ARE1 and ARE3

[Former Member]

Dear All SD CIN experts,

Pls explain me the Difference between ARE1 and ARE3 procedure.

Pls tell me what r the major setting for ARE1 documents and Exports under bonds and what r the taxes will be aplicable in ARE1 and UnderBonds

regards

supriya

[safeer_rahman2 · Accepted solution]

Dear Supriya...

Let me try to explain my knowledge on ARE-1 and ARE-3 .

Actually, Manufacuting plants are entitled not to pay any excise duty ,as long as the goods are accompanied by an ARE document.R/3 system Handles ARE docs and other permitted docs like export bonds and deemed export licences.

R/3 allows 3 types of exports

1.Export under bond

2.Export under claim for rebate

3.Deemed exports

Let us analyse only case 1 and 3 here....

Export under bond:

Each excise bond only covers a limited amount of basic excise duty ,the bond value. Every time we post an ARE-1 document the system reduces the bond balance automatically. Please note that excise bonds should be assigned to ARE-1.

Following is the processflow involved in ARE-1

1.Receive the excise bond forrm Govt, enter that in system

2.Receive sales order from customer

3.Created delivery and excise invoice(type:export under bond)

4.Excise clerk creates ARE-1 doc,calls the local excise offier to check the goods

5.Excise officer check the goods against ARE-1 and fillout a part of form

6.Clerk posts ARE-1 and exise officer will sign in that

7.Shipping dept ship the goods and before it leaves the country customs will check the goods

8.Customs will check the ARE-1 and will fill out part b of ARE-1

9.Clerk receives and update ARE-1 send it back to excise officer he will send the excise clerk a final confirmation

10.Excise clerk will close ARE-1

Deemed Export:

We can ship deemed export to ANY customer who is in possesion of Deemed export licence without paying any basic excise duty,but only when the goods are accompanied by an ARE-3 doc. For this in R/3 we have to enter the CUSTOMERS DEEMED EXPORT LICENCE.Please note that we can issue an ARE-3 only with respect to a customer deemed licence and its should be assigned to ARE-3

All the procees steps involved in ARE-1 are same here to except that customer warehouse person receives the goods ,fills out the part b of ARE-3 doc and send it back to the excise clerk...

Kindly revert incase you need more info..

Reward incase you find this informative..

Thanks,

Safeer Rahman

[Former Member · Accepted solution]

thanks

[Former Member · Accepted solution]

you are working in country india version project . could you tell me some ultimate task and questions

regards

magha

[safeer_rahman2]

Dear Supriya...

To be more short... the basic diffrence between ARE-1 and ARE-3 is that

1.ARE-1 is used for Export under bond whereas ARE-3 are used for Deemed Exports.

2.Excise bonds should be assigned to ARE-1 where as Customer Deemed Licence should be assigned to ARE-3

Does that make sense..

Thanks again...

Safeer Rahman

[former_member204513]

Dear Supriya,

Please go through this SAP help link it will help you about ARE1 and ARE3 forms

http://help.sap.com/saphelp_47x200/helpdata/en/93/75663ca0a9272ae10000000a11405a/frameset.htm

I hope it will help you,

Regards,

Murali.