Skip Headers

Oracle Financials for India User Guide
Release 12.1
Part Number E13658-03
Go to Table of Contents
Contents
Go to previous page
Previous
Go to next page
Next

India Local Projects

Projects Costing

Oracle Project Costing records and reports cost against a Project; and integrates with other Oracle E-Business Suite, including Oracle Purchasing, Oracle Payables, Oracle Inventory, Oracle Assets and Oracle General Ledger to account for costs. Costs reflected for a project may flow from different modules like Oracle Purchasing and Oracle Payables. These costs shown in Projects include non-recoverable portion of the India Localization taxes. There are two dimensions to the information reflected in Oracle Projects costing with respect to Purchasing and Payables Module.

Solution Flow

Non recoverable Financials For India Taxes in Projects Commitments

  1. Enter Requisition/Purchase Order with Project Related Information. Taxes default and get calculated based on IL tax setups. There is no change in the tax defaulting hierarchy provided by India Localization.

  2. You can view taxes by clicking Taxes on the localization Purchase Order. Non-recoverable taxes are indicated by the Modvat Flag. An unchecked Modvat Flag indicates a non-recoverable tax. Further, the destination type of the receipt also determines recoverability.

  3. Approve the Purchase Order.

  4. Run the PRC: Update Project Summary Amounts for a Single Project concurrent to view the commitments created in the Oracle Projects Module. Commitments in Project Status Inquiry form include the NonRecoverable tax component. The Projects cost reflected in Project Raw Cost and Project Burdened Cost column are inclusive of Item cost, and Financials for India Non Recoverable Taxes.

    Note: Commitments view in projects also gets updated with Financials for India Non recoverable taxes in case of Supplier invoices matched to Purchase order, prior to interface to Projects. In this case the tax lines appear as individual lines on the Project status inquiry form.

Non-Recoverable Financials for India Taxes in Projects Costs

Costs Interfaced from Receipt or Invoice would be sent in as separate lines for the Item cost and Non-recoverable tax component to Projects.

  1. Enter Purchase Order with Project Related Information.

  2. Enter Receipt for the Purchase Order. You can view taxes by clicking Taxes on the localization receipt form.

  3. Non-recoverable taxes are indicated by way of the "Recoverable Flag" checkbox. Further, as the destination type of this receipt is EXPENSE even the Central Excise taxes are considered as non-recoverable as per the India Localization functionality. Central Excise type of taxes is considered as recoverable only for Capital goods when the destination type is EXPENSE. All the receipts to destination type RECEIVING and INVENTORY are part of the Project Manufacturing transaction flow and not the Project Costing transaction flow.

  4. Run the PRC: Interface Supplier Costs concurrent to import the actual costs from Oracle Purchasing or Oracle Payables module to in the Oracle Projects module.

  5. On querying for the receipt in expenditure inquiry you would see the item cost as a separate line and the total of all non-recoverable financials for India tax amounts on the receipt as a separate line.

    Note: Project costs include Financials for India Non recoverable taxes interfaced from Supplier invoices matched to Purchase order/Receipt In this case each non recoverable tax line appears as individual lines on the Expenditure inquiry form.

Integrating with Purchasing

When you enter project-related transactions in Oracle Purchasing, you only need to enter project information on the source document; either the requisition or the purchase order. When you create purchase orders from requisitions using Oracle Purchasing AutoCreate feature, the project information from the requisition is copied to the purchase order. India Localization taxes on the purchase document will be appropriately considered as Commitment Costs and Actual Costs in projects. The process below describes how each purchase document is handled in integration with India Localization taxes:

  1. Enter Requisitions

    Enter project-related purchase requisitions using the Requisitions window in Oracle Purchasing. Enter default project information in the Requisitions Preferences window in the Project Information tab. This default information will be used to populate requisition distribution lines you create during your current session.

    The requisitions distribution line has a Project tab to enter project-related information. A requisition can have a combination of project-related and non-project-related distribution lines.

    India Localization taxes will default on the requisition based on its 3-Way tax defaulting mechanism. Non-recoverable taxes for project related distribution lines will be included in the commitment amount for the Project.

