Port as a plant under Export scenario

Priyam89 · ‎08-25-2016

Scenario example: Company code 1000, have Port as a plant(1001) assigned to it. Now, while exporting the goods from manufacturing plant via port, how would the scenario be mapped? Would like to understand the logistics perspective and also the Excise in India perspective.

Message was edited by: G Lakshmipathi

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Lakshmipathi · ‎08-26-2016

Would like to understand the logistics perspective and also the Excise in India perspective.

You have to tell this how your client want to capture in SAP from excise point of view. With different options available in SAP, we can achieve the requirement. But since you have already treated the port as a plant, not sure, from excise point of view, your client has got the approval from excise authorities. Also there are lot of disadvantages in considering the port as a plant. Couple of disadvantages are

Your client cannot avail any export benefit when the materials are exported from port since ARE-1 should not be generated from there
Excise duty has to be paid when transferring the material from delivering plant to port which cannot be taken credit

Like this, I am sure, more disadvantages are there and I am surprised, who have recommended to go for a plant; instead, it could have been treated as a shipping point if at all you want to differentiate. From logistics perspective, if you follow shipment process, you can very well capture all expenses related to transporting the material from delivering plant to port

G. Lakshmipathi

Priyam89 · ‎08-27-2016

Hi Lakshmipathi Sir,

The Decision of defining the Port as a plant was to meet one of client's requirement and that is to have different valuation at port and manufacturing plant. And also, the while import, the stock gets dumped at the port and the transfer between the port to plant takes place in months. So Client wants to take a record of the stock at port and the valuation at port(which would be different).

Now coming to the export scenario with respect to excise, client requires to do a stock transfer first to Port, and then sale to export customer from Port with a commercial invoice from PORT. But as ARE-1 needs to be raised once the exisable goods leave the manufacturing plant premises, is it possible in SAP to create ARE-1 document with respect to Stock Transfer Invoice JEX?

Thanks,

Priyam

Former Member · ‎08-28-2016

Hello Priyam,

This scenario is very much possible in SAP.

SAP has provided the business function LOG_MM_SIT functionality.

Please go through the below mentioned thread.

1. Create sales order.

2. Create Delivery document and do PGI ( The accounting entries will be Finished Goods inventory account Credit to Valuated stock in transit account Debit)

3. Create Proforma billing document.

4. Create Excise Invoice

5. Create ARE1 document.

6. Once goods are leaving from port do POD confirmation (The accounting entries will be Valuated stock in transit account Credit to COGS account Debit)

7. Create Billing document (FC invoice to the customer)

Regards,

S.Himavanth.

Lakshmipathi · ‎08-29-2016

Himavanth s

Can you please let me know from which plant ARE-1 can be generated in the process you listed out? If my memory is right (it is almost 8 years since I handled CIN project), as per Central Excise rules, you cannot generate ARE-1 for the goods shipped out from manufacturing plant to another local plant which I have already indicated. Same way, from Port also, you cannot generate as it is not a manufacturing plant. As per the link you shared, it only explains about the functionality of SD, MM & FI but what about Excise? OP has to check with their client and need to explain what was the outcome from their excise authorities.

G. Lakshmipathi

Priyam89 · ‎08-29-2016

@Lakshmipathy Sir, The process of creating ARE-1 document from the Stock transfer from Manufacturing plant to Port is a current practice practised by my client in their ERP which is compliant with the Excise Law.

@Himavanth, Suppose 100 quantity is dispatched from Manufacturing plant to Port, but out of that only 70 quantity gets exported. This 30 quantity is taken back from Port to Manufacturing plant and ARE-1 gets updated with the actual quantity which is exported.

My question is, 1) is the quantity updation possible in VLPOD?

2) Can the commercial invoice be generated for 70 quantity to export customer?

Looking forward to your response.

Thanks,

Priyam

Priyam89 · ‎08-29-2016

@Himavanth, Suppose 100 quantity is dispatched from Manufacturing plant to Port, but out of that only 70 quantity gets exported. This 30 quantity is taken back from Port to Manufacturing plant and ARE-1 gets updated with the actual quantity which is exported.

My question is, 1) is the quantity updation possible in VLPOD?

2) Can the commercial invoice be generated for 70 quantity to export customer?

3) How would the 30 quantity which is taken back from port after updating ARE-1, be mapped in SAP? to simplify, is goods movement from IN TRANSIT to UNRESTRICTED possible?

Looking forward to your response.

Thanks,

Priyam

Former Member · ‎08-29-2016

Dear Lakshmipathi,

ARE1 has to be generated from the manufacturing plant only. As you have rightly said it is not possible to generate ARE1 from Port.

As per the process that I have proposed only one plant will be there. The title in the books will only change once the goods are shipped from the port. Excise related requirements are fulfilled while goods are moving from manufacturing plant to the port.

Regards,

S.Himavanth.