India localization Interview Questions
Purchase Orders
1. How do I view India
localization Taxes included in a PO that I would like to approve from
Notification summary screen?
Notifications are
generated by Workflow engine and India Localization taxes do not appear in
notification summary screen.
In order to view the
Purchase Order with the Tax Amount run ‘India PO Printing report’ for the
Order.
2. How do I use
Supplier Merge effectively with localization?
a. Setup ‘Supplier
Additional Information’ screen for the new Supplier before running Supplier
merge report.
b. After completing
the setup Run Supplier Merge
If you do not do the
above, Supplier Merge Report ends with an Error.
3. Which Localization
tables are updated in the course of Purchase transaction created with
Localization Taxes?
When PO is created
with taxes attached, records are populated into
a.
Jai_po_line_locations for Shipment level details and
b. Jai_po_taxes for
tax related entries.
These tables will be
updated on Insert, Update and Delete
On creating the
receipt from Receipt Localized screen following tables are populated
a. Jai_rcv_lines for
line level details and
b. Jai_Rcv_Line_Taxes
for tax related entries.
When the Receipt
localized form is closed “For Passing Accounting Entries “ concurrent request
is submitted. This would
a. Generate Accounting
Entries by populating into Gl_Interface and
b. Populate
JAI_RCV_JOURNAL_ENTRIES for Receipt Accounting entries.
If excise types of
taxes are attached then JAI_CMN_RG_23AC_I_TRXS and JAI_CMN_RG_23AC_II_TRXS will
get populated depending upon the item classification.
On Delivery to a
Bonded Sub inventory Non cenvatable Taxes would be added to the item cost. This
will insert records into
a.
JAI_RCV_JOURNAL_ENTRIES for delivery entries and
b.
Mtl_Material_Transactions_Temp for average cost update. The Tax amount will be
populated into Value_Change field.
Inventory transfer
worker fires and pushes the record from Mtl_Material_Transactions_Temp to
mtl_material_transactions table.
When Average cost
update worker fires for costing Mtl_Transaction_Accounts and
mtl_cst_txn_cost_details tables will be populated.
4. What do we do when
Taxes have not defaulted on PO created against the Quotation?
While Converting the
Quotation to Purchase Order using Copy Document, taxes will not flow until you
run "Concurrent request for defaulting taxes in PO when linked with
quotation".
You can submit this
request by navigating through
India Local Purchasing
Reports Run.
This Program can be
scheduled, if required.
5. How do taxes
default on a Purchase Orders?
India Localization Tax
Configuration follows 3-way defaulting methodology for Tax Defaulting. This
feature automates defaulting of Taxes that would be applicable to the
Transactions, Below are the actual setups required to default the taxes:
1. First two levels of
tax defaulting are based on the Item Category list, where, for every Item in
the list, a Tax Category is associated.
a. First level
considers the Item Category list attached to the Supplier and Site.
b. In the absence of
Item Category list for Supplier and Site combination, the Item Category for the
null Site of the Supplier is considered.
2. If neither of the
above returns any Tax Category, the same is fetched based on the Item Class
assigned to the Item. Tax Category and Item Class relationship should be set in
the Tax Category window.
In all the cases,
after arriving at the Tax Category, the taxes defined thereof are defaulted.
The user can make changes to the taxes that have been defaulted.
Where all levels of
defaulting fail, the user would have an option to assign Taxes to the Shipment
lines manually.
6. Can we change taxes
on an Approved PO?
Taxes can be modified
only before approving the Purchase Order. If you need to change the taxes on
approval of the Purchase Order then, create a Purchase Order Revision by
modifying the PO lines. Change Taxes on this modified PO.
7. What is the impact
on taxes on changing quantity on a PO Release?
Whenever you change
quantity on Releases (through the Base Application screen), you need to
navigate to Releases (Localized) screen, open Tax Details by Clicking on the
Taxes Button. Click the Apply button in Tax details screen to enable
recalculation of taxes based on the revised Quantity.
Purchase Orders - Errors
8. How to avoid the
Error: ‘Currency conversion rate not defined in the system’ when the PO was
amended?
This error occurs when
PO is created or updated.
This will happen only
when Inventory Organization is not attached to the Ship To Location
To resolve this:
Attach the Inventory
Organization to Ship To Location by navigating through
India local Inventory
- Setup - Organization - Location.
Quotations
9. How is Per landed
cost calculated for a quote that includes localization taxes?
