domain process of subcontrating with excise

[Former Member]

hi all,

it will be very helpful,if anybody explain me the domain process of subcontrating with excise with ex.

regards

sumit

[Former Member · Accepted solution]

Dear Sumit C,

Prerequsites are-:

1) SPRO path Logistic general- CIN-India.

2) Maintain Transaction ID that is 01 and Assingn it to 57F4 challan if it is not assign the subcontracting will not work.

3) Maintain your vendor with XK01 and maintain CIN details for your vendor and also maintain the vendor Schema in your Purchasing view of your vendor.

4) Maintain your material and vendor assignment in J1ID.

5) Now create PO with Item category L and maintain the TAX code in your PO.

6) Also check that IN India is assigned with TAXINN.

7) Rest all you can go with Suman Kumar details describe...

Regards,

Amir Kadri

[Former Member · Accepted solution]

ok,

so,whats the difference between the process of subcontracting with excise and subcontracting without excise?

regards

sumit

[BijayKumarBarik · Accepted solution]

Hi,

As per the Central Govt Law,  the components(raw materials) are giving to Sub contractor (if they are excisable - this come to know throgh the Excise Department)

#.Without payment excise {The Subcontract vendor must retun the Finished product or damaged components with 6 months(180 days) from goods taken date}

##.With excise payment.(No such restriction of 180 days)

Subcontracting without Payment of Duty:

You have to maintain the Assessable Value for the Components to be supplied to Vendor in J1ID and also Excise Tax rates for the Chapter IDs linked with these components. So Subcontracting Challan  created during J1IF01, system will take the Assessable Value as Excise base Value and calculates the Excise Duties by taking Excise Tax Rates.Goods Receipt w.r.t. Subcontracting PO (Refer Subcontracting Challan) in t.code:MIGO.The other process are reconciliation of Subcontracting Challan (J1IFQ),Completion of Subcontracting Challan (J1IF13) and generation of Annexure IV (J1IFR)

Subcontracting under Full Payment of Duty:

Creation of Outgoing Excise Invoice w.r.t. Transfer Posting Document (J1IS) after  MB1B tranaction- Used to send the components to Subcontractor's. Here subcontracting Challan is not created.

Capture Vendor Excise Invoice at the time of GR of Finished Goods w.r.t. Subcontracting PO i t.code:MIGO

Refer link:

http://www.scribd.com/doc/58793155/User-Manual-CIN

Regards,

Biju K

[former_member187965]

Hi Sumit,

There are two ways of sub-contracting process.

First - If the material is excisable then as per Excise rule you have to create 57F4 challan to send material outside factory premises for job-work. As per law, This material should be received back within 180 days and if it is not received within 180 days then you have to debit part 2 account by the same amount You can claim the excise duty again, once the material is received back from the vendor.

In this case company is not supposed to pay the excise duty as the material movement is carried out with the 57F4 document.

If vendor doesn't and his material for processing then he will not generate any tax document for sending material back to the company. He will just fill the 57F4 challan second part with the processing details. After posting the GR for this sub-contracting PO, you have to reconcile and complete the 57F4 challan.

Second - Create excise invoice for sending material to vendor for job-work. This will be a Sale to the vendor. In this case the excise duty will be paid and the material movement takes place with the Excise Invoice document. Here there will not be restriction of 180 days for receiving material back after processing.

After selling the material to vendor, this will be a standard purchase scenario where you will capture the excise invoice sent by vendor.

[tejyadav]

The things you do in sap is equivalent to domain process only, If talking in Layman language without sap, Subcontracting is to procure materials which the companies manufactue from outside vendor due to huge requirement or order or not having enough capacity to produce the same.

Excise again is in same way like while sending ROH you send on challan which in sap is called 57f4 challan, again after 180 days if goods not coming need to book for excise payments which normally people don't do

[Former Member]