Accounting Entries

In this chapter, the accounting entries created for accounting localization taxes are discussed. In the general ledger proper accounts need to be defined for accounting localization taxes. Accounting entries will be created on completion of the respective transaction and the same can be imported to General Journal.

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Accounting entries in India Local Inventory
The following Accounting Entries are passed in India Local Inventory.

On Receipt of Material
Account Inventory Receiving A/c AP Accrual A/c Debit PO price PO price Credit

On Claim ing CENVAT credit
Account Inventory Receiving A/c AP Accrual A/c BOE/ customs duty paid a/c CENVAT A/c Inventory Receiving A/c CENVATable tax amount * CENVAT percentage CENVATable tax amount * CENVAT percentage Debit Total tax amount Credit Taxes other than customs duty & CVD Only customs duty and CVD amount

Creation of I nvoice for accounting IIrd party taxes I
Account AP Accruals Supplier a/c Debit Tax amount of the respective tax Credit

Tax amount respective tax

of

the

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Item cost gets increased by the amount that is additionally loaded on to the inventory. Item cost gets increased by the amount that is additionally loaded on to the inventory.Delivery of Material For Average Costing Organiz ation (Bonded Warehouse Sub Inventory) Account Sub inventory A/c Debit All non-CENVATable taxes + Amount not loaded in CENVATable taxes Credit Inventory Receiving A/c All non-CENVATable taxes + Amount not loaded in CENVATable taxes * In addition to passing these accounting entries. Delivery of Material For Standard Costing Organiz ation (Bonded Warehouse Sub Inventory) Account Purchase Price Variance ( PPV)A/c Debit All non-CENVATable taxes + Amount not loaded in CENVATable taxes Credit Inventory Receiving A/c All non-CENVATable taxes + Amount not loaded in CENVATable taxes Delivery of Material ( Duty paid Sub Inventorynon bonded) For Average Costing Organization Account Sub inventory A/c Debit All tax amounts both CENVATable/ non-CENVATable taxes except Individual taxes Credit Inventory Receiving A/c All tax amounts both CENVATable/ non-CENVATable taxes except Individual taxes * In addition to passing these accounting entries. Oracle India Localization User’s Reference Guide 532 .

the Expense Account is picked up from the Subinventory setup. the same account would be considered for reversal entries created on Return to receiving. Similarly. W here the delivery of an Inventory Item is made to an Expense Subinventory. Return to Vendors Return to Receiving(Bonded Sub Inventory) On Return from Inventory to Receiving Inspection (By Base product) Account Debit Receiving Inspection A/c Item Purchase Price Inventory Receiving A/c Credit Item Purchase Price Oracle India Localization User’s Reference Guide 533 .For Standard Costing Organization Account Purchase Price Variance (PPV) A/c Debit All tax amounts both CENVATable/ non-CENVATable taxes except Individual taxes Credit Inventory Receiving A/c All tax amounts both CENVATable/ non-CENVATable taxes except Individual taxes Delivery of Material (Bonded/Duty paid Sub Inventory) For All Other Taxes Account Respective Tax A/c Inventory Receiving A/c Debit Tax amount * Tax credit percentage Credit Tax amount * Tax credit percentage Delivery of expense item to Bonded/Duty paid Sub Inventory (Both Average and Standard Costing) Account Expense A/c Note 1 Inventory Receiving A/c Debit Total Tax amount Credit Total Tax amount Note: 1.

