Business Processes

Country Version India

AGENDA
GLOSSARY
BACKGROUND CIN
INTERFACE BETWEEN SAP AND CIN
INDIAN LOCALISATION COVERAGE
PROCESSES IN SAP WITH CIN
PROCUREMENT
SALES
FINANCE
REPORTS

GLOSSARY
CIN - COUNTRY VERSION INDIA
INPUT TAX -Tax that is charged by the vendor.
A claim for refund of the deductible portion of input tax can be
submitted to the tax authorities
OUTPUT TAX -Tax levied on customers at all levels of
production and trade.
Output tax represents a tax liability.
SERVICE TAX - Tax levied on the customer on services
specified by the Government.
DEPOT - Depot is a plant where the material is stored and sold.
There is no manufacturing activity at the depot. The depots
when registered with the excise authorities can pass on the
Modvat benefits to the customer.

GLOSSARY
EXCISE DUTY (BED) - A quantity-based tax which must be paid
when a dutiable material is moved from a duty-free (bonded)
location to a duty-paid (unbonded) location or the customer. Also
known as excise tax. The excise duty is based on the quantity /
Value of material moved.
AED Additional Excise duty is a duty which is calculated over and
above the Excise Duty payable on the material.
SED Special Excise Duty is an additional duty levied on certain
materials depending on the characteristics of the material. The
statute specifies these materials.
CHAPTER ID All materials that are required for manufacturing and
subsequently those which are manufactured, are classified under
the Central Excise Law into chapters. These chapters are further
subdivided into headings and subheadings, which together form the
chapter ID. Chapter ID 7216.10 is an example.

GLOSSARY
CVD Countervailing duty is a levy charged on the imports of
materials in lieu of excise duty.
CENVAT Central Value Added Tax. The tax is levied on the
difference between the output and the input value. This is also
referred as MODVAT.
CESS Cess is a tax imposed for a specific purpose under different
acts with reference to certain goods. Cess is levied at the time of
removal of goods from the factory.
OCTROI A levy payable on the material to the local authorities.
ASSESSABLE VALUE - Denotes the value of goods that you have
manufactured in-house at the price as assessed by an authorized
auditor.
SETOFF A certain percentage of input tax which is refunded by the
government to the manufacturer. This refund does not form part of
material cost.

GLOSSARY
INTERSTATE TRANSACTIONS - A transaction where the goods /
material are traded between two different states.
CONCESSIONAL TAX FORMS The Government announces tax
concessions in excise and taxes on sales and purchase. This can
be availed by submitting the forms prescribed by the Government.
E.g C form , AR4 , CT3.
TDS - Tax deducted at source ( Withholding tax) is a form of
indirect taxation deducted at the beginning of the payment flow.
Generally, an amount is withheld and paid over or reported to the
tax authorities on behalf of (as opposed to by) the person subject
to tax, the exception being self-withholding tax.
If a withholding tax exemption is available, withholding tax is not
withheld.

GLOSSARY
REGISTERS The registers are the books prescribed
having specific format under the statute e.g RG23A,RG23D.
RETURNS The prescribed forms having a specified format
under the statute e.g. RT12, RG1, ANNUAL RETURN FOR
TDS.

BACKGROUND
FIRST VERSION DEVELOPED IN 1996 IN RESPONSE TO
NEEDS OF INDIAN CUSTOMERS
STANDARD PRODUCT SUPPLIED BY SAP AS AN ADD-ON
CONFORMS TO SAP DEVELOPMENT STANDARD (LOOK
AND FEEL ETC)
SUPPORTED BY SAP DEVELOPMENT LAB AT
BANGALORE

CIN INTERFACE WITH SAP

FI
SD
MM

SAP

IN

CIN

FI - INTERFACE
COMPONENT
INSTALL COMPONENT
ACTIVATE COMPONENT
ACTIVATE PROCESSES
OPEN FI - INTERFACE

FI
SD
MM

CIN INTERFACE WITH SAP

COUNTRY VERSION INDIA INSTALLATION
COPIES THE FOLLOWING
1. STANDARD INDIA TEMPLATES
2. TAX PROCEDURE (TAXINJ/ TAXINN)
3. CONDITIONS EXCISE, TAXES ON
SALES &
PURCHASE,
SERVICE TAX, CVD ETC
4. TABLES , FUNCTION MODULES , NO.RANGE OBJECTS,
CUSTOMER EXITS
5. TAX DEPRECIATION KEYS

INDIAN LOCALISATION COVERAGE

COVERS THE FOLLOWING
CENTRAL / LOCAL SALES TAX
SALES TAX SETOFF
PURCHASE TAX
CONCESSIONAL TAX FORMS
SERVICE TAX
OCTROI

INDIAN LOCALISATION COVERAGE

BASIC / ADDITIONAL / SPECIAL EXCISE DUTY
MAINTENANCE OF RATES ON VENDOR CLASS
MAINTENANCE OF RATES AS PERCENTAGE &
AMOUNT
UTILISATION OF MODVAT
FORTNIGHTLY PAYMENT
CVD ( IMPORTS)
SUB-CONTRACTING
SUB-CONTRACTING CHALLANS
RECONCILIATION OF QUANTITIES
MAINTENANCE OF 57F4 REGISTER

