Accounting Entries

Accounting Entries
In this chapter, the accounting entries created for accounting localization taxes are discussed. In the general ledger proper accounts need to be defined for accounting localization taxes. Accounting entries will be created on completion of the respective transaction and the same can be imported to General Journal.
Oracle India Localization Users Reference Guide
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Accounting entries in India Local Inventory

The following Accounting Entries are passed in India Local Inventory.
On Receipt of Material
Account Inventory Receiving A/c AP Accrual A/c Debit PO price PO price Credit
On Claiming CENVAT credit

Account Inventory Receiving A/c AP Accrual A/c BOE/ customs duty paid a/c CENVAT A/c Inventory Receiving A/c CENVATable tax amount * CENVAT percentage CENVATable tax amount * CENVAT percentage Debit Total tax amount Credit Taxes other than customs duty & CVD Only customs duty and CVD amount
Creation of Invoice for accounting III rd party taxes

Account AP Accruals Supplier a/c Debit Tax amount of the respective tax Credit
Tax amount respective tax
of
the
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Delivery of Material For Average Costing Organization ( Bonded Warehouse Sub Inventory)
Account Sub inventory A/c Debit All non-CENVATable taxes + Amount not loaded in CENVATable taxes Credit
Inventory Receiving A/c
All non-CENVATable taxes + Amount not loaded in CENVATable taxes
* In addition to passing these accounting entries, Item cost gets increased by the amount that is additionally loaded on to the inventory.
Delivery of Material For Standard Costing Organization ( Bonded Warehouse Sub Inventory)
Account Purchase Price Variance (PPV) A/c Debit All non-CENVATable taxes + Amount not loaded in CENVATable taxes Credit
All non-CENVATable taxes + Amount not loaded in CENVATable taxes
Delivery of Material (Duty paid Sub Inventory-non bonded)

For Average Costing Organization Account Sub inventory A/c Debit All tax amounts both CENVATable/ non-CENVATable taxes except Individual taxes Credit
All tax amounts both CENVATable/ non-CENVATable taxes except Individual taxes * In addition to passing these accounting entries, Item cost gets increased by the amount that is additionally loaded on to the inventory.
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For Standard Costing Organization Account Purchase Price Variance (PPV) A/c
Debit All tax amounts both CENVATable/ non-CENVATable taxes except Individual taxes
Credit
All tax amounts both CENVATable/ non-CENVATable taxes except Individual taxes
Delivery of Material (Bonded/Duty paid Sub Inventory)

For All Other Taxes Account Respective Tax A/c Inventory Receiving A/c Debit Tax amount * Tax credit percentage Credit
Tax amount * Tax credit percentage
Delivery of expense item to Bonded/Duty paid Sub Inventory

(Both Average and Standard Costing) Account Expense A/c Note 1 Inventory Receiving A/c Debit Total Tax amount Credit Total Tax amount
Note: 1. Where the delivery of an Inventory Item is made to an Expense Subinventory, the Expense Account is picked up from the Subinventory setup. Similarly, the same account would be considered for reversal entries created on Return to receiving.
Return to Vendors
Return to Receiving(Bonded Sub Inventory)
On Return from Inventory to Receiving Inspection (By Base product) Account Debit Receiving Inspection A/c Item Purchase Price Inventory Receiving A/c Credit Item Purchase Price
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On Return from Inventory to Receiving Inspection (Localization entries)

Return to receiving for Average Costing Organization
Account Inventory Receiving A/c Debit All Non-CENVATable taxes loaded to inventory for the delivery Credit
Sub Inventory A/c
All Non-CENVATable taxes loaded to inventory for the delivery
Return to receiving for Standard Costing Organization

Account Inventory Receiving A/c Debit All Non-CENVATable taxes loaded to inventory for the delivery Credit
Purchase Price Variance (PPV) A/c
All Non-CENVATable taxes loaded to inventory for the delivery
Return to Receiving (Duty paid Sub Inventory) For Average Costing Organization
Account Inventory Receiving A/c Debit All tax amounts both CENVATable/ non-CENVATable taxes except Individual taxes Credit
Sub Inventory A/c
All tax amounts both CENVATable/ non-CENVATable taxes except Individual taxes
* In addition to passing these accounting entries, Item cost gets increased by the amount that is additionally loaded on to the inventory.
Return to Receiving (Duty paid Sub Inventory For Standard Costing Organization
Account Inventory Receiving A/c Debit All tax amounts both CENVATable/ non-CENVATable taxes except Individual taxes Credit
Purchase Price Variance (PPV) A/c
All tax amounts both CENVATable/ non-CENVATable taxes
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except Individual taxes
On Return to Receiving Inspection to Vendor (by Base Product)

