Raw Material (excise duty paid) scrapped at the stage of Production.

[Former Member]

Dear Experts,

Excise duties applicable (and paid) raw Material is scrapped due to damage in Production. This material is not returned to vendor.

Excise duty has been paid, Excise entries are updated.

As per the central government excise rules, how this material is to be treated. Also please explain SAP CIN point of view. I have to run this business process in SAP.

Thanks in Advance

[Former Member · Accepted solution]

Typically, you would do a 161 movement of this material and return to vendor

Else you would scrap the qty .

If you use 161 & return to vendor then you can do J1IS to create an outgoing excise invoice which will also reverse your excise credit.

If you scrap, then you can use the material document and do J1IH > Material write off and reverse the credit.

[Former Member · Accepted solution]

Thank you very much Hemlata!

But please explain Material writeoff in details.

regards,

Kiran

[Former Member · Accepted solution]

Please login to your system, go to transaction J1IH you will see a tab for material write off, in the selection screen give the scrap mat doc number and the other details which you will understand once you see the screen.

Regards

[Former Member · Accepted solution]

Hi,

U can srap that material and u can sell the scrap at that time u dont need to pay the excise duty applicable on to the Raw material. But the excise duty liable on Scrap only.

u cannot writoff the Raw material once used for prodution.

regards,

sujit

[Former Member · Accepted solution]

Thanks Sujit,

Then where exactly Material Writeoff is to be used ?

Thanks in Advance