Import Procurement

Purpose: The purpose of the document is to give the overview of Import cycle with India specific functionality to handle the Countervailing duty (CVD) on imports and other customs Duties, which are levied in place of excise duty. nli!e other forms of customs duties, such as "asic customs duty or special customs duty, you can credit CVD paid on imports to your C#$V%T account. Why Import? &achinery 'aw material %vaila"ility 'esale etc...

Basic Steps for Import: (. Choose the Vendor ). $egotiation for price and incoterms *. Terms and condition in +etter of Credit ,. Choose -reight forwarder .. Custome house %gent (C/%) 0. Transporter

Letter Of Credit:
What is letter of credit +etter of Credit is the 1uyer2s 1an!er2s promise to the 1an! of the 3eller 4 #xporter that the "an! will honor the Invoice presented "y the #xporter on due date and ma!e payment. Executing a Letter of Credit % seller only gets paid after performing specific actions that the "uyer and seller agree to.

-or example, the seller may have to deliver merchandise to a shipyard in order to satisfy re5uirements for the letter of credit. 6nce the merchandise is delivered, the seller receives documentation proving that he made delivery. The letter of credit now must "e paid even if something happens to the merchandise. If a crane falls on the merchandise or the ship sin!s, it7s not the seller7s pro"lem. To pay on a letter of credit, "an!s simply review documents proving that a seller performed his re5uired actions. They do not worry a"out the 5uality of goods or other items that may "e important to the "uyer and seller. Pre re uisite: &aterial &aster Vendor &aster CI$ &aster Data o Chapter IDs o &aterial ID and chapter ID com"ination o C#$V%T Determination o Vendor #xcise Details o #xcise Tax 'ates
!endor "aster #$%&'(

Create the Vendor with order currency for example 3D, # '. 3chema group needs to "e given so system will pic! Import pricing procedure.

 CI) "aster *ata

(. Chaper Id

). &aterial and ChapterId com"ination

*. Cenvat Determination

,. Vendor #xcise Detail

Import Procurement Cycle

+lo, chart and Cycle

Import Procurement

Import Process Steps

Create Purchase Order LI! of Custom Capture Excise In-oice .oods receipt Post Excise In-oice LI! of .oods and *eli-ery Cost

 Create Purchase Order

Create 8urchase order with Import document type which is 9 document type as it is not availa"le in 3tandard.

6rder Currency is pic!ed from Vendor master Tax code must "e V: or ;ero tax code. Duties levy on imported materials. o <CD1 = 1asic Custom o <CV( = CVD o <#CV = #cess on CVD o <(CV =3/# Cess on CVD o #cess on Custom o /secc on Custom o <%DC = %dditional Duty

 %part from excise some charges are also included in 86 li!e.. o o o o o -rieght ("y 3ea or %ir) Insurance +anding charges +oading Charges 3tamp Duty Pricing Procedure

/ighlighted condition types are the Delivery cost

/ighlighted condition types are Custom duty and CVD

8urchase order=

Custom *uty and C!*

Condition types of Custom and C!*: <CD1 <CV( <#CV <(CV 9T#3 9T3/ 1asic Custom is calculated on &aterial 8rice > In-entorised CVD is calculated on 1asic 8rice?Custom >.et set off # C#33 is calculated on CVD >.et set off 3/# C#33 is calculated on CVD >.et set off # C#33 is calculated on Total CVD? 1asic Custom >In-entorised 3/# C#33 is calculated on Total CVD? 1asic Custom > In-entorised

<%DC %dditional Duty is calculated on Import Cost? Total Duty > .et set off depends on "aterial %s per the government rule, Custom duty is always in-entorised and ,e can not get set off. @e can get set off on CVD, #cess on CVD, 3hess on CVD and %dditional duty. /o, system get to 0no, that ,hich condition type is moda-ata1le2 -or that @e need to maintain the #xcise default.

38'6 A +ogistics > Beneral A Tax on Boods &ovements A India A 1asic 3ettings A Determination of #xcise Duty A &aintain #xcise Defaults

$ow we have to assign the vendor to the condition type of Custom duty, CVD and additional duty which we are going to pay to the government.

Clic! on Details .

&aintain the Custom office as a vendor as shown in screenshot.

 LI! of Customs #"I3O( -irst we need to do +IV of Customs (/ere you enter all the Import duties as per 1ill of #ntry) and following %4c entry get generated.

Indian Custom Office I$ 1asic customs I$ CVD I$>#cess on CVD>C 3/# Cess on CVD Total #cess C Total 3/# Cess %dditional Duty

Credit De"it De"it De"it De"it De"it De"it De"it

 .oods 3eceipt #"I.O( %t the time of B', system as! for Commercial Invoice $o. $eed to give the &I'6 num"er and year while B'.

3ystem will pic! CVD values from commercial Invoice automatically.

@ithout 'eference of commercial Invoice num"er.

If do .3 ,ithout reference of "I3O4 system ,ill pic0 ,hole excise amount from PO2

5ccounting entry of "I.O

%s shown in screen shot= Custom duty includes "asic custom duty, #cess on Custom and /ecess on Custom. These duties are get loaded on material. Delivery cost includes -rieght ("y 3ea or %ir) will also "e get loaded on material. In this case #xcise invoice is captured at the time of &IB6. 8ost #xcise Invoice <(I#D %ccounting #ntry of #xcise Invoice

 "I3O for .oods Do &I'6 for goods. %ccounting #ntry will "e as follows=

 "I3O of *eli-ery Cost -or example = C/% charges