  2. Using AutoCreate

    When you automatically create purchase orders from project-related requisitions in the AutoCreate Documents window, Oracle Purchasing copies the project information and accounting information from the requisition to the purchase order. You do not need to enter any additional project-related information on your purchase order when you use this feature. For further information, see: AutoCreate Documents Overview, Oracle Purchasing User’s Guide.

    You can change the project information on the purchase order that was copied from the requisition; the project information on the requisition is not updated.

    India Localization taxes will be copied from the requisition to the Purchase Order or taxes are redefaulted in the Purchase Order. Non-recoverable taxes for project related distribution lines would be included in the commitment amount for the Project. If the project information is changed from Requisition to Purchase Order, India Localization non-recoverable taxes will be included in the respective project as Commitment cost.

  3. Enter Purchase Orders

    If your company does not use online requisitions or the AutoCreate feature, enter project-related information directly on your standard purchase orders using the Purchase Orders screen in Oracle Purchasing.

    When you use this window, you specify project-related information in the Project tabbed region of the distribution line. Based on the project-related information entered, the account information will be automatically created by the Account Generator. For further information, see: Overview of Purchase Orders, Oracle Purchasing User’s Guide.

    India Localization taxes will default on the Purchase Order based on its 3-Way tax defaulting mechanism. Non-recoverable taxes for project related distribution lines will be included in the commitment amount for the Project.

  4. Enter Releases

    Enter project-related releases against blanket purchase agreements and planned purchase orders using the Enter Releases window in Oracle Purchasing. Specify if the release distribution line is project-related. If it is project-related, you continue to enter project information for the line. See: Entering Release Headers, Oracle Purchasing User’s Guide.

    India Localization taxes will default on the Blanket Purchase Agreement and Planned Purchase Order based on its 3-Way tax defaulting mechanism. Non-recoverable taxes for project related distribution lines will be included in the commitment amount for the Project.

  5. Recording Receipts and Delivery

    You can track receipt and delivery of goods for project-related purchase orders using the Receipts window in Oracle Purchasing. You can report the delivery of purchased goods in your commitment reporting. Oracle Purchasing does not record the received goods as delivered for your project until the goods are delivered and assigned to a purchase order distribution line. See: Overview of Receipts, Oracle Purchasing User’s Guide.

    When a purchase order line is flagged to accrue on receipt and the purchased goods are delivered to an expense destination, you can interface receipt accrual accounting entries from Oracle Purchasing to Oracle Projects as actual transactions. This allows you to recognize the cost to your project in the period in which it is incurred rather than in the period in which it is invoiced. For more information, see: Overview of Receipt Accounting, Oracle Purchasing User’s Guide, and Interface Supplier Costs, Oracle Projects Fundamentals.

    India Localization taxes on receipts are derived from the Purchase Orders. User has the ability to modify the defaulted taxes at the time of making the receipt. You can add, delete or modify taxes on the receipts. Further, user can modify amounts of adhoc taxes as well. While interfacing costs from receipts to projects, India Localization non-recoverable taxes on receipts are also interfaced as actual cost transactions.

    Note: Since the receipt is made to an expense destination, India Localization functionality considers recoverable Central Excise taxes (other than taxes on Capital Goods) as non-recoverable.

Requisition Adjustments

You can update project information on a requisition. If the requisition is included on a purchase order before you update the project information, the purchase order is not updated with the new project information. If the requisition line is included on a new purchase order after you change the project information, Oracle Purchasing copies the new project information to the new purchase order.

The Account Generator builds a new account number value when you change the project information. The new project information is used in commitment reporting.

India Localization taxes will be included as commitment cost in the appropriate projects.

Purchase Order Adjustments

You can update project information on a purchase order, even after it is approved and invoiced. However, you cannot update project information if there has been any accounting activity on the purchase order (for example, if it is encumbered, or if it is accrued on receipt and the distribution has been received or billed). If the purchase order is invoiced before you update the project information, the invoice is not updated with the new project information. If the purchase order line is invoiced on a new invoice after you change the project information, Oracle Payables copies the new project information to the new invoice.

