Excise Duty Pass on Scenario i.e. Trader Invoice

Below document a typical dealer invoice scenario in India.

B is a dealer and purchase materials from its principal A by paying Base amount (say Rs 100 ) & Excise duty (say BED 12%, Ecess 2% & SEcess 1%), comes to Rs 115 and applicable VAT (say 5%)on it. Thus landed value comes to Rs 120.75. Again B sells this material to a manufacturer C for a base amount (say Rs 125) and pass on the excise value he paid to A (Rs 15,ie Rs 125 + 15 =140) and applicable VAT (say 5%) on it. Thus landed value comes to (Rs 140 + Rs 7 =147).

This document explains how C (manufacturer) can handle this scenario in SAP:



Scenario 1: ED Set off & VAT inventory

Step 1:
Create Purchase Order with the basic price Rs. 140 and add tax code relevant to VAT 5%.
So the total landed value will be Rs. 147.

Step 2.
Do MIGO with reference to Purchase order and Input details like Quantity and Delivery note etc. At header level in Excise Invoice tab, click on 'More data' button and in Miscellaneous Tab, click on MRP Indicator.

At Item level Excise item tab, enter the base value as Rs. 125 and in BED 12, Ecess 2 and SEcess 1. Save the document.
After the posting accounting document will be created as.

Dr	Stock of Raw Material	132
Cr	GR/IR Clearing	132

Excise entries will be as follows:

Dr	RG23A Cenvat BED	12
Dr	RG23A Cenvat Ecess	2
Dr	RG23A Cenvat SEcess	1
Cr	Cenvat Clearning	15

Step 3: Invoice Verification

Enter the PO number and change the basic amount at line item Rs 137 and choose the relevant tax code. Simulate and save it.

Dr	GR/IR Clearing	132
Dr	Cenvat Clearing	15
Cr	Vendor A/c	147

Scenario 2: ED Set off & VAT Set off

If both Excise duty and VAT is set off then following method needs to be adopted:
Create PO with VAT set off Tax code
During MIGO edit the base value and input appropriate values against BED, ECS & SEcess.

Account Posting will be:

Dr	Stock of Raw Material	125
Cr	GR/IR Clearing	125

Here VAT value (Rs7) is not added to Stock value as it is SET OFF. Excise posting will be same:

During Invoice verification MIRO:
Edit the value manually to value booked under stock of materials during GR (Rs 125) In header under Basic data, select VAT set off Tax code, input total amount(Rs147) under Amount, Tax amount will be Rs 22 as Excise duty Rs. 15 and VAT Rs. 7.

Simulate and save, account posting will be as under:

Dr	GR/IR Clearing	125
Dr	VAT Input Credit	7
Dr	Cenvat Clearing	15
Cr	Vendor A/c	147