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Subcontracting for excise credit

Hello SAP friends,

To start with, 'Mat A' is considered as a Semifinished product as this allows the material go to the subcontractor for rework process wherein 'Mat B' (Specification..eg red, seat, curtain) is taken care by the subcontractor himself. In this instance . 'Mat A' material issued to Subcontractor which is received as a 'Mat B1( Mat A + Mat B) and again there are couple of operations carried out to to confirm the final product 'Mat C'.

In Simple ways, there are 2 production orders : At 'Mat A' and 'Mat C'  level once the operation gets over.

1 GR when we receive the 'Mat B1' from Subcontractor after body building..

From taxation team, the department wants to take credit for the 'Mat B'( Includes services) which is mounted onto the 'Mat A' which is issued. In other words the would want the 'Mat A' to be received Seperately and the 'Mat B' separately.

The Bom Structure looks like.. 1. Mat C- Inhouse ( After few operation from Mat B1 is received)

                                                        2. Mat B1 ( GR'd after rework process)

                                                            3) Mat A ( Inhouse, Production order to STock)

The Mat B1 is externaly procured considering the component as Mat C.

Question is, How can we receive the 'Mat B' separately and 'Mat A' separately. As 'Mat B' is completely taken care by the subcontractor and 'Mat B' is one of the operation under 'Mat B1'.

Solution & question are appreciated.

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2 Answers

  • Jan 07, 2015 at 05:58 AM

    Hi Ravi,

    As per my knowledge you can take the credit by making use of Excise Manual JV transaction J1IH-Additional Excise.

    Regards

    Binoy

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  • Jan 08, 2015 at 05:30 AM

    Dear Ravishankar,

    Kindly check the following process is meet your requirement.

    First:

    1. Kindly create separate PO for Mat B along with SC vendor indicator and ED.

    2. Do GR the stock will be updated directly to vendor stock instead of coming to your plant.

    3. Now you can avail cenvat credit for Mat B.

    Second:

    1. Create Subcon PO for Mat B1 along with bom Mat A + Mat B.

    2. Do 541 only for Mat A (Mat B already supplied via above process)

    3. Do GR once rework process completed.

    Regards,

    Karna J

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    • Karunanithi Jayapal Ravishankar Venkatramanan

      Dear Ravi,

      There are two way to proceed this process

      Either you have to do manual excise posting or sub-con process has to be done with excise unless you procure the mat A from vendor.

      Below screen shot which we proposed to customer.

      Regards,

      Karna J

      scon.jpg (183.3 kB)