Account AP Accrual A/c Receiving Inspection A/c Debit Item Purchase Price Credit Item Purchase Price
On Return to Receiving Inspection to Vendor

Account AP Accrual A/c Receiving Inspection A/c CENVAT A/c Debit Total Tax Amount at the time of Receipt Credit
Individual Tax A/c
All taxes loaded to inventory for the Receipt Amount of CENVAT Originally Claimed (Only on Generation of Excise Invoice on RTV) Taxes (except Excise & CVD) with CENVAT
On Return to Vendor in the year of Purchase

In case a part of goods received are returned in the year of purchase, then following entries would be passed on RTV Dr. CENVAT Account Cr. CENVAT Receivable Account Dr. Inventory Receiving Account Cr. CENVAT Account For the balance amount (Balance credit for a Quantity returned) 100% of the credit for the Quantity Returned
On Return to Vendor a year after Purchase (After claim of 100% CENVAT Credit)
Dr. Inventory Receiving Account Cr. CENVAT Account 100% of the credit for the Quantity Returned
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Accounting entries on claiming CENVAT

Accounting entries on Claiming CENVAT on inputs
Account CENVAT Raw material A/c Inventory Receiving A/c Debit CENVATable tax amount * CENVAT percentage Credit
CENVATable tax amount * CENVAT percentage
Accounting entries on Claiming CENVAT on capital goods

Account CENVAT Capital goods A/c Inventory Receiving A/c CENVAT receivable Account Percentage of credit deferred for the next financial year Percentage of credit deferred for the next financial year Debit CENVATable tax amount * CENVAT percentage Credit
CENVATable tax amount * CENVAT percentage
CENVAT Capital goods Account
Accounting entries on claiming the balance credit on capital goods

Account CENVAT Capital goods Account CENVAT receivable Account Debit Amount of credit that is being availed Credit
Amount of credit that is being availed
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Accounting entries regarding OSP Transaction

While sending the material through 57 F (4) Challan
Account OSP Excise A/c Debit With percentage of duty set up in the additional organization information screen Credit
CENVAT / PLA A/c
With percentage of duty set up in the additional organization information screen
On receipt of goods cleared under 57 F (4) Challan

Account CENVAT A/c OSP Excise A/c Debit Duty paid at the time of clearance Credit
Duty paid at the time of clearance
* According the current provisions of Excise Rules there is no need to pay duty while clearing the goods for sub contracting operations. User should take care to record zero percentage for OSP rate in the additional organization information
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RMA Receipts
RMA Receipts into a Bonded Warehouse
For the sale price amount with out excise duty. Account Sub inventory a/c Cost of goods sold a/c Debit Sales Inventory Cost Credit Sales Inventory Cost
RMA Receipts considered as Production Input

CENVAT Credit For Excise and CVD Taxes Account Debit CENVAT RM/CG A/c Tax Amount Excise Paid Payable Account Credit Tax Amount
RMA Receipts considered as Finished Goods Return

Localization accounting entry for Excise Tax treatment Account Debit CENVAT RM/CG A/c Excise Amount Excise Paid Payable Account Credit Excise Amount
RMA Receipts considered as Scrap

Account Scrap Cost a/c Sub Inventory a/c Item cost Item cost Debit Credit
Localization accounting entry for Excise Tax treatment Account Debit Excise Expense a/c Excise Amount Excise Paid Payable Account (Excise duty paid will be written off as an expense account)
Credit Excise Amount
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Accounting entries related to AP invoices

On Matching the Payable Invoice with PO/Receipt
Localization Entry for Tax amounts Account AP Accruals a/c Debit Sum of Tax amount of the respective tax + Line Amount Credit
Vendor a/c
Sum of Tax amount of the respective tax + Line Amount
On Creation of Credit Memo at the time of approving the created Regular Invoice for TDS Deduction
Account Vendor a/c TDS a/c Debit Amount debited towards TDS Credit
Amount debited towards TDS
On Creation of TDS Invoice at the time of approving the created Regular Invoice for TDS deduction
Account TDS a/c TDS Tax Vendor a/c Debit Amount debited towards TDS Credit
Amount debited towards TDS
*Same accounting entries will be passed for different type of withholding taxes.
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Accounting entries related to Bill of Entry

On Approval of BOE Invoice
Account BOE/ customs duty paid A/c Customs authority - Vendor Debit BOE Amount Credit BOE Amount
On Payment of the BOE Invoice

