SAP CIN - COUNTRY VERSION INDIA

Business Processes

Country Version India

AGENDA

• GLOSSARY

• BACKGROUND – CIN

• INTERFACE BETWEEN SAP AND CIN

• INDIAN LOCALISATION COVERAGE

• PROCESSES IN SAP WITH CIN

PROCUREMENT

SALES

FINANCE

REPORTS

GLOSSARY

CIN - COUNTRY VERSION INDIA

INPUT TAX -Tax that is charged by the vendor.

A claim for refund of the deductible portion of input tax can be submitted to the tax authorities

OUTPUT TAX -Tax levied on customers at all levels of production and trade.

Output tax represents a tax liability.

SERVICE TAX - Tax levied on the customer on services specified by the Government.

DEPOT - Depot is a plant where the material is stored and sold. There is no manufacturing activity at the depot. The depots when registered with the excise authorities can pass on the Modvat benefits to the customer.

GLOSSARY

EXCISE DUTY (BED) - A quantity-based tax which must be paid when a dutiable material is moved from a duty-free (bonded) location to a duty-paid (unbonded) location or the customer. Also known as excise tax. The excise duty is based on the quantity / Value of material moved.

AED – Additional Excise duty is a duty which is calculated over and above the Excise Duty payable on the material.

SED – Special Excise Duty is an additional duty levied on certain materials depending on the characteristics of the material. The statute specifies these materials.

CHAPTER ID –All materials that are required for manufacturing and subsequently those which are manufactured, are classified under the Central Excise Law into chapters. These chapters are further subdivided into headings and subheadings, which together form the chapter ID. Chapter ID 7216.10 is an example.

GLOSSARY

CVD – Countervailing duty is a levy charged on the imports of materials in lieu of excise duty.

CENVAT – Central Value Added Tax. The tax is levied on the difference between the output and the input value. This is also referred as MODVAT.

CESS – Cess is a tax imposed for a specific purpose under different acts with reference to certain goods. Cess is levied at the time of removal of goods from the factory.

OCTROI – A levy payable on the material to the local authorities.

ASSESSABLE VALUE - Denotes the value of goods that you have manufactured in-house at the price as assessed by an authorized auditor.

SETOFF – A certain percentage of input tax which is refunded by the government to the manufacturer. This refund does not form part of material cost.

GLOSSARY

INTERSTATE TRANSACTIONS - A transaction where the goods / material are traded between two different states.

CONCESSIONAL TAX FORMS – The Government announces tax concessions in excise and taxes on sales and purchase. This can be availed by submitting the forms prescribed by the Government. E.g ‘C’ form , AR4 , CT3.

TDS - Tax deducted at source ( Withholding tax) is a form of indirect taxation deducted at the beginning of the payment flow. Generally, an amount is withheld and paid over or reported to the tax authorities on behalf of (as opposed to by) the person subject to tax, the exception being self-withholding tax.

If a withholding tax exemption is available, withholding tax is not withheld.

GLOSSARY

REGISTERS – The registers are the books prescribed having specific format under the statute e.g RG23A,RG23D.

RETURNS – The prescribed forms having a specified format under the statute e.g. RT12, RG1, ANNUAL RETURN FOR TDS.

BACKGROUND

FIRST VERSION DEVELOPED IN 1996 IN RESPONSE TO NEEDS OF INDIAN CUSTOMERS

STANDARD PRODUCT SUPPLIED BY SAP AS AN ADD-ON

CONFORMS TO SAP DEVELOPMENT STANDARD (LOOK AND FEEL ETC)

SUPPORTED BY SAP DEVELOPMENT LAB AT BANGALORE

SAPFISD

MM

CIN FISD

MM

CIN INTERFACE WITH SAP

IN

FI - INTERFACE

COMPONENT

INSTALL COMPONENT

ACTIVATE COMPONENT

ACTIVATE PROCESSES

OPEN FI - INTERFACE

COUNTRY VERSION INDIA INSTALLATION

COPIES THE FOLLOWING

1. STANDARD INDIA TEMPLATES

2. TAX PROCEDURE (TAXINJ/ TAXINN)

3. CONDITIONS – EXCISE, TAXES ON SALES & PURCHASE, SERVICE TAX, CVD ETC

4. TABLES , FUNCTION MODULES , NO.RANGE OBJECTS, CUSTOMER EXITS

5. TAX DEPRECIATION KEYS

CIN INTERFACE WITH SAP

INDIAN LOCALISATION COVERAGE

COVERS THE FOLLOWING

CENTRAL / LOCAL SALES TAX

SALES TAX SETOFF

PURCHASE TAX

CONCESSIONAL TAX FORMS

SERVICE TAX

OCTROI


BASIC / ADDITIONAL / SPECIAL EXCISE DUTY

MAINTENANCE OF RATES ON VENDOR CLASS

MAINTENANCE OF RATES AS PERCENTAGE & AMOUNT

UTILISATION OF MODVAT

FORTNIGHTLY PAYMENT

CVD ( IMPORTS)