The Account Generator builds a new account number when you change the project information. The new project information is used in commitment reporting.

India Localization taxes will be included as commitment cost in the appropriate projects.

Integrating with Payables

When you match an invoice to a purchase order or receipt in Oracle Payables, the project information from the purchase order or receipt is copied to the invoice. When you enter new project-related invoices in Oracle Payables, you only need to enter project information on the source document, the invoice. If you use distribution sets with project information, Oracle Payables automatically supplies project information for your supplier invoice distribution lines.

Matching Invoices

If you use Oracle Purchasing and have already associated project-related information to a purchase order, and you are matching an invoice to a purchase order or receipt using the Invoices windows instead of manually creating invoice distribution lines, Oracle Payables automatically copies the project information from the purchase order or receipt to the invoice.

Note: You cannot change the project information that is copied from the purchase order to the invoice.

India Localization Taxes on Payables Invoice are interfaced based on matching to either Receipt or Purchase Order. In case of non-recoverable India Localization taxes, the Projects details will be copied from the parent Item line in the Invoice Distributions. These non-recoverable taxes will be interfaced to Project Costing module as separate cost lines. From India Localization perspective, you must ensure the following:

Entering Invoices

You can enter project-related invoices directly in the Invoices windows in Oracle Payables. You can enter project-related information in the Invoices window, which will default to all distributions you enter for the invoice. These values can be overridden. You also enter project-related information in the Distributions window. You can create a folder with project-related fields to be used for entering information. An invoice can have both project-related and non-project-related distribution lines. See: Entering Invoices Overview, Oracle Payables User Guide.

Note: You can also import through the Payables Open Interface tables projects-related invoices from the Invoice Gateway and other systems.

Currently, India Localization does not support taxes to be entered on Payables Invoices directly. Users should use Purchase Order or Receipt matched Payables Invoices for the transactions.

Supplier Invoice Adjustments in Payables

You can perform supplier invoice adjustments in Oracle Payables at any stage in the process flow.

Adjusting project information for matched invoices

If you have matched an invoice to a purchase order, you cannot directly change any of the project information copied from the purchase order. You may encounter cases in which you want to change the project information; in particular, you may want to change the expenditure item date that was copied from the purchase order, because the expenditure item date on the purchase order was not maintained.

If you want to change the project information in this case, there are two ways of making the change.

You can reverse the matching distribution line from the purchase order in the Distributions window in Oracle Payables, change the purchase order project information in Oracle Purchasing, and match the invoice to the purchase order again.

India Localization tax distributions (for non-recoverable) tax, derive the project information from the parent line distribution. If you wish to make any changes in the project information for parent distribution, please make sure that similar adjustment is carried out on the related India Localization tax distribution in order to achieve correct project cost.

Adjusting manually entered, unposted invoices

You can directly change any or all of the project information before an invoice is posted. The Account Generator derives a new account number based on the new project information that you enter. India Localization does not support taxes on manually entered payables invoices.

Adjusting manually entered, posted invoices

You cannot directly change any project information on a posted invoice. You must reverse the distribution line and create a new distribution line with the new project information using the Distributions window in Oracle Payables. India Localization does not support taxes on manually entered Payables invoices.

Interfacing Adjustment Lines to Oracle Projects

If the original invoice distribution line that was reversed was not yet interfaced to Oracle Projects, the Interface Supplier Invoices from Payables process does not interface the original or reversing items that are included on the same invoice, to Oracle Projects. These items are marked as net zero adjustment lines that are not to be interfaced to Oracle Projects. The new line with the correct project information is interfaced to Oracle Projects.

India Localization tax distribution (for non-recoverable tax) derives the project information from the parent line distribution. If you wish to make any changes in the project information for parent distribution, please make sure that similar adjustment is carried out on the related India Localization tax distribution to achieve correct project cost.

Supplier Invoice Adjustments in Oracle Projects

You can perform the following adjustments for supplier invoices in Oracle Projects:

Project users can perform these adjustments in Oracle Projects because the actions do not change the amount of the invoice that is processed in Oracle Payables. These adjustment actions change the project information of the supplier invoice item, which is used in Oracle Projects processing.