Return to Receiving (Duty paid Sub Inventory For Standard Costing Organization Account Inventory Receiving A/c Debit All tax amounts both CENVATable/ non-CENVATable taxes except Individual taxes Credit Purchase Price Variance (PPV) A/c All tax amounts both CENVATable/ non-CENVATable taxes Oracle India Localization User’s Reference Guide 534 .On Return from Inventory to Receiving Inspection (Localization entries) Return to receiving for Average Costing Organization Account Inventory Receiving A/c Debit All Non-CENVATable taxes loaded to inventory for the delivery Credit Sub Inventory A/c All Non-CENVATable taxes loaded to inventory for the delivery Return to receiving for Standard Costing Organization Account Inventory Receiving A/c Debit All Non-CENVATable taxes loaded to inventory for the delivery Credit Purchase Price Variance (PPV) A/c All Non-CENVATable taxes loaded to inventory for the delivery Return to Receiving (Duty paid Sub Inventory) For Average Costing Organization Account Inventory Receiving A/c Debit All tax amounts both CENVATable/ non-CENVATable taxes except Individual taxes Credit Sub Inventory A/c All tax amounts both CENVATable/ non-CENVATable taxes except Individual taxes * In addition to passing these accounting entries. Item cost gets increased by the amount that is additionally loaded on to the inventory.

then following entries would be passed on RTV Dr.except Individual taxes On Return to Receiving Inspection to Vendor (by Base Product) Account AP Accrual A/c Receiving Inspection A/c Debit Item Purchase Price Credit Item Purchase Price On Return to Receiving Inspection to Vendor Account AP Accrual A/c Receiving Inspection A/c CENVAT A/c Debit Total Tax Amount at the time of Receipt Credit Individual Tax A/c All taxes loaded to inventory for the Receipt Amount of CENVAT Originally Claimed (Only on Generation of Excise Invoice on RTV) Taxes ( ept Excse & exc i CVD) wi CENVAT th On Return to Vendor in the year of Purchase In case a part of goods received are returned in the year of purchase. Inventory Receiving Account Cr. CENVAT Account 100% of the credit for the Quantity Returned Oracle India Localization User’s Reference Guide 535 . Inventory Receiving Account Cr. CENVAT Receivable Account For the balance amount (Balance credit for a Quantity returned) Dr. CENVAT Account 100% of the credit for the Quantity Returned On Return to Vendor a year after Purchase (After claim of 100% CENVAT Credit) Dr. CENVAT Account Cr.

Accounting entries on claiming CENVAT Accounting entries on Claiming CENVAT on inputs Account CENVAT Raw material A/c Inventory Receiving A/c Debit CENVATable tax amount * CENVAT percentage Credit CENVATable tax amount * CENVAT percentage Accounting entries on Claiming CENVAT on capital goods Account CENVAT Capital goods A/c Inventory Receiving A/c CENVAT receivable Account Percentage of credit deferred for the next financial year Percentage of credit deferred for the next financial year Debit CENVATable tax amount * CENVAT percentage Credit CENVATable tax amount * CENVAT percentage CENVAT Capital goods Account Accounting entries on claiming the balance credit on capital goods Account CENVAT Capital goods Account CENVAT receivable Account Debit Amount of credit that is being availed Credit Amount of credit that is being availed Oracle India Localization User’s Reference Guide 536 .

User should take care to record zero percentage for OSP rate in the additional organization information Oracle India Localization User’s Reference Guide 537 .Accounting entries regarding OSP Transaction While sending the material through 57 F (4) Challan Account OSP Excise A/c Debit With percentage of duty set up in the additional organization information screen Credit CENVAT / PLA A/c With percentage of duty set up in the additional organization information screen On receipt of goods cleared under 57 F (4) Challan Account CENVAT A/c OSP Excise A/c Debit Duty paid at the time of clearance Credit Duty paid at the time of clearance * According the current provisions of Excise Rules there is no need to pay duty while clearing the goods for sub contracting operations.

