Expert Guided Implementation

Realizing Logistics Processes in Indian Localization

Day 2
Vijayapal Tumma

Expert Guided Implementation Schedule

EGI Topic Name
Day 1

Day 2

Day 3

Day 4

Day 5

Empowering lesson

Empowering lesson

Empowering lesson

Empowering lesson

Empowering lesson

SAP expert explains the

indirect taxes in India
(Excise, VAT) , the
business processes to be
realized in this EGI activity
scenario and executes
customizing in FI module

SAP Expert explains tax

procedure for India
(TAXINN) and sets up
customizing in FI module
and Indian
localization(CIN)MM
module

SAP Expert continues with

TAXINN set up , sets up
customizing and master
data creation. SAP Experts
executes logistics
processes on the
procurement side.

SAP expert sets up SD

customizing (standard and
CIN specific) and explains
pricing procedures in SD,
with respect to indirect
taxes

SAP expert explains a

legal change and realizes
the same on the
procurement and sales
modules

(Web session, 2-3h. in the morning)

(Web session, 1-2 h. in the morning)

(Web session, 1-2 h. in the morning)

Execution by
customer

Execution by
customer

Execution by
customer

Execution by
customer

Execution by
customer

Check and fulfill

prerequisites by customer
in own system backed by
on-demand expertise and
support

Customer executes core

and India specific MM
customizing

Implementation by
customer in own system

Implementation by
customer in own system

Implementation by
customer in own system

(Web session, 1-2 h. in the morning)

(Web session, 1-2 h. in the morning)

(Remote support in the afternoon)

(Remote support in the afternoon)

(Remote support in the afternoon)

Goal of the day

Goal of the day

Goal of the day

Goal of the day

Goal of the day

Have a clear
understanding of
indirect taxes in India
Execute successfully,
the core FI module
customizing

Have a clear
understanding of
TAXINN tax procedure,
conceptually.
Understand and
execute customizing for
MM (standard and CIN)

Customer fully
understands and
executes TAXINN set
up.
Has a functional system
in which the India
specific procurement
processes are working

Customer fully
understands the indirect
taxes realization in SD
Has a functional system
in which the India
specific procurement
processes are working

Customer fully
understands the
activities during a legal
change
Successfully configures
the system to comply
with the legal change

2011 SAP AG. All rights reserved.

Expert Guided Implementation

How to get help

How to get
help

Customer

+91 9538869940
vijayapal.tumma@sap.com

SAP Expert

During the execution part you have direct access to the Expert via
telephone number to solve questions quickly. Please ensure that the
R/3 support and http connections are open and that we can logon to
your system.
2011 SAP AG. All rights reserved.

Agenda
1. Day one

Introduction to Indirect taxes in India

Ensure basic FI configuration is in place
2. Day two

Understanding of TAXINN
Ensure standard and Indian specific customizing works in MM module
3. Day three

Setup TAXINN
Realize basic logistics processes in procurement
4. Day four

Indirect taxes in sales

Realize basic sales cycles
5. Day five

Implement a legal change in both procurement and sales modules

2011 SAP AG. All rights reserved.

Tax Determination in MM - Overview

(*)For India, each of excise duty condition type is mapped to CIN

condition type and account determination is done on the basis of this
mapping table
2011 SAP AG. All rights reserved.

Schema diagram- how TAXINN works

2011 SAP AG. All rights reserved.

Check assignment of Tax Procedure to Country

SAP Implementation Guide-Financial Accounting-Tax on Sales and
Purchases

Note:
Once

assigned
and used, the tax
procedure should
not be changed!
Only

one tax
procedure can be
used for a
country

2011 SAP AG. All rights reserved.

A view of TAXINN

Condition
type

2011 SAP AG. All rights reserved.

Process Key
Account determination+ set
off/inventorize rule

TAXINN- A view of Tax item Condition type

For excise conditions, the

access sequence is JTAX

Excise conditions are

defined as Tax
conditions. This is an
example of a % based
tax condition(means
condition records will be
maintained as a %

2011 SAP AG. All rights reserved.

Total Condition Type- Why do we need them

Total Condition types
are used to accumulate
diferent tax amounts of
same tax type. Defined
as 100% in condition
records

BED% and BED quantity

taxes are totalled into
JMX1. It is a statistical
condition type and has no
accounting relevance

In CIN specific
transactions, total taxes
are displayed (from the
total condition types)

2011 SAP AG. All rights reserved.

10

TAXINN- A view of Access Sequence

1.

