Subcontracting process

1]
http://scn.sap.com/thread/3380899
There is no accounting document posted for the components when you are posting 541 movement. The components
/ raw material will be consumed only once you post the 101 document for the FG / SFG. During 101, the accounting
document also will be posted.

When Full excise duty is paid
You need to maintain the Assessable Value for the Components to be supplied to Vendor in J1ID and also Excise
Tax rates for the Chapter ID's linked with these components. So during J1IF01, system will take the Assessable
Value as Excise base Value and calculates the Excise Duties by taking Excise Tax Rates, Below will be the Cycle &
Accounting entries,

Subcontracting under Full Payment of Duty
- Creation of Subcontracting PO (ME21N)
- Transfer Posting of Components to Subcontractor (MB1B/ME2O/MIGO) movement type :541
- Creation of Outgoing Excise Invoice w.r.t. Transfer Posting Document (J1IS) - Used to send the components to
Subcontractor's. Here 57F4 Challan is not created.

Accounting Entry: -
CENVAT Input BED - Cr
CENVAT Input ECS - Cr
CENVAT Input ECS - Cr
CENVAT Suspense A/c - Dr
Capture Vendor Excise Invoice at the time of GR of Finished Goods w.r.t. Subcontracting PO (MIGO) - 101
Post Excise Invoice for FG received from Subcontractor (J1IEX)
Accounting Entry: -
CENVAT Input BED - Dr
CENVAT Input ECS - Dr
CENVAT Input ECS - Dr
CENVAT Clearing A/c - Cr

2] When No excise duty is paid

No Accounting entry for Excise






3] Standard Scenerios for Subcontracting

There are 4 scnario in subconracting.
1) When we know that material will not return in 180 days
2) when we know that material will return in 180 days
3) when we dont know that material will return or not in 180 days at the time of sending of material and later come to
know that material is returned in 180 days
4) when we dont know that material will return or not in 180 days at the time of sending matieral and later come to
know that matieral is not returned in 180 days..

4] Transaction key maintained for subcontracting

Then why there are 4 transaction key is created in SAP if excise entreis are generated only 2 times
57CM 57F CHALLAN COMPLETION
57FC 57F CHALLAN CAPTURE/CHANGE
57GR GOODS RECEIPT FOR 57F4
57NR 57F NON RECEIPT
5] CIN Accounting entries for FI/ MM & SD

For Domestic Procurement of Raw Material

During GR
Material Stock Dr.
GR/IR clearing Cr.

During Excise Invoice Credit
Cenvat Account Dr.
Cenvat Clearing Cr.

During Invoice Verification
Cenvat Clearing Dr.
GR/IR Clearing Dr.
Vendor Payable Cr.

For Domestic procurement of Capital Goods

During GR
Material Stock Dr.
GR/IR clearing Cr.
During Excise Invoice Credit
Cenvat Account Dr. (50%)
Cenvat On-hold Dr. (50%)
Cenvat Clearing Cr.
During Invoice Verification
Cenvat Clearing Dr.
GR/IR Clearing Dr.
Vendor Payable Cr
Subsequent of Capital Goods
Cenvat Account Dr. (50%)
Cenvat On-hold Cr. (50%)

For Import Procurement of Raw Material

During Customs Duty Clearing invoice
Custom Clearing Dr.
Custom Payable Cr.
During GR
Material Stock Dr.
GR/IR clearing Cr.
During Excise Invoice Credit
Cenvat Account Dr.
Custom Clearing Cr.
During Invoice Verification
GR/IR Clearing Dr.
Vendor Payable Cr.



For Excise Duty Credit of Raw Material without PO

Cenvat Account Dr.
Cenvat Clearing Cr.


For Excise Duty Reversal through Excise JV

Cenvat Clearing Dr.
Cenvat Account Cr.

o What should be my accounting entry when the goods are issued through MM and excise invoice
is created (J1IS & J1IV)?
During Excise Invoice Creation
Cenvat Suspense Account Dr.
Cenvat payable Cr.

For TR6C Challan
PLA Account Dr.
PLA on hold Account Cr.

During Fortnightly Utilization
Cenvat payable Dr.
Cenvat Account Cr.
PLA Account Cr.

Note: Cenvat Suspense Account should be cleared appropriately using FI JV's.


o What should be my accounting entry in subcontracting reversal / Recredit?
For Subcontracting Challan Reversal
Cenvat Reversal Dr.
Cenvat Account Cr.

For Subcontracting Challan Recredit
Cenvat Account Dr.
Cenvat Reversal Cr.

o What should be my accounting entry in SD ?
o
For Factory Sale

During Billing Document
Customer Account Dr.
Sales Account Cr.
Cenvat Suspense Account Cr.

During Excise Invoice Creation
Cenvat Suspense Account Dr.
Cenvat payable Cr.

For TR6C Challan
PLA Account Dr.
PLA on hold Account Cr.

During Fortnightly Utilization
Cenvat payable Dr.
Cenvat Account Cr.
PLA Account Cr.

For Stock Transfer through SD

No Accounting entries for Performa Billing Document

During Excise Invoice Creation
Cenvat Suspense Account Dr.
Cenvat payable Cr.

For TR6C Challan
PLA Account Dr.
PLA on hold Account Cr.

During Fortnightly Utilization
Cenvat payable Dr.
Cenvat Account Cr.
PLA Account Cr.

Note: Cenvat Suspense Account should be cleared appropriately using FI JV's.

6] http://scn.sap.com/thread/3197013 - Important

http://scn.sap.com/thread/1022927 - important - cenvat suspense a/c

http://www.sapfunctional.com/FI/ST/Page2.htm - Imp - service tax & RCM

http://www.sapfunctional.com/FI/ST/Page3.htm