Account Customs authority - Vendor Bank A/c Debit BOE Amount Credit BOE Amount
On writing of the customs duty paid

Account BOE & Customs duty written off a/c BOE & Customs duty paid a/c Debit Write off Amount Credit Write off Amount
Accounting entries for PLA Payments

On Approval of PLA Invoice
Account PLA A/c Excise authority - Vendor Debit PLA invoice amount Credit PLA invoice amount
On Payment of PLA Invoice

Account Excise authority - Vendor Bank A/c Debit PLA payment amount Credit PLA payment amount
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Ship Confirmation
Accounting entries on Ship Confirmation
Base Application Accounting entries Account Cost of Goods Sold a/c Sub Inventory a/c Debit Sales Inventory Cost Credit Sales Inventory Cost
Accounting entries for updating the excise accounts Account Excise Paid Payable a/c CENVAT/ PLA a/c Debit Total Excise Duty Payable Credit Total Excise Duty Payable
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Accounting entries in AR
On Invoicing in AR
Accounting entries for raising invoices for dispatches made from both a duty paid or Bonded warehouse (After running Receivable Interfaces in OM and moved to AR module) Account Debit Credit Receivables a/c Sales Inventory Cost + Total of all taxes Revenue a/c Sales Inventory Cost Individual Excise Tax a/c Individual Excise Amounts Other Individual Tax a/c Individual Tax Amounts
On saving AR Transactions
Account Receivables a/c Revenue a/c Individual Excise Tax a/c Other Individual Tax a/c Debit Sales Inventory Cost + Total of all taxes Credit
Sales Inventory Cost Individual Excise Amounts Individual Tax Amounts
On completion of an AR Transaction
Account Excise Paid Payable a/c CENVAT/ PLA a/c Debit Total Excise Duty Payable Credit Total Excise Duty Payable
Raising Credit Memo from AR Transactions

Account Revenue a/c Excise Paid Payable a/c Other Individual Tax a/c Receivables a/c Debit Sales Inventory Cost Excise Duty Paid Individual Tax Amounts Sales Inventory Cost + Total of all taxes Credit
For debiting duty under Rule 6 of The CENVAT Credit Rules (Old Rule 57 CC)
Account CENVAT Recovered a/c Debit 8% on Selling Price (based on Organization. Credit
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Parameters) CENVAT a/c-RG23A-Part II 8% on Selling Price (based on Organization. Parameters)
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Accounting entries for RG consolidation Transactions

On setting off the CENVAT credit with PLA Debits
Account PLA Account CENVAT RM Account CENVAT on Capital goods A/c
Debit Total transfer amount from CENVAT registers
Credit
Amount set off from the CENVAT on input Account Amount set off from the CENVAT on capital goods
On payment of excise duty (On approval of the PLA Invoice)

Account PLA Account Excise Authority Account Debit Amount of the PLA invoice Credit Amount of the PLA invoice
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Accounting entries for Internal Sales Order Transactions

The following Accounting Entries passed during an Internal Sales Order Transaction. .
Excise Invoice Generation

Account Excise Paid/Payable account RG23 Register/ PLA Account Organization Debit Sending EXCISE AMOUNT Sending Credit EXCISE AMOUNT
Issue Transaction (In Transit Transfer)

FOB Point is set to Receipt: Account In-transit inventory account Excise Paid/Payable account Organization Debit Sending EXCISE AMOUNT Sending Credit EXCISE AMOUNT
FOB Point is set to Shipment: Account Inter-Organization Receivable Excise Paid/Payable account In-transit Inventory account Inter-Organization Payable Organization Debit Sending EXCISE AMOUNT Sending Receiving EXCISE AMOUNT Receiving Credit EXCISE AMOUNT EXCISE AMOUNT
Receipt Transaction (In Transit Transfer)

FOB Point is set to Receipt:
Account Inter-Organization Receivable In-transit Inventory account Inventory Receiving account Inter-Organization Payable Organization Debit Sending EXCISE AMOUNT Sending Receiving EXCISE AMOUNT Receiving Credit EXCISE AMOUNT EXCISE AMOUNT
FOB Point is set to Shipment:

Account Inventory Receiving account In-transit Inventory account Organization Debit Receiving EXCISE AMOUNT Receiving Credit EXCISE AMOUNT
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Direct Transfer
Account Inter-Organization Receivable Excise Paid/Payable account Inventory Receiving account Inter-Organization Payable Organization Debit Sending EXCISE AMOUNT Sending Receiving EXCISE AMOUNT Receiving Credit EXCISE AMOUNT EXCISE AMOUNT
CENVAT Entries (If the Receiving Unit is Bonded)

