thirdparty process

[Former Member]

We are sending  X material which is non excisable to Sita steel,they tack it doing some work and added some material in it and finaly produce a Y material, they send back to us Y material but they have raised excisable  invoice so how can I treated that.

1.If I go for sub-contacting process  then how can I book excisable  value in our system.

2. or other process is there

so please suggest how I can handle this scenario

[Former Member]

Does your raw material which you send are exciseable?

[Former Member]

that raw material are non excisable.

[Former Member]

Please let me Know

Exciseable means BED,ECS,SECS or Vat which one vendor is sending,

Vendor is with in state or outside state

[former_member192897]

You said Subcon vendor will add some components and after job work is done return the final product to you. Do you procure the additional components added by vendor then? If yes, are they excisable material? please confirm your complete process including excise processing.

1) You will have to add the components (that are added additional by your subcon vendor during processing) into Subcontracting BOM.

2) Create a Subcontracting Purchase order with first line item for Parent material with Item category "L" subcontracting. Also insert the second line item for the additional component added by vendor with Standard item category. Ensure you have added Sucon vendor in the Vendor code field with Subcontracting check under PO item detail in delivery address tab.

3) Perform Stock transfer against Subcontracting Purchase order for the components issued from your factory.

4) Since component is not excisable, you donot need to prepare Challan for the same.

5) Perform Goods receipt for the second line item of PO. As soon as you post the Goods receipt the stock gets updated at Subcontractor end.

6) Create subcontracting challan for the PO second item if the Material is excisable in J1IF01 referring 101 O Material document.

7) Perform Goods receipt against Subcontracting PO line item 1 and ensure you refer the subcontractin challan while performing MIGO.

😎 Now reconcile the challan for the component added by subcontracting vendor in J1IFQ.

9) Complete the challan in J1IF13.

[Former Member]

Dear Hari

Sita steel should return the material with Pat II fillied in Original Challan, Party cannot Raise the Excise Invoice aginst the Non exciseable material, Please talk to your indirect taxation team, take the clarity and then you process the GRN. and ensure whether you really sent the material with Challan or With Excise invoice for process.

Regards

Maruthi S

[Former Member]

Dear Ashok,

Additional material will procured by sub-contractor which are excisable material that's why they raise excisable invoice(ED+ECS+HES+VAT+ET), that work done within a state.

[former_member192897]

Option 1 :

Do you pay for the additional components added by the subcontractor?

If not, you may normally run the Subcontracting process like other procurement scenarios. You donot need to refer the challan during MIGO. Capture and Post excise invoice normally.

Run one complete cycle in Dev server and confirm the results / findings.

Option 2 : You can use EWPO transaction type in J1IEX transaction (Use Capure Mode and Reference mode as Without Purchase order) to get the excise credit and for Vendor payment use FB60 transaction code. If you proceed in this way, while performing GRN select No excise entry and Post the document and ensure you choose Zero tax code in PO.