After you have made adjustments to supplier invoice items, you must send the adjustment information back to Oracle Payables so the Payables distribution lines match what is recorded in Oracle Projects. Oracle Payables will interface adjustments that affect the GL account number to Oracle General Ledger. You run the following processes in Oracle Projects for supplier invoice adjustments:

If you need to change the invoice amount, supplier, or expenditure type, organization, or item date for a supplier invoice line, reverse the line and create a new line in Oracle Payables. For further information, see: Adjusting Project Information for Matched Invoices, Oracle Projects User’s Guide.

Restrictions to Supplier Costs Adjustments

Adjustments to supplier costs in Oracle Projects must adhere to the specific business rules for supplier invoices and receipt accruals.

Supplier Invoices

When Projects is integrated with Payables, you cannot adjust supplier invoices (either in Oracle Projects or in Oracle Payables) if the invoice is:

Note: You cannot adjust an invoice selected for payment until the Confirm Payment Batch action has been performed.

Receipt Accruals

You cannot adjust the item in Oracle Projects when the item is interfaced from Oracle Purchasing. If the invoice is matched to accrue on receipt purchase order line and the invoice line (rather than the purchase order receipt) is interfaced, then the invoice line can be adjusted in Oracle Projects.

India Localization tax distributions are interfaced to Project Costing module as separate expenditure line items. User should not make any modifications to these expenditure lines and interface them back to Oracle Payables module.

Integrating with Inventory

You can perform inventory transactions related to projects – such as Issue to Projects, Issue from Projects etc. This is achieved by checking the “Project” check box at the time of defining User Inventory Transaction Types. These Inventory transactions related to Projects are also considered for appropriate quantity register update as per India Localization functionality. For e.g. Issue to Project inventory transaction for a raw material item will update the RG 23 Part I register, Issue to Project inventory transaction for a finished good item will update the RG I register.

India Local Projects Billing

This section provides an overview and details of each step involved in completion of setups required for India Localization support for Project Billing solution.

Setting Up Projects Billing Tax Defaults and Preferences

This setup determines the tax defaulting hierarchy to be used for defaulting tax categories on Projects related invoices. You can define tax defaulting hierarchy for each Distribution Rule used in Oracle Project Billing. Within the Distribution Rule, you can define tax defaulting hierarchy for Event Type, Project, Expenditure Type and Customer or Customer Site.

Tax defaults and preferences for Project Billing is setup in a new user interface called Tax Defaults. To access it, login with India Local Project Billing responsibility and navigate to India Local Tax Setup under Setup.

Field Description Description
Preferences Tab Use this tab region to define the tax defaulting hierarchy preference for Distribution Rule and Context Name.
Distribution Rule This will display the distribution rules as per Project Billing Setup.
Context Name This will display the following context names:
  • Event Type

  • Project

  • Expenditure Type

  • Customer/Site


Define the preference number for each of the context name. This preference number will determine the hierarchy of tax defaulting to be used.
Preferences Enter Preference number. You can enter any unique number for a combination of Distribution Rule and Context Name. This preference number will determine the tax defaulting hierarchy.
For instance, consider the following setup:
  • Event Type = 1

  • Project = 2

  • Expenditure Type = 3

  • Customer/Site = 4


Tax Category defined in the Context Tab Region of the form for the Event Type in the invoice will take highest precedence for tax defaulting. If the tax category is not setup for Event Type, then the tax category at the Project level will be defaulted in the invoice.
Header Section  
Contexts Tab Use this tab region to define the tax categories to be used for each of these context names:
  • Event Type

  • Project

  • Expenditure Type

  • Customer/Site

Context Name
  • Event Type

  • Project

  • Expenditure Type

  • Customer/Site

You can enter the above context names and query all the context values in the lines section.
Default Context Name Use this Default button to query the default context name.
Tax Category LoV contains all the defined tax categories.
Default Tax Category If you select this radio button the Tax Category will be assigned to all the context values in the lines section where the tax category is empty. This will not override the current tax categories for any of the context values.
All, Override All Tax Categories If you select this radio button the Tax Category will be assigned to all the context values in the lines section. This will override the current tax categories for any of the context values.
Lines Section  
Context Name
  • Event Type