INDIAN LOCALISATION COVERAGE

MODVAT
UPDATING OF PART-I REGISTER FOR QUANTITY
UPDATING OF PART-II REGISTER FOR VALUE
UPDATING OF RG23D REGISTER FOR DEPOT
PRINTING OF EXCISE REGISTERS
PART-I / PART-II REGISTERS
RG1 REGISTER
RT12 RETURN
FACILITY FOR DOWNLOAD

INDIAN LOCALISATION COVERAGE

EXTENDED WITHHOLDING TAX
WITHHOLDING TAX ON DOWN PAYMENTS / INVOICES / PROVISIONS
ACCUMULATIONS
MULTIPLE TAX LINE ITEMS IN ONE INVOICE
CALCULATION ALTERNATIVES (GROSS, NET, OFFSET)
ROUNDING OPTIONS
PAYMENT DUE DATES BY BUSINESS PLACE
CHALLAN UPDATE AND ACCOUNT CLEARING
SURCHARGE ON WITHHOLDING TAX
CERTIFICATE NUMBERING FOR DIFFERENT SECTIONS / BUSINESS
PLACE
CERTIFICATE PRINTING WITH CUSTOMISABLE LAYOUT
ANNUAL RETURNS FOR VARIOUS SECTIONS OF INCOME TAX ACT

PROCUREMENT PROCESS
REQUIREMENTS AS PER INDIAN STATUTE
1.

CALCULATION OF EXCISE DUTY BASED ON MATERIAL AND

CHAPTER ID COMBINATION

2.

CALCULATION OF EXCISE BASED ON CLASS OF VENDOR

3.

CALCULATION OF INPUT TAX BASED ON INTERSTATE

TRANSACTIONS

4.

CALCULATION OF INPUT TAX SETOFF ON INCOMING MATERIAL

(APPLICABLE TO FACTORY).

5.

CAPTURE OF PART I AND PART II FOR CENVAT.

6.

SUBCONTRACTING U/S 57F4 WITHOUT PAYMENT OF EXCISE DUTY

7.

SUBCONTRACTING QUANTITY RECONCILIATION & SETTLEMENT

8.

SUBCONTRACTING PAYMENT OF EXCISE DUTY FOR NONRECEIPT OF MATERIAL AFTER SPECIFIED PERIOD.

PROCUREMENT SCENARIOS
LOCAL
MATERIALS
IMPORT
MATERIALS
SUB CONTRACTING
CAPITAL
GOODS

TAX CALCULATION AT PURCHASE

1.

TAXES ON SALES & PURCHASE ARE MAINTAINED AT

FEDERAL LEVEL AND STATE LEVEL

2.

THE EXCISE CONDITION IS MAINTAINED AT 100%

3.

THE EXCISE RATE FOR THE MATERIAL IS MAINTAINED IN

CIN MASTER.

4.

THE INPUT / OUTPUT TAX RATE IS MAINTAINED FOR

FEDERAL TAX AND STATE LEVEL TAX CONDITIONS

5.

PERCENTAGE OF SETOFF ON INPUT TAX IS MAINTAINED IN

SETOFF CONDITION

HOW TAXES ARE DETERMINED

1.

THE CHAPTER ID FROM CIN TABLE FOR THE MATERIAL

2.

EXCISE RATE DERIVED FROM CHAPTER ID FROM CIN MASTER

3.

IN TAX PROCEDURE 100% OF THE RATE IS CALCULATED

4.

THE TAX CODE IS ENTERED IN THE LINE ITEM AND THE

JURISDICTION OF THE VENDOR IS ACCETPTED AS AN INPUT.,

5.

THE CVD IS ENTERED MANUALLY IN THE PRICING SCHEMA.

PROCUREMENT- LOCAL PURCHASE

SAP
CREATE PO
PRICING

GR

IV

CIN

Excise Rate
Determination
Based on Material /
Chapter ID and
Vendor Class
Simulate & Post
Cenvat.
Update Part I -Qty
Update Part II Val
A/c. Determination

This also updates the excise header / line item tables.

PROCUREMENT- IMPORT PURCHASE

SAP

CIN

CREATE PO
PRICING

GR

Create Excise
Invoice for CVD.
This is entered
manually in Pricing
Update Part I - Qty
Simulate & Post
Cenvat.
Update Part II Val
A/c. Determination

IV

This also updates the excise header / line item tables.

PROCUREMENT SUB-CONTRACT
SAP

CIN

CREATE PO
TRF.
POSTING

GR

IV

Create Sub- Contract

Challan w.r.t mat. doc.
Print Excise Challan
Update Register

Settle w.r.t. subcontract challan.

Consumes the child
material.
Updates Register
Reconciliation and
Completion of Challan

This also updates the excise header / line item tables.

PROCUREMENT CAPITAL GOODS

SAP
CREATE PO
PRICING

GR

IV

CIN

Excise Rate
Determination
Based on Material /
Chapter ID and
Vendor Class
Simulate & Post
Cenvat.
Update Part I -Qty
Update Part II Val
A/c. Determination
50% - current year
50% - next year.

