Hi,
In Indian subcontracting process when you issue materials to a subcontractor, you need to keep track of what materials you have issued and when they have to be returned by subcontractor. The reason for this close monitoring has to do with Indian tax law(Under excise law 57AC), when you send materials to a subcontractor for processing, you are not required to pay any excise duty, even though the materials have left your premises. However, if the materials have not been returned to you within 180 days specified by the law, you will have to reverse any excise credit that you posted when you have purchased the materials. When you send material out of your factory premises you need to send with 57F4 Challan.
Process Steps:
u2022 Creation of Sub Con PO -ME21N
u2022 Issue of components to sub con vendor-MB1B
u2022 Creation Sub-Con challan with respect to the above Material Document-J1IF01
u2022 GR for the Finished goods from Job Worker-MIGO
Printing of subcon challan-J1if11
u2022 Reconciliation of Sub con challan -J1IFQ
u2022 Completion(Closing) of Sub-Con challan u2013J1IF13
u2022 Report of Annexure IV-J1IFR
If the material didn't recv within 180 days then the subcon challan has to reversed using J1if13 t-code(have to reverse eqivalent part 2 entries that was taken as a excise credit in J1iex). However the above entry can be taken back as recredit in the same t-code if you expect the goods to recd after 180 days.
The assesable value that has to printed in the subcon challan has to be maintained in J1iD.
regards,
S.S.Kumar.
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