This Presentation Covers

Master Data

Standard SAP Business Processes

Excise Registers & SAP Reports

Brief IDEA
In India , Excise duty is a tax on the manufactured goods that is levied
when goods leave the place of manufacturer . Manufacturer can set off
the duty paid on input materials against their output duty , this procedure
is known as central value added tax [CENVAT ] .
General ledger for excise duty updation will be assigned in CIN [ IMG ]
under Accounting customization .When ever goods are received , Excise
G/L will be updated for Modvat credit on inputs , RG 23 A part 1 for
quantity and part 2 for Modvat credit amount . This register is used for
material other then Capital Items . For Capital Items RG 23 C Part 1 and
Part 2 will be Updated . For Depot receipts and sales RG 23 D Part 1 and
Part 2 will be updated .

SAP Easy Access India Localization Menu

Go To Address Bar and Type Transaction Code J1ILN

You get the SAP India Localisation

Menu

J1ID - Master Data Screen

Follow the Menu Path for

Excise Master Data

You get the Master Data Screen

Create Chapter-id

Chapter ID: The number given to a material in the schedules of materials published by the
government of India. The schedule lists all materials involved in manufacturing, input materials
and output materials alike. It shows how much excise duty is levied on each material.Each
material in the schedule is assigned its own identification code, called "chapter ID.

We Create Chapter ID for Material

Master . All Chapter ID where
Cenvat determination Is Applicable
should be Maintained First .

Create New Entries

Save the Chapter ID

Maintain Material & Chapter-id Combination

Click on New Entries and enter the following details

Here we indicate a
material as Sub-contracting

For all subcontracting

Material ( sent and received )
pls tick on Subcontracting
BOX

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Here we define material

type as :
Consumables
Assets
Tools
Non Convertible
Raw Material
RG1

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12

Enter the Material no. in

Input and Output Norms
with Plant assignment
along with Excise
Declaration date .

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Click on New
Entries and update
Vendor Excise
details

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Put Excise Indicator as :

01 100 % Taxable
09 - Nil Tax

The System will determine this

Vendor as subject to Excise

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17

Similar to Vendor,
Make Entries for your
Customer also
Make sure that you
assign Appropriate
Excise Indicator to
your Customer.

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Here we maintain Excise Indicator

for the Plant in a combination of
Co Code--PlantsFirst Month of
Excise YearNo. RangeExcise
Indicator
Excise Indictor for all
Manufacturing Plants in a
Company Code will be 1

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We Maintain the Final Excise Indicator

for Vendor & Plant.
Similarly maintain final excise
indicator for Customer and Plant.

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We Maintain Excise Tax rate Based

on Material Chapter ID and Final
Excise Indicator

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This table will be maintained if there is

any excise rate other then Excise rates
based on Material Chapter ID and Final
Excise Indicator . ( e.g.- S.S .I Vendors ,
Qty based excise amount ) .In
purchase order first Excise rates will be
searched in exceptional table and then
in table based on Final excise indicator
and material chapter ID . The
exceptional rates will be maintained with
combination of Material number and
vendor Code as follows

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26

1.

2.

SAP also support Sales Tax

Setoff. We define the % on
the combination of Plant &
Material.
Also we can define AED &
SED on Quantity Basis

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Standard SAP Business Processes

Procurement:
Procurement of Raw Material Domestic & Import
Procurement of Capital Goods (Assets, Consumables & Tools)
Stock Transfer
Subcontracting
Without Payment of Excise Duty.
With Payment of Excise Duty.

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Procurement of Raw Material - Domestic.

1.
2.

You Create Purchase Order via ME21N or a Schedule Agreement via

ME31L with Pricing which includes Excise Duty.
When the goods arrives, the warehouseman enters the goods receipt via
MIGO. Here The System Creates:
Material Document to Record Goods Receipt
Creates an Accounting Document to debit the inventory account and
credit the GR/IR clearing account
Creates Part I Entry in Register RG23A or RG23C

The Excise Clerk Captures the Vendors Excise Invoice with reference
PO/GR Document via J1IEX-Capture.

The Excise Supervisor checks the excise invoice captured by the clerk &
Posts the CENVAT via J1IEX-Post . The System Creates PART II Entry in
Register RG23A or RG23C and a Accounting Document to debit MODVAT
Accounts and Credits GR/IR Liability CENVAT.