Account Sub inventory a/c Cost of goods sold a/c Debit Sales Inventory Cost Credit Sales Inventory Cost RMA Receipts considered as ‘Production Input’ CENVAT Credit For Excise and CVD Taxes Account Debit CENVAT RM/CG A/c Tax Amount Excise Paid Payable Account Credit Tax Amount RMA Receipts considered as ‘Finished Goods Return’ Localization accounting entry for Excise Tax treatment Account Debit CENVAT RM/CG A/c Excise Amount Excise Paid Payable Account Credit Excise Amount RMA Receipts considered as ‘Scrap’ Account Scrap Cost a/c Sub Inventory a/c Item cost Item cost Debit Credit Localization accounting entry for Excise Tax treatment Account Debit Excise Expense a/c Excise Amount Excise Paid Payable Account (Excise duty paid will be written off as an expense account) Credit Excise Amount Oracle India Localization User’s Reference Guide 538 .RMA Receipts RMA Receipts into a Bonded Warehouse For the sale price amount with out excise duty.

Accounting entries related to AP invoices On Matching the Payable Invoice with PO/Receipt Localization Entry for Tax amounts Account AP Accruals a/c Debit Sum of Tax amount of the respective tax + Line Amount Credit Vendor a/c Sum of Tax amount of the respective tax + Line Amount On Creation of Credit Memo at the time of approving the created Regular Invoice for TDS Deduction Account Vendor a/c TDS a/c Debit Amount debited towards TDS Credit Amount debited towards TDS On Creation of TDS Invoice at the time of approving the created Regular Invoice for TDS deduction Account TDS a/c TDS Tax Vendor a/c Debit Amount debited towards TDS Credit Amount debited towards TDS *Same accounting entries will be passed for different type of withholding taxes. Oracle India Localization User’s Reference Guide 539 .

Vendor Bank A/c Debit BOE Amount Credit BOE Amount On writing of the customs duty paid Account BOE & Customs duty written off a/c BOE & Customs duty paid a/c Debit Write off Amount Credit Write off Amount Accounting entries for PLA Payments On Approval of PLA Invoice Account PLA A/c Excise authority .Vendor Debit PLA invoice amount Credit PLA invoice amount On Payment of PLA Invoice Account Excise authority .Vendor Bank A/c Debit PLA payment amount Credit PLA payment amount Oracle India Localization User’s Reference Guide 540 .Vendor Debit BOE Amount Credit BOE Amount On Payment of the BOE Invoice Account Customs authority .Accounting entries related to Bill of Entry On Approval of BOE Invoice Account BOE/ customs duty paid A/c Customs authority .

Ship Confirmation Accounting entries on Ship Confirmation Base Application Accounting entries Account Cost of Goods Sold a/c Sub Inventory a/c Debit Sales Inventory Cost Credit Sales Inventory Cost Accounting entries for updating the excise accounts Account Excise Paid Payable a/c CENVAT/ PLA a/c Debit Total Excise Duty Payable Credit Total Excise Duty Payable Oracle India Localization User’s Reference Guide 541 .

Credit Oracle India Localization User’s Reference Guide 542 .Accounting entries in AR On Invoicing in AR Accounting entries for raising invoices for dispatches made from both a duty paid or Bonded warehouse (After running Receivable Interfaces in OM and moved to AR module) Account Debit Credit Receivables a/c Sales Inventory Cost + Total of all taxes Revenue a/c Sales Inventory Cost Individual Excise Tax a/c Individual Excise Amounts Other Individual Tax a/c Individual Tax Amounts On saving AR Transactions Account Receivables a/c Revenue a/c Individual Excise Tax a/c Other Individual Tax a/c Debit Sales Inventory Cost + Total of all taxes Credit Sales Inventory Cost Individual Excise Amounts Individual Tax Amounts On completion of an AR Transaction Account Excise Paid Payable a/c CENVAT/ PLA a/c Debit Total Excise Duty Payable Credit Total Excise Duty Payable Raising Credit Memo from AR Transactions Account Revenue a/c Excise Paid Payable a/c Other Individual Tax a/c Receivables a/c Debit Sales Inventory Cost Excise Duty Paid Individual Tax Amounts Sales Inventory Cost + Total of all taxes Credit For debiting duty under Rule 6 of The CENVAT Credit Rules (Old Rule 57 CC) Account CENVAT Recovered a/c Debit 8% on Selling Price (based on Organization.

