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India 88 Locationziation Details
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24. Define Tax Categories for VAT and Excise India Localization : Setup : Tax Setup : Tax
Categories
25. Define Tax Collected at Source Regime for India Localization : India TCS/VAT/Service
Inventory Orgs. Tax : Setup : Regime Registration
26. TCS Applicable to Item / Item Class India Localization : Setup : Item Setup :
VAT/Excise Item Classification
Labels: INDIA
1.1.1 Common tax engine for input and out put taxes
India Localization use its own tax engine for all tax calculations. India Localization works with one tax engine, which need to be used for handling
both input and output type of taxes. For taking advantage of the functionality’s provided in India Localization, user need to perform the tax setups
only in Localized tax engine and not in standard application tax engines.
1.1.2 Multiple type of taxes
In India, we have different type of taxes and each tax has its own rules, procedures and reports. Using India Localization product, the user can
define multiple taxes for different tax types like Excise, Customs, Sales tax, Octroi, Service tax etc. etc. These will be used for generation of basic
statutory reports that need to be maintained under different taxes like Excise, Sales tax etc.
Through India Localization product, the user can also track other add on costs like freight, Insurance, discounts etc. Provision for generating III party
invoices for expenses like freight, insurance, handling charges etc. is also built in Localization product.
1.1.5 Provision to set up rounding- off factor for taxes during the definition of taxes
There is a provision to set up rounding off factor to be considered for the tax calculations at the time of transactions.
These details are defined for a supplier or customer and are available for the customer / supplier at their sites unless changed specifically.
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Users can define advelorem rate of duties or specific rates of excise duties. Through the tax precedence calculation functionality, the user can work
out duty on duty if required.
1.2.7 Provision to Arrive at the Landed Cost Per Item (Average Costing)
From the taxes applicable at the item level, users will be able to define the taxes which will be loaded to the inventory, to compute per item landed
cost. In the case of partially recoverable taxes, the user can define the recoverable percentage of the specified tax while defining the tax.
1.2.8 Facility to Avail CENVAT on Excise Duty Paid by the Supplier
India Localization supports all Cenvat transactions prescribed under Rule 57 of the Central Excise Rules. The user can avail cenvat credit on the duty
paid on his inputs and capital goods. In the case of capital goods, the user can take partial credit and the balance can be availed later. There is an
option for the user to avail credit on inputs either at the time of receipt through automatic mode or to claim credit later through a separate option.
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When the material is received against a Purchase Order, the taxes defined at the PO level will default. Defaulting will be proportional to the quantity
received. Since the taxes specified on the invoice are actually applicable, user will be able to modify the taxes as per the available invoice. This will be
applicable only for the first receipts against the PO. i.e. if an item is received in part shipments, the taxes could be modified only for the first receipt.
All subsequent receipts will be at the taxes specified for the first receipt.
Localization provides the functionality to modify the taxes at the time of receipt. This functionality can be effectively used by the user, when there are
changes in tax rates due to change in the statute/budget etc. In case of any change in taxes from the PO, the user needs to take care to update the
taxes immediately while performing the receipt. Tax changes will not be allowed once the user comes out from the receipt screen for the first time.
In the case of unordered receipts, user need to take care to ensure that the taxes attached to the purchase order match with the taxes at the time of
receipt as localization do not support change of taxes at the time of receipt for unordered receipts.
If the user opts for receipt matching, system will work out the taxes based on the taxes available for the particular receipt and based on the matched
quantity, taxes will be apportioned.
In India, as the occurrence of variance in the taxes defined in PO with actual receipt being very frequent, it is suggested to opt for receipt matching,
so that the taxes in AP will be in sink with the taxes at the time of receipt.
System will put a hold to RTV transaction for a Cenvatable item on which credit was not availed. In such cases, user need to take credit and then
perform the RTV transaction. This check has been built for ensuring that payment of duty do not happen if credit is not availed.
1.2.26 Miscellaneous Transactions
There is a provision to update the Excise Registers on performing miscellaneous transactions. The user can effectively use this functionality
whenever he need to make adjustments in the excise registers for various reasons. The user can make manual adjustments in excise registers by
using this functionality. User need to take care to define the appropriate GL accounts or else will have far reaching consequences as far as accounting
is concerned.
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Oracle Application allows the stocks to be adjusted through various transactions. On updating of these transactions the RG registers must also be
updated and appropriate CENVAT amount is to be reversed. Updation of RG registers is done automatically however, the CENVAT amount reversal
will have to be done using the data entry screens provided. User need to take care to define the correct ledger accounts for such transactions.
User can make use of this facility either for export transactions under bond or for other transactions relating to clearance of goods without payment of
duty under bond (like clearance for exhibitions etc).
* By considering the view of existing users of Oracle Applications, in release 11-I, we continue to provide RG 23 registers. The user can take the
print out of these registers for reconciliation purposes and forward the consolidated cenvat register report to the excise authorities.
The above are only few reports generated from Localization. For details, please refer to the chapter relating to
Reports.
