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Shifting of Plant to different State

Former Member
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Dear All,

In case of a Plant shifted from one state to another state, what should we do in SAP?

a. Shoud we change the address of the same plant & start using the same plant?

b. Should we create a new plant, upload/extend all the master data & use the new plant for all activities.

will there be any legal complication if we simply change the address & using the inventory without showing any transfer (stock out) from the old plant.

pls. advise,

Regards,

Accepted Solutions (1)

Accepted Solutions (1)

Former Member
0 Kudos

You should create a new plant .. enter all excise vat cst details and enter new address also.

Extend all material to new plant

transfer all material physically to new plant with payement of excise and CST/VAT

Block the old plant for all further postings .... dont delete it .... because u will have to deal with tax authorities for many more years.

Former Member
0 Kudos

thanks a lot for the reply.

can't we use the same materials/ stock without showing any transfer in sap?

physical movement of material can take place thru manual challan.

is there any legal implication or problem in sap auditing if don't create a new plant & go ahead with the same plant with doing changes in address, some tax data?

creating new plant means a huge work with respect to master data extension.

regards,

Former Member
0 Kudos

Hi,

By simply changing the name of plant to the new plant is not the right solution. The system should reflect the process how it happened actually.

There will be many implications and problem from audit, finance, taxation, legal, reporting and process point of view. Taxation will be main thrust area as the state is different.

You cannot simply do away just for the huge effort involved.

When ever this scenario is there it is like a new Roll-out.

You need to plan the following:

1) Data extraction activities

2) Creation of master data as the case may be, excise balance, initial uplaod, STO, etc

3) Migration Plan

4) Cut off date for closing the old plant and making new plant operation

5) Authorisation.

what I mentioned is not the exhaustive list, there may be more activities depending upon the business processes.

Your questions:

1) can't we use the same materials/ stock without showing any transfer in sap?

2) is there any legal implication or problem in sap auditing if don't create a new plant & go ahead with the same plant with doing changes in address, some tax data?

You need to show this as stock transfer from old plant to new plant. As it the matter of 2 differnt states,Govt Authorities can look for excise related data. If your plant in both the state or one of the state is covered under ESZ or tax holiday zone from that point of view also it is important. If the import process is there than also -as duty draw back issues/laws will be there. These all things will be already in the preview of your company legal battery.

I donot thing you need to go in that legal expects in so deep. And also it is not a straight cut answer on all legal implication, what I have mentioned is just a few. It has many dependies on state law, current prevailing law, type of goods manufactured, ESZ zones, import , etc, etc.

You plan the migration activities craftly and carefully.

Regards

Rajesh

Former Member
0 Kudos

Hi PK,

Points to be taken care of:

1. Does the new plant is in the same company code? If it is a diff comp code, u need to create new one.

2. You should think from all modules perspective. If tansactional data exists for the plants, what to do with them.

3. Talk to your FI guys and ask whether they want to see the accouts differently for the new plant. This is the key.

4. If you change the name, it is not going to hurt. Your work will be more with sap scripts.

5. If create a new plant, all the transactional data has to be cleaned up and masted data to be extended. But if your company wants to account the plant seperately, then go for a new plant.

6.How should be the stock treated?

Hopefully this wil help you..

Regards,

KSB

Answers (1)

Answers (1)

Former Member
0 Kudos

Dear,

Since you are shifting the plant from one state to another state - I suggest to change name and address accordingly and use the same plant, instead to create new one.

I think (but sure) in India the tax structures are different between state to state and easily can be incorporated in existing plant or not, what are the effects and how to handle. Please perform a simple study with concerned accounting, taxation, management employees in your organization and MM,FI and other consultants if necessary.

In this case there is no question of create new plant and sudden disappear or disable operations of an existing plant.

Regards,

Syed Hussain.