SUMMER INTERNSHIP PROJECT FOR MASTER OF

MANAGEMENT STUDIES [M.M.S] DEGREE IN PARTIAL

REQUIREMENT DURING 2008-09
SUBMITTED TO

IBSAR INSTITUTE OF MANAGEMENT STUDIES

Karjat Dahivali , Tarfe Need Dist-Raigad

TITLE OF THE PROJECT - PAYMENT THROUGH E-MODE AT

INDIAN OIL CORPORATION LTD .

BY
NAME - MAHENDRA .S. DHENAK
ROLL NO – 17 , MMS – II ,
E-MAIL ID – Mahendra.dhenak@gmail.com ,
CONTACT NO – 9029243946.

Under Guidence Of –
MR. Dr. Phopale A. [Internal guide]
MS. Shalini Kabra [External guide ]

AUTHORIZATION

This Project is prepared on the basis of summer training from 1-5-2009 to 30-6-2
009 as a part of two year MMS course at IBSAR college , karjat
ACKNOWLEDGEMENT

First & Foremost I would like to Special Thank MR.V.S.DUGAR [DGM] who provide
me opportunity to work in his FINANCE department without whom this wouldn’t be p
ossible .
I would like to Thank MR.RAJESH GOHEL [SR. T&D MGR] for Providing me an opport
unity to do project on PAYMENT THROUGH E-MODE .
I would also like to Thank MS. SHALINI KABRA [AO] ,
MR. PRAKASH TARACHANDANI [ASST.MGR ], & MRS.NITISHA DESAI [AO-II] for helped dur
ing course of my internship & encouraged me to complete it successfully.
Last but not least I would also like to Thank MR. Dr. Phopale A at IBSAR College
Karjat for being my mentor in my persuit to success .

CONTENT

I – COMPANY’S SUMMARY
- PROFILE
- OVERVIEW
- PRODUCT
II - COMPANY’S STRUCTURE

III - COMPANY ‘S FINANCIAL PERFORMANCE

- TABLE
- GRAPH
- OWNERSHIP COMPOSITION [ SNAPSHOT ]

IV – INTRODUCTION TO PROJECT
- OBJECTIVE OF PROJECT
- CASH MANAGEMENT SYSTEAM
- CASH MANAGEMENT PRODUCT

V – TYPES OF ACCOUNT
- CURRENT ACCOUNT
- WITHDRAWAL ACCOUNT
- IMPREST ACCOUNT
- LETTER OF AUTHORITY
- RAILWAY CREDIT NOTE FACILITY
- CASH CREDIT ACCOUNT
- REGIONAL CASH CREDIT ACCOUNT
VI – ELECTRONIC MODE OF FUND TRANSFER

- NATIONAL ELECTRONIC MODE TRANSFER

- REAL TIME GROSS SETTLEMENT [ RTGS ]
- FLOW OF FUND IN RTGS [CHART ]
- ICICI BANK INSTRUMENT CARD
- INTERNET
- BENEFIT OF ELECRONIC PAYMENT

VII – PERCENTAGE OF PAYMENT THROUGH VARIOUS MODE IN MARCH 2009

[ PIE-CHART ]

VIII –WORKING OF PAYMENT TRANSACTION UNDER SAP R / 3 MODULE

- CREATING CASH RECPT OF PAYMENT DEPOSITED BY CUSTOMER [ SNAPSHOT ]
- PRINTING CASH RECPT [ SNAPSHOT ]
- GENERATING THE DCR [ SNAPSHOT ]
- CREATING LIABILITIES FOR WITHDRAWAL ACCOUNT [ SNAPSHOT ]
-TO MAKE PAYMENT TO VENDOR [ SNAPSHOT ]

IX - TO PROCEDURE FOR MAKING ENTRY FOR CREDIT NOTE

- CREDIT NOTE – XEROX COPY

- CONTROL SHEET - PROFORMA
- ENTRY FOR CREDIT NOTE [ SNAPSHOT ]

X - PROCEDURE FOR CENTRAL SALES TAX

- INTRODUCTION OF CST
- TO PREPARE STATEMENT
- TO INDENT OF STATEMENT
- TO SUBMIT ONLINE TO CST DEPT
- ISSUE OF C FORM [ PROFORMA C FORM ]

XI - LINKING C FORM FROM OTHER STATE

- LINKED C FORM [ XEROX COPY ]

