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
CIN INTERFACE WITH SAP

FI CIN FI
SD SAP IN SD
MM MM

FI - INTERFACE
COMPONENT

INSTALL COMPONENT
ACTIVATE COMPONENT
ACTIVATE PROCESSES
OPEN FI - INTERFACE
CIN INTERFACE WITH SAP

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
INDIAN LOCALISATION COVERAGE
COVERS THE FOLLOWING
 CENTRAL / LOCAL SALES TAX
 SALES TAX SETOFF
 PURCHASE TAX
 CONCESSIONAL TAX FORMS
 SERVICE TAX
 OCTROI
INDIAN LOCALISATION COVERAGE

 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
INDIAN LOCALISATION COVERAGE

 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

LOCAL
MATERIALS

IMPORT
MATERIALS

SUB -
CONTRACTING

CAPITAL
GOODS
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
HOW TAXES ARE DETERMINED

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.
 PROCUREMENT- LOCAL PURCHASE
SAP CIN

CREATE PO
Excise Rate
Determination
PRICING Based on Material /
Chapter ID and
Vendor Class

GR Simulate & Post

Cenvat.
Update Part I -Qty
Update Part II –Val
IV A/c. Determination

This also updates the excise header / line item tables.

 PROCUREMENT- IMPORT PURCHASE
SAP CIN

CREATE PO
Create Excise
Invoice for CVD.
PRICING This is entered
manually in Pricing
Update Part I - Qty

Simulate & Post

GR Cenvat.
Update Part II –Val
A/c. Determination
IV

This also updates the excise header / line item tables.

 PROCUREMENT– SUB-CONTRACT
SAP CIN

CREATE PO
Create Sub- Contract
Challan w.r.t mat. doc.
TRF.
Print Excise Challan
POSTING
Update Register

Settle w.r.t. sub-

GR contract challan.
Consumes the child
material.
Updates Register
Reconciliation and
IV Completion of Challan

This also updates the excise header / line item tables.

PROCUREMENT– CAPITAL GOODS
SAP CIN

CREATE PO
Excise Rate
Determination
PRICING Based on Material /
Chapter ID and
Vendor Class

Simulate & Post

GR Cenvat.
Update Part I -Qty
Update Part II –Val
A/c. Determination
50% - current year
IV 50% - next year.

This also updates the excise header / line item tables.

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

FACTORY
SALES

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
TAXES ARE DETERMINED BY THE SYSTEM
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
 SALES SCENARIOS – FACTORY SALES
SAP CIN

CREATE SO Excise Rate

Determination
Based on Material /
DELIVERY Chapter Id / Form
type.
ST based on
Jurisdiction and Tax
PGI Codes

Excise Inv. WRT

BILLING
This also updates the excise
header / line item tables.
SAP Billing Doc.
Selection of Rules
Update No. Range
Update Tables
A/c Determination
REQUIREMENT OF FINANCE
WITHHOLDING 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
TDS ON PAYMENT TDS ON INVOICE

REQUEST FOR CALCULATE TDS

DOWN PAYMENT
ADJ. FOR DOWN
PAYMENT OF PAYMENT
REQUEST

CALCULATE TDS PAYMENT OF TDS

UPDATE CHALLAN
ACCOUNTING

PRT CERTIFICATE

THE TABLES FOR TDS AND CERTIFICATES ARE UPDATED

ANNUAL RETURN
 PROCESS FOR PAYMENT OF EXCISE
SELECTION OF
DATES

UTILIZATION

SELECTION OF
REGISTERS
RG23A,RG23C,PLA

PAYMENT

ACCOUNTING

THE TABLES FOR EXCISE ARE UPDATED

 STATUTORY REGISTERS / REPORTS
RG23A 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

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