Account CENVAT Account Inventory Receiving Account Organization Debit Receiving EXCISE AMOUNT Receiving Credit EXCISE AMOUNT
Delivery (If the Receiving Unit is Non-Bonded/ Trading)

Account Inventory Valuation Account Inventory Receiving Account Organization Debit Receiving EXCISE AMOUNT Receiving Credit EXCISE AMOUNT
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Process flow
To update the chapter number, press ALT F9. Update the sequence number as appropriate, for example 1, 2, etc. and press ALT F9 again. Highlight the chapter number and press F9 to update the number. This chapter contains a diagrammatic presentation of certain activities on how India Localization on Oracle Applications -Release11 addresses your business needs under Indian Laws.
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Deduction of Tax at Source (TDS) Process
Define Tax with TDS type
Enter IT registration Details For Organization
Enter IT registration Details and TDS Section & limit for Suppliers and at Supplier Site in Additional Vendor Info.
Enter Prepayment invoice with applicable TDS tax Approve Pay
Enter TDS tax Names and specify TDS section to which it belongs.
Define Income Tax as supplier of type Tax Authority
Enter Invoice with applicable TDS Tax type matching with PO Approve
Apply Prepayment amount net of Tax system will adjust proportionate TDS
Approve related TDS Invoices and pay in batch in batch
Review Print Status of certificate to print Original again
Generate TDS Certificate Print Original
Print reports on TDS at Concessional rates
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Duty Drawback Process

Setup
Enter Bill Of Material in Oracle BOM
or
Enter Bill Of Material in India Localization Inventory
Attach Order source or AR Invoice type to bond register or indicate it as for Process Export type
AR Invoice Invoice of Export Type Invoice created by Auto invoice Program
Enter Proof of Export
Automatic Duty Drawback Process Specify the receipt selection method i.e. LIFO/FIFO
Manual Duty Drawback Process Specify the receipt selection method i.e. LIFO/FIFO
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Process continued .. If Bill Of Material defined in Oracle BOM module process will consider latest wrt. Removal date else latest Bill Of Material defined in Oracle Inventory module process will be considered.
Automatic Duty Drawback Process Specify the receipt selection method i.e. LIFO/FIFO
Selected BOM will be exploded to the lowest level
Process will calculate the claim amount for each receipt till amount against entire quantity is claimed
If MODVAT is claimed against selected receipt Process will reverse the MODVAT credit in RG 23 A part II and corresponding GL entry will be passed. If the balance in register is insufficient then process will stop.
Receipts will get selected based on receipt selection method selected
Print Duty Drawback Claim Report
Process will calculate the claim amount for each selected receipt till amount against entire quantity is claimed Manual Duty Drawback Process Specify the receipt selection method i.e. LIFO/FIFO
If MODVAT is claimed against selected receipt Process will reverse the MODVAT credit in RG 23 A part II and corresponding GL entry will be passed. If the balance in register is insufficient then process will stop. If Bill Of Material defined in Oracle BOM module process will consider latest wrt. Removal date else latest Bill Of Material defined in Oracle Inventory module process will be considered.
Receipts will get listed based on receipt selection method selected. Select Receipts against which Duty Drawback to be claimed Selected BOM will be exploded to the lowest level and you can view that in Components Window
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Support for Trading Process
Define Trading Item by enabling Trading Flag to Y in Item Definition
Enter Trading registration Details For Organization / Location (Additional organization information)
Enter Purchase Order for Trading Item with Ship to Organization being Trading
Enter Receipt for Purchase Order and deliver them to Trading Sub Inventory
Sales Order For Trading Item
AR Transaction for Trading Item
Match Receipt While matching receipt for an invoice Excise Duty per unit will be defaulted from the receipt line. Excise Duty will be made Zero for a delivery to duty exempted customer.
RG23D Register Updated during Receipts, Invoice, RTV and RMA
Report RG23D
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RMA Process
Book RMA Order with India Localization

Enter Sales Order India Localized & Click On Open
Enter the Base Sales Order Header
Enter Line Details
Prepare RMA W ith or W ithout Reference
RMA with Reference
RMA without Reference
Reference to Order or Invoice
Invoice
Order
Localization DFF with India Invoice
Localization DFF with India Sales Order
Localization DFF Not Required
Automatic Population of Delivery Detail id
Save RMA Order
Save RMA Order
Return to India Localized Sales Order Screen
Return to India Localized Sales Order Screen
Taxes are display mode only based on the Delivery Detail id
Taxes are defaulted based on setup & can be modified
Return to Base Apps Sales Order Form
Book RMA Order
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Descriptive Flex fields used in India Localization