- PENDING C FORM [ XEROX COPY ]

XII – LEARNING

XIII – REFERENCE

XIV – CONCLUSION
COMPANY PROFILE
Indian Oil Corporation is an Indian public-sector petroleum company. It is India
’s
largest commercial enterprise, ranking 116th on the Fortune Global 500 listing
(2008). It began operation in 1959 as Indian Oil Company Ltd. The Indian Oil Cor
poration was formed in 1964, with the merger of Indian Refineries Ltd. Indian Oi
l and its subsidiaries account for a 47% share in the petroleum products market,
40% share in refining capacity and 67% downstream sector pipelines capacity in
India. The Indian Oil Group of Companies owns and operates 10 of India s 19 refi
neries with a combined refining capacity of 60.2 million metric tons per year
OVERVIEW
Indian Oil operates the largest and the widest network of fuel stations in the c
ountry, numbering about 17606 (15557 regular ROs & 2049 Kissan Sewa Kendra). It
has also started Auto LPG Dispensing Stations (ALDS). It reaches Indane cooking
gas to over 47.5 million households through a network of 4,990 Indian distributo
rs.
In addition, Indian Oil s Research and Development Center (R&D) at Faridabad sup
ports, develops and provides the necessary technology solutions to the operating
divisions of the corporation and its customers within the country and abroad.
Subsequently, IndianOil Technologies Limited - a wholly owned subsidiary, was se
t up in 2003, with a vision to market the technologies developed at IndianOil s
Research and Development Center. It has been modeled on the R&D marketing arms o
f Royal Dutch Shell and British Petroleum.
PRODUCT
Indian Oil s product range covers petrol, diesel, LPG, auto LPG, aviation turbin
e fuel, lubricants, naphtha, bitumen, paraffin, kerosene etc. Xtra Premium petro
l, Xtra Mile diesel, Servo lubricants, Indane LPG, Autogas LPG, Indian Oil Aviat
ion are some of its prominent brands.
Recently Indian Oil has also introduced a new business line of suppl
ying LNG(Liquefied natural gas) by the cryogenic transportation. The branding ca
lled "LNG at Doorstep". Lng headquarters are located in scope complex, Lodhi Roa
d Delhi.

ORGANIZATION STRUCTURE
The The whole of Indian Oil Corporation (IOC) works under Corporate
Office located at
New Delhi. It follow hierarchical structure where the decision flows from
top to bottom and
the data flows from bottom to top .

FINANCIAL PERFORMANCE & ACHIEVEMENT

2003-04 2004-05 2005-06 2006-07 2007-08

Turnover (Rs/crore) 130203 150729 183172 220779 247479
Profit After Tax(Rs/crore) 7005 4891 4915 7499 6963
Earnings Per share(Rs) 59.97 41.88 42.08 62.9 58.39
Debt Equity Ratio .53:1 .67:1 .90:1 .78:1 .86:1

