monthly utilization and excise values reversal in import material return

[Former Member]

Hi Friends,

this is chandu working as a mm consultant , 1) first time working on cin project , so here i have a doubt regarding monthly utilization what is meant by monthly utilization how to go with this as a mm consultant , any one can please explain me the procedure step by step in MM consultant point of view .

2) i'm doing import material return to the vendor in this i dont how to reverse excise values what ever updated (at the time of procurement )in excise registers, wether it is required to reverse this values the or not because in import process we will maintan 2 vendors customes and mat vendor , so please tell me how go with this.

regards

chandu

[Former Member]

answered

[Former Member]

Hello Chandu

Monthly Utilization - As per indian govt law we have to pay Excise duty on the Manufactured item we sale, now to manufacture those item we buy some raw materials and we pay to the vendor the basic price as well as excise duty amount. So practically if we look in this we are paying excise duty to govt at the time of purchases as well as we are charging excise on selling of finished goods from the customer and pay it to govt. which will be wrong ideally. So to avoid all this govt. has given us the provision of MODVAT benefit which says whatever Excise duty part which we pay at the time of purchase of raw materials can be adjusted against the amount of excise duty which we recover from customer at the time of sales.

So in SAP / India Law terminology Duty we pay to vendors is called as Duty Available and Excise duty we recover from customer is called as Duty Payable.

Calculation is -

Duty amount to be deposited to govt = Duty Payable - Duty available

So whatever net amount calculated for deposit to govt. is paid thru TR6 challan and the UTILIZATION in SAP is -

Duty Payable = Duty avialably + TR6 (in SAP known as PLA)

I hope it is understandable

Thanks

Vineet Baweja