Parameters) CENVAT a/c-RG23A-Part II 8% on Selling Price (based on Organization. Parameters) Oracle India Localization User’s Reference Guide 543 .

Accounting entries for RG consolidation Transactions On setting off the CENVAT credit with PLA Debits Account PLA Account CENVAT RM Account CENVAT on Capital goods A/c Debit Total transfer amount from CENVAT registers Credit Amount set off from the CENVAT on input Account Amount set off from the CENVAT on capital goods On payment of excise duty (On approval of the PLA Invoice) Account PLA Account Excise Authority Account Debit Amount of the PLA invoice Credit Amount of the PLA invoice Oracle India Localization User’s Reference Guide 544 .

Excise Invoice Generation Account Excise Paid/Payable account RG23 Register/ PLA Account Organization Debit Sending EXCISE AMOUNT Sending Credit EXCISE AMOUNT Issue Transaction (In Transit Transfer) FOB Point is set to Receipt: Account In-transit inventory account Excise Paid/Payable account Organization Debit Sending EXCISE AMOUNT Sending Credit EXCISE AMOUNT FOB Point is set to Shipment: Account Inter-Organization Receivable Excise Paid/Payable account In-transit Inventory account Inter-Organization Payable Organization Debit Sending EXCISE AMOUNT Sending Receiving EXCISE AMOUNT Receiving Credit EXCISE AMOUNT EXCISE AMOUNT Receipt Transaction (In Transit Transfer) FOB Point is set to Receipt: Account Inter-Organization Receivable In-transit Inventory account Inventory Receiving account Inter-Organization Payable Organization Debit Sending EXCISE AMOUNT Sending Receiving EXCISE AMOUNT Receiving Credit EXCISE AMOUNT EXCISE AMOUNT FOB Point is set to Shipment: Account Inventory Receiving account In-transit Inventory account Organization Debit Receiving EXCISE AMOUNT Receiving Credit EXCISE AMOUNT Oracle India Localization User’s Reference Guide 545 . .Accounting entries for Internal Sales Order Transactions The following Accounting Entries passed during an Internal Sales Order Transaction.

Direct Transfer Account Inter-Organization Receivable Excise Paid/Payable account Inventory Receiving account Inter-Organization Payable Organization Debit Sending EXCISE AMOUNT Sending Receiving EXCISE AMOUNT Receiving Credit EXCISE AMOUNT EXCISE AMOUNT CENVAT Entries (If the Receiving Unit is Bonded) Account CENVAT Account Inventory Receiving Account Organization Debit Receiving EXCISE AMOUNT Receiving Credit EXCISE AMOUNT Delivery (If the Receiving Unit is Non-Bonded/ Trading) Account Inventory Valuation Account Inventory Receiving Account Organization Debit Receiving EXCISE AMOUNT Receiving Credit EXCISE AMOUNT Oracle India Localization User’s Reference Guide 546 .

Process flow To update the chapter number. 2. press ALT F9. Update the sequence number as appropriate. for example 1. etc. This chapter contains a diagrammatic presentation of certain activities on how India Localization on Oracle Applications -Release11 addresses your business needs under Indian Laws. Highlight the chapter number and press F9 to update the number. and press ALT F9 again. Oracle India Localization User’s Reference Guide 547 .

Define Income Tax as supplier of type Tax Authority Enter Invoice with applicable TDS Tax type matching with PO Approve Apply Prepayment amount net of Tax system will adj ust proportionate TDS Approve related TDS Invoices and pay in batch in batch Review Print Status of certificate to print Original again Generate TDS Certificate Print Original Print reports on TDS at Concessional rates Oracle India Localization User’s Reference Guide 548 .Deduction of Tax at Source (TDS) Process Define Tax with TDS type Enter IT registration Details For Organization Enter IT registration Details and TDS Section & limit for Suppliers and at Supplier Site in Additional Vendor Info. Enter Prepayment invoice with applicable TDS tax Approve Pay Enter TDS tax Names and specify TDS section to which it belongs.

