Excise duty process for Inventory transfers

This functionality is specific for India.

To implement inventory transfer, do the following:

  1. Use bilateral invoicing method.
  2. Set up goods transfer relationships between the entities involved in the Enterprise Modeling Management module.
  3. Define internal business partner entities in the Business Partners (tccom4100s000) session.
  4. Maintain the relationship details of warehouses in the Entity - Entity Relationships (tcemm2110m000) session.
  5. Check if excise duty is applicable on goods before printing the excise invoice. You can print the excise invoice in Invoicing, if you select Excise Applicable check box in the Outbound Order Lines (whinh2120m000) session.
Note

According to Excise duty laws, excise duty is not applicable when goods are transferred between two warehouses with same ECC code. The Excise duty for the Goods pass out document must be Zero or Not Applicable.

To handle CENVAT credit in inventory transfers:

  1. For Normal order
    • When the goods are transferred and if the excise duty is payable, follow the standard incoming procedure defined for incoming goods. For details, refer to Excise duty process in Normal Purchases. For financial postings, refer to Financial postings for Warehouse transfers.
    • If the excise duty is not applicable, the value of excise duty must be Zero or Not Applicable. In the Tax Codes by Country (tcmcs0136s000) session, select the Tax Code for No Tax check box. The same tax code must be linked in the Outbound Order Lines (whinh2120m000) session. Release the order for invoicing, and print the invoice document in Invoicing. The CENVAT credit is not applicable.
  2. For Capital goods
    • When the capital goods are transferred and the goods are not used, the CENVAT credit amounts must be reversed.
    • When capital goods are transferred and the goods are used, the CENVAT credit amounts must not be reversed. However, tax is recalculated. For details, refer to, Excise duty process for AS SUCH Sale of Capital goods.
  3. For Non-Capital goods
    When the non-capital goods are transferred and the goods are not used, the CENVAT credit amounts must be reversed. In case the goods are used, CENVAT credit must not be reversed. For details refer to, Excise duty process for AS SUCH sale of Non-Capital goods.

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