Exicse for free of Cost Material

[vivek_srivastava12]

Hello,

I have a question regarding Excise on Free of cost Material. When we are sending material to Customer as a sample or free of cost then we do not pass any accounting entry for the same during VF01.

In the above scenario how do we capture the excise in our system..Please guide me.

Br,Vivek

[Lakshmipathi · Accepted solution]

I am sure, you would be having a separate pricing procedure for this free of cost scenario where the customer will not be debited. In the same pricing procedure, you should also have excise condition types. So after creating the billing document or proforma, you have to generate excise invoice via J1IIN.

G. Lakshmipathi

[vivek_srivastava12 · Accepted solution]

Dear Lakshmipati,

Thanks for the reply.

I dont have separate Pricing Procedure for FOC Sales. If I create new Procedure, then how the entry will be? Please correct me--

1. Billing - No Accounting Entry

2. Excise Invoice J1IIN- Accounting Entry CENVAT Suspense Dr

BED Cr

eCess Cr

HeCess Cr

Br,Vivek

[Former Member · Accepted solution]

Dear taurian,

The entry you specified is perfect.even with out maintaining separate procedure you can do it for existed procedure itself.there will be no issue.

after creating proforma if you refer it for excise invoice those excise conditions will be determined into the excise invoice.

As Mr. laxmipathy suggested it is the best implementation process to have separate pricing procedure for FOC.

Thank you,

[vivek_srivastava12 · Accepted solution]

Dear,

I have confusion.

If at billing there is no Accounting entry then how system will post Accounting at J1IIN because base amount will be ZERO.

Aslo at J1IIN CENVAT Suspense will be debited so how to knock off this entry as well.

Please guide me.

Br,VIvek

[Former Member · Accepted solution]

My Dear,

I have gone through the thread and here you have material sent to customer as Free of Cost. As per excise point of view any product which is moved out from factory where it is eligible for excise duty payment, in this case it should have an assessable value. I am sure even without SAP this process is handled in legacy system of Customer. Hence map this as Price or Assesseble condition. Then you can capture duty values. Here Assesable condition is a statistical condition, there will not be any accouting posting during billing.

Regards

Murali

[vivek_srivastava12 · Accepted solution]

Dear Murli,

Thank you so much for the explanation.

Here is my understanding:

In Pricing Procedure of Sales Base Price & Excise Condition Types will be statistical so at the time of Billing Posting no accounting entry..

but at the time of Creating Excise Invoice system will post below accounting Entry:

CENVAT Suspense Dr

BED Cr

eCess Cr

HeCess Cr

now how CENVAT Suspense will be cleared...

Please advise..

br,Vivek

[Former Member · Accepted solution]

Hi,

Against That excise invoice You should pay the CENVAT amount.after clearing this amount accounts will be updated automatically.This is same as you do Excise invoice with r.f commercial invoice.

Thank you,

[vivek_srivastava12 · Accepted solution]

Hi Ravi,

Request you to please clarify in the Pricing Procedure for FOC, shall I maintain the Excise Condition Type as Statistical?

I am still not clear how the excise amounts will be calculated if Condition Type for base price is statistical in PRicing Procedure.

Can you please help me what will be the pricing procedure.for FOC. If possible can you please help me the entire process along with accounting document flow.

Regards,

Vivek

[Former Member · Accepted solution]

Hi taurian,

This is very simple.

in the Pricing Procedure for FOC, shall I maintain the Excise Condition Type as Statistical?

for this no need to Specify statistical for condition types because after delivery subsequent billing is proforma.because this value should not post to accounts,that's why we create proforma invoice.So even without specifying statistical accounting document will not be generated.

but as per central department of excise we should pay the duty while goods leaving from factory.So that we should post this excise conditions amount to the accounts.

So create subsequent excise invoice then accounting document will be generated.system will calculate the excise condition amounts based on basic price you maintained in V/08,system does not bother whether basic price condition type is statistical or not.

For your understanding:

Configuration:

order type FD,Item category-KLN,Schedule line-CP

Delivery type LF

Billing type F8 (delivery related proforma)

Sales cycle:

Va01>vl01n>vf01>j1iin

Let me know for further clarifications.

Thank you,

[Former Member · Accepted solution]

Dear Vivek,

I was expecting this question from you, For your information, for your information, similar posting will be done for STO movement within the same company code where there is no accounting document. For such scenario there is no direct solution from SD side, but there would be solution to Clear the Open "Cenvat Suspence Account" from Finance side manually.

Please get in touch with Finance guy for this sollution, I belive even SAP would provide similar solution for this kind of scenario.

Thanks in advance

regards

Murali

[vivek_srivastava12]

Solved

[Former Member]

Dear Vivek let us know how it is solved ????????????

[Former Member]

Hi,

As per excise laws when ever your goods moves you have to pay the excise duty.Since you sending the goods as free of Cost to customer and creating the proforma invoice.In your case you have to create the Excise Invoice through J1IIN.

Regards

Rajev

[former_member217082]

Hi Vivek

To capture the excise for free of goods first create GR for free goods then perform J1IH (Additional excise) to take the excise credit.Here Part2 entry will be created via Excise transaction type DIEX finally Settle the excise liability via FB60.

Regards

Srinath