, various input services will be consumed in

theheadquarters/administrative offices of manufacturers and OSPs. In such
cases, the invoices indicating the payment of service tax will be in the name
of such headquarters/ administrative offices. Provision can be made for
availing credit of such service tax, in the premises where manufacturing
activity is undertaken or the premises where the output services are
rendered.

Reporting

Half yearly return in form ST-3 to be filed within 25 days from the end of the
half year
Return needs to be accompanied by TR -6 challan evidencing duty payment

Excise Transaction types

by Jayanth on June 21, 2013

Excise Transaction types:

So Many people asks what is the excise invoice document types in SAP there is no document
types for Excise & we have on ly Excise Transaction Types as below.
57CM 57F CHALLAN COMPLETION
57FC 57F CHALLAN CAPTURE/CHANGE
57NR 57F NON RECEIPT
ARE1 EXPORT PROCESSING UNDER ARE1
ARE3 DEEMED EXPORTS UNDER ARE3
CAGI CAPITAL GOODS ISSUES
CAPE CAPITAL GOODS
CEIV CANCELLATION OF EXCISE INVOICE
DIEX- DIFFERENTIAL EXCISE THROUGH JV
DLFC GOODS REMOVAL THROUGH SALES
EWPO EXCISE INVOICE WITHOUT PO
GRPO EXCISE INVOICE FOR GOODS RECEIPT AGAINST PO
MRDY REVERSAL WITHOUT REFERENCE
MRRD REVERSAL INCASE OF COMSUMPTION OTHER THAN PRODUCTI
MRWO CENVAT REVERSALS FOR WRITE OFF
OTHR INVOICE FOR OTHER MOVEMENTS
TR6C PLA ACCOUNT ADJUSTMENT THROUGH
UTLZ MONTH PAYMENTS
SUBTRANSACTION TYPES:
The importance of subtransaction is to post duties to separate GL accounts.

Normally for a plant which is having excise registration we will maintain one set of registers and
GL accounts right ?
There are some situations where we hve to maintain more than one set of registers and respective
transactions has to hit different GL accounts. In this case we will assign GL accounts with
combination of Excise transaction and sub transaction type. Based on this configuration system
will pick the respective GL accounts.
MAINTAIN SUBTRANSACTION TYPES:
IMG > LOGISTIC GENERAL > TAX ON GOODS MOVEMENT > INDIA > BASIC SETTINGS
> MAINTAIN SUBTRANSACTION TYPES

So by default, the system records excise duties on the accounts that we have
specified in the IMG activityspecify excise accounts per excise transaction.If we
want to be able to record some excise duties on other accounts:Create a
subtransaction type in this IMG activity.In the IMG activity specify Excise accounts
per Excise Transaction, create a new entry with this subtransaction type and enter
the accounts that we want to post to.

tep by Step Reference Guide to SAP (CIN) FI

Excise Duty Procedures
by Jayanth on January 21, 2013

Excise duty in SAP is a special function designed for India according to local requirements under
Country India Version (CIN) template. In this document you will read various processes related
to Excise of following procedures with screenshots:
TR6 Challan Creation J1IH
CENVAT Utilization J2IUN
Registers Updation (RG1, RG23) J1I5
Registers Extraction J2I5
CENVAT Register J2I9
ER1 Report J2IER1

Tax Procedures TAXINJ vs TAXINN

by Jayanth on September 18, 2013

What is the difference between maintaining tax codes in TAXINJ and TAXINN
Both procedure TAXINJ and TAXINN has thin line difference where as TAXINN procedure is
condition based & TAXINJ is fomula based.If you drag down details of TAXINJ is fomula
based,where you can find Routine( selection with logic in line of condition type) are play vital
role in tax calculation.
If you selected TAXINN procedure , you can maintained tax rate with respective condition types
in FTXP during creation of tax code.But you should maintain condition record in FV11 t.code
for condition types JMX1 & JMX2 are as 100%. Also you can maintain tax rate for condition

types Basic Excise Duty,Edu cess , H. Edu cess,VAT/CST in FV11 t.code in stead of
maintaining tax rate in FTXP.

1. TAXINJ is a tax calculation procedure for country version India and it supports
formula-based excise determination. You need to configure this tax calculation procedure
Excise Conditions
JMOD IN: A/R BED
JNED

IN: A/R NCCD

JAED

IN: A/R AED

JSED

IN: A/R SED

JCES

IN: A/R Cess

JECS A/R Educational CESS

LST/CST/VAT Conditions
JIN1

IN: A/R CST

JIN2

IN: AR LST

JIN4

IN: A/R CST Surcharge

JIN5

IN: AR LST Surcharge

JIN6

A/R VAT Payable

 JIN7

A/R CST Payable VAT

Service Tax Conditions

JSE4

Service Tax

JES4

ECS on Service Tax

2.

Set up the following Account Key

IMG Financial Accounting Financial Accounting Global Settings Tax on Sales/Purchases

Basic Settings Check and Change Settings for Tax Processing.
VS6
3.

