Procurement of Imported Materials (CVD Computation)

Pre-requisites:

 Material Master Record

 Vendor Master Record
 CIN Master Data
i) Chapter IDs
ii) Material ID and Chapter ID combination
iii) CENVAT Determination
iv) Vendor Excise Details
v) Excise Details for Plant
vi) Excise Indicator for Plant and Vendor
vii) Excise Tax Rates

Important Notes:

Two Vendor Master Records are required. Main imported vendor is created as first
vendor and Commissioner of Customs is created as a domestic vendor.
In master record of main imported vendor GR-based IV tick should not be there on
purchasing data screen of vendor master and Schema Group vendor is selected as “Z1”

Process flow:

1. Create the PO using the standard procedure:

Important Field Selection details:

1. Vendor : Main Imported Vendor

2. Order Currency: Foreign Currency
3. In the Item details, Invoice tab page enter Tax code “ Zero Input Tax”
4. In the item details, select the Conditions tab page, we get three condition types
JCDB, JCDS and JCV1 are ready to input as percentage of duties

Since the PO vendor is imported vendor and he is nothing to do with the customs duty,
special customs duty and CVD. These duties are paid to local commissioner of customs,
who is a domestic vendor in our case.

So, for the above three condition types, the vendor needs to be changed to Domestic
vendor. Proceed as follows,

Select the relevant condition type (for ex: JCDB) and click details icon at the bottom-left
hand side below item details screen. On the details screen, change the vendor to domestic
vendor located at the lower right hand side of the screen. This has to be done for all the
three condition types.
Enter the condition values as a percentage of duties. Set up message output, check the PO
and save the document.

2. Invoice verification for CVD, Customs duty and Special Customs duty

Subsequent to the PO placed on the imported vendor, the goods arrive in India, they go
through the customs formalities. The customs officers issue a bill of entry for goods, after
payment of necessary duties like basic customs duty, special customs duty and CVD.
This is like invoice for the CVD on goods. This process is dealt in Logistics invoice
verification.

Before starting, ensure that G/L accounts for customs provisions (MM) and customs
clearing have the following settings done in GL master data

In control data tab page, Tax category field is marked with * (for all tax types) and
Posting allowed with out tax indicator is ticked.

Important field inputs,

 In the item lines area, select planned delivery costs indicator and select all details
from drop down list.
 Layout of invoice verification, select all the information from drop down list.

Since, invoice verification is being done before goods receipt as a planned delivery cost,
system will display three blank lines. These three blank lines are three condition types as
entered in PO. Input the quantities and amount as per Bill of entry.

Simulate and post the document.

Since this scenario does not involve any excise duty, there is no Part -1 and Part-2
entries made and there are no excise register entries. Any system warning messages have
to be ignored.

3. Good Receipt for Imported PO

Goods are received from the vendor as a result of a PO. A goods movement is entered
into the system referencing this PO and GR is posted to create a material document and
corresponding postings are done in accounting and accounting documents are created.

Since this is imported PO, invoice verification is already done for planned delivery cost.
So, system will give a new pop up “Excise Invoice item” number screen asking for
Commercial invoice number and year. Enter the document number and year done in the
previous step.

Use the standard procedure for Goods Receipts and input the details as required. To get
the Excise invoice tab page at Header data for entering the vendor excise invoice number
etc, for posting part 1 and part 2 of excise duty press Check push button. System will
issue a message prompting to enter the details. Proceed as follows and make field entries
in the Excise Invoice tab at Header data,

Some of the fields are defaulted by the system from CIN Master Data maintenance as
well as PO and fill up the other fields as required.

Next select the Excise Item tab page at the item level details and check the defaulted
entries like Chapter ID, EI quantity, Base value and BED.

Check and post the document.

4. Invoice Verification for Imported Vendor

Follow the standard procedure to post the vendor invoice. Use the tax code for “ Zero
Input tax” and check the currency as “USD”. All other entries are to be checked as per
standard procedure. Simulate and post the document.

Since this scenario does not involve any excise duty, there is no Part -1 and Part-2
entries made and there are no excise register entries. Any system warning messages have
to be ignored.

5. Statutory postings: