External Procurement (Domestic) 

Purpose

This process illustrates how the basic procurement process – including excise duty – is handled by the SAP System.

Process Flow

  1. You create a purchase order for the goods you want and send it to the vendor.

    2. After a few days, the vendor sends you the goods together with an excise invoice.

  2. Now that the goods have arrived, you enter the goods receipt and capture the excise invoice.
    1. The storeperson enters the goods receipt.

      2. The system creates a goods receipt document, and an accounting document to debit the raw materials account and credit the goods receipt clearing account. Assuming that the materials are subject to excise, it also creates an entry for the goods receipt in Part I of the appropriate excise register.

      Note that if you first want to post the goods to blocked stock, for any reason, do so using the standard procedure. The excise clerk then captures the excise invoice as normal.

    2. The excise clerk captures the excise invoice.

    For information about what to do if the vendor sends the goods in more than one delivery, see Multiple Goods Receipts for a Single Excise Invoice.

  3. A supervisor in the accounts department checks the excise invoice captured by the clerk, makes any changes necessary, and posts it.

    4. The system automatically debits the excise duty to the excise duty accounts and credits the CENVAT clearing account. It the creates an entry in Part II of the appropriate excise register to record this posting.

  4. You post the vendor's invoice, following the standard procedure.

If the excise supervisor has reduced the amount of excise duty that is to be credited to the CENVAT account, the system adds the difference to the material price.

The system also creates an accounting document. The document contains debit postings to clear the clearing accounts for goods receipts and CENVAT; and a credit posting to create an open item on the vendor's account.

Alternatives

The above procedure is just one way of using the SAP System to handle incoming excise invoices. If your business processes differ from the procedure described above, there are a number of alternatives available to you.

Capture Excise Invoice Before Goods Receipt

In step 2, the vendor sends you the goods and there are two documents, the goods receipt and the excise invoice. If your business processes require, you can capture the excise invoice before the goods receipt is posted.

During the goods receipt, the system adjusts the material value for any changes to the taxes that the clerk has made in the captured excise invoice. An accounting document to debit the raw materials account and credit the goods receipt clearing account is created.

One Person Captures and Posts Excise Invoice

In the procedure described above, the excise clerk captures the excise invoice and the excise supervisor posts it. If you want, you can have one person perform both of these activities in a single step, using the transaction under Indirect Taxes ® Procurement ® Excise Invoice ® Incoming Excise Invoice ® Central Processing ® Capture/Change/Cancel/Display/Post.