This document details Descriptive Flex fields being used/reserved for India Localization. The users are advised not to use these attributes while doing their Inhouse Customization. Any data present in these fields has to be migrated to attributes other than those used by Localization, failing which the data will be lost on application of Localization patch..
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Details of attributes used / being used in DFF by Release. 11i Localization Sl. Application Title Context Attribute No 1 Oracle Items India Items Attribute1 Inventory Attribute2 Attribute3 Attribute4 Attribute5 Attribute13 Attribute14 Attribute15 2 Oracle Inventory Oracle Human Resources Transaction history Additional Organization Unit Details India Other Transaction India Org Info Attribute1
Segment Name excise_flag modvat_flag item_class_id item_tariff item_folio Future use Future use trading_flag Temp
Remarks
NonDisplay
Attribute1 Attribute2 Attribute3 Attribute4 Attribute5
Tan No. Pan No. Ward No. OM Tax Source Future use Excise Invoice No. Excise Invoice Date Claim CENVAT on Receipt Generate Excise Invoice Future use Excise Invoice No Excise Invoice Date Claim CENVAT on Receipt RM_ITEM_NO RMA_Type Excise Invoice No. Excise Invoice Date Claim CENVAT on Receipt Paddr Excise Invoice No. Excise Invoice Date
Oracle Purchasing
Receiving Transactions
India Receipt
Attribute1 Attribute2 Attribute3
India Return to Vendor India RMA Receipt
Attribute4 Attribute5 Attribute1 Attribute2 Attribute3 Attribute4 Attribute5
Oracle Purchasing
RCV_SHIPM ENT_HEADE RS
India Receipt
Attribute1 Attribute2 Attribute3 Attribute5
Transacti on Type
India RMA Receipt
Attribute1 Attribute2
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Attribute3 Attribute4 Attribute5 6 Oracle Payables Invoice Distribution India Distributions Attribute1 Attribute2 Attribute3 Attribute4 Attribute5 7 Application Object Library Common Lookups India Lookup Codes Attribute1 Attribute2 Attribute3 8 Oracle Order Management Additional Line Attribute Information Invoice India Attribute2 Attribute3 Attribute4 Attribute5 Attribute14 Customer PO India Attribute2 Attribute3 Attribute4 Attribute5 Attribute14 Sales Order India Attribute2 Attribute3 Attribute4 Attribute5 Attribute14 9 Oracle Receivables Line Transaction FlexField SUPPLEMENT CM INTERFACE_ LINE_ATTRIB UTE2
Claim CENVAT on Receipt RM_ITEM_NO RMA_Type JA_IN_TDS_TAX_ NAME_INV JA_IN_WCT JA_IN_WCT1 Future use Future use Classification TDS Limit Tax Type Delivery Detail Id Allow Excise Credit? Allow Sales Tax Credit? Excise Duty Rate per Unit Excise Duty Rate (%) Delivery Detail Id Allow Excise Credit? Allow Sales Tax Credit? Excise Duty Rate per Unit Excise Duty Rate (%) Delivery Detail Id Allow Excise Credit? Allow Sales Tax Credit? Excise Duty Rate per Unit Excise Duty Rate (%) Value2
NonDisplay NonDisplay
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SUPPLEMENT DM SUPPLEMENT INVOICE TDS CREDIT 10 Oracle Assets Asset Category Payment Information India B Of Assets India Payment Information
INTERFACE_ LINE_ATTRIB UTE2 INTERFACE_ LINE_ATTRIB UTE2 INTERFACE_ LINE_ATTRIB UTE2 Attribute1 Attribute2
Value2 Value2 Value2 Date of Acquisitions Block of Assets Check Deposit date Bank Name Challan No. Original InvoiceTDS VAT Invoice Number VAT Invoice Date Date of Acquisitions Block of Assets None
11
Oracle Payables
Attribute1 Attribute2 Attribute3
12
Oracle Payables
Invoice
India Original Invoice for TDS India VAT
Attribute1 Dynamic Registration Dynamic Registration Attribute1 Attribute2
13
Oracle Assets
Mass Additions Additional Line Return Information
India B Of Assets LEGACY
14
Oracle Order Management
None
In addition to the above, we intend using First 5 attributes for all the remaining tables/ flex fields, in normal cases and/or Attribute 14,15 in special cases for future development, if required.
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Oracle India Localization Users Reference Guide