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Objective Of This Blog Is To Highlight The Purchase Process From Economic Zone



Definition of Economic Zone


Economic Zone is the area that is used to promote free flow of goods and services & enjoys simple tax and easier legal formalities. SEZ's are located within country borders, however they are treated as foreign territory from taxation perspective. As per GST rule, any supply of goods or services from/To Special economic zone attracts IGST even supplier or buyer belongs to same or different state


Target Audience


Business Users, Key Users, Consultants



Target Industry


All



Applicable Conditions & Tax Code


Procurement of SEZ (with IGST deductible) involves below tax conditions & Tax Code



JCDB - IN Basic Customs (Maintained in Material pricing procedure A18001-Service/Material)


JSWC - IN: Social Welfare C (Maintained in Material pricing procedure A18001-Service/Material)


JIMD - IN: Import GST deduct (Maintained in Tax pricing procedure 0TXIN – Sales Tax India)


K9 - IGST 18% - Imports - SEZ purchase (Deductible)



Below Roles are used to simulate the example







Business Role




Business Role ID as Delivered by SAP








Product Master Data Specialist




SAP_BR_PRODMASTER_SPECIALIST






Purchaser




SAP_BR_PURCHASER






Master Specialist




SAP_BR_BUPA_MASTER_SPECIALIST






Warehouse Clerk




SAP_BR_WAREHOUSE_CLERK






Accounts Payable Accountant -




SAP_BR_AP_ACCOUNTANT








Step – 1 Create Purchase Order for SEZ Vendor


Role – PURCHASER; Fiori App – Create Purchase Order – Advance


Let’s assume product SP005- Mechanical Seal is supplied by vendor 1004191 Gujarat Traders, Located in Special Economic Zone within Gujarat State & delivery location is at Ahmadabad, Gujarat. As per GST Rule, all the taxation structure will be applicable as of Import procurement i.e. Custom Duty Component & IGST Component (deductible in our example)



In Condition Tab, Ensure Custom Vendor is maintained for the Condition type


JCDB – IN: Basic Custom



JSWC – IN: Social Welfare C




At item level, Click on Invoice then maintain Tax code K9 – GST 18% Deductible




After Entering all the details Save the PO. In our case, PO reference is 4500020683


Step 2 - PO Approval


We are assuming automatic approval of Purchase Order



Step 3- Book Custom Supplier Invoice


Role - AP_ACCOUNTANT


Fiori App – Create Supplier Invoice – Advance


In this step, custom part is paid



Next step is to Enter Assessable value, Basic Custom & Social Welfare Cess manually as shown below




Ensure, selection of Tax code which is maintained in Purchase Order




In above example, Total amount payable to custom vendor is 3906 as per below tax calculation





After validating all the entries, post the custom invoice. Below FI accounting entries are generated after posting it




Step 4 - Delivery of Goods


After custom clearance, next step is receive the goods in plant


Role: WAREHOUSE_CLERK


Fiori App – Post Goods Movement




Step 5 – Book Supplier Invoice – SEZ Vendor


Role - AP_ACCOUNTANT


Fiori App – Create Supplier Invoice – Advance


Last step is post invoice of material vendor which belongs to SEZ




Conclusion – Procurement Process from Suppliers belonging to SEZ is explained



Additional Learning


A) Standard Import Procurement Process (India Localization) in SAP S/4 HANA Cloud


https://blogs.sap.com?p=254


B) Import Process for Free of Cost items (India Localization) in SAP S/4 HANA Cloud


https://blogs.sap.com?p=252


C) SNOTE – 2458404 – GST Import











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