Unit 3: Procurement

Contents
 Inbound Movement
 Handling of special cases
Procurement : Unit Objectives

 At the conclusion of this unit, you will be able to:

 Understand the excise related procurement processes
 Run the procurement processes
Legal View: Procurement of Raw Materials

Excise Invoice
Domestic Vendor
Price: 1000
Qty : 10 PC
Duty 16%
- 160

Excise Stock/
Part I Register

Deposit Rs. 160 Receipt

as Duty to the Qty : 10 PC
Govt.
GR at Factory Gate

CENVAT / Part II
Register

Excise Invoice ED Credit

: Rs 160
Capture and Post
Procurement: Excise Invoice Capture Scenarios

 Excise Invoice Capture for a Purchase Order / Scheduling

Agreement / Contracts

 Excise Invoice Capture for a Goods Receipt

 Excise Invoice Capture for imports Purchase Order

 Excise Invoice Capture without Purchase Order

 Excise Invoice Capture for a Stock Transport Order

Procurement: Tax View of a Purchase Order

 Pre-requisites for calculation of Taxes in a Purchase Order:

 The material must be excisable

 Identify the Tax Code and the Jurisdiction Code for each line item

 Use the GR based IV for the line items.

SAP Enjoy Transaction for Excise Invoice

First Line

Header Data

Item Data in
Table Control

Detailed item
data for one
line item
Procurement: Excise Invoice Capture for Single /Multiple PO

Purchase Order 1

Qty : 10 PC
Base Price : 1000
ED: 16%=160
Net Price = 1160

OR
Single Excise
Invoice
Purchase Order 1

Qty : 10 PC
Base Price : 1000
ED: 16%=160
Net Price = 1160

Purchase Order 2

Qty : 10 PC
Base Price : 1000
ED: 16%=160
Net Price = 1160
Procurement: Goods Receipt

 MIGO Transaction is delivered with CIN Changes

 Captured Excise Invoice can be referenced in MIGO

 Multiple Goods receipts can be done against a single

Excise Invoice

 GR for multiple POs can be done simultaneously

 Inventory valuation is based on excise invoice

 Part I gets created for excisable goods

Procurement: Excise Invoice Post

 Simulation of accounting document with account postings at

line items
 Accounts are determined from transaction type ‘GRPO’ for
Raw materials and ‘CAPE’ for Capital goods
 Rejection code for posting the CENVAT amount to
ONHOLD account
 Sub Transaction Type used for alternate determination of
accounts
 Part II entry gets created in RG23A or RG23C based on the
material type
 For Capital goods 50% Credit is moved to CENVAT and
balance kept on hold.
Invoice Verification

 Invoice Verification with Excise Amount

 Warning if Cenvat Credit is not availed

 Support for manual excise

 Revaluation of the inventory if the CENVAT amount is changed

 Support for ERS

Procurement: Excise Invoice Capture/Post Subsequent to Goods Receipt

One Step Process for

Capture & Post

 During GR no Excise Invoice reference is given

 Part I gets created during GR
 Register type, Excise Group mentioned at GR gets defaulted
during the Excise Invoice capture for the Goods Receipt
 Part I gets assigned to excise invoice
 Part II entry gets generated
 Inventory valuation gets adjusted during IV
Procurement: Excise Invoice Capture for Imports
PO
 Capture Commercial Invoice for custom duty payment for CVD as
delivery charges
 Capture of Excise Invoice allowed only for single Commercial Invoice
 Defaults Commercial Invoice number in the pop-up during capture.
 Capture of Excise Invoice for multiple imports Purchase Orders possible
Excise Invoice Capture/ Post without PO

 One Step Process for Capture and post Excise Invoice

 Used for free samples, non-stock items, consumables, etc..
 A material document can be referenced
 Without a reference document , Capture is possible
 Part I and Part II register entry gets created at the time of posting
excise invoice
 Accounts are determined from the transaction type ‘EWPO’
Inter Plant Stock Transfer

 Applicable for Plants in different registration IDs

 In case of Inter Plant billing use Delivery through SD else use MM
Stock transfer
 In the Issuing plant if delivery is done via MM use Excise Invoice
creation via other movements
 Assessable value in excise master used for duty computation
 Capture the excise invoice in receiving plant w.r.t. STO or GR
 Excise Values gets copied during capture based on supplying plant
invoice
Two Step GR

 Goods are received into blocked stock and then moved to unrestricted
stock

 Part I during block stock can be done based on configuration

 Excise Invoice can be captured and credit can be availed on block

stock GR

 Inventory valuation based on excise is done only when goods moved

from blocked stock to unrestricted stock
Procurement: Vendor Returns

 Vendor returns possible by creating an excise invoice for Other

movements

 Avail the credit for the materials/goods that are received.

 Create an excise invoice for the materials/goods returned to the vendor

and pay excise duty by posting this invoice.
Procurement: Cancellation of CENVAT credit

 It is now possible to cancel the CENVAT credit after it has been availed.

 In the first step, the material document has to be cancelled.

 This is followed by cancelling the CENVAT credit.

Procurement: Additional Adjustments

 A supplementary excise invoice for extra excise duty sent by a vendor

can be captured and credit availed
 CENVAT credit for Materials destroyed, lost, etc. can be written off.
 Surrender of credit for the excisable materials which are used for non-
productive purposes
Receipt of Material – Basic Excise Tax Functions
Multiple Registrations per Plant
Manual Excise at PO
Depots at Excise Group Level
Excise Invoice Query
Multiple GR’s per Excise Invoice at Excise Group
List of GR’s without Excise Invoice
level
P u rc h a s e O rd e r

E x c is e In v o ic e G o o d s R e c e ip t
C a p tu re
50% CENVAT Credit on Capital
Goods Default Quantity from Excise
E x c is e In v o ic e
Follow-on functions for Capital V e r i f ic a t io n
Invoice
Goods Quantity Mismatch Indicator
In v o ic e V e r i f i c a t io n
CENVAT for CVD
Separate Exchange Rate for CVD
Alternate Account Determination
Invoice Verification with Excise and CVD
Profit Center Accounting
Support of Evaluated Receipt Settlement (ERS)
Vendor Payment with CENVAT Credit on Hold
Posting Parked Documents with Excise
Excise Invoice Capture & Post (EICP): New Functions
Field selection for Excise Invoice Capture & Post (EICP)
Customizable Transaction Codes for EICP
Single-step, single screen Transaction
Separate Roles for Capture/Display/Change/Cancel/Post
Message log
EICP with Reference to
Excise Group Setting for Part I
Multiple PO’s
Indicator P u rc h a s e O rd e r
 Without PO
 Blocked Stock
Plant to Plant transfers
 Stock Transport Order G o o d s R e c e ip t

Consumption Stock
E x c is e In v o ic e
Multiple GR setting at Excise C a p tu r e a n d V e r ific a tio n
Simulation of CENVAT
Group Level
Postings
In v o ic e V e r if ic a t io n
Excise material type at line item level Postings at line item level
Rejection Codes to Block CENVAT Availment Display of Part I & II Entries
Reset to Initial Tax Values During EICP Display of Non-Deductible
Recalculate tax values based on rate changes and Deductible Taxes
during EICP