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Function documentation Formula-Based Excise Determination  Locate the document in its SAP Library structure

Use

When you execute a business transaction involving materials that are subject to excise duty, the system automatically calculates the duty for you.

Prerequisites

In order for the system to be able to determine which rate of excise duty to apply, you must have maintained all the data on the Excise Rate Maintenance screen, which you can access from the SAP Easy Access screen by choosing Indirect Taxes → Master Data → Excise Rate Maintenance.

You maintain the following types of data:

You assign each of your plants an excise duty indicator. You can use the same indicator for all the plants with the same excise status from a legal point of view, such as all those that are in an exempt zone.

See also the information about manufacturers that are only entitled to deduct a certain portion of the duty (see Partial CENVAT Credit).

For each of your vendors with the same excise status from a legal perspective, you define an excise duty indicator. You must also specify the vendor type – for example, whether the vendor is a manufacturer, a depot, or a first-stage dealer. You must also stipulate if the vendor qualifies as a small-scale industry.

For each permutation of plant indicator and vendor indicator, you then create a final excise duty indicator.

Similarly, you assign the same excise duty indicator to each of your customers that share the same legal excise status.

Again, for each permutation of plant indicator and customer indicator, you then create a final excise duty indicator.

Each material is assigned a chapter ID.

For every chapter ID and final excise duty indicator, you maintain the rate of excise duty.

If your business only qualifies for partial CENVAT credit, you must customize your system accordingly.

Activities

Let us consider an example to illustrate how the system determines which rate of excise duty to apply to a material. Assume you are posting a sale of ball bearings to a customer. The system automatically determines the rate of excise duty as follows:

  1. Looks up the customer master data to see what status you have assigned the customer.

    2. Let's assume you've assigned the customer status 3.

  2. Looks up the plant master data to see what status you have assigned the plant.

    3. Similarly, your plant has status 2.

  3. The system looks up the table under Excise Indicator for Plant and Customer to see what the final excise duty indictor is for customer status 3 and plant status 2: It is 7.
  4. The system determines the chapter ID of the ball bearing for the plant.

    5. Let’s assume the chapter ID at plant for the ball bearings is 1000.01.

  5. Finally, the system looks up the table under Excise Tax Rate to see what rate of duty applies to chapter ID 1000.01 under status 7.
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