Control code means Chapter Id maintained in Material Masters

2.

Exclusive indicator means that system will not check for further records, once a valid record is
found

3.

It is possible to create a new access seqence and assign to condition types, if standard
delivery does not meet your requirements

2011 SAP AG. All rights reserved.

11

Access Sequence- How it stores data

Every row in an
access sequence
is a transparent
table in SAP.
Tables are stored
as A<Access
sequence
number>

This structure
shows how data
is transferred. For
example structure
KOMK-LIFNR
transfers data to
LIFNR of
condition record

2011 SAP AG. All rights reserved.

12

TAXINN- A view of Condition Record

Date validity plays a crucial
part in legal change

Depending on access
sequence, this is %, or
other UOM
Total condition type (eg
JMX1) will have 100% in
the Amount field
2011 SAP AG. All rights reserved.

Zero tax code to

be assigned,
which in turn
should be
assigned to
company code
13

SAP Delivered Condition types and Account Keys(sample

list) for Excise Duties (MM conditions)
Description

Qty Cond type

(account key)

% cond type
(ac key)

Total condition
(ac key)

access sequence

Base
duty( deductible)

JMOQ(VS1)

JMOP(VS1)

JMX1 (none)

JTAX

AED( deductible)

JAOQ(VS2)

JAOP(VS2)

JAX1(none)

JTAX

SED(deductible)

JSOQ(VS3)

JSOP(VS3)

JSX1(none)

JTAX

base duty (non

deductible)

JMIP (NVV)

JMIQ(NVV)

JMX2(none)

JTAX

AED( nondeductible
)
JAIP(NVV)

JAIQ(NVV)

JAX2(none)

JTAX

SED( non
deductible)

JSIQ(NVV)

JSX2(none)

JTAX

JSIP(NVV)

2011 SAP AG. All rights reserved.

14

Activity for Day 2

2011 SAP AG. All rights reserved.

15

Create Standard Settings in MM:

Step 1: Copy and Assign Plant

Copy Plant 0001 to

<EGIN>

By default,< EGIN>
gets assigned to
CC 0001. delete
this assignment
and reassign to
your own CC

2011 SAP AG. All rights reserved.

16

Step 2: Copy and Assign Purchase Organization

Create Purchase
Organization EGIN,
by copying from
0001.

Assign the PO to
Plant EGIN and
Company Code
EGIN

2011 SAP AG. All rights reserved.

17

Step 3: Maintain posting periods for MM postings

This ensures that
you can post from
December 2011
onwards. (to post in
December 2011,
maintain period as 9

2011 SAP AG. All rights reserved.

18

Step 4: MM Account determination; Assign valuation

grouping code

SAP Standard
delivers Valuation
grouping= Active.
So this entry is
required for correct
accounting
determination

2011 SAP AG. All rights reserved.

19

Step 5: Create Material Master for inbound material

(Transaction MM01)
Enter details for Plant
EGIN and Sloc 0001.
1)Base

unit
measure=KG
2)Material

group= 01

3)Gross

Weight, New
Weight = 10 KG
4)Valuation

Class

=3000
5)Price

Control = V

6)Moving

Ave price

=100

2011 SAP AG. All rights reserved.

20

Step 7. Zero% tax code for sales and purchases

1.

Go to Financial accounting global setting- tax on sales and purchases- basic

settings- check calculation procedure Define Condition types
1. Ensure that for JSER and JSVD condition type, access sequence MWST is maintained
and condition category is D

2.

Go to Financial accounting global setting- tax on sales and purchasescalculation

1. Create a tax code 01 with tax type V (input tax). Enter 0.000 as tax rate in Account key
ESA

3.

Go to Financial accounting global setting- tax on sales and purchases- Postingdefine tax account
1. For transaction Key ESA and ESE, maintain tax code 01 and enter GL account13113900
2. Go back to tax code activity (previous step) and maintain 0.000 for tax rate. System will
save this rate

4.