TURNOVER FOR 5 YR

OWNERSHIP COMPOSITION
INTRODUCTION TO PROJECT ON PAYMENT THROUGH
E-MODE AT IOCL .
OBJECTIVE OF PROJECT
• To Gain Insight On History And Evolution, Business Model, Organizational
Structure And Operations Of IOCL
• To Study And Evaluate The Payment System
At Indian Oil Corporation Ltd .
PRESENT CASH MANAGEMENT SYSTEM
IOCL is a huge organization and involves in marketing of petroleum prod
ucts all over India and across also. The product flow path encompasses Depots, t
erminals, plants and AFSs which are engaged in purchasing and selling products a
nd money is paid and collected at all these places. Being a huge organization al
l transaction of IOC takes place through cheques, Demand Drafts, Letter of Credi
t etc. and a very few in cash. Proper fund management and accounting of such fun
ds at each centre is paramount importance and ensuring quickest availability of
funds at central cash credit account by evolving and streamlining the system for
pooling of funds, in order to optimize the use of valuable resources of the org
anization. IOCL has MOU with SBI according to which the Bank caters to various b
aking needs of the corporation.
Corporate Accounts Group (CAG) – central office of SBI at Andheri, M
umbai is the controlling office of SBI. It is the controlling office of SBI havi
ng Sanctioning Authority for the various credit facilities and the other banking
needs of the corporation. CAG of SBI operates with network of branches called "
CAG Branches" in all the Metro Cities. IOC is the biggest customer of SBI and be
cause of this IOC enjoys lots of facilities.
The Credit Facilities of the Corporation provided by SBI are divided into two pa
rts:
Fund Based Facility -
It is the amount of overdraft obtained from the Bank. At present the
total overdraft limit of the corporation is controlled through the Main Cash Cr
edit Facility. Other accounts opened at various branches and other places are ju
st the extension of this limit. It gets renewed time to time.
Non Fund Based Facility -
These facilities are for pure banking convenience provided by the ba
nk, so that the Corporation can carry out the Business transactions. Various Non
Fund-Based facilities available include
o Performance/ Financial bank Guarantee Facility
o Letter of Credit Facility - Inland ,
o Letter of Credit Facility – Import .
 CASH MANAGEMENT PRODUCT (CMP)
Cash management product is a facility provided by SBI to its corpora
te clients in which collections and withdrawals from various branches are transf
erred via electronic mode to their respective pooling centers. Under CMP facilit
y provided by SBI to IOCL, the entire day end balances for different collection
centre where the receipts of various state offices branch and depots are transfe
rred to the main Cash Credit Account maintained in SBI branch Mumbai.
The CMP facility can be divided into two Main Modules
• The Credit Module of CMP: This module deals with the Collection Proceeds
• The Debit module of CMP: This Module deals with the Withdrawals.
Under CMP no new account is opened rather on receipt of the request
for collection account for a location, HO Finance gets a separate, client code
allotted to the location through CMP cell Mumbai. Such Client code is unique for
each location .
The CMP Charges are divided into 3 broad categories:
• 0.01/ 100 for all the Metros i.e. A Class City
• 0.05 / 100 for all the B Class Cities (that includes mainly Capital Citi
es)
• 0.12 / 100 for all the C Class Cities (this includes all the other locat
ions not included in the above 2 categories)
The CMP Module provides convenience to the Company in the sense that,
the information flows to the company faster and according the company can have
precise information of where the funds are and how to utilize them more efficien
tly.
IOCL has wide network of activities scattered in various parts of the country. E
very day it has to make collections from more than 500 branches and accordingly
payment is also taken care off. In order to accurately assess the collections f
rom various locations the CMP facility of SBI is used. Now CMP operates through
a chain of activities involving the various regional offices, locations coming u
nder them and the head office. These operations involve large no. of accounts .
TYPES OF ACCOUNTS
The different types of accounts IOC operates for its Cash Management includes
A – CURRENT ACCOUNT
Collection accounts are opened for various locations and other offices for depos
iting various instruments collected from customers/parties.
Characterastic
Closing balance in these accounts should not be more than Rs 1000 at the
end of each day.
If an instrument is not cleared within 15 days of depositing follow-up a
ction is taken against party or customer.
Any debit for dishonor or loss in transit after 60 days from the date of
deposit is done with prior intimation to the company.

B- SPECIAL CURRENT [ WITHDRAWAL ] ACCOUNT

This account is opened at all Regions and State Offices for the purpos
e of withdrawal. The locations having monthly payments of more than Rs. 1 crore
have the facility of this account. For this purpose locations are to assess thei
r fund requirements and put up the proposal for opening it as this will result i
n avoidance of blockage of funds.
Characterastic
No pre-funding of this account is done.
All payments made are centrally funded from the corporation s main Cash
Credit Account at Mumbai.
Daily balances are transferred through Regional Cash Credit Account to M
ain Cash Credit Account at Mumbai.
 Cheques that are more than 6 months old should not be revalidated and tr
ansferred to time barred cheque code.
C – CURRENT IMPREST ACCOUNT
This account is generally opened at all locations of IOC. Main purpos
e of the account is to meet day-today expenses of respective locations .
Characterastic
This account has to be pre-funded by State/Region Office.
It’s safe because locations cannot make payments more than the credit av
ailable in the account.
Only computerized cheque books printed by IOC should be used with "Accou
nt-payee only" printed on.
D – LETTER OF AUTHORITY
At every location of IOC some special type of payments are made, e.g.
Customs and Excise Authorities or Payment to Port Trust Authorities or Payment
to other refineries for cost of product etc. With the help of this facility paym
ents can be made to these authorities from respective locations.
Characterastic
Various payments to only one authority can be made via this facility.
For payments to different authorities from one branch only there should
be approval for this from IOC as well as SBI and then a new facility for new aut
hority payment is made.
For the payment of Excise duty, only three LA s in a month can be issued
not more than that. For the payment of others e.g. Customs / Port Trust etc. no
such restriction is imposed .
E – RAILWAY CREDIT NOTE AUTHORITY
This is a special facility provided by SBI in which IOC s all locations
can make payments for Railway freight. All locations, under this facility are au
thorized to make payment of Railway freight, shunting charges etc.

