Excise invoice in SAP : A business document that is issued by your vendor to accompany any goods that it sends you. It stipulates how much excise duty has been paid on the goods.You can capture and post excise invoices in one or two steps, depending on your business requirements. In the two-step procedure, the excise clerk captures the incoming excise invoice. This means that the clerk enters the data, but the system does not yet create an entry in Part II of the appropriate excise register. Another user (the excise supervisor) checks the excise invoice and posts it. The system then creates a Part II entry.
In the one-step procedure, the excise clerk captures and posts the incoming excise invoice simultaneously. The system creates the Part II entry automatically.
Structure of Excise invoice in SAP
In SAP , the excise invoice consists of header data and line items.
The header data comprises:
- An internal number
- The excise invoice number
- The date of the excise invoice
- The details of the vendor who generated the excise invoice.
At line item level, the excise invoice lists the materials on the excise invoice with its :
- Chapter ID
- Quantity of materials
- Excise duty base amount
- Rates of excise duty
- Amount of duty paid
External Procurement (Domestic)
When the goods arrive at your company,
The Excise supervisor enters the excise invoice in the system (J1IEX_C).
Then the warehouseman enters the GR.
The system creates a material document to record the goods receipt .
This creates an accounting document to
Debit the inventory account and
Credit the GR/IR clearing account
This also creates a Part I entry in register RG 23A
The excise supervisor then posts the excise invoice (J1IEX_P).
The system automatically
Debits the excise duty to the excise duty accounts and
Credits the CENVAT clearing account:
It then creates a Part II entry in register RG 23A Register.
If you work with subcontractors, there are two ways of handling the excise invoice on the goods that you provide them with:
Subcontracting without payment of excise duty
Subcontracting under full payment of duty
Country Version India supports both of these approaches
4. Subcontracting Without Payment of Excise Duty
When you issue materials to a subcontractor, you need to keep track of what materials you have issued and when they have to be returned by.
The reason for this close monitoring has to do with India’s tax law. Under excise law 57AC, when you send materials to a subcontractor for processing, you are not required to pay any excise duty, even though the materials have left your premises.
However, if the materials have not been returned to you within a given length of time specified by the law (180 days), you will have to reverse any excise credit that you posted when you purchased the materials .
5. Excise Registers
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 .
The R/3 System makes all the entries for these registers automatically, and you can prepare copies of them as and when necessary.
The SAP System handles the following excise registers:
Register RG 1
Register RG 23A and 23C, Parts I and II
Personal Ledger Account (PLA)
This is the bank account from which you transfer any money owing to the excise authorities.
This is a monthly report that summarizes the CENVAT and PLA information from the other registers.
6. Register RG 1
A register of excisable finished goods kept by manufacturing plants. The register shows goods movements from the factory to a store specifically for excisable finished goods.
Register RG 23A/23C
A record of receipts and issues of excisable materials, as kept by manufacturing plants. The register consists of two parts:
Part I shows the quantities of the materials.
Part II shows the amounts of excise duty on the materials, and how much you have transferred to the CENVAT accounts.
Previously, manufacturers were required to keep two separate registers, RG 23A and RG 23C for raw materials and capital goods respectively. This is no longer the case, but the distinction still remains in the R/3 System.
7. Transaction : J1IH – CENVAT Adjustment Postings
This is used when we need to make an adjustment posting to any of our CENVAT accounts. You can make adjustment postings to account for:
- Materials that you have not used in production
- Additional excise paid by vendors
- Money that you have transferred to your personal ledger account
- Other transactions
8. Excise Invoice (Outgoing)
A document that acts as the proof of payment of excise duty and is required for the customer to take CENVAT credit on the item.
Procedure for creating excise invoice:
Sales direct from the factory
This procedure is for when you sell manufactured goods straight from the factory at which they were produced, in which case you levy excise duty when the goods leave the factory on their way to the customer.
When you send the goods to the customer, you enclose the commercial invoice and the excise invoice with reference to the commercial invoice.
9. Creating Excise Invoices (Outgoing)
We create an outgoing excise invoice with reference to a billing document.
Use transaction code : J1IIN
Specify the Billing Document number.
The excise invoice screen appears.
The header data is displayed at the top;
the line items, are displayed at the bottom.
Enter header data as required .
To display the balances of the CENVAT accounts, choose Balances.
Save the excise invoice.
10. Transaction J2IU : Remittance of Excise Duty Fortnightly
Legislation requires you to remit excise duty twice monthly: for all the goods issues in the first half of any given month and from 16 to month-end.
You use this report to calculate how much excise duty you must remit to the authorities.
Once the report has determined how much you have to pay, it allows you to specify where the money should be paid from :whether it should be deducted from the CENVAT credits that you have accumulated, or whether it should be deducted from the personal ledger account (PLA).
Also , for each sort of excise duty, the system shows you:
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)
When you have finished, save your entries. The system then:
Creates an accounting document that:
Credits the CENVAT clearing account to remove the excise duty owed
Debits the accounts from which the excise duty is to be paid
11. Major transaction Codes (CIN) for India
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
J1IH Make a CENVAT adjustment posting
J1IIN Create an outgoing excise invoice
J1IS Process an excise invoice (outgoing) for other movements
J2IU Remit excise duty fortnightly
J1IR Download register data
J2I5 Extract data for excise registers
J2I6 Print excise registers
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