  • Project

  • Expenditure Type

  • Customer/Site

Pick the appropriate context name for which you want to assign a tax category.
Context Value LOV contains values based on the context name selected.
For e.g. If the Event Type context name is selected, then all the event types as per Oracle Project Billing setup will be displayed here.
Pick the appropriate Context Value for which you want to assign a tax category.
Customer Site LOV contains customer site for the customer selected as the Context Value.
This LOV is available only if Context Name is Customer/Site.
Tax Category LOV contains the tax categories defined.
Pick the appropriate tax category you wish to use as the default tax category for the selected Context Value.

Enter events or expenditures and distribute costs in Oracle Projects

For related information, see: Expenditures, Oracle Project Costing User Guide.

Generate draft revenue

Generate draft revenue wherever required. For more information, see: Processing Adjustments, Oracle Project Costing User Guide.

Generate Draft Invoices

Generate draft invoice using the Oracle Projects Billing concurrent program:

This process will calculate and default India taxes on the India Draft Invoice Screen. The tax defaulting will take place based on the setup created. See Setting Up Projects Billing Tax Defaults and Preferences, for further information.

Invoice - India screen can be viewed from a separate menu option or from View > Zoom on the base Projects draft invoice screen. Login with India Local Projects Billing responsibility and navigate to Oracle Projects > Billing > Invoice Review > Find Invoices > Invoice Summary > Tools > India Invoice. In the Find Invoices screen, query your required invoices.

Field Description Description
Projects Region  
Project Number Enter the project number by which you want to query the invoices.
Project Name Enter the project name by which you want to query the invoices.
Invoices Region  
Invoice Number Enter the invoice number by which you want to query the invoices.
Invoice Status Enter the invoice status by which you want to query the invoices.
Creation Date Enter the creation date by which you want to query the invoices.
Customers  
Customer Number Enter the customer number by which you want to query the invoices.
Customer Name Enter the customer name by which you want to query the invoices.

Based on the selected query criteria the invoices will be queried and displayed in the Invoice Review screen.

Field Description Description
Draft Invoice Area  
Number This field will display the invoice number.
Status This field will display the invoice status.
Creation Date This field will display the invoice creation date.
Customer Area  
Number This field will display the customer number related to the invoice.
Name This field will display the customer name related to the invoice.
Amount This field will display the invoice amount.
Tax Amount This field will display the invoice tax amount.
Currency This field will display the invoice currency.
Taxes This field will indicate if there is any tax defaulted for this invoice.

Click Lines to display the invoice lines.

Field Description Description
Invoice Region  
Draft Invoice This field displays the Invoice number.
Creation Date This field displays the creation date for the Invoice.
Invoice Status This field displays the invoice status for the Invoice.
Amount This field displays the invoice amount for the Invoice.
Tax Amount This field displays the tax amount for the Invoice.
Currency This field displays the currency for the Invoice.
Project Name This field displays the Project name for the Invoice.
Project Number This field displays the Project number for the Invoice
Customer Name This field displays the Customer name for the Invoice.
Customer Number This field displays the Customer number for the Invoice.
Organization Select the Inventory Organization for which you wish to update the Central Excise and Value Added Tax Registers

Note: Selecting Inventory Organization and Location is mandatory in this form. Organization and Location selected here will be used for updating the Central Excise and Value Added Tax registers. User will not be able to close this form unless Inventory Organization and Location is selected.

Location Select the Location related to the Inventory Organization for which you wish to update the Central Excise and Value Added Tax Registers.

Note: Selecting Inventory Organization and Location is mandatory in this form. Organization and Location selected here will be used for updating the Central Excise and Value Added Tax registers. User will not be able to close this form unless Inventory Organization and Location is selected.