Go to transaction FS02 (edit GL Accounts). Enter GL account 13113900. In the

control tab, enter * in tax category and check postings with tax allowed,

2011 SAP AG. All rights reserved.

21

Step 8. Create Vendor Master for MM(XK01)

2011 SAP AG. All rights reserved.

Recon Account = 13110000

Payment terms = 0001

Order currency = INR

Terms of Payment = 0001

Incoterms = FOB

22

Verification Step: Check if you can post MM documents

for your Company Code (without taxes)
Steps:
1.Create
2.

a Purchase Order (ME21)

Create a Goods Receipt (MIGO)

3.Create

Invoice receipt

2011 SAP AG. All rights reserved.

(MIRO)

Entity

Number

Company Code

EGIN

Plant

EGIN

Purchase Orgn

EGIN

Purchasing group

001

Storage Loc

0001

Material

RAWMAT

Vendor

VENDOR

23

CIN Specific customizing for Procurement

[perform this only if

verification step of core MM is successful]

1.

India Country Version (CIN)delivers several pre configured entries.

In this activity, we will leverage those customizing entries and adapt for
our usage

2.

Not all customizing activities are required for our activity. Focus will be
on only the required customizing steps

3.

Once basic procurement processes run, you can change certain

customizing settings, to realize your own business processes (not part of
course content)

2011 SAP AG. All rights reserved.

24

Step 1. Maintain Company Code Settings

IMG path: Logistics General-> Tax on goods movement-> India-> Basic Settings
Maintain Company Code Settings
This controls the number ranges
used for generating CIN Accounting
documents

Determines the first month of

excise year

When set, rounds off line items in

Purchasing documents

2011 SAP AG. All rights reserved.

25

Step 1a. Copy and Verify Excise Group Settings

Ensure Depot Indicator is taken

out. Otherwise Excise Invoice
capture and post will not be
possible

EI Capture controls if EI can be

captured during MIGO. If not
flagged, only Part1 update or refer
EI is possible

If not flagged, EI cannot be posted;

only captured

For empowered users to change

Duty amounts in MIGO and still
post EI.

2011 SAP AG. All rights reserved.

26

Step 2. Maintain Plant Settings

IMG path: Logistics General-> Tax on goods movement-> India-> Basic Settings
Maintain Plant Settings
Ensure Depot Indicator is taken
out. Otherwise Excise Invoice
capture and post will not be
possible
If your business follows a strict 1:1
relation between Excise invoice and
delivery, choose Single GR.
If you wish to allow multiple GRs
for an excise invoice, choose
multiple GRs

In this setting, Excise registration is

also assigned to a Plant

2011 SAP AG. All rights reserved.

27

Step 3:Maintain Chapter Ids

IMG path: Logistics General-> Tax on goods movement-> India-> Master Data
Maintain Chapter IDs

Chapter Id is the number given to

a material in the schedules of
materials published by the
government of India

This has to be entered in the CIN

specific views of material master

Tax rates maintenance per chapter

id is also possible (Via access
sequence)

2011 SAP AG. All rights reserved.

28

Step 4: Assign users for Screen reference

IMG path: Logistics General-> Tax on goods movement-> India-> Master Data
Assign Users to Material Screen Sequence

Has to be 99. Othewise,

Material master cannot be
maintained for CIN specific
details

Enter your User ID here. Only

after this, you will have access
to CIN specific customer and
Vendor master details

2011 SAP AG. All rights reserved.

29

Step 5 : Specify GL accounts for excise transactions

IMG path: Logistics General-> Tax on goods movement-> India-> Account Determination

->Specify GL accounts per excise transaction

A Very important activity. This

controls all CIN postings to GL.
You can copy IN01 settings to IN02
If you wish to assign alternate GL
accounts, you may do so using Sub
transaction type (not covered in this
activity)
Maintain this account only for
excise transactions that are
relevant for this activity (GRPO)
This is covered in more depth in the
slide on Account Determination in
MM

2011 SAP AG. All rights reserved.

30

Step 6: Assign Number ranges for excise transactions

IMG path: Logistics General-> Tax on goods movement-> India-> Tools->Number Ranges

Create Number ranges for

objects J_1IINTNUM,
J_1IRG23A1, J_1IRG23A2
Enter number range object, click
Number ranges icon on tool bar
Enter excise group E1
Number range interval number
should be always 01.
Insert Number range object
interval,
save

2011 SAP AG. All rights reserved.

31

Step 7:Assign Zero Tax codes to Company Code

2011 SAP AG. All rights reserved.

IMG path: Logistics General-> Tax on goods

movement-> India-> Basic Settings
->Determination of Excise duty ->condition based
excise determination->Assign tax codes to
company code

32

Thank You!