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1.2.33 Calculation of Excise duty based on Transaction value
User is provided with a facility use a separate price list for the excise tax calculation this will be the assessable value price list for the purpose of excise
duty calculation and can be defined like any other price list. User will be able to select a price list for every customer either at customer level or
customer address level called assessable price list. If defined, only excise duty will be calculated on this price else sale price (list price - discounts) will
be used. All other taxes will be calculated on the sales price only. This facility will be available in Oracle Order Management and Purchasing
modules.
1.2.35 User definable Excise invoice numbers for different transactions (Sales Cycle)
User can set up different series of excise invoice numbers for different types of transactions. An option to define user definable prefixes for excise
invoice numbers generated for different transactions.
The user need to define the Order type/Transaction type in the Define Bond register screen and the same need to be mapped with the excise
generation region of Additional organization information screen.
In the case of works contract tax, the user need to define the tax authority as a vendor with vendor type TDS and at the time of approving the invoice,
the prescribed WCT will be deducted through a negative credit memo and an invoice will get generated to the Tax authority.
1.4.6 Report for Set Off Sales Tax Paid on Purchases with Tax Payable on Sales
The following reports are provided to facilitate the Sales tax set off feature.
· Purchases and sales tax on purchases within the state
· Purchases and sales tax on purchases outside the state
· Purchases from unregistered dealers
1.4.11 Reports
In addition to other reports, the user is provided with the following reports
· Purchase Return beyond the specified period, where the period has been provided as a report parameter.
· Status of Sales tax form issued / not issued against purchases.
1.5.4 Facility of tax deduction at source for specific types of payment transactions
Addresses tax deduction at Source for following types of payments
· Payment to Contractors / Subcontractors
· Rent
· Professional / Technical Fees
· Other transactions where TDS need to be deducted
· Deductions as per works contract Act
· User definable transaction where amounts need to be withheld under any other provisions of Law/procedures (for eg. Deductions towards ESI)
1.5.9 Automatic Creation of Credit memo for TDS and Invoice for Tax Supplier
The system based on the TDS Tax applied to an invoice line will recover the TDS and create a credit memo against the same invoice line. The system
will also create an invoice for the same amount for the Tax authorities supplier account. The Credit memo and also the Invoice will be created with an
approved status automatically by the system. The due date can be accordingly set for the Tax supplier and on due date the system will automatically
create payment.
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· Posted Invoice Register
will now show both Invoice amount and net of TDS as applicable.
1.5.15 Facility to cancel previous TDS invoice automatically, on cancellation of original invoice, if the original TDS invoice was
not paid to IT Authorities
User can cancel the previous TDS invoice automatically, if the original invoice on which this TDS is deducted, is canceled and the old TDS invoice is
not paid to I T Authorities, till date.
1.5.20 Credit Memo for TDS Certificates Received from the Customer
There is facility to raise credit memo on the customers outstanding amount which will be linked to the receipts and / or to the invoices raised by the
user against the TDS certificate received from the customers.
· TDS on pre-payments
· TDS on invoices
· Works contract tax on pre-payments
· Works contract tax on invoices
· Applying/Un applying prepayments to invoices
· Cancellation of invoices(TDS entries will be reversed only if the payment to the TDS authority is not made)
· Other type of witholding tax (for eg. ESI)
1.6.3 Reports
The system will provide a service tax report based on the parameters set for the report with the details of all collections for the invoices where service
tax is charged. The user has to create an invoice in AP for the payment of the same to the tax authorities.
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1.7.2 Provision to capture user definable excise invoice numbers for trading organizations
User will have a provision to capture Excise department approved numbers for Excise invoices being generated for shipments from these Trading
Organizations.
1.7.3 Tracking original excise invoice of receipt with the shipments from these trading organizations
User will have a provision to associate original excise invoice reference on the basis of LIFO or FIFO. There is a provision to specify the invoice
number at the transaction, so as to allow override with each shipment ( at the time of completing sale invoice, in the case of only AR installation)
happening from trading organization location.
1.8.3 Retrospective difference in amounts due to price / tax changes (Sales Cycle)
Is a provision to consider all the invoices and credit memos created during a given period and work out retrospective difference in amounts, as
applicable.
1.8.4 Report on retrospective difference in amounts due to price/tax changes (Sales Cycle)
Is a provision to print retrospective difference in amounts on all invoices and credit memos during a given period due to price / tax changes in Sales
Cycle.
1.9 INTERFACES
1.9.1 Interfaces
The following interfaces are provided through localization.
· Quotations
· PO Requisitions
· Purchase Orders with Taxes
· Receipts interface including Taxes
· Material transactions
· Tax categories
· Sales Order Interface
· AR Interface
· Interface of externally calculated taxes (except Excise) on OE transactions
· RG 23 A Register (Part I & Part II)
· RG 23 C Register (Part I & Part II)
· PLA Register
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1.10.1 Definition of Block of assets
User will be able to define block of assets by having the asset categories defined with highest level of details as required for Income Tax.
1.11.2 Option to consideration of Receipts in LIFO or FIFO or external basis for arriving at Duty drawback claims
User is provided with an option to chose the mode of operandi to calculate duty draw back. It can be either automatic or manual. If automatic the
system will further provide an option for LIFO or FIFO on receipts. If manual, the user will be able to choose the receipts at his choice.
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