03-23-2015 9:54 AM
Hi Xperts
We have created a purchase order for High Sea Purchase cycle. We have done MIRO for Custom Duties(Planned Del Costs) and then posted MIGO. After that we had noted that there was some issue in the Custom MIRO doc posted. All the accounting entries were correct.
We are procuring this at Head Office which is not eligible to avail Modvat Credit , though they do not inventorize the CVD and Additional Custom Duty and those are getting utilized/knocked off at factory level.
To correct that , we had reversed the GRN first and then reversed the Customs MIRO posted thru MR8M. When we checked the accounting entry of the reversal doc of the Custom MIRO , we checked that half of the amount from CVD and Additional Custom Duty clearing account were reversed and remaining half reversed from Price Difference account. Pl help me to identify the Root Cause for this.
Pl note that I had posted all the documents and their reversals on the same posting date.
Accounting Entry at MIRO
Accounting entry at MIRO Reversal
Regards
Soumick
03-23-2015 10:24 AM
You have not posted the correct screen shot (reversal)
Please have a look into the KBA 1609927 - MR8M / Credit Memo postings and OSS note 46564 - Cancelling/reversing an invoice/credit memo: Posting logic which explain the logic behind the unexpected accounting entry at the of reversal.
03-23-2015 10:24 AM
You have not posted the correct screen shot (reversal)
Please have a look into the KBA 1609927 - MR8M / Credit Memo postings and OSS note 46564 - Cancelling/reversing an invoice/credit memo: Posting logic which explain the logic behind the unexpected accounting entry at the of reversal.
03-23-2015 11:14 AM
03-23-2015 11:22 AM
You should give the transaction event key for those account entries, so that others can know the correct posting. It will be quite tough to guess the transaction event key by seeing your G/L account description (or even posting key).
By the way, these notes should give you sufficient information about your query.
03-23-2015 11:44 AM
03-23-2015 12:19 PM
Well, first observation is that, your amount for ZCV transaction key is divided equally ZCV and PRD transaction key during MIRO reversal.
You should check the goods receipt and reversal account entry as well. Is there any changes for the same ?
03-23-2015 1:11 PM
Hi Dibyendu
We are not either inventorizing the CVD & ADC or availing credit at the receiving plant being at Head Office. What we do is utilizing the same amount at factory level from the clearing account as we have maintained same Ex. Reg for the Head office and the Factory as well.
This is a strange issue. First time we had reversed the GR , the accounting impact of GR-Reversal was exactly opposite of the GR(there was no CVD clearing component either in GR or in GR-reversal).
Afterwards we have posted Custom's MIRO again & then we had posted GR again and reversed it as well. Now GR has correct accounting impact , whereas GR-Reversal has as two entries for CVD clearing account in the accounting doc.
Afterwards when we reversed the Custom MIRO we have noted that there is an accounting impact where more than 50% amount from CVD clearing went to Price Diff account
What Process should we follow ? I have specifically checked that if we reverse the GR first & then cancel the Custom's MIRO - it hits the Price Difference Account. Whereas if we cancel the Customs MIRO first & then reverse the GR , the accounting entries are correct.
GR Accounting Doc
GR-Reversal Accounting Doc
IR Accounting Doc(Customs)
IR-Reversal Accounting Doc(Customs)
03-24-2015 5:39 AM
If Cenvat credit is not availale, you can copy JCV1 and JADC to ZCV1 and ZADC condition types and have used in the Purchase order. In this case, Custom duty and CVD will be loaded on to the Material cost or Consumption account provided if its a text item purchase.
During Customs invoice (MIRO)
Customs payable account Cr.
Custom Duty clearing (JCDB) Dr.
CVD Clearing Account (JCV1 & JADC) Dr.
During GRN (MIGO)
Stock account BSX Dr.
Customs duty clearing Cr
GR/IR Clearing Account Cr.
During Excise Invoice Posting (J1IEX)
RG23(A/C) recievable account Dr
CVD clearing account Cr.
03-24-2015 9:34 AM
Hi Ashok
We do not inventorize CVD while receiving Material at Head Office so that the Factory could utilize it , for which we have assigned the same Excise Registration to Factory and Head Office as well. Also could you pl let me know the Reversal Process of Import Procurement , i.e., whether Custom's MIRO would be reversed prior to MIGO-reversal?
Regards
Soumick
03-24-2015 10:29 AM
Yes, you have to cancel the Customs invoice first, GRN and the Excise invoice finally.