This also updates the excise header / line item tables.

SALES PROCESS
REQUIREMENTS AS PER INDIAN STATUTE
CALCULATION OF EXCISE DUTY BASED ON MATERIAL AND CHAPTER ID
COMBINATION
1.

CALCULATION OF EXCISE BASED ON CONCESSIONAL FORMS.

2.

CALCULATION OF OUTPUT TAX BASED ON INTERSTATE

TRANSACTIONS

3.

MAINTENANCE & PRINTING OF EXCISE / ST. DETAILS OF CUSTOMERS

ON INVOICES

4.

USAGE OF PRE-PRINTED INVOICE NO.

5.

LEVY OF SERVICE TAX ON ALL SERVICES RENDERED FROM FACTORY.

6.

PAYMENT OF CESS ON CERTAIN CATEGORY OF MATERIALS (IF

APPLICABLE

7.

MAINTAINING OF EXCISE RULES

SALES SCENARIOS
FACTORY
SALES
TAX CALCULATION - SALES
1.

TAXES ON SALES & PURCHASE ARE MAINTAINED AT

FEDERAL LEVEL AND STATE LEVEL

2.

THE EXCISE CONDITION IS MAINTAINED AT 100%

3.

THE EXCISE RATE FOR THE MATERIAL IS MAINTAINED IN

CIN MASTER.

4.

THE INPUT / OUTPUT TAX RATE IS MAINTAINED FOR

FEDERAL TAX AND STATE LEVEL TAX CONDITIONS

5.

REGIONS ARE MAINATINED AT PLANT / CUSTOMER

TAXES ARE DETERMINED BY THE SYSTEM

1.

THE CHAPTER ID FROM CIN TABLE FOR THE MATERIAL

2.

EXCISE RATE DERIVED FROM CHAPTER ID FROM CIN MASTER

3.

IN TAX PROCEDURE 100% OF THE RATE IS CALCULATED

4.

THE JURISDICTION IS DETERMINED BASEED REGION

MAINTAINED IN CUSTOMER MASTER AND PLANT,

5.

IF THE REGION IS SAME THEN STATE LEVEL TAXES ARE

APPLICABLE ELSE FEDERAL TAXES WILL BE APPLICABLE . THIS
IS DETERMINED BY THE ROUTINES IN TAX PROCEDURES.

6.

THE TAXES ON SALES AND PURCHASES ARE DETERMINED

BASED ON THE TAX CODES

SALES SCENARIOS FACTORY SALES

SAP
CREATE SO
DELIVERY

PGI

BILLING

This also updates the excise

header / line item tables.

CIN
Excise Rate
Determination
Based on Material /
Chapter Id / Form
type.
ST based on
Jurisdiction and Tax
Codes
Excise Inv. WRT
SAP Billing Doc.
Selection of Rules
Update No. Range
Update Tables
A/c Determination

REQUIREMENT OF FINANCE
WITHHOLDING TAX

ACCUMULATION OF TAX BASE AMOUNT

CERTIFICATE NUMBERING BASED ON BUSINESS
PLACE AND IT SECTION
ANNUAL RETURN FOR EACH SECTION
PAYMENT OF WITHHODING TAX
CALCULATION OF SURCHARGE
CERTFICATE PRINTING SHOWING TAX RATE INCLUSIVE
OF SURCHARGE
PAYMENT BY DUE DATE

EXCISE DUTY

FORTNIGHTLY PAYMENT

PROCESS OF WITHHOLDING TAX

TDS ON PAYMENT

TDS ON INVOICE

REQUEST FOR
DOWN PAYMENT

CALCULATE TDS

PAYMENT OF
REQUEST
CALCULATE TDS
ACCOUNTING

ADJ. FOR DOWN

PAYMENT

PAYMENT OF TDS
UPDATE CHALLAN
PRT CERTIFICATE

THE TABLES FOR TDS AND CERTIFICATES ARE UPDATED

ANNUAL RETURN

PROCESS FOR PAYMENT OF EXCISE

SELECTION OF
DATES
UTILIZATION

SELECTION OF
REGISTERS
RG23A,RG23C,PLA
PAYMENT
ACCOUNTING
THE TABLES FOR EXCISE ARE UPDATED

STATUTORY REGISTERS / REPORTS

RG23A PART I REGISTER
RG23A PART II REGISTER
RG23C PART I REGISTER
RG23C PART II REGISTER
RG1 REPORT
RT12 REPORT
57F REGISTER
TDS CERTIFICATES REPORT
TDS ANNUAL RETURN REPORT

ALL THE REGISTERS & REPORTS WITH CUSTOMIZABLE

LAYOUT WITH DOWNLOAD FACILITY ARE AVAILABLE AS PART OF STANDARD CIN

FISCAL YEAR
All the statutory reports and registers have to be maintained as per
the Government Fiscal Year. The Government Fiscal year starts
from 1st of April and ends on 31st of March of the subsequent year.
The Income Tax Depreciation has to be calculated on the basis of
the Government Fiscal Year basis.

PSML Business Processes

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