Three ways of making payment under this facility:-

1. By having a special current (withdrawal) account of the location.
2. By issuing cheques of special current (withdrawal) account maintained at
the RCC branch.
3. By issuing Railway Credit Note (RCN) .
Characterastic
Any other payment accept from RCN is not permitted under this facility b
y the bank.
Locations need to have pre-printed cheque books with the name of Railway
.
Authority to which payment is made.
SBI cannot charge any charges for accepting IOC s cheques presented by t
he Railway s banker.
F – CASH CREDIT ACCOUNT
Cash credit Account is the principle Account operated by the HO marke
ting division to transfer the day end balances of cash collected at the pooling
center.
Characterastic
Transfer of funds from all other accounts like the Collection account, S
pecial Current (Withdrawal) Account etc. except the Current Imprest Account are
to the Cash Credit Account.
Apart from Transfer entries all payments handled by HO like purchase of
foreign currencies, repayment of Loan availed, and etc. is directly debited to t
he Cash Credit account.
 Interest payable to the bank are based on daily "Value Dated" balances i
n the CC Account and is calculated every quarter by applying the prevalent Prime
-Lending rate and interest amount is debited to Cash Credit Account.
G – REGIONAL CASH CREDIT ACCOUNT
Each regional office of the Marketing and other Divisions of the corpor
ation individually operates a Regional Cash Credit (RCC) Account for recording t
he entries where the SBI cannot provide the CMP facility.
ELECTRONIC MODE OF FUND TRANSFER
Electronic modes of Fund Transfer enable an efficient, secure, economical
and reliable system of transfer of funds from bank to bank as well as from remi
tter’s account in a particular bank to the beneficiary’s account in another bank
across the country.
NATIONAL ELECTRONIC FUND TRANSFER [ NEFT]
Electronic payment system in which payment instructions between banks a
re processed and settled on deferred net settlement (DNS) basis at fixed times d
uring the day. There is no minimum or maximum stipulated transaction value for u
sing this facility.
Under this system, RBI acts as an intermediary between the remitting ba
nk and the receiving bank and effects inter-bank funds transfer. The remitting b
ank gives remittance instructions to its service branch which in turn provides r
emittance details to RBI. The RBI sends the credit to the service branch of the
beneficiary bank, and the service branch passes the same to the branch where ben
eficiaries’ account is maintained .
REAL TIME GROSS SETTLEMENT [RTGS]
Real time gross settlement (RTGS) system is a transparent method for s
ettlement of inter-bank transaction. An ideal RTGS means that a cheque issued by
a customer drawn on any branch of a bank deposited in any branch of another ban
k gets instantly cleared. Simultaneously, the funds position between the two ban
ks gets settled in the central hub of the central banking institution. It involv
es intricate communication and networking for transfer of data. There is certai
nty of payment and the receiving bank can credit the beneficiary s account immed
iately and allow full use of the funds. Available for transaction value of Rs.1.
00 lakh and above.
In broad terms, it involves two steps of networking: Intra-bank (netw
orking of branches within the bank) and inter-bank (networking of banks and othe
r participants through a central hub). RTGS is being promoted through connectivi
ty of banks and participants with the central hub of Reserve Bank of India (RBI)
.
At IOCL, RTGS mode of collection of funds has been launched in June 20
08 after successful trials. Under this system, the funds can be transferred by t
he IOC’s customers from any of their bank to SBI on “Real Time” and on “Gross” b
ases .
Characterastic
This network is provided by RBI across the country among all the banks .
Every payment trough RTGS is identified with a Unique Transaction Number
(UTR) which will be captured while posting collections in SAP and the s
ame is
reflected in the PAD also.
From the time the customer remits the payment to the time his a/c in IOC
receives
The credit, the process takes about 2/3 hrs only as compare to banking
instruments that may take up to 2/3 days.
FLOW OF FUND IN RTGS/NEFT
Customer’s bank Collection of payments IO
C’sBank
IOC’s Bank Making Payments
Vendor’s account
ICICI BANK INSTRUCTION CARD
ICICI bank offers scheme to provide the card based solution i.e. the
payments by the retail dealers/ distributors to IOC trough customized “Instruct
ion Card”.
Characterastic
Instruction card is issued only to selected dealers
Its almost like debit card, used by dealer at IOC location for authorizi
ng the bank
for debiting dealer’s overdraft account with the bank and making
payments to
IOC.
Card reader machine is installed by the bank at IOC supply point. Card s
hall be
swiped by IOC officer and the amount is keyed in and charge slip is gen
erated.
IOC has separate bank account with ICICI at head office centrally for th
e purpose
of pooling the collections made through instruction card all over Indi
a.
INTERNET
At IOCL collection/payment of funds is also done using e banking fac
ility provided by the SBI bank. Almost 50% of payments made by IOC is done troug
h internet. Lots of care is being taken for proper authentication of such paymen
ts.
BENEFIT OF ELECTRONICS PAYMENT
Enormous manual work of handling instruments, preparation of cash receip
ts
DCRs, and etc gets eliminated.
RTGS payments by customers will enable savings in float of funds to IOCL
since
in case of DD/Pay order/Cheque; funds are credited in IOCL account afte
r 2-3
days.
Administrative convenience to customers since they are required to advis
e their
own banker to transfer to IOCL account without any further botheration
of
ensuring that instrument reaches the supply location.
RTGS collections received in IOCL bank account at SBI CAG Mumbai will be
accounted for in SAP centrally from HO banking through file upload opti
on
thereby reducing work at various supply locations as no cash receipts &
DCR will
be generated and further bank reconciliation entries will drastically
reduce.
PERCENTAGE COLLECTION THROUGH VARIOUS MODE IN MARCH 2009
About 57% of collection has taken place through electronic
mode (54% RTGS/NEFT, 2% instruction card, 1% internet)
and rest 43% is through cheques and cash receipt) .