You enter the Vendor Invoice in the system via MIRO. The system creates
an accounting document crediting the Vendor and debiting the GR/IR
Document. By this your GR/IR Documents gets Cleared off.
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Eg: PO Conditions

System determine Excise Duty

as per TAX Code & Master
Data maintained J1ID.

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Eg: Goods Receipt & Capture Excise Invoice

Here we can Capture or
Capture & Post Excise
Invoice while doing
Goods Receipt

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Procurement of Raw Material - Imports

1.

You Create Purchase Order with all conditions applicable for Imports via
ME21N.

2.

You Create Shipping Notification via VL31N.

3.

You do Goods Receipt w.r.f. to Shipping Notification via MIGO. The System
Create PART I Entry in Register RG23A or RG23C and an Accounting
Document.

4.

You Capture & Post Vendors Excise Invoice via J1IEX or together with
MIGO. The System Creates PART II Entry in Register RG23A or RG23C and
creates the Accounting Document.

5.

You Enter the Vendor Invoice via MIRO. The system created accounting
Entries crediting your Vendor & debiting the GR/IR Account.

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Procurement of Capital Goods

**Capital Goods in SAP CIN is classified into Assets, Consumables & Tools**

Procurement of Capital Goods is same as Procurement of Raw material.

The Difference is:
As per Excise Law you can take MODVAT 50% in the year of Purchase and 50% in
the next year. SAP Supports this feature. What you do is you define All such materials
as Capital Goods in Excise Master Data J1ID as earlier discussed. So, When you
Post your CENVAT via J1IEX, The System creates an Accounting Entries by posting
50% in MODVAT Accounts and 50% in MODVAT on HOLD Account.

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Subcontracting
There are two ways of handling the excise invoice on the goods that you provide them with:

Subcontracting without payment of Excise Duty:

The Process Flow is:

1. You Create a subcontract order via ME21N with NIL TAX CODE.
2. You Create a Transfer Posting Document via MB1B w.r.f. to Subcontract Order.
3. You Create a Subcontracting Challan widely called as 57F4 Challan via J1IF01.
4. You do Goods Receipt with that Challan Reference via MIGO.
5. You Reconcile received Qty. with Challan Qty. via J1IFQ.
Under excise law 57AC, when you send materials to a subcontractor for processing, you
are not required to pay any excise duty, even though the materials have left your
premises. However, if the materials have not been returned to you within a given length
of time specified by the law (in 2000, 180 days), you will have to reverse any excise
credit that you posted when you purchased the materials. In the case of materials that
you have manufactured in-house, you will have to post credit entries to the extent of the
CENVAT rate of the assessable value of the materials.
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Subcontracting

Subcontracting under Full payment of Excise Duty:.

The Process Flow is:
1. You create a Subcontract Order via ME21N.
2. You create a transfer posting for the materials that you want to send to the
subcontractor via MB1B.
3. You create an outgoing excise invoice for the materials via J1IS w.r.f to Material
Document.
4. You send the materials to the subcontractor, together with the excise invoice.
5. The subcontractor processes the materials and returns them to you, together with
another excise invoice.
6. You capture the subcontractors excise invoice, using the purchase order as the
reference document via J1IEX.
7. The warehouseman enters the goods receipt via MIGO.
8. The excise supervisor posts excise invoice via J1IEX.
9. The accounts payable clerk posts the subcontractors invoice via MIRO.

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Stock Transfer
1.

You create a stock transport order, and send the order to the issuing plant.

2.

The issuing plant has processes your order, and when it is ready to ship:
a. Issue the goods using a transfer posting via MB1B.
b. Create an excise invoice via J1IS.
c. Verifies and posts the excise invoice.
Then Goods are dispatched, together with the excise invoice.

3.

Once the goods arrive at receiving Plant,

a. Enter the goods receipt, again using the stock transport order as the
reference document via MIGO.
b. Capture the excise invoice, using the GR Document as the reference
document via J1IEX.
c. Posts the excise invoice via J1IEX.
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Standard SAP Business Processes

Sales
Stock Transfer

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Sales from Factory

1.
2.
3.

You Create a Sales Order via VA01 or Schedule Order via VA31 with
conditions of Excise.
You Create an Outbound delivery via VL01N with movement type 601.
You define this movement type as relevant for RG1 Register.
You Create a Billing Document/Commercial Invoice via VF01. Excise
Invoice is created in Background. The system creates two accounting
documents.
a Dr. Customer A/c.
At the end of the
Cr. Sales A/c
year
Cr. Excise duty Recovered Account
Recovered Account
Cr. Any other Condition like Freight, Octroi etc.
= Paid Account
b

Dr. Excise Duty Paid A/c.

