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Oracle Financials for India Implementation Guide
Release 12.1
Part Number E13657-05
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Additional Frequently Asked Questions

Additional Frequently Asked Questions

How to Transfer VAT Amount Across Two Inventory Organization?

The Amount of VAT can be transferred by using the Manual VAT Entry Form.

Navigation -> India Local Payables->India TCS /VAT/Service Tax -> Transactions -> Manual Entry.

Amount of VAT can be transferred by passing two Manual Entries one in each Inventory Organization. 1. Transaction type to be used in one Inventory Org should be 'Liability ' 2. Transaction type to be used in another Inventory Org should be 'Recovery'.

How to edit the TDS Vendor Type Information on Vendor Additional Information Setup?

The TDS Threshold Set ups are defined for a combination of Section Code and Vendor Type.

The TDS Vendor type assigned to a Vendor determines the Threshold Set up under which the TDS needs to be deducted for the Vendor.

So once a TDS Vendor type is attached the same cannot be modified as this would lead to data corruption.

India Localization TDS Invoice got generated even after removing TDS Tax ID from Invoice Distribution Descriptive Flexfield.

If the 'Default Section Code' and /or 'Tax Name' is attached at the Vendor Additional Information Set Up, the TDS Invoices will get generated based on the Threshold setups applicable to the Vendor. System checks for the Threshold amount of the Vendor and compare it with the Threshold Slabs applicable to the Vendor. If the Threshold is breached, TDS Invoices will get generated. The defaulted TDS Tax Id cannot be removed in such a scenario. The above is an intended product behavior.

How to handle the Excise requirements for an Item in Trading Organization on the receiving side?

Items that are being used in a Trading Organization shall have specific Excise requirements. In order to meet these requirements, the Item shall be defined with the following flags in the India Items DFF.

Excise Flag – ‘YES’

Modvat Flag – 'NO'

Trading Flag – ‘YES’

In case of Trading Organization, system will not check for the Receipt DFF Flag "Claim Cenvat on receipt".

While creation of Receipt in a Trading organization, RG 23 D Register will get updated only if the following conditions are satisfied.

1. Excise Flag in the Items DFF is set 'YES' .

2. Excise Invoice Number and Excise Invoice date is provided on the Receipt DFF.

In case of Trading organization, system will not check for the Receipt DFF flag "Claim Cenvat on receipt". CENVAT /MODVAT is applicable only to Manufacturing Organization where production and removal of goods by paying Excise takes place. Trading is governed under RG23D Rules (Where Warehouse is marked as Trading and can only pass on the CENVAT on receipts on to Sales by matching receipts). As there is no payment of Duty on removal of goods in a trading organization, the question of claiming CENVAT does not arise.

Further, to clarify as Cenvat /Modvat is not applicable in case of Trading organization, the receipts of Trading Organization will also not be available on the form "Claim Modvat on Receipts - India" as the question of deferring cenvat does not arise in case of trading organization.

What is the setup which determines the GL Date Basis for India Localization TDS Invoices?

The GL Date Basis Set up is defined at the below navigation:

Oracle Payable>Setup>Options>Payables

GL Date Basis - The date you want Payables to use as the default accounting date for invoices during invoice entry.

1. Invoice Date - Invoice date you enter during invoice entry.

2. System Date - Current date for your Payables system. The date you enter the invoice.

3. Goods Received/Invoice Date - Date that you enter in the Date Goods Received field. If no value is entered, then the invoice date is used.

4. Goods Received/System Date - Date that you enter in the Date Goods Received field. If no value is entered, then the system date is used.

What is the impact on Financials for India when Inventory module is installed in Shared mode?

When Financials module is only installed, some of the financial modules might be dependent on other modules (ex:Inventory,BOM etc ) hence system will automatically install those dependent modules in shared mode.

Financials for India is dependent on Inventory module because Inventory Organization needs to be associated to Locations form, Inventory Organization field will be grayed out when Inventory module is installed in shared mode.

Financials for India does not support when Inventory module is installed in shared mode.

The following modules are recommended to be installed:

1. Bills of Material for calendar.

2. Inventory module for associating Inventory Organization with location.

3. Order Management for adding OE: Item Validation Organization

Is it required to setup Organization Additional Information for OPM organization after upgrading to 11.5.10.2?

After upgrading to 11.5.10.2 most of the features of OPM are mapped to Discrete, its recommended to complete Additional Information for OPM organization and following are the minimum charge accounts required for setup:

1. excise_expense_account

2. excise_paid_account

3. excise_rcvble_account,

4. modvat_rm_account_id

5. modvat_cg_account_id

6. excise_rg23d_account

How to Import Service Tax entries to General Ledger?

Interim account entries for Service tax amount is generated while the material is received and Recovery account is generated as follows:

1. Create a Purchase Order with recoverable Service tax and approve, (N) India Local Purchasing > Purchase Order > Purchase Order (Localized)

2. Create a Receipt for Purchase order, (N) India Local Purchasing >Receipts >Receipt(Localized)

3. Create an Invoice and matched the Invoice to Receipt, (N) India Local Payables > Invoices

4. Validate the Invoice and make the Payment for Invoice.

5. Submit India Service Tax Processor.Service tax entries will be inserted into GL Interface

6. Run General Import program for Source 'SERVICE', (N) General Ledger > Journals > Import > Run.

How To Update VAT Registration Number when Registration Number is allocated by VAT Authorities? What will be the impact of updating VAT Registration Number in Additional Organization Information and Regime Registration?

VAT Registration Number can be updated in Additional Information and Regime Registration when VAT Authorities allocate VAT Registration Number.

If Value Added Tax (VAT) is not attached to any transaction there will not be any impact.