WORKING OF PAYMENT TRANSACTION UNDER SAP R/3

FINANCE MODULE .
IOCL has adopted SAP R/3 ERP software for its
various operations, activities and their integration
across all major locations, state offices, regional offices
and head offices.

PERCENTAGE COLLECTION THROUGH VARIOUS MODE IN MARCH 2009

Approx 73% of payments made by IOC is done
through electronic mode (49% Internet and 23% RTGS/Internet)and 28% through trad
itional mode.

Here some activities which I have learnt pertaining to payment are discussed as
they are carried on the SAP platform .
SAP CAN START WITH LOGIN ID & PASSWORD . EACH DEPT. HAS SEPARATE LOGIN ID & PA
SSWORD.
I AM WORKING IN FINANCE DEPT. THIS DEPT ALSO USE A SEPARATE LOGIN ID & PASS
WORD .IT IS COMMON FOR ALL THOSE WHO WORKING IN FINANCE DEPT. IF WE TYPE IT
WRONGLY , ENTIRE SAP SYSTEM LOCK . IT IS OPERATED FROM DELHI SERVER .
WHEN WE CLICK O
N SAP ICON

CLICK ON LOG ON ,TYPE LOGIN ID & PASSWORD

1 - Creating the cash receipt of the payment deposited by the customer
Step 1: TCODE: F-28 used
Step 2: All relevant information is entered like document date, type, account no
. of
customer and bank account no. , type of instrument and its number
as assignment

Step 3: Details of the bank account where the amount need to be transferred are
entered

Step 4: Details of the customer’s account who has made the payment and type of p
roduct.

Step 5: document is simulated and saved.

2 - Printing the cash receipt
Step 1: TCODE YF42 is used .
Step 2: Document No. is entered and execute

Following is the format of generated cash receipt

3 - Generating the DCR - A DCR is generated for all the cheques received during
the day
Step 1: TCODE YF07
Step 2: company code, date and account no is entered
Following is the format of the DCR generated. This report is transferred to RO/S
O and amount in the bank account is transferred to RCC or CC account .
4 - Creating Liabilities for withdrawal account
Step 1: TCODE: FB60
Step 2: Enter the vendor account, date, bill number in references, amount, GL ac
count from
which the payment need to be made. Execute
Following overview is displayed

5 - To make payments to the vendor

Step 1: TCODE F-53 .
Step 2: enter the document date and posting date, account no, amount .