SUB-CONTRACTING

SUB-CONTRACTING CHALLANS

RECONCILIATION OF QUANTITIES

MAINTENANCE OF 57F4 REGISTER


MODVAT

UPDATING OF PART-I REGISTER FOR QUANTITY

UPDATING OF PART-II REGISTER FOR VALUE

UPDATING OF RG23D REGISTER FOR DEPOT

PRINTING OF EXCISE REGISTERS

PART-I / PART-II REGISTERS

RG1 REGISTER

RT12 RETURN

FACILITY FOR DOWNLOAD

INDIAN LOCALISATION COVERAGE EXTENDED WITHHOLDING TAX

WITHHOLDING TAX ON DOWN PAYMENTS / INVOICES / PROVISIONS

ACCUMULATIONS

MULTIPLE TAX LINE ITEMS IN ONE INVOICE

CALCULATION ALTERNATIVES (GROSS, NET, OFFSET)

ROUNDING OPTIONS

PAYMENT DUE DATES BY BUSINESS PLACE

CHALLAN UPDATE AND ACCOUNT CLEARING

SURCHARGE ON WITHHOLDING TAX

CERTIFICATE NUMBERING FOR DIFFERENT SECTIONS / BUSINESS PLACE

CERTIFICATE PRINTING WITH CUSTOMISABLE LAYOUT

ANNUAL RETURNS FOR VARIOUS SECTIONS OF INCOME TAX ACT

PROCUREMENT PROCESS

REQUIREMENTS AS PER INDIAN STATUTE

1. CALCULATION OF EXCISE DUTY BASED ON MATERIAL AND CHAPTER ID COMBINATION

2. CALCULATION OF EXCISE BASED ON CLASS OF VENDOR

3. CALCULATION OF INPUT TAX BASED ON INTERSTATE TRANSACTIONS

4. CALCULATION OF INPUT TAX SETOFF ON INCOMING MATERIAL (APPLICABLE TO FACTORY).

5. CAPTURE OF PART I AND PART II FOR CENVAT.

6. SUBCONTRACTING – U/S 57F4 WITHOUT PAYMENT OF EXCISE DUTY

7. SUBCONTRACTING – QUANTITY RECONCILIATION & SETTLEMENT

8. SUBCONTRACTING – PAYMENT OF EXCISE DUTY FOR NON-RECEIPT OF MATERIAL AFTER SPECIFIED PERIOD.

PROCUREMENT SCENARIOS

IMPORTMATERIALS

SUB - CONTRACTING

CAPITAL GOODS

LOCAL MATERIALS

TAX CALCULATION AT PURCHASE

1. TAXES ON SALES & PURCHASE ARE MAINTAINED AT FEDERAL LEVEL AND STATE LEVEL

2. THE EXCISE CONDITION IS MAINTAINED AT 100%

3. THE EXCISE RATE FOR THE MATERIAL IS MAINTAINED IN CIN MASTER.

4. THE INPUT / OUTPUT TAX RATE IS MAINTAINED FOR FEDERAL TAX AND STATE LEVEL TAX CONDITIONS

5. PERCENTAGE OF SETOFF ON INPUT TAX IS MAINTAINED IN SETOFF CONDITION

1. THE CHAPTER ID FROM CIN TABLE FOR THE MATERIAL

2. EXCISE RATE DERIVED FROM CHAPTER ID FROM CIN MASTER

3. IN TAX PROCEDURE 100% OF THE RATE IS CALCULATED

4. THE TAX CODE IS ENTERED IN THE LINE ITEM AND THE JURISDICTION OF THE VENDOR IS ACCETPTED AS AN INPUT.,

5. THE CVD IS ENTERED MANUALLY IN THE PRICING SCHEMA.

HOW TAXES ARE DETERMINED

SAP

PROCUREMENT- LOCAL PURCHASE

PRICING

Excise Rate Determination

Based on Material / Chapter ID and

Vendor Class

CREATE PO

CIN

GR

IV

Simulate & Post Cenvat.

Update Part I -QtyUpdate Part II –ValA/c. Determination

This also updates the excise header / line item tables.

SAP

PROCUREMENT- IMPORT PURCHASE

PRICING

Create Excise Invoice for CVD.

This is entered manually in PricingUpdate Part I - Qty

CREATE PO

CIN

GR

IV


Update Part II –ValA/c. Determination


PROCUREMENT– SUB-CONTRACT

Create Sub- Contract Challan w.r.t mat. doc.Print Excise Challan

Update Register

SAP CIN

Settle w.r.t. sub-contract challan.

Consumes the child material.

Updates RegisterReconciliation and

Completion of Challan

TRF.POSTING

CREATE PO

GR

IV


SAP

PROCUREMENT– CAPITAL GOODS

PRICING


Based on Material / Chapter ID and

Vendor Class

CREATE PO

CIN

GR

IV


Update Part I -QtyUpdate Part II –ValA/c. Determination50% - current year

50% - next year.


