CIN Overview

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Prepared by :Nikhil Narayan Muley
 CIN Overview
Agenda

 What is Country Version in SAP ?

 What is CIN ?

 Understand the features of CIN

 Understand CIN terminologies

 Explore different statutory registers

Prepared by :Nikhil Narayan Muley

What do we mean by Country Version in SAP ?

Country Version is a version of a Software which is designed to allow you to

run your business operations in a particular country.

Each country version consists of generic SAP R/3 functions, country-specific

functions & a country template.

SAP offers around forty standard country versions.

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What is CIN in SAP ?

CIN is the country version in SAP for INDIA.

Most of the country-specific version for India relate to Finance & Logistics.
The main areas are :-

 Excise duty & Central Value Added Tax (CENVAT)

 Withholding Tax (also known as tax deducted on source)
 Sales Tax
 VAT (Value Added Tax)
 Maintenance & printing of statutory excise registers

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What is Excise Duty ?
A tax, in India, on the manufacture of goods, payable by manufacturers when
goods leaves their premises.

Different types of Excise Duties

There are mainly following types of Excise Duties collected in India

• Basic Excise Duty (BED)

• Special Excise Duty (SED)

• Additional Excise Duty (AED)

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Basic Excise Duty (BED)
This is the duty charged under section 3 of the Central Excises and Salt Act,1944
on all excisable goods other than salt which are produced or manufactured in India
at the rates set forth in the schedule to the Central Excise tariff Act,1985
Special Excise Duty (SED)
A form of excise duty in India on a limited number of Products, mostly luxury goods.

Additional Excise Duty (AED)

A form of excise duty in India , levied on a select range of products, mostly textiles.

Cess
Cess is a form of tax on manufacture of certain products.
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What is CENVAT ?
Just think over a product which is reached to a end user, how many manufacturing
activities are done. So to reduce the tax burden of the end user, the Govt. of India
introduce the MODVAT scheme which is now called CENVAT scheme.

Based on this, if any manufacturer purchased a material, which is duty paid, and if it
is used for his further manufacturing activity, he can avail this as credit in his book
based on the Central Excise Invoice. At the time of selling his manufactured goods,
he is liable to pay the excise duty. He can adjust the credit which he has taken into
his book and pay the rest. For example:

CENVAT availed at the time goods purchased Rs.20,000 (Only Excise duty)
CENVAT payable for his product at the time sales Rs.25,000

He will pay only Rs.5000 through cash deposit in PLA.

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What is Withholding Tax ?

Withholding tax is an amount withheld by the party making payment to another

(payee) and paid to the taxation authorities. The amount the payer deducts may vary,
depending on the nature of the product or service being paid for. The payee is
assessed on the gross amount, and the tax to be withheld (the withholding tax) is
computed in that assessment.

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What is Sales Tax ?

A sales tax is a tax charged at the point of purchase for certain goods and
services. The tax is usually set as a percentage by the government charging the tax.

The tax can be included in the price (tax-inclusive) or added at the point of
sale (tax-exclusive).

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What is VAT ?
Value added tax (VAT) is tax on exchanges. It is levied on the added value that
results from each exchange.

It differs from a sales tax because a sales tax is levied on the total value of the
exchange

VAT is levied on every business as a fraction of the price of each taxable sale they
make, but they are in turn reimbursed VAT on their purchases, so the VAT is applied
to the value added to the goods at each stage of production.

Sales taxes are normally only charged on final sales to consumers.

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What is an Excise Invoice & there Types ?
A business document, in India, that should accompany the excisable goods.
It lists the goods and states how much excise duty applies on them.

There are two different types of excise invoices

 Incoming Excise Invoices

When we purchase from a vendor.

 Outgoing Excise Invoices

When we make a sale to our customer.

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What are the different Statutory Excise Registers ?
 RG1

 RG 23 A Part I & II

 RG 23 C Part I & II

 RG23 D

 RT12

 PLA (Personal Ledger Account)

 TR6 Challan

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What is RG1 Register ?

A register of excisable finished goods kept by manufacturing plants. The register

shows goods movements from the factory to a store specifically for excisable
finished goods.

This register is also known as Daily Stock Register.

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What is RG23 A – I & II Registers ?

A record of receipts and issues of excisable input materials, as kept by manufacturing

plants.

The register consists of two parts:

Part I shows the quantities of the materials.

Part II shows the amounts of excise duty on the materials, and how much you have
transferred to the CENVAT accounts.

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What is RG23C – I & II Registers ?

A record of receipts and issues of excisable capital materials, as kept by manufacturing

plants.

The register consists of two parts:

Part I shows the quantities of the materials.

Part II shows the amounts of excise duty on the materials, and how much you have
transferred to the CENVAT accounts.

However, unlike with raw materials, you can only set off half of the duty in the first year,
and the rest in any year after that.

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Whenever you – as a manufacturing plant – post an incoming excise invoice, or
create an outgoing excise invoice, the system automatically creates an entry in
Part II of the appropriate register (RG 23A or RG 23C).

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What is RG23 D Register ?
A record of receipts and issues of excisable materials, as kept by depots.

In procurement, when the warehouseman posts a goods receipt, the system

creates a register entry.

In sales, when a sales clerk creates a sales order, he has to specify which excise
invoices were delivered with the goods that are being sold.

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What is PLA ?
Personal Ledger Account, is the bank account from which you transfer any money
owing to the excise authorities.

What is RT12 Register ?

This is a monthly report that summarizes the CENVAT and PLA information from the
other registers.

What is TR6 Challan ?

This is a procedure to make an adjustment posting when you transfer money to your
personal ledger account (PLA).

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Materials Types in SAP for register Determination

Register type is determined from a Master which can be access using J1ID T-code

RG1 – Goes into RG1 Register

Raw Materials – Goes into RG23 A – I & II

Assets, Tools, Consumables – Goes into RG23 C – I & II

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 Interaction of CIN with other SAP Modules

CIN

FI MM SD

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Activities in Materials Management (MM)

In Customizing and master data, the Excise Manager is authorized to:

 Work with the CIN Implementation Guide (IMG)

 Use the health check tool
 Define number ranges for excise invoices
 Maintain excise master data

In your day-to-day operations, this role allows you to:

 Capture, change, display, post, and cancel incoming excise invoices

 Capture excise invoices at depots
 Complete subcontracting challans and perform quantity reconciliation
 Post excise invoice journal vouchers
 Track forms
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Activities in Financial Accounting (FI)

The Excise Manager can:

 Create the excise registers

 Transfer outstanding CENVAT credit on capital goods to the appropriate CENVAT
accounts

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Activities in Sales and Distribution (SD)
In Customizing and master data, the Excise Manager is authorized to:
 Work with the CIN Implementation Guide (IMG)
 Use the health check tool
 Maintain excise master data
 Make retrospective price amendments
In your day-to-day operations, this role allows you to:
 Create and verify outgoing excise invoices for other movements
 Create excise invoices in batches
 Post excise journal vouchers
 Print excise invoices
 Track forms
In reporting, this role also allows you to:
 Remit excise duty using the fortnightly utilization program
 Print 57AE returns
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Thank You

Prepared by :Nikhil Narayan Muley