Creating port as a plant (Depot)

[Former Member]

Dear All,

I need you opening on this scenario.

My client import liquid chemical for manufacturing purpose, they import chemical in bulk eg 100000L of chemical.

But they don’t have that much capacity of storage in there plant. Hence they take storage tank on rent from Port department.

So whenever they required certain quantity of chemical they  transfer it from port to manufacturing plant.

Now my client requirement is that :-

1. They want to create PO in their manufacturing Plant, i.e liability should be booked in manufacturing plant.
2. Capture excise only on quantity they transfer from port to plant and not on full quantity they import.
3. They want to show total stock (100000 L) in their balance sheet of manufacturing plant.

How can we full fill above requirement.

I checked below link but don't find helpful.

Thanks in advance.

Shayam

[tomasz_domanski · Accepted solution]

Hi,

Is it legal to show full stock but pay only excise for the part you moved into your manufacturing location? You should capture excise on GR and only via GR you can legally put the goods on your stocks. But if this is OK from legal point of view you might have a look at this:

You can consider 2 step GR though 103 + 105 movements. 103 is not financial movement so probably no excise would be done (GR to GR blocked stock only). You will have the goods in your stock q-ty wise but not with value. Then with 105 you will have the posting and excise captured.

Best Regards,

Tomek

[Former Member · Accepted solution]

Thanks for reply Tomasz

Will check the solution proposed by you with my MM consultant and revert back.

Regards

Shayam

[Former Member · Accepted solution]

Thanks this solution help us.

[tomasz_domanski · Accepted solution]

Thx Shayam if you're writing to me, as you actually marked your own answer to my answer as helpful

[Former Member · Accepted solution]

Hello All,

A simple note from my side : many companies have bonded stores with goods like cigarettes/perfume/alcohol which appear in the monthly stock report, balance sheet.... Excise is mostly a question of VAT and commercial area and not of ownership.

I guess, that the design proposed has to be approved by the financial department anyway, on my side, I do not understand fully 103/105.

It is common in ports to have warehouses operating under specific regulations regarding excise and common for companies to store their goods there (so in their stock duty unpaid) and only pay the VAT when the stock is moved out. Of course, this depends on the services/facilities offered at the port.

The main driver in terms of decision here is compliance with the fiscal regulations/accounting and not "sap movements".

Alex