Subcontracting Process for GST

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Table of Contents
1. With Challan ............................................................................................................. 2
1.1 With Challan Cancellation Process ...................................................................... 3
2. Without Challan............................................................................................................ 4
Disclaimer ........................................................................................................................ 5
You can run Subcontracting process in one of the following ways:
With Challan
Without Challan

1. With Challan
2. Create the subcontracting PO using the transaction ME21N, with item category L
3. Create the material document with 541 movement type using the transaction
MIGO.
4. Execute the transaction J1IGSUB.

5. In the Processing tab, you can either create challan or display existing challans.
6. In the next screen, you can select the material document (541 movement type) and
choose the With Challan button to create the billing document (Proforma invoice).

7. Create the goods receipt for the subcontracting purchase order, using transaction
ME21N.
8. Execute MIRO for the invoice verification for the service charges paid to the
subcontractor.
9. For the reconciliation of challans created, execute the transaction J1IGRECON.
10. There are two options provided for reconciliation:

First In, First Out (FIFO) It will automatically assign the existing challans to the goods
receipt document.
Manual Enter the challan number to reconcile the challan for the material document.

11. Once the data is verified, click Save to update the reconciliation table.

GR Open Quantity Goods receipt open quantity

Challan Quantity Quantity available in challan
Reconciled Quantity Challan quantity reconciled against the Goods receipt quantity
GR Remaining Quantity Remaining quantity of goods receipt after challan reconciliation
Sub. status Status of the subcontracting challan (F- Fully Reconciled, P- Partially
Reconciled)

1.1 With Challan Cancellation Process

If the subcontracting challan is already created for a 541-material document,

then the 541-material document cannot be reversed until the challan is
cancelled first.
If the challan is already reconciled against the subcontracting goods receipt
document (543 movement type), then the challan cannot be cancelled.
2. Without Challan
1. Create the subcontracting PO using the transaction ME21N, with item category L
2. Create the material document with 541 movement type using the transaction
MIGO.
3. Execute the transaction J1IGSUB.

4. In the Processing tab, you can either create challan or display existing challans.
5. In the next screen, you can select the material document (541 movement type) and
choose the Without Challan button to create the billing document.

6. Create the goods receipt for the subcontracting purchase order, using transaction
ME21N.
7. Execute MIRO for the invoice verification for the service charges paid to the
subcontractor.
8. For the consumed materials create Vendor invoice through FB60.

Note: You can create With Challan and Without Challan billing in the same screen. To do
so, select the material document(s) and choose the With Challan and/or the Without Challan
buttons.
Disclaimer
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