Step 3: Click process open items. Select the amount. Simulate and save

PROCEDURE FOR MAKING ENTRY FOR CREDIT NOTE

CREDIT NOTE issue to party for sales promotion , product promotion disc. etc
. We can take Party code ,& Credit area from CONTROL SHEET & then make entry
in SAP .
PROFORMA OF CONTROL SHEET

SR.NO
PARTY NAME
PARTY CODE
CREDIT AREA
1
M/S A.MANILAL LUBRICANT
SEWREE
RSE - MUMBAI
215578
001
2
M/S AMCO DISTRIBUTORS
SEWREE
RSE – MUMBAI
200749
001
3
M/S DOSHI ENTERPRISES
SEWREE
RSE – MUMBAI
199950
001
4
M/S INDUSTRIAL LUBE
KALAMBOLI
RSE - THANE
202170
001
5
M/S MINAR LUBRICANT
CFA PUNE
RSE - PUNE
193140
023
6
M/S PRITAM AUTOMOBILE
CFA PUNE
RSE - PUNE
126183
023
7
M/S VARDHAMAN LUBRICANT
CFA PUNE
RSE - PUNE
149112
023
8
M/S P RAMESHCHANDRA & CO
CFA PUNE
RSE - KOLHAPUR
141576
023
9
M/S GOMTESH ENTERPRISES
CFA PUNE
RSE - KOLHAPUR
217270
023
10
M/S KISHAN SERVO
CFA PUNE
RSE - PUNE
133085
023
11
M/S S R VENTURE
CFA PUNE
RSE-AURANGABAD
215655
023
12
M/S UMED SERVO
CFA PUNE
RSE-AURANGABAD
219378
023
13
M/S MORYA TRADING CO.
CFA PUNE
RSE – AKOLA
133288
001
14
M/S SR LUBRICANT & FILTERS
CFA PUNE
RSE – AKOLA
220257
001
15
M/S A.MANILAL & SON
NASHIK DEPOT
RSE-AURANGABAD
212449
001
16
M/S PRERANA TRADING
GAIGAON DEPOT
RSE – AKOLA
220256
001
17
M/S TLB TRADE LINK
KHAPRI DEPOT
RSE - NAGPUR
149403
001
18
M/S AWDHOOT TRADE LINK
KHAPRI DEPOT
RSE – NAGPUR
156785
001
19
M/S MERCURY ENTERPRISES
KHAPRI DEPOT
RSE – NAGPUR
193142
001
20
M/S DHAWALIKAR AGENCIES
VASCO TERMINAL
KAM - GOA
131933
001
CREDIT NOTE – XEROX COPY
6 - TO MAKE ENTRY FOR CREDIT NOTE IN SAP PLATFORM
Step 1 : Type TCODE F-51
Step 2 : Enter the document date and posting date, Type ,Company code ,Referenc
e ,&
Doc.Header text .

Step 3: Enter Party Code { given} ,Amount , Assignement & type Text { narration
}
[CREDIT A/C]

Step 4: Open Exp. A/c e.g COMMISSION & DISCOUNT A/C .[ DEBIT A/C]
Enter EXP. CODE 519912100 & Types same Amount,Material,Assignment &
Text .
Step 5 : Click on document - Simulate . It should be tally

Step 6 : click on save option

Once doc. is saved SAP generated DOC. NO automatically . It should be written i

n Credit note .e.g 102723 .
Step 7 : To check entry Enter TCODE – FB03
Type Company Code ,Posting Date ,Financial yr

After that DOCUMENT LIST is displayed , which involve transaction in sequence .

We can see a transaction separately in following way

.

CENTRAL SALES TAX

Sales Tax is one of the most important Indirect Tax for purpose of tax
ation by State Governments.Revenue from CST goes to State from which movement of
goods commences .
MVAT ACT deal with tax on sale /purchase within state of Maharashtra .
similarly , each other state in India has its own local SALES TAX which impos
e tax on local sales/purchase . however ,According to Article of 286 of Constitu
tion of India , a state can’t levy tax on inter-state sale or on import into
India or Export out of India .The CENTRAL SALES TAX ACT ,1956 deal with tax on
inter-state sale/purchase .
Objects of the Act, as stated in preamble of the CST Act are –
To formulate principles for determining
(a) when a sale or purchase takes place in the course of inter-state trade or c
ommerce .
(b) When a sale or purchase takes place outside a State .
(c) When a sale or purchase takes place in the course of imports into or export
from India .
CST was cut to 3 per cent on April 1, 2007 from 4 per cent and it was t
o be reduced to 2 per cent on April 1, 2008 .From 1-4-2010 CST will be abolish .