Per landed cost = Unit
Price + [Sum (non cenvatable taxes ) / qty ]
You can view Per
Landed Cost through Quote Analysis (localized) screen by navigating through
India Local Purchasing
RFQ and Quotations Quote Analysis (localized)
10. How do we make the
Supplier available in the Supplier LOV on a Quotation?
Please set 'HOLD_FLAG'
attribute of the supplier to 'N' in Supplier screen.
Navigation - India
Local Purchasing - Supply base - Supplier.
Can we create multiple regimes for service tax? Can we have the same
registration value for n number of organisations?
No we can not create multiple regimes for service tax. Yes we can have same
registration numbers for multiple inventory organisations.
Whether tax is created against inventory org or operating unit
Tax is created against operating units. But against inventory
organisations only we can enter the form
as transactions happen at inventory organisation level.
for finished goods what register report is used
RG-1 register is used for finished goods
Where the MODVAT Flag & the recoverable Flag are available? What
will happen if both Flags are disabled and write their localized accounting
entries?
MODVAT Flag available at PO level & recoverable Flag available at the
receipts level. If both the Flags are disabled, claim can
not be made.
Localised accounting entry if claimed:
Excise
Duty
Dr.
Cess
Dr.
SHE
Cess
Dr.
VAT Interim recovery a/c. Dr.
To Inv AP accrual a/c. Cr.
If not claimed:
Material
A/c.
Dr.
To Inv. AP Accrual a/c. Cr.
What are the basic registers we use for excise?
RG-23A part-I & II, RG23C part I & II, RG-1, PLA
Can we see the register while creating the receipt
Yes we can see. Tools → View Register
Can we see the localised accounting entry in PO receipt before
importing?
No we can not see the localised accounting entry in PO before importing. It is
seen only after importing
A client issue is that he has made a receipt with excise & VAT and
forgotten to claim them. What will be the solution to claim both excise &
VAT?
He can claim excise by going thru “Claim MODVAT on Receipt” form. VAT claim
entry form is available for claiming VAT. (N:
India TCS/VAT/Service Tax/FBT–> Transaction –>
VAT Tax Claim.
Why I’m not able to see anything in the VAT claim form?
There may be the following reasons for that:
i. MODVAT & recoverable Flag are not enabled
ii. Supplier additional information not given with site
iii. In item classification, we have given finished goods instead of raw
material
iv. In regime registration we have not defined inventory organisation
v. Tax type we selected VAT instead of Value Added Tax
In TB the balance for ST interim recovery account & VAT interim
recovery account is available. How to reconcile and what steps to be made?
The following are the reconciliation steps:
For
service tax:
1. Payment should be checked. If not, make the payment & run the concurrent
“India – Service Tax Processing”.
2. Check manual JVs
3. Check the invoices whether accounted or not
4. Check & post JVs
5. Check with PO-PO receipt
6. In GL import, “Service Tax India”
For
VAT:
1. Check the manual JVs
2. In GL, import, “VAT India”
3. Check for VAT claimed in PO receipt stage
4. If claimed then import
5. Check the receipt entries are posted
Can we select the excise & VAT taxes in payable invoice?
We can select VAT but not excise.
Do we have localization payable invoice?
No.
Can we make partial claim for VAT & excise, how?
Yes we can make partial claim. Partial claim can be made through “VAT – Claim
Terms
Definition form” (India TCS/VAT/Service Tax/FBT → Setup → VAT – Claim
Terms
Definition)
What is the setup determining the
GL date for TDS certificate generation? How to create the TDS section code?
What will be prefix for the automated TDS invoice?
From TDS year info, we get the GL date.
Creation of TDS Section Code: In India Localisation, Asia Pacific Lookup: The
name of the lookup is JAI_TDS_SECTION
Prefix will be the Standard Invoice Number
What will be the accounting entry for the TDS invoices? What will be the
payment accounting entries for the TDS invoices?
At the time of invoice generation:
a. Standard Invoice for supplier:
Expense a/c. Dr.
To Sundry Creditor Cr.
b. Credit Memo for supplier:
Supplier a/c. Dr.
To TDS Payable a/c. Cr.
c. Standard invoice for tax authority:
TDS Payable a/c. Dr.
To Tax authority Cr.
At the time of making payment:
a. Payment to supplier:
Sundry Creditor a/c. Dr.
TDS Payable a/c. Dr.
To Bank a/c. Cr.
b. Payment to tax authority:
Tax Authority a/c. Dr.
To Bank a/c. Cr.
For the tax authority invoice
from where the tax authority name & the TDS account is taken?
From tax form itself we get tax account information and tax authority
information.
