CIN --Free Goods

[Former Member]

Hello SAP Experts!

We have free goods which are to be deleivered to the customers if he purchases 5 get 1 free.

How to handle the excise in this case.

regards,

A S

[Former Member · Accepted solution]

AS

As Raja mentioned, all goods which are shipped out of factory are excisable irrespective of selling price. So you will have to create a excise duty liability for 6 quantity.

Check with the business to see how they want to handle the liability for the 6th item. If the liability is going to be paid by customer then I suggest putting the discount condition type below excise calculations. Thus your excise liability will be captured and also the discount will reflect in AR.

If the company has to expense the excise liability then do the above and then add offset condition types for all the excise conditions.

You also might want to check if a VAT/ CST liability should be created for the 6th item.

Siva

[Former Member · Accepted solution]

Thanks a lot it was of great help

What do you mea by offset condition type if the Tax is to be borne by the company at all

Thanks @

[Former Member · Accepted solution]

I meant creating new condition types which are -100% of the corresponding condition type (one for BED, one for ECS, one for Higher Secondary Cess). You will also need to create new account keys which will make these offset condition types hit different GL accounts.

Let me know if it helps

[Former Member]

Dear AS,

all the goods will be excisable. in your case 5+1 = 6 items will be excisable.

Thanks,

Raja

[Former Member]

For a Rebate kind of scenerio and for free goods

Who would be paying the excise duty on behalf of the Customer

As we would not be charging excise for the 1 item free.. correct.

Now register RG1 will be updated with excise duty paid by the customer ....So for the free goods what will happen ?