CST issue following form such as

F FORM
F FORM is single Declaration may cover all transaction of transfer o
f goods otherwise than sale effected within one celender month for every year .
It must be separate .It should be one which transferee has obtained from author
ity of state in which such good are to be delivered .
H FORM
Selling dealer must obtained H FORM from Exporter . It should be duly
filled in . Schedule is attach to H FORM which is also required to be filled
in by given detail .
 C FORM
Importance of C FORM so far as Concessional rate of tax is concerned
under CST ACT The production of C FORM for the purpose of concessional rate of
tax during course of assessment is so important that any negligence in this rega
rd might result in depriving the assessee of it’s legitimate claim .Assessee is
entitled to get defect set right from purchasing dealer & reproduce the same.
When a C FORM as furnished by buyer has been lost , selling dealer may demand
from buyer a duplicate C FORM with declaration recorded in red ink & signed by b
uyer on all portion of certificate .C FORM are valuable document both from the S
eller’s point of view & Purchaser’s point of view , even from the Govt. point of
view .therefore it’s safe custody is essential .It is importance from the point
of Seller because unless he produce C FORM from his sale can’t be taxed at conc
essional rate .From the point of purchaser , he has to account disposal of form
which he has to obtained from the Registering Authority .
If he fail to do so then inter-state purchase can be estimated agains
t such C FORM & dealer would be taxed on such sales under local ACT . From the p
oint of Govt. it is importance because if C FORM fall in hand of unscrupulous
person then they would be purchasing good at concessional rate & would not be sh
ow such sales in his book of account .
PROCEDURE FOR ISSUANCE OF C FORM UNDER CENTRAL SALES TAX
PREPARE STATEMENT
IOCL ask for detail of transaction [ purchase] ,invoice , payment de
tail ,& purchase order from each party From that IOCL preare statement of each
party in EXCEL SHEET FORMAT . Each statement contain Name of Party , Period ,
P O NO , Sr.No ,Invoice No., Invoice Date , Amount .Total. [ copy attached ]
Prepare following statement of some parties are
ADYA OIL CHEMICAL LTD ,
CREST CHEMICAL LTD ,
CIBA INDIA LTD ,
INTERNATIONAL CYLINDER PVT. LTD ,
KANCHI PLAST ENTERPRISES ,
MOLD TEK TECHNOLOGIES ,
ORONITE,
PIONEER PACKER LTD ,
RAJIV PLASTIC ,
T & D GALIAKOT CONTAINER PVT. LTD ,
YASHRAJ CONTAINER
KUSA CHEMICAL PVT. LTD ,
PREMIER HALLOWARE .
INDENT OF STATEMENT
CENTRAL SALES TAX DEPT. issue C FORM against SALES TAX.
IOCL receive detail of transaction [ purchase] ,invoice , payment detail ,& pu
rchase
order from each party . All statement are indent into EXCEL SHEET for each par
ty.
SUBMIT ONLINE TO CST DEPT.
It is submitted to SALES TAX DEPT. online against each CST NO .[ copy attached
]
ISSUE OF C FORM
After one month , SALES TAX DEPT. dispatch C FORM to IOCL by post .
C FORM are check with indent statement i.e period , amount , party name . whe
n it is ready , statement of each party’s are paste / staple behind each party’
s C FORM with duly signed by authority person . purchaser has to give C FORM
to seller .therefore IOCL give C FORM to party.
Each party called for taking delivery of C FORM by hand by signed on REGISTER ,
C FORM is divided into 3 part :
1) Counterfoil ,
2) Duplicate ,
3) Original .
With same period , amount ,& party name . Duplicate & Original C FORM are given
to party & Counterfoil are kept with himself . Each C FORM has separate number
which is mentioned in statement of each party .
C FORM are given period-wise for each party e.g
1) APRIL – JUNE ,
2) JULY – SEPTEMBER ,
3) OCTOBER – DECEMBER ,
4) JANUARY – MARCH .
When C FROM issued to party, there is another entry in files of C FROM ISSUED R
egister.[ copy attached ]
LINKING OF C FROM
When IOCL make sales to other party .party has to issue C FORM to IOC
L @ 2% again sales. After issuing C FROM , it is linked & make separate files as
LINKING OF C FROM in EXCEL SHEET as per period wise . It include Party Name ,P
ost date ,Bill document ,Total , C FORM NO , Sr.No , Status , Period . From that
we can come to pending C FROM which is not linked yet. It include all detail ex
cept Status . [ copy attached ]