However if you attach VAT taxes and perform transactions then transactions will be recorded based on VAT Registration Number (AF) defined at VAT Regime and Settlement will be performed based on VAT registration number .

So in these case you will find two set of entries :

1. Transactions with VAT registration number as 'AF'

2. Any transaction performed after VAT registration number will be grouped under new registration number, so you need to perform settlement two times. If your organization is not VAT registered, Its recommend not to attach VAT taxes in the transaction which will update VAT repository.

How to Return Defect Material Received from OSP Vendor?

Defect Material received from OSP Vendor can be returned against a new Form Number. Please follow the steps given below:

1. In Oracle WIP when material is moved to queue of OSP operation, an approved requisition is created.

2. Submit Requisition Import, Using this requisition, autocreate PO and approve the PO.

3. Navigate to India Local Purchasing>Outside Processing>Approve 57F(4) Dispatch, Select PO number from the list and click on 'Create 57F4' button to default components from Bills of Material (BOM).

4. Click on Save button to Generate the Form Number/Challan.

5. Receive material to update Work in Process (WIP) Operations by navigating from Receipt Localized form.

6. On final Receipt of material go to Approve 57F(4) Receipt form and click on 'Approve Receipt' button to complete the transaction.

7. After inspecting, if defect material is found then you can dispatch the same back to the vendor by performing Return to Vendor transaction. Navigate to India Local Purchasing>Receiving>Return to Vendor(India)>New>Find the purchase order, Select India Return to Vendor context in Receiving Transactions DFF , select Generate VAT/Excise Invoice ='Y' and Save.

8. Navigate to Approve 57F(4) Dispatch and find on Purchase Order number, new record for return quantity will be populated.

9. Click on Approve Dispatch button to save and generate form number.

How to Dispatch Excess Quantity to Outside processing?

Excess Material can be dispatch to Outside processing when 'Allow Dispatch Qty to Exceed Orig Qty' flag in Additional Information is set to 'Y'

How to Dispatch Partial Quantity to Outside Processing (OSP) Vendor?

Provision for dispatching partial quantity is possible via Primary and Secondary 57F4 challan.

How to generate VAT Invoice and Excise Invoice Document for Purchase Returns?

Following setups control generation of VAT ,Excise Invoice Number and Report.

1. Organization and Location should be classified as Manufacturing in Additional Information.

2. Excise Invoice Number should be setup in Additional Information. (N)India Local Purchasing>Oracle Purchasing>setup>Organization>Additional Information.

3. VAT document setup should be complete. (N)India Local Purchasing>India VAT/Service Tax>VAT Document sequencing.

Transaction Flow:

When Returning the material to supplier in Returns screen fill RMA Number. Sselect India Return to Vendor context from Receiving Transactions DFF and select Generate VAT/Excise Invoice no=Y.

To check VAT / Excise Invoice number generated, submit India Return to Vendor report based on RMA Reference and Receipt Number. Based on the report Material can be despatched.

How to resolve 'APP-JA-460480:OSP sub-inventory not defined for this organization' error while querying Purchase Order from Approve Dispatch 57F4 form?

You need to define Subinventory with name 'OSP' to resolve this issue,following is the navigation for setting up OSP

Subinventory. India Local Inventory>Oracle Inventory>Setup>Organizations>Subinventories

How to Resolve India receiving transaction processor running into error-ORA-01400: CANNOT INSERT NULL INTO ("JA"."JA_IN_RG23_PART_I"."FIN_YEAR")?

Setup for Organization and Tax calendar should be complete.

1. Navigation: India Local Inventory-->setup-->Organization-->Additional Info.

2. Select the Organization.

3. Provide Excise information to classify Organization as Manufacturing / Trading.

4. Click on Tax calendar to do the setup, Active flag should be 'Y' for the current financial year, this is called as Tax calendar. This setup is mandatory to hit the Excise register in the active tax period.

How to make inventory entry for VAT amount when supplier invoice is lost or not received ?

1. Create Purchase Order with Value added tax attached. Navigation: India Local Purchasing-->Purchase Orders-->Purchase Order (localized)-->Open

2. Save and Approve Purchase Order.

3. Create Receipt against the Purchase Order from Receipt Localized window and save. (N)India Local Purchasing/India Local Inventory-->Receipts-->Receipts Localized-->New

4. Receipt gets auto queried in Receipt Localized window when receiving transaction processor is completed normal.

5. Deliver the material. (N)India Local Purchasing/India Local Inventory-->Receipts-->Receiving Transactions

6. Click on Claim VAT button to open and query in claim details window.

7. When the Supplier invoice is not received, in Populate details block ,select Processing action = UnClaim and Save.

8. Check for India - VAT Claim Processor (India - VAT Claim Processor) completes normal from view-->Request.

9. Once the request is completed normal, find the Receipt in Vat-Tax claim screen to check the status. Navigation: India Local Purchasing/India Local Inventory-->India VAT/Service Tax-->Transactions-->VAT-Tax Claim.

10. VAT tax amount will be loaded to item cost.

When creating Purchase Orders on foreign suppliers exact tax values cannot be determined hence taxes are not added. Hence Tax will be added manually in Receipt localized Tax window but system does not allow to add or modify currency nor tax amount?

Following setups clarify how to control the taxes.

1. Allow tax change at Receipt is "Y" in additional info setup then Receipt localized window will allow to ADD taxes. (N)India Local Inventory-->Setup-->Organization-->Additional Info.

2. Update Transactions flag in Tax definition window controls modification of taxes. (N)India Local Inventory-->Setup-->Tax-->Taxes.

3. Update Currency flag in Tax definition window controls modification of tax currency. (N)India Local Inventory-->Setup-->Tax-->Taxes.