Cr. Excise Duty payable Account
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Eg: Sales Order Condition

The System Creates Excise Entries on

the Combination of TAX Code and
Excise Master Data Maintained in J1ID

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Eg: Accounting Documents

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Stock Transfer
This is the Stock Transfer of our Finished Goods from one Plant to Other. This
Stock Transfer follows SD Route.
Process Flow: At Issuing Plant:
1. You Create Stock Transfer Order via ME21N or ME27.
2. You Create an Outbound Delivery and w.r.f. Purchase Order via VL04.
3. You do the Post Goods Issue via VL02N
4. You Create Billing Document w.r.f. Outbound Delivery via VF01 and Excise
Invoice is created in Background.
At Receiving Plant:
1. You do Goods Receipt w.r.f. to Purchase Order via MIGO.
2. You Capture Excise Invoice w.r.f. GR Document via J1IEX or the same can
be done in one step via MIGO.
3. You Post CENVAT via J1IEX.
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Accounting Entries
MODVAT Entry
When making Goods Receipt for Non-Capital Goods ( Coded and Non-coded
done through SAP MM Module).
Excise duty RG23A Part 2 Input
Dr
To
GR/IR Liability - Cenvat
Cr

CENVAT entry Capital Goods

Excise duty RG23C CAPITAL
Cenvat In abeyance CAPITAL
To
GR/IR Liability - Cenvat

Dr (50%)
Dr (50%)
Cr

Sale of Goods
Only excise entry through India version
Excise duty paid
To
Excise duty payable account

Dr
Cr
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Accounting Entries
TR6 Payment
Excise Duty PLA
Dr
To
XXXX Intermediate TR6 A/c
Cr
If the payment is made on account of some expenditure such as Interest,
Stationary and overtime account.
XXXX- Expenditure A/c
Dr
To
Excise Duty PLA
Cr
This is manual JV.
Monthly Adjustment
When monthly or fortnightly payment is made to Excise dept .
Excise Duty
Payable a/c
To
Excise Duty RG23A-Input
To
Excise Duty RG23C-CAPITAL
To
Excise Duty PLA
( This is to be done with outgoing payment and clearing only).

Dr.
Cr
Cr.
Cr.
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Accounting Entries
Return of Excise goods where payment is required to be done immediately. (
Purchase Return )
GR/IR Liability - Cenvat
Dr
To
Excise Duty RG23A-Input
Cr } Any one a/c
To
Excise Duty RG23C-CAPITAL
Cr. }
To
Excise Duty Payable
Cr. }
( All LRN entries will be discussed separately).
JV every year end to be passed in the subsequent year after the asset is put to use
in the subsequent year.
Excise Duty RG23C- Capital
Dr
To
Cenvat In abeyance CAPITAL
Cr.

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Accounting Entries
Manual JV for Cancellation RCIA

To

GR/IR Liability Cenvat

Excise duty RG23A Part 2 Input

Dr
Cr

Excise duty RG23A Part 2 Input

Excise Duty Paid

Dr
Cr

Sales Return

To

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FORT NIGHT UTILISATION

TRAN:J2IU
TYPE THE
COMPANY
CODE,PLANT,
EXCISE
GROUP,PAYMEN
T DATEAND
PERIOD FROM
AND TO.
SELECT PAY
SED FM BED
AND PRESS F8

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TYPE THE
AMOUNT FOR
WHICH ACCOUNT
TO BE PAID.
AND PRESS
ENTER. IF THERE
IS NO ERROR
SAVE
The System Creates following
Accounting Entries:
Dr. Excise Duty Payable Account
Cr. RG23A BEDA/c.
Cr. PLA
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TR6C Challan
When you dont have enough Balance in either of RG23A BED or RG23C BED
to pay off Excise duty, you transfer the Balance amount in your PLA and
then do Utilization.
1.

You Create an FI Document Dr. PLA and Crediting Bank A/c.

2.

