Capital Goods Excise

After service tax, service tax process, excise duty, and CENVAT registers, next we’ll see what are capital goods excise. Now, under capital goods excise, first, we’ll see what is the sale of capital goods in the year of purchase. Now if the capital goods are sold in the year of purchase, then we have to take the 100% credit in the year of purchase in spite of normal 50% credit in the year of purchase and balance 50% credit in the subsequent year. So here, sale of capital goods means we have to take the credit 100% in the year which we have purchased rather than taking 50% credit in the same year of purchase and rest balanced 50% credit in the subsequent year.

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So this is the sale of capital goods. So here the transaction code is J2I8, that is a report, or you can go via an SAP menu path, which is SAP menu indirect taxes. Under that, we have master data and procurement data. So we’ll go to procurement.

Then under that, we have excise inverse where we can click on the report that is balance credit for capital goods.

So after that, we’ll get a screen where we have to maintain the company code, plant and excise group details.

And then we’ll click on this execute button, and then we’ll get a detailed description of the transfer of credit. So this is the description for the credits.

Here we’ll select the desired capital either on the vendor basis or on the entry number basis, and we’ll click on transfer credit tab. So here we’ll click on this Transfer Credit tab either by selecting the, entries on vendor, or we’ll select the entry based on the number. Then after clicking on this transfer credit tab, the entry number and the accounting entry will be generated, and the full credit will be available. So once we click on this transfer credit tab, we’ll get the entry number and the account entry generated.

So here this is the data entry view where we have the entry number and the account entry generated for the full credit. So here credit on hold is created and the register RG23C excise duty is debited back. That is debited to this particular account. So this is credit on hold is created, and this particular excise duty is debited from the account. So this is how we maintain the sale of excise duties.

Now after maintaining the sale of capital goods, next we’ll see for claiming the balance. That is a 50% balance CENVAT credit on assets in the next accounting year. So first, we have seen that if we have 100% account, that is a 100% sale of goods, then we’ll have the credit of 100% rather than having 50% as balance and 50% in the current year. Now here, we’ll see how to claim the balance which has remained 50% on the next accounting year. So here, we’ll follow the same process as we have followed under the sale of capital goods. Here, we’ll select all the entries for the previous accounting year and on the 1st day of the succeeding year, and then we’ll transfer the credit. Here, we’ll follow the same process, which we have done on the sale of capital goods.

Next, we’ll see what is register ER1. For that, we have to use a transaction code called J2IER1. So this is the screen which we’ll get when we execute this transaction code.

Here, we’ll have to provide the excise group, the plan details, then the utilization period details. After that, we’ll have to maintain the service tax account details. So here we’ll mention the GL code of service tax credit. Then we have to maintain the radio buttons. So here we’ll select the radio button as details of manufacturer clearance and duty payable. So we’ll select the details one by one to get the output. So for after maintaining these details, we’ll click on this program that is J_1IER1, or we click on the transaction code J2ier1. So after clicking on this execute button, we’ll get the output for this particular report. Now let us see what is the output format for this ER1 registers. So this is the output format for the ER1 register.

It will give the details for the reports which we have created by selecting the radio buttons. So here we have the central excise non tariff details. Then here it is showing the title as CBEC notifies new ER1 and new ER3 forms. So these are the detailed descriptions for the forms based on those details.

So here, it is showing the details of the manufacturer, clearer, and duty payable. That’s the third part of that selected radio button. Then fourth is clearance details for inter unit transfer of intermediate goods without payment of duty under sub rule of rule 12BB. Then next is the fifth point. Then sixth is details of duty paid on the excisable goods.

Then, likewise, we have self assessment memorandum.

So this has how we get the output when we select the ER1 register. Now after viewing the output for the ER1 registers, next we’ll see sales tax.

Now after service tax, we have something called as sales tax. Now under sales tax, we have form tracking. What is the use of this sales tax? Here, the first use is you can use this function to record and monitor forms related to tax concessions. You can record the forms that the customer sends to you against their sales orders and those that you send to your vendors against your purchase orders. So this form tracking on the sales tags helps us to record the details of the customers that send us against the sales order and those we send to the vendors against the purchase orders. Now next function is we can also use these functions for monitoring our routine activities. Like, for example, when you transfer money to your personal ledger account using a Tr6 challan. So this form tracking is useful to keep the records of the forms, which has our routine activities, that is day to day activities. Now under form tracking, we have seen what is the use of form tracking. Now let us see some features of the form tracking. First feature is forms for concessional sales tax must be submitted by the buyer after the goods have been delivered or after it has paid the invoice. So in case of interstate concessional sales tax, rate sales, the concessional rate is granted against the issue of this C-forms. So this is the first feature based on this concessional sales tax. 2nd feature is exemption from excise duty may be granted by the excise authorities under certain circumstances. So, for example, on reports, that’s on exports or deemed exports. In such cases, the buyer has to produce certain statutory forms to claim concessional rates of excise duty or exemption. The exporter has to provide the vendor with proof of exports. So here under form tracking, we can have the exemption from excise duty, which are paid by the vendors. Then if the buyer is unable to furnish the certificate at the appropriate time, material supply should be at the normal rate of sales tax or excise duty. So these are some features on form tracking that is sales tax.

Now last is the activity that is how to do the sales tax on a finance module. So here we go via an SAP menu path for tracking these functions. We’ll go to indirect taxes, then we’ll click on form tracking. There we have the options of change, create, and display. So from there, we can maintain the form tracking for that particular excise invoice.

So these are the sales tax details where we have seen the use of this form tracking, the features of form tracking, and the path by an SAP menu where we can create change and display.