Input Tax

Define the Tax Procedure according to the settings in the figures below.

You can do this in the IMG Financial Accounting Financial Accounting Global Settings
Tax on Sales/Purchases Basic Settings Check Calculation Procedure Define
Procedures. Tcode:OBBG
4.

Assign Tax Procedure to the country.

You can do this in the IMG Financial Accounting Financial Accounting Global Settings
Tax on Sales/Purchases Basic Settings Assign Country to Calculation
Procedure. Tcode:OBYZ
The standard system comes with two tax calculation procedures. TAXINN is only supports
condition-based excise determination, whereas TAXINJ supports condition-based excise
determination and formula-based excise determination.
Both tax procedures contain condition types that cover all of the excise duties and sales taxes
applicable.
Since the exact rates of excise duty can vary on a large number of factors, such as which vendor
you purchase a material from, or which chapter ID the vendor stocks the material under, you
create condition records for every sort of excise duty.
When you come to enter a purchasing document, the system applies the excise duty at the rates
you have entered in the condition records.
Activities,
Customizing

Make the settings in Customizing for Logistics u2013 General, by choosing Taxes on Goods
Movements India Basic Settings Excise Duties Using Condition Technique and u2026
Account Determination.
These activities include one activity where you define a tax code for condition-based excise
determination.
Master Data
Create condition records for all excise duties that apply, and enter the tax code for conditionbased excise determination in each.
TAXINN Vs TAXINJ:

Definition: condition-based excise determination

A method that the system uses of determining excise duty in India.
This method requires you to create condition records for each combination of vendor or customer
and material (and possibly other conditions).When you create a purchasing document, the system
calls the tax procedure assigned to India. The tax procedure finds all of the condition records that
you have created for that combination of vendor and material.
When you create a sales document, the excise duties and sales taxes are determined by the
pricing procedure (not the tax procedure).
Definition: formula-based excise determination
A method that the system uses of determining excise duty in India.

This method was used in the Country Version India Add-On and requires you to maintain
additional data in the Excise Rate Maintenance transaction, J1ID.
When you create a purchasing document, the system calls the tax procedure assigned to India.
Each of the excise duties in the tax procedure has its own condition types, and each condition
type is assigned to a formula. This formula instructs the system to calculate the excise duty using
the data that you have maintained in the Excise Rate Maintenance transaction.
When you create a sales document, the system determines the excise duties and sales taxes using
the pricing procedure (not the tax procedure).
Pricing Procedures:
The primary job of a pricing procedure is to define a group of condition types in a particular
sequence. The pricing procedure also determines:

Which sub-totals appear during pricing

To what extent pricing can be processed manually

Which method the system uses to calculate percentage discounts and

surcharges

Which requirements for a particular condition type must be fulfilled before

the system takes the condition into account

Example of a Pricing Procedure:

If a sales department processes sales orders for a variety of foreign customers, the department
can group the customers by country or region. A pricing procedure can then be defined for each
group of customers. Each procedure can include condition types that determine, for example,
country-specific taxes. In sales order processing, you can specify pricing procedures for specific
customers and for sales document types. The system automatically determines which procedure
to use.
Choose Basic Functions Pricing Pricing control Define and assign pricing
procedures.
Assign Pricing Procedure to Sales Area
T Code: OVKK and assign respective sales area for different kind of pricing procedure.

Pricing procedure follows below assignment.

Pricing procedure condition types(1:N) access sequence (1:N)
accesses(1:N) condition tables(1:1) condition fields.
During creation you can follow bottom-up sequence.
1. Create condition table with condition fields. CUSXXXXX
2. Create access sequence and maintain accesses assigned with condition table. ZAS
->CUSXXXXX
3. Create condition type and assign access sequence. ZCT->ZAS
4. Create pricing procedure and assign condition types. ZPP->ZCT
Determination part.
In order to determine pricing procedure 5 parameters needed.
Sales org + distribution channel + division + customer pricing procedure + document pricing
procedure ,SO+DC+DIV+CP+DP = ZPP
and we assign pricing procedure against above 5 parameters in the configuration.
based on condition maintenance we restrict the application where you gonna maintain the
condition record.
lets say you restricted it to product and successfully you maintained a condition record for
testing.

now I am using this product in a transaction document(example ZAG). you called the transaction
type(ZAG) and entered the customer ABC and entered some product XYZ with quantity. now
the minute you enter the product and hit on enter.
System searches for relevant pricing procedure to determine. by formulating all 5 parameters
from the sources based on org model it brings respective sales area data(SO+DC+DIV) and
based on ABCs customer pricing procedure(you can find it in sales area data a/block under
billing area.
based on transaction type it will bring the value document pricing procedure ( ZAGs transaction
category header data).
after forumalting all 5 parameters it determines corresponding pricing procedure from the
configuration.
again based on the maintained condition record it will apply the value on to the screen.
based on number of different condition types(diff calculation types) it will show different price
element in the output. and all these calculation will be done by IPC.
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