CIN domain process ..??

Question

Hi experts
Can anybody explaine in detail about CIN process (End to End in legacy system)
In domain, without SAP how CIN process being processed..???
expalined me in 4 point of view.
1.Procurement exciseable material -
2.Production exciseable material
3.Selling with Excisable material
4.Accounting of procurement,production and selling exciseable materials
Jus explain me in short, example assume ABCD raw material, 1234 is Finished material , both materials are excieasble . one full cycle of Excise duty scenario.??
Thanks
SAP-MM

Answer 1

Hi,
When you purchase you should get excise invoice from your vendor. You use this material for production and then finished goods are  produced. Now when you sell this finished goods you will be again charged excise on sales value of the goods you maufactured. As a result of this you will be charged excise at the time you sell which includes input cost which again consists of excise on purchase. Thus to avoid tax on tax you can get credit of the same. I will give an example.
You Bought Material A for Rs. 115.
             Basic Price            Rs. 100
          + Excise @ 15%      Rs.   15
                                           Rs. 115
You Sold Material B Which Is Manufactured Out Of Material A
Now after that you used labour and its form changes. Means identity of raw material changed and it is recongnised in market as different commodity Say Material B. Then when you sell you will need to charge excise on sales value. I will give example.
         Basic Price Material B      Rs. 200
      + Excise @ 15%                 Rs.   30
                                                 Rs. 230
So now when you will need to pay excise department you will not need to pay Rs. 30/- as your are entitled to credit of Rs. 15 which is the excise paid by you when you purchased material A. Thus you take input credit (ie credit of excise paid at the time of purchase). Thus you will pay to excise department only Rs. 15 ( Rs. 30 excise on sale - Rs. 15 excise on purchases).
For accounting of material and input excise credit etc excise department has its own format which are incorporated by SAP in CIN. As mentioned by other like RG 23 A etc.SAP has incorporated these format in CIN.  In SAP when you post MIRO transaction at time of purchase or create billing at the time of sale, excise document will be geneated by SAP which will give effect to all the excise related registers and accounting entries.
I hope this will clear your doubt about the procedure. Please let me know about your satisfaction on the information.
Edited by: DHANANJAY S NAPHADE on Dec 30, 2009 1:26 PM
Edited by: DHANANJAY S NAPHADE on Dec 30, 2009 1:32 PM