Why the credit percentage is not given for TDS tax? What is the
difference between single & cumulative threshold type?
TDS is not recoverable tax. Hence we don’t give credit percentage.
Threshold types:
Single: applicable to a single transaction.
Cumulative: In this case TDS is applicable only when
the cumulative purchases made from the supplier in one financial year exceeds
the specified limit.
What are the concurrent used to generate the TDS certificate?
The concurrents are:
1. India – Process TDS Payment
2. India – Generate TDS Certificate
3. India – TDS Certificate
The claim VAT button in the PO receipt is greyed out. What is the
solution to enable this?
You would have selected VAT instead of Value Added Tax in the tax type
creation.
Is Excise invoice generation mandatory in India Localisation?
Yes, it is mandatory
For VAT, is document sequencing
mandatory?
Yes, it is mandatory
When the shipment of FG over, does it affect PLA Register or RG23A
register?
It will search in RG23A register first. In organisation additional information
we give 1, 2, 3 sequence so that it looks into the sequence which we
mentioned.
What is the difference between CENVAT Flag and Excise Flag while
defining item?
CENVAT Flag is for PO while Excise Flag is for Sales.
For a shipment the excise invoice number is not generated. What could be
the reason for this?
The following could be the reasons
1. Customer additional information (check for without site & with site)
2. We have not defined order types where we define the excise invoice number
generation
3. Bond register
4. Bonded sub-inventory
5. Organisation additional information
What is Regime Registration? Why we are not able to select Inventory
Organisation in Regime Registration?
It used to define rules applicable to all taxes assigned to it. We need to
complete this setup
before we move ahead with other setups.
It is because we don’t have inventory org additional information
What is Bond Register?
The calculation of ED & updates of excise registers are based on the setup
made in the define bond register. Before making
this setup, you need to define the order types &
transaction sources. Excise
transactions are classified into the following categories:
1. Domestic with Excise
2. Domestic without excise
3. Export with Excise
4. Bond Register (Export under bond)
Why to create Excise invoice number and document Sequence? What are the
concurrents involved and to run the same fo a shipment what details are you
giving?
We can not claim excise & VAT in their absence.
For excise, “India – Excise Invoice Generation” & we give delivery number
for generation
for VAT, “India – VAT Invoice Generation / Accounting” & we give
registration value
How to insert taxes in AP and AR
invoice?
We run the following concurrents:
for AP: “India to insert tax for pay on receipt”
for AR: “Local concurrent for processing order lines to AR”
What is Bonded Sub-inventory and what is the use of it?
Excise related transactions & records will be updated only for those
subinventories which are identified as bonded for
manufacturing organisations. For example, if we have not
defined bonded sub-inventory, claim can not be made
and the excise & VAT recoverable will
go into the material cost. As a
result, the cost of material will rise.
What is RG Consolidation?
We perform RG consolidation (excise) to make sure that our balances available
in RG registers are
adjusted against PLA register & to find out the liability to be paid to the
tax authority of excise.
What are the sources we use to import Excise, Service Tax and VAT into
GL?
For excise: Purchasing India
for VAT: VAT India
for ST: Service tax India
During the PO Return will the taxes be reversed? If yes what are the
reversal accounting entries?
Yes, the taxes will be reversed.
Where to see the receipt accounting entry and delivery accounting entry?
Receipt accounting entry is viewed in the Receiving Transaction Summery (after
the receipt and the delivery).
N: Oracle Purchasing → Receiving →
Receiving Transaction Summary
Delivery Accounting Entry is viewed in Material Transaction.
N: Oracle Inv → Transaction → Material
Transaction
Can we have the same invoice number for excise and VAT & how?
Yes we can have the same invoice number for excise & VAT
How do you differentiate between your manufacturing org and trading org?
When you go to the org additional information, the accounting information will
be grayed out for trading org while the trading
information will be grayed out for manufacturing org.
What is BOE invoice?
During customs accounting process, BOE invoice is the one through which we make
payment to the customs authority.
What are the setups for TCS?
Tax
Tax Category
Item Catagory
Item classification
Transaction type
Transaction source
Receipt class
Regime registration
Tax calendar
Tax authority & Tax authority additional information
Customer & Customer additional information
What is the difference between Accrual Basis and Cash Basis?
The accrual accounting method recognises the revenue when it is earned &
expenses when they are
incurred. While cash basis accounting recognises revenue & expense
when cash is actually spent or received.
How to create tax code for VAT?
Through Asia pacific lookup, the look-up name is JAI_TAX_TYPE
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