Posting the difference in excise to customer account

[Former Member]

Hi,

Dear Gurus,

I am trying to post the difference amount for the excise duty in SAP.

1. The excise credit was taken at 14% (bought out item)

2. while invoicing only 10% was passed on to the customer

3. I want to post the difference (i.e. 4%) to the customers account.

Please guide me in doing this.

Thanks in advance!

[Lakshmipathi · Accepted solution]

As per Central Excise rule, If a bought out component involves some additional manufacturing process, and you sell to a customer, then 10% duty is applicable. If no manufacturing activity is involved, then you have to levy 14% only.

Since this is allowed by Central Excise itself, you dont need to address this difference in SAP.

thanks

G. Lakshmipathi

[Former Member · Accepted solution]

Dear G. Lakshmipathi,

As stated in your reply, we are not doing any operations on the material. That means we have to pass on the 14% excise credit to cutomer. But in this case we have passed on just 10% of that. Now how to pass on the remaining 4% amount??

[former_member839993 · Accepted solution]

Hi,

Please issue a debit note/Supplementary invoice to the customer for the difference amount as i suggested you earlier.

regards,

US

[Lakshmipathi · Accepted solution]

Dear Akshay

Let me clarify that once you procure the component you would be taking 14% credit. While selling the goods, are you selling with the same packing or redo packing ?? If I am correct, definitely packing process is involved in which case also, only 10% duty is applicable and you dont need to pass on this to customer.

Here there wont be any loss in duty due to the fact that the selling price would have been higher than the purchased price and this will compensate the difference. There is no need to make any adjustment entries in J1IH.

thanks

G. Lakshmipathi

[Former Member · Accepted solution]

Dear Lakshmipathi,

That was really helpful information.

Just one more doubt I would like to clarify. If this involves a STO process, will it be the same or different scenario??

1. plant A takes the credit at 14%

2. plant B makes a STO against plant A

3. In the sales order from plant B, they only pass on 10% credit to plant A

In this case plant A is at loss, or is it?? How to tackle this??

Thanks

[Lakshmipathi · Accepted solution]

It is the Management's discretion of the company as to which plant should absorb the difference. Here also, there wont be any loss due to the fact that since its only a stock transfer, it is a normal tendency of the Management to retain the same price what they have procured and pass on the duty benefit to receiving plant.

thanks

G. Lakshmipathi

[Former Member]

Hi,

You can issue a debit note or if u have to required to create excise invoice for that u have to create Supplementary invoice.

Regards,

PM

[former_member839993]

Hi,

Issue a debit note to the customer.

regards,

US