Register details Region Register Details Region will not display any values until the Projects Invoice is released. Draft Invoice generated in projects, this invoice is approved. User can modify any tax details after approval of the invoice as well. All the tax details will be frozen once the Invoice is released. Release of Invoice will also generate Excise and VAT Invoices. This will perform Central Excise and VAT Accounting and update the respective Central Excise Register and VAT repository as well.

Note: Project Invoices do not have any link to items. Hence the quantity registers will not be updated. You should make manual entries for the required quantity register updates.

Excise Invoice This field will display the excise invoice number generated related to this Project Invoice.
Excise Invoice Date This field will display the excise invoice date related to this Project Invoice.
Excise Register This field will display the excise register updated related to this Project Invoice. This register relates to the utilization of excise.
VAT Invoice This field will display the VAT invoice number generated related to this Project Invoice.
VAT Invoice Date This field will display the VAT invoice date related to this Project Invoice.
Lines Section  
Field Name
  • Tax Category

  • Service Type

You can use this option to default the tax category on the invoice lines.
Default Value LOV contains the values of tax category or service type, based on the Field Name selected.
Default for all the record If you select this check box then the default values will be inserted for all the lines. If you leave this check box unchecked, then values will be inserted only for those lines where the values are NULL.
Default Use this button to default the values of Tax Category or Service Type based on Field Name selected.
Line Number This field displays the line number for the invoice line.
Description This field displays the description for the invoice line.
Line Amount This field displays the line amount for the invoice line.
Tax Amount This field displays the line tax amount for the invoice line.
Tax Category You can select a tax category here. This will override the tax category defaulted for the invoice line.
Service Type Select the Service Type to be used for the invoice line.

Click Taxes to view taxes for the line.

Field Description Description
Header Section  
Application This field will display Projects as default value.
Document Type This field will display PROJECT_DRAFT_INVOICE as default value.
Document Number This field will display Document Number.
Document Line Number This field will display Document Line number.
Line Amount This field will display the Line amount.
Lines Section  
Line No This field will display Tax Line number.
Tax Name You can delete the tax line. You can also add a tax line by clicking on the next line.
Tax Type This field will display Tax Type related to the line.
Precedences 1-10 This field will display the precedences (from 1 to 10) for this tax line.
Tax Rate This field will display Tax Rate for this tax line.
UOM This field will display UOM for this tax line, only if the tax is UOM based.
Qty Rate You can enter the quantity rate for this tax line. This will display only if the tax is UOM based.
Tax Amount This field will display Tax Amount for this tax line.

Note: You can view the GL Drilldown Accounting lines by clicking the Show Transactions button on the Tools menu in Invoice Review India Localization form.

The Invoice - India form with localization tax details can also be viewed from the Tools special menu option on the Oracle Project Billing Invoice Review form.

Approve and release the invoice so that the invoice can be imported into Oracle Receivables.

Note: Once the invoice is released, none of the tax information can be modified.

Run the PRC: Interface Invoices to Receivables process to interface the invoices to Oracle Receivables and run AutoInvoice program to import the invoice into Oracle Receivables.

You must run the India - Import Projects Taxes to Receivables program to import India Localization taxes to Oracle Receivables. You can view the India Local taxes in Transactions Localized form after running the program.

Service Tax repository updates take place after performing these steps:

  1. Apply receipt to the projects invoice with service taxes in Receivables (after running the India Import Project Taxes to Receivables.)

  2. Run the India Service tax processing concurrent program.

Run the tie back to receivables process of Oracle Projects to complete the billing cycle

Credit Memos and Foreign Currency Invoices

Credit Memos

For Invoices with “Accepted in Receivables” Status, write off or cancellation can be done. This generates a new draft invoice with negative amounts, which has negative India Local taxes. A credit memo is generated in Receivables for such write-offs and cancellations. Taxes are inherited from the parent invoice and you must not make any modifications to these taxes. Any such modification performed will create inconsistencies in Original Invoice taxes and Credit Memo taxes. All the processes described above are applicable for the negative draft invoice as well.

Foreign Currency Invoices

For foreign currency invoices in unapproved status, changes may be made to the exchange rate or currency. India taxes will be recalculated when such changes are made.