PENDING C FORM
PENDING LIST SHOW THOSE C FORM WHICH ARE NOT YET RECEIVED / LINKED
PENDING C FORM FOR YEAR 2007-08 WORKED BY MAHENDRA DATED 19.05.09
BILL DOCNO POST DATE PAYER PAYER_NAME TOTAL STATUS QUARTER
623403589 25012008 120518 BDK ENGINEERING INDUSTRI 301823
PENDING JAN-MAR
623875163 21022008 120518 BDK ENGINEERING INDUSTRI 311421
PENDING JAN-MAR
623753400 14022008 120302 BHASKAR BIO INDUSTRIES, 404973 PENDING
JAN-MAR
623730432 13022008 216520 H.N. KANKALE 301823 PENDING JAN-MAR
623687276 11022008 184919 MAHANT RUBBER FACTORY 301823 PENDING
JAN-MAR
623350590 23012008 208422 SHRI LAXMI NARAYAN CHEHICAL 267813
PENDING JAN-MAR
623857233 20022008 208422 SHRI LAXMI NARAYAN CHEHICAL 255946
PENDING JAN-MAR
624340605 15032008 119083 SOUTHERN FERRO LTD., / / IN - 580007 BE
LUR 267306 PENDING JAN-MAR
624492077 24032008 206893 SURENDRA CONSTRUCTION PVT.LTD 322691
PENDING JAN-MAR
624533863 26032008 206893 SURENDRA CONSTRUCTION PVT.LTD 322691
PENDING JAN-MAR
623084996 9012008 215157 TROPICANA LIQUID STORAGE(P)LTD 350670 PENDING
JAN-MAR
620716988 28082007 211764 GODREJ AGROVET LTD 228415 PENDING
JULY-SEPT
622567328 12122007 118830 JINABAKUL FORGE PVT LTD 296758 PENDING
OCT-DEC
621473012 12102007 204293 SAMYUKTA AGRITECH PVT. LTD 233025
PENDING OCT-DEC
621861574 3112007 204293 SAMYUKTA AGRITECH PVT. LTD 258539 PENDING
OCT-DEC
622792579 24122007 119076 YENKAYS ENGINEERING UNITI 339152
PENDING OCT-DEC
TOTAL 4764869

LEARNINGS

The Key Learning from the internship may be summarised in the following po
ints-
• Understanding of Cash Management in this industry .
• Importance and criticality of cash resources in a business.
• Understanding of ERP software SAP R/3 (FI module) through firsthand expe
rience.
• Understanding of organisational structures and workflow across various f
unctions.
• Information flow in a hierarchy based and function based organisation.
• Behavioural aspects of an organisational manager and his corporate relat
ionships with peers and superiors.

REFERENCES

- www.iocl.com

- http://www.sap.com/malaysia/solutions/safeguarding/pdf/IndianOilCorp.p
df

- Handbook on Banking Functions, HO finance, Marketing Division

- SAP-Do it yourself manual, IOCL
- Policy manual, circulars and reports of IOCL .
CONCLUSION

IOCL is one of the largest organizations present in India, with opera

tions spread across the length and breadth of the country. It is primarily engag
ed in marketing and distribution of various petroleum products all over India, i
ncluding its remotest parts. The sales and distribution network encompasses lar
ge no. of Depots, Terminals, Plants and AFSs and a product passes through one or
more of these before reaching the end consumer. Hence, the delivery of a produc
t to the end consumer often involves multiple cash transactions.
Given the large sales volumes of IOCL, there are a large number of such
transactions happening every day in different parts of the country through diff
erent banks. Monitoring and managing all these cash inflows and outflows is a di
fficult task involving transactions taking place at various levels within the or
ganization as well as with various banks across the country.