You Create a TR6C Challan on the basis of that FI Document

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TR6 CHALLAN ACCOUNTING

TRAN: J1IH

SELECT TR6 ICON

IN THE POP SCREEN
TYPE
THE ACCOUNTING
DOC NO FROM
GLA/C CODE
YEAR COMPANY
CODE
PLANT
EX GRP AND
SUB TRAN AND
PRESS ENTER

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FILL UP THE
AMOUNT AS
PER
DEPOSITED,
AND SAVE

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Reports & Excise Registers

Excise Registers:
RG23A PART I: This Register has now become Obsolete and not required
now a days. This Register shows the quantities of the materials.
RG23A PART II: Part II shows the amounts of excise duty on the materials,
and how much you have transferred to the CENVAT accounts
RG23C PART I: This Register has now become Obsolete and not required
now a days. This Register shows the quantities of the materials.
RG23C PART II: Part II shows the amounts of excise duty on the materials, and
how much you have transferred to the CENVAT accounts
PLA: These is Personal Ledger Account for Excise.
RG23D: It records the receipts & issues of excisable materials at Depot.
RG1: A register of excisable finished goods kept by manufacturing plants. The
register shows goods movements from the factory to a store specifically
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for excisable finished goods.

RG1 Register

Follow the Process:

1.

Update Register via T. Code J1I5

2.

Extract Register via T. Code J2I5

3.

Print RG1 Register via T. Code J2I6

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UPDATION OF RG1 REGISTER

T.CODE: J1I5
RECEIPTS

Enter : Posting date

Movement Type for Receipts
Classification as ROP
Select RG1 and press f8
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You get the List of Material Documents for Receipts

This is
called
Traffic
Lights

Select all & Simulate. Traffic Lights goes Green.

Again Select All and Click on Create Register Entry.
System will update your RG1 Register.

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RG1 Updation for Dispatches

Repeat the Procedure:

Enter Posting date
Movement Type
Classification as IDH
Select RG1 and press f8
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RG1 Updation for Dispatches

If Traffic lights goes Green, it

means system will update the
material Documents but if it
goes Red then it means that
there is no stock

Select all and click on Create

Register Entries. The System
updates the RG1 Register

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REGISTER EXTRACTION
T.CODE J2I5
Enter : Excise Group
Start & End Date

Select Register
Execute

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REGISTER PRINTING
T.CODE: J2I6

Select Register and

Execute

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Report: Monthly Return Under Rule 57AE

T.CODE:J2I9

Enter: Company code

Excise Group
Posting Date
Select the Annexure for Transaction
details & Abstract for Total Credits
and Total Debits

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CENVAT AVAILMENT OF CAPITAL GOODS IN NEXT

FINANCIAL YEAR
T.CODE: J2I8

ENTER: COMANY CODE

PLANT
EXCISE GROUP
POSTING DATE

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SELECT ALL AND SELECT TRANSFER OF CREDIT

You get the List of Excise Invoices for which you have to
avail CENVAT
Select the Excise Invoice(s) and Click on Transfer Credit.
System Creates an Accounting Entry:
Dr. CENVAT on HOLD A/c.
Cr. MODVAT Clearing A/c.

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Report: CENVAT not availed

T.CODE J1I7
Enter Document Year
Excise Group
Select No posting or
Part1 posted, Part2
not posted
Click on Execute or Press F8

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SYSTEM DISPLAYS THE LIST OF EXCISE INVOICE FOR

WHICH CENVAT IS NOT AVAIED

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DAY TO DAY ACTIVITIES

J1IEX_C Capture Excise Invoice
J1IEX_P Post CENVAT
J1IIN Create an Outgoing Excise Invoice
J1IF01 Create Subcontracting Challan
J1IS Create an Excise Invoice for other Movements
J1IH CENVAT Adjustment
J1I7 CENVAT not availed
J1IFQ Subcontracting Challan reconciliation
J1I5 Finished Goods receipts & Issues updation
J2I5 - Register Extraction
J2I6 Register Printing
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MONTHLY ACTIVITIES
J2IU - PLANING TR6 AMOUNT DEPOSIT BY
SIMULATE
J1IH - UPDATION OF TR6 CHALLAN AMOUNT IN
PLA REGISTER
J2IU - UTILIZE THE CENVAT AMOUNT

J2I6 - PRINTOUT OF E1 MONTHLY RETURN

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YEARLY ACTIVITIES
On Union Budget Check any Tariff ED % changes
update if any
Close all Pending Excise Transaction
J1IH CENVAT Adjustment

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ON BEGINING OF THE
FINANCIAL PERIOD

Excise Number Range Copy to New Fiscal Year.

Carry forward of Balance in PLA, RG23A &

RG23C Accounts.
J2I8 Transfer of 50% MODVAT on Capital Goods

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