SALES PROCESS

REQUIREMENTS AS PER INDIAN STATUTE

CALCULATION OF EXCISE DUTY BASED ON MATERIAL AND CHAPTER ID COMBINATION

1. CALCULATION OF EXCISE BASED ON CONCESSIONAL FORMS.

2. CALCULATION OF OUTPUT TAX BASED ON INTERSTATE TRANSACTIONS

3. MAINTENANCE & PRINTING OF EXCISE / ST. DETAILS OF CUSTOMERS ON INVOICES

4. USAGE OF PRE-PRINTED INVOICE NO.

5. LEVY OF SERVICE TAX ON ALL SERVICES RENDERED FROM FACTORY.

6. PAYMENT OF CESS ON CERTAIN CATEGORY OF MATERIALS (IF APPLICABLE

7. MAINTAINING OF EXCISE RULES

SALES SCENARIOS

FACTORYSALES

TAX CALCULATION - SALES

1. TAXES ON SALES & PURCHASE ARE MAINTAINED AT FEDERAL LEVEL AND STATE LEVEL

2. THE EXCISE CONDITION IS MAINTAINED AT 100%

3. THE EXCISE RATE FOR THE MATERIAL IS MAINTAINED IN CIN MASTER.

4. THE INPUT / OUTPUT TAX RATE IS MAINTAINED FOR FEDERAL TAX AND STATE LEVEL TAX CONDITIONS

5. REGIONS ARE MAINATINED AT PLANT / CUSTOMER

1. THE CHAPTER ID FROM CIN TABLE FOR THE MATERIAL

2. EXCISE RATE DERIVED FROM CHAPTER ID FROM CIN MASTER

3. IN TAX PROCEDURE 100% OF THE RATE IS CALCULATED

4. THE JURISDICTION IS DETERMINED BASEED REGION MAINTAINED IN CUSTOMER MASTER AND PLANT,

5. IF THE REGION IS SAME THEN STATE LEVEL TAXES ARE APPLICABLE ELSE FEDERAL TAXES WILL BE APPLICABLE . THIS IS DETERMINED BY THE ROUTINES IN TAX PROCEDURES.

6. THE TAXES ON SALES AND PURCHASES ARE DETERMINED BASED ON THE TAX CODES

TAXES ARE DETERMINED BY THE SYSTEM

SALES SCENARIOS – FACTORY SALES

SAP


Based on Material / Chapter Id / Form

type. ST based on

Jurisdiction and Tax Codes

CREATE SO

CIN

PGI

BILLING

Excise Inv. WRTSAP Billing Doc.Selection of RulesUpdate No. Range

Update TablesA/c Determination


DELIVERY

REQUIREMENT OF FINANCEWITHHOLDING TAX

• ACCUMULATION OF TAX BASE AMOUNT• CERTIFICATE NUMBERING BASED ON BUSINESS

PLACE AND IT SECTION• ANNUAL RETURN FOR EACH SECTION• PAYMENT OF WITHHODING TAX• CALCULATION OF SURCHARGE• CERTFICATE PRINTING SHOWING TAX RATE INCLUSIVE

OF SURCHARGE• PAYMENT BY DUE DATE

EXCISE DUTY

• FORTNIGHTLY PAYMENT

PROCESS OF WITHHOLDING TAX

PAYMENT OF TDS

UPDATE CHALLAN

PRT CERTIFICATE

ANNUAL RETURN

TDS ON INVOICE

ADJ. FOR DOWN PAYMENT

CALCULATE TDS

THE TABLES FOR TDS AND CERTIFICATES ARE UPDATED

TDS ON PAYMENT

REQUEST FOR DOWN PAYMENT

PAYMENT OF REQUEST

CALCULATE TDS

ACCOUNTING

PROCESS FOR PAYMENT OF EXCISE

THE TABLES FOR EXCISE ARE UPDATED

SELECTION OF DATES

UTILIZATION

SELECTION OF REGISTERS

RG23A,RG23C,PLA

PAYMENT

ACCOUNTING

STATUTORY REGISTERS / REPORTSRG23A PART I REGISTER

RG23A PART II REGISTER

RG23C PART I REGISTER

RG23C PART II REGISTER

RG1 REPORT

RT12 REPORT

57F REGISTER

TDS CERTIFICATES REPORT

TDS ANNUAL RETURN REPORT

ALL THE REGISTERS & REPORTS WITH CUSTOMIZABLE LAYOUT WITH DOWNLOAD FACILITY ARE AVAILABLE AS PART OF STANDARD CIN

FISCAL YEAR

All the statutory reports and registers have to be maintained as per the Government Fiscal Year. The Government Fiscal year starts from 1st of April and ends on 31st of March of the subsequent year.

The Income Tax Depreciation has to be calculated on the basis of the Government Fiscal Year basis.

PSML Business Processes

Thank You

SAP CIN - COUNTRY VERSION INDIA

Technology

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