Duty Drawback Process Setup Enter Bill Of Material in Oracle BOM or Enter Bill Of Material in India Localization Inventory Attach Order source or AR Invoice type to bond register or indicate it as for Process Export type AR Invoice Invoice of Export Type Invoice created by Auto invoice Program Enter Proof of Export Automatic Duty Drawback Process Specify the receipt selection method i. LIFO/FIFO Oracle India Localization User’s Reference Guide 549 .e.e. LIFO/FIFO Manual Duty Drawback Process Specify the receipt selection method i.

LIFO/FIFO Selected BOM will be exploded to the lowest level Process will calculate the claim amount for each receipt till amount against entire quantity is claimed If MODVAT is claimed against selected receipt Process will reverse the MODVAT credit in RG 23 A part II and corresponding GL entry will be passed.e. Receipts will get selected based on receipt selection method selected Print Duty Drawback Claim Report Process will calculate the claim amount for each selected receipt till amount against entire quantity is claimed Manual Duty Drawback Process Specify the receipt selection method i. Receipts will get listed based on receipt selection method selected. LIFO/FIFO If MODVAT is claimed against selected receipt Process will reverse the MODVAT credit in RG 23 A part II and corresponding GL entry will be passed.. If the balance in register is insufficient then process will stop. If the balance in register is insufficient then process will stop.e. If Bill Of Material defined in Oracle BOM module process will consider latest wrt. Removal date else latest Bill Of Material defined in Oracle Inventory module process will be considered. Select Receipts against which Duty Drawback to be claimed Selected BOM will be exploded to the lowest level and you can view that in Components Window Oracle India Localization User’s Reference Guide 550 .Process continued … . If Bill Of Material defined in Oracle BOM module process will consider latest wrt. Removal date else latest Bill Of Material defined in Oracle Inventory module process will be considered. Automatic Duty Drawback Process Specify the receipt selection method i.

Excise Duty will be made Zero for a delivery to duty exempted customer.Support for Trading Process Define Trading Item by enabling Trading Flag to ‘Y’ in Item Definition Enter Trading registration Details For Organization / Location (Additional organization information) Enter Purchase Order for Trading Item with Ship to Organization being ‘Trading’ Enter Receipt for Purchase Order and deliver them to Trading Sub Inventory Sales Order For Trading Item AR Transaction for Trading Item Match Receipt While matching receipt for an invoice Excise Duty per unit will be defaulted from the receipt line. RTV and RMA Report RG23D Oracle India Localization User’s Reference Guide 551 . RG23D Register Updated during Receipts. Invoice.

RMA Process Book RMA Order with India Localization Enter Sales Order India Localized & Click On Open Enter the Base Sales Order Header Enter Line Details Prepare RMA W ith or W ithout Reference RMA with Reference RMA without Reference Reference to Order or Invoice Invoice Order Localization DFF with India Invoice Localization DFF with India Sales Order Localization DFF Not Required Automatic Population of Delivery Detail id Save RMA Order Save RMA Order Return to India Localized Sales Order Screen Return to India Localized Sales Order Screen Taxes are display mode only based on the Delivery Detail id Taxes are defaulted based on setup & can be modified Return to Base Apps Sales Order Form Book RMA Order Oracle India Localization User’s Reference Guide 552 .

Descriptive Flex fields used in India Localization This document details Descriptive Flex fields being used/reserved for India Localization.. failing which the data will be lost on application of Localization patch. Any data present in these fields has to be migrated to attributes other than those used by Localization. Oracle India Localization User’s Reference Guide 553 . The users are advised not to use these attributes while doing their Inhouse Customization.

