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Asset Procurement

Domestic: -

1. ME21N – Create Asset Purchase Order

Here put details as mentioned below

Account Assignment Category – “A” i.e. Asset

In Account Assignment Tab page put Asset code (This asset code will be created by FI User)
Use Tax code in “Invoice” Tab if it is excisable.
Put Price in Conditions Tab page and check all other entries.
Then save the PO.

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Remove GR non Valuated Tick

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2. MIGO – Goods Movement

Select Transaction as “Goods Receipt” and reference as “Purchase Order”.

Here put all details as mentioned below,

Vendor Challan no, date, excise invoice no, date, etc… in Header Details.

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Here all details like quantity, UoM, etc… is to be filled at Item Level.

Here one additional Tab of “Account Assignment” will appear at Item level which stores details of
Controlling Object (i.e. Account Assignment like Asset, Cost Center, Order, etc…) and
corresponding G/L Account.

Now check and Post the GRN Document.

It will post the GRN Document as below.

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FB03 - Accounting Entries generated during GRN are

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3. J1IEX – Post Excise Invoice

Here Select Transaction as “Post” and reference as “Vendor Excise Invoice” and Press “Enter”.

It will default the details like excise invoice no, date and excise values, etc… of Excise Invoice
already captured at the time of creating GRN.

Now click on “Check” button to confirm the details entered here.

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Once system will say “Document id O.K.” then click on “Simulate CENVAT” button to confirm the
Accounting Entries.

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Once you will click on “Simulate CENVAT” button, it will show a pop up of accounting entries
generated.

If it is correct then press enter to continue the further transaction.

Here we can observe that 50% of Total CENVAT is only getting posted to CENVAT Accounts,
remaining 50% is going to CENVAT On hold A/c. This entry is arising since Material procured is a
Capital Good.

After confirming Accounting Entries, click on “Post CENVAT” button to Post the excise invoice.
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Once you will click on “Post CENVAT” button, it will post the excise invoice as below.

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Say “Continue” to come out of the transaction.

4. MIRO – Enter Vendor Invoice

Here Select Transaction as “Invoice”

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Put Vendor Invoice no, date, Asset PO, Select “Goods/ service items” and Press “Enter”

It will default all details like quantity, value, Tax code, etc… as per GRN made w.r.t. the PO.

Select “Tax code” as per PO Line item in “Basic Data” Tab and click on “Calculate Tax” Indicator.
It will calculate Tax Amount as per the Tax Code.

Now put the Payable value in the “Amount” field and when Balance becomes ‘Zero” or within
Tolerance limit then it will show messages in “Green or yellow” color.

Now click on “Simulate” button to analyse Accounting Entries.

After analyzing Accounting Entries, click on “Post” button to create Invoice document.

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It will generate an Invoice Document as below;

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List of Transaction Codes: -

1. ME21N – Create Purchase Order

2. ME2N – List of Purchase Orders
3. MIGO – Goods Receipt against PO
4. MMBE – Stock Overview
5. MB51 – List of Material Documents
6. MIRO – Enter Vendor Invoice
7. MIR5 – List of Invoice Documents

Import: -

1. ME21N – Creating Import Purchase Orders

Acct. Assmt. Cat. – “A” - Asset.

Use

You follow this procedure to create a purchase order for imports.

Procedure

Create a purchase order for the materials that you want to order using the standard procedure,
but when you fill out the item information, make sure that you observe the following:

 Invoice tab

 Enter a zero-rate tax code i.e. V0

 Deselect GR-based IV

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 Conditions tab

a. Select the countervailing duty (CVD) condition and choose “Condition Detail” Button.
a. In the Rate field, enter the rate of CVD that will be levied on the material when it arrives
at customs.

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b. In the vendor field, enter the vendor master record that you have created for the customs
office.

Then, once the vendor has delivered the goods and you enter the invoice, the system will
automatically credit the CVD liability to the customs office.

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 Account Assignment tab

Here put Asset code (This asset code will be created by FI User)

Save the Purchase Order and system will generate a PO No. as following.

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2. MIRO - Entering Invoices for Bills of Entry

To enter an invoice for a bill of entry, you follow the standard invoice verification procedure, but
make sure you observe the following:

Header Data

 Basic data tab

 In the Amount field, enter the amount of countervailing duty (CVD) stated on the bill of entry
in rupees.
 Do not enter any other taxes. Use Tax Code as V0.

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 Details tab

 Assuming you specified in the purchase order that the CVD was to be paid to the customs
office, the system shows the customs office as the vendor. If not, enter the customs office’s
vendor master record in the Inv. party (Invoicing party) field.

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Line Items

On the PO reference tab, enter data as follows:

1. Enter the number of the purchase order related to this delivery.

 If you only created one purchase order for the goods, enter the purchase order number and
select planned delivery costs.

2. For each line item:

 In the Amount field, enter the amount of CVD on the item (if you have more than one item, you
may have to work the amount out manually).
 In the Quantity field, enter the quantity of goods on the invoice.
 Enter a zero-rated tax code.

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3. Choose “Simulate” button.

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A dialog box appears with a list of the postings that will be made to Financial Accounting (FI).

4. Choose “Post” button.

System will generate Custom Invoice as follows,

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3. MIGO – Entering Goods Receipts

Use

In this procedure, you record the receipt of the goods from the vendor abroad, following the
standard procedure.

Procedure

1. In the top line, enter the purchase order number and click on “Execute” button.

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2. A dialog box appears.

Enter the number of the invoice that you entered for the bill of entry and click on “Enter” button.

3. If you need to enter more purchase orders – for example, if you sent the vendor more than one
purchase order and it sent you back all the ordered materials in a single delivery – for each
purchase order, enter the number in the top line and click on “Execute” button.

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4. Check that the line items in the goods receipt are correct.

5. Save the goods receipt, Click on “Post” button.

Result

The system creates:

 A goods receipt document.

 An accounting document.
 An entry for the goods receipt in Part I of the appropriate excise register.

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4. J1IEX - Posting Excise Invoices

1. Select Transaction as Post and Reference as Vendor Excise Invoice.

2. Enter the number of the excise invoice that you created for the bill of entry.

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3. Check that the data is correct.

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4. Click on “Simulate CENVAT” button.

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A dialog box appears with a list of the accounting entries that will be made to transfer the CVD
from the clearing account to the excise duty account.

To close the dialog box, click on “enter” button.

NOTE: - A new imports duty, Additional Duty of Customs - ADC, has been introduced with the
Budget 2006-2007. As per the law, it is allowed to take 100% of credit for ADC for capital goods in
the first instance, unlike other excise duties for capital goods. For all other excise duties for capital
goods, it is required to take only 50% of the duty credit and the remaining after a certain period of
time through the transaction J2I8.

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5. If the data is correct, click on “Post CENVAT” button.

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The system posts the CENVAT and creates a corresponding entry in Part II or the appropriate excise
register.

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6. MIRO – Vendor Invoice Verification

Here Select Import Purchase Order and select Goods/Service Items.

Select Tax Code as V0 and Click on “Calculate Tax” Indicator.

Put the Actual amount to be paid to Vendor in “Amount” Field.

And Click on “Simulate” button.

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System will show a pop up of Accounting Entries.

Analyze the accounting entries generated and Click on “Post” button.

System will generate an invoice document as below.

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