Import Procurement with GST ( Interview Q & A ) in SAP MM

 Concept of Import procurement:-

 

When we procure materials or services from outside the country for India, we have to pay the Custom Duty to the Government. We create purchase order against foreign Vendor with foreign currency. We have create a new pricing procedure & Vendor schema group for the import procurement. Schema group will be assign into the foreign vendor. 

After GST, CVD & AED replaced with IGST.

We also maintain some condition type in the PO conditions like Custom and Countervailing Duty in the Purchase Order.

Tax Code will be zero in the Import Purchase Order. In Import cases, the GR-Based IV should not be checked as we are posting Commercial Invoice before the Goods Receipt.

Import process step by step after GST implementation:-

1- To clear the goods from the customs, custom duties has to be paid for custom clearance.

2-The custom invoice consists of the Basic Custom Duty (BCD), CESS and IGST in the GST regime.

3- To create the customs invoice in MIRO, Basic Customs Duty is derived from the delivery cost line.

4- IGST is computed on the Basic customs duty and the assesseble value.

5- CESS quantity based is calculated on quantity in Custom Invoices.

How to calculate custom Duty?

Custom duty calculation formula:-

Assessable Value = Total PO value and total Po value= Net value * Total qty.

IGST calculation formula:-

IGST calculation= Custom duty+ Assessable value..

While creating Custom duty invoice verification( MIRO) A/C entry:- MIRO

Custom Clearing A/C        Dr.
IGST Receivable A/C        Dr.
Custom Vendor A/C         Cr.

At the Time of Goods receipts A/C entry:- MIGO

     Inventory A/C                Dr.
    Custom Clearing A/C     Cr.
    GR/IR Clearing A/C       Cr.

Invoice verification with Foreign vendor A/C entry:-

     GR/IR Clearing A/C        Dr.
     Vendor A/C                     Cr.

 Note:- At the time invoice verification with foreign vendor GST is not applicable.

Important Point in Import procurement after GST:-

1-                  No more CVD and AED in Import Process after GST.

2-                  Now only Custom Duty, Social Welfare Surcharge in PO Pricing Condition in GST

3-                  No pop-up for Commercial Invoice at the time of Goods Receipt after GST. 

4-                  There is configuration for the pop-up to display at the time of GRN.

Config path:- o                  SPRO - SAP Ref. IMG - Logistics - General - Tax on Goods Movements - India - Basic Settings - Determination of Excise Duty - Maintain Excise Defaults