Details of attributes used / being used in DFF by Release. Application Title Context Attribute No 1 Oracle Items India Items Attribute1 Inventory Attribute2 Attribute3 Attribute4 Attribute5 Attribute13 Attribute14 Attribute15 2 Oracle Inventory Transaction history India Other Transaction Attribute1 Segment Name excise_flag modvat_flag item_class_id item_tariff item_folio Future use Future use trading_flag Temp Remarks NonDisplay 3 Oracle Human Resources Additional Organization Unit Details India Org Info Attribute1 Tan No. Attribute2 Attribute3 Attribute5 India RMA Receipt Attribute1 Attribute2 Excise Invoice Date Claim CENVAT on Receipt Paddr Excise Invoice No. Attribute2 Attribute3 Attribute4 Attribute5 4 Oracle Purchasing Receiving Transactions India Receipt Attribute1 Attribute2 Attribute3 India Return to Vendor India RMA Receipt Attribute4 Attribute5 Attribute1 Attribute2 Attribute3 Attribute4 Attribute5 5 Oracle Purchasing RCV_SHIPM ENT_HEADE RS India Receipt Attribute1 Pan No. Excise Invoice Date Transacti on Type Oracle India Localization User’s Reference Guide 554 . Ward No. OM Tax Source Future use Excise Invoice No. 11i Localization Sl. Excise Invoice Date Claim CENVAT on Receipt Generate Excise Invoice Future use Excise Invoice No Excise Invoice Date Claim CENVAT on Receipt RM_ITEM_NO RMA_Type Excise Invoice No.

Attribute3 Attribute4 Attribute5 6 Oracle Payables Invoice Distribution India Distributions Attribute1 Attribute2 Attribute3 Attribute4 Attribute5 Claim CENVAT on Receipt RM_ITEM_NO RMA_Type JA_IN_TDS_TAX_ NAME_INV JA_IN_WCT JA_IN_WCT1 Future use Future use NonDisplay NonDisplay 7 Application Object Library Common Lookups India Lookup Codes Attribute1 Attribute2 Attribute3 Classification TDS Limit Tax Type Delivery Detail Id 8 Oracle Order Management Additional Line Attribute Information Invoice India Attribute2 Attribute3 Attribute4 Attribute5 Attribute14 Customer PO India Attribute2 Attribute3 Attribute4 Attribute5 Attribute14 Sales Order India Attribute2 Attribute3 Attribute4 Attribute5 Attribute14 Allow Excise Credit? Allow Sales Tax Credit? Excise Duty Rate per Unit Excise Duty Rate (%) Delivery Detail Id Allow Excise Credit? Allow Sales Tax Credit? Excise Duty Rate per Unit Excise Duty Rate (%) Delivery Detail Id Allow Excise Credit? Allow Sales Tax Credit? Excise Duty Rate per Unit Excise Duty Rate (%) Value2 9 Oracle Receivables Line Transaction FlexField SUPPLEMENT CM INTERFACE_ LINE_ATTRIB UTE2 Oracle India Localization User’s Reference Guide 555 .

in normal cases and/or Attribute 14. Oracle India Localization User’s Reference Guide 556 . if required. we intend using First 5 attributes for all the remaining tables/ flex fields.SUPPLEMENT DM SUPPLEMENT INVOICE TDS CREDIT 10 Oracle Assets Asset Category India B Of Assets INTERFACE_ LINE_ATTRIB UTE2 INTERFACE_ LINE_ATTRIB UTE2 INTERFACE_ LINE_ATTRIB UTE2 Attribute1 Attribute2 Value2 Value2 Value2 Date of Acquisitions Block of Assets Check Deposit date Bank Name Challan No. Original InvoiceTDS VAT Invoice Number VAT Invoice Date 11 Oracle Payables Payment Information India Payment Information Attribute1 Attribute2 Attribute3 12 Oracle Payables Invoice India Original Invoice for TDS India VAT Attribute1 Dynamic Registration Dynamic Registration Attribute1 Attribute2 13 Oracle Assets Mass Additions India B Of Assets Date of Acquisitions Block of Assets None 14 Oracle Order Management Additional Line Return Information LEGACY None In addition to the above.15 in special cases for future development.

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