This chapter covers the following topics:
This topic provides an insight into how Outside Processing is built to cover the statutory requirement in India as per the Goods and Services Tax law.
In GST, the taxable event would only be supply of goods and services. The goods supplied by the principal supplier to job worker would be supply of goods chargeable of CGST or SGST in case of intra state job work and IGST, in case of interstate job work.
Followings are major features provided in GST:
OSP challan is created based on only Purchase Order.
Manual OSP challan is generated in the case of staggered dispatch, this is generated against a primary challan.
You can cancel the OSP challan to overcome errors if the if the material is not received yet.
You can generate Original, Duplicate Challan in case where the challan is lost.
System allow sending excess material for outside process and tracking the return
For Outside processing transaction, following setup are required in GST to complete OSP
Define Tax Calendar
Define the Regime and attach the Tax Calendar
Define Tax Type
Define Tax Rate
Define Tax Category
Item Classification
First Party Registration
Third Party Registration
This setup is required to generate the Form Challan Number while creating the challan based on Purchase Order and Manual Challan
(N) Oracle Financial Of India > Tax Configuration > Document Sequencing
Core Application Functional flow
Standard Oracle Application support Outside Procession Operation in Oracle Work, in Process (WIP) module. You can monitor the movement of goods to the sub-contractor in Oracle F inancial for India Module.
Bill of Material needs to be created for the assembly in BOM module and a Job should be created for the Assembly on Oracle Work in Process (WIP) module.
When the Job is released and component is moved to queue of OSP operation, a requisition gets created in Purchasing module. Submit Requisition import to create the Requisition. Using requisition you can create a Purchase Order using auto create and approve the PO. When you receive material it is directly update in WIP Operations.
Note: There are multiple way to creating a Purchasing document based on sourcing rule .
Outside Processing Transaction flow in GST
Under Oracle Financial of India following additional steps or process are involved
You need to navigate to Outside Processing Screen and verify the details populated , update the quantity you wish to dispatch and approve the dispatch. Form (Challan) number will be generated
OSP Dispatch forms are crated on the basis of BOM component defined for the item being subcontracted. In case the issue of material to the sub-contractor is in a staggered manner (item or quantity ).Manaul Challan can be used for the subsequent dispatches. Each dispatch in manual challan generates a new challan number
Receive the item against the Purchase Order or Release ; Return quantity in OSP Challan will get updated .
Using this window you can find out the dispatch form for a Purchase Order (PO) and the same is approved. Dispatch approved in this form is Primary form for a particular OSP PO. System creates the challan form comprising the entire WIP component required for the specific WIP operations attached to OSP PO in Outside Processing Details.
If the WIP operation is the first Operations, only the components are to be dispatched to the subcontractor, if the WIP operation is the second or higher, the intermediate assembly of earlier operations only with the components required for current operation need to be dispatched to the subcontractor. Hence, additional item line with the PO OSP item is created in OSP dispatch form for such OSP Purchase Orders. The PO OSP item description could be provided in such a way to identify with intermediate Assembly.
This is specific workaround to meet the GST requirement. It is not mandatory to dispatch all the component or their full quantities in the Primary window. If the dispatches are done in a staggered manner, the first batch could be dispatched through the Primary window.
Subsequent dispatches are done through the Manual OSP Dispatch (N) Oracle Financial Of India > Transactions > Outside Processing. Use the window to create the challan based on PO number and query the window using PO number or Vendor name or From Number and From Date. This window is challan details window where you can validate the component item details that is used for outside processing.
Navigate to OSP Transactions – India Localization window.
Displays the Organization name defaulted as PO Number.
Displays the Location from the PO.
System generated window number displays after the completion and approval of dispatch.
To Date displays the current date.
PO supplier name is default in the Supplier name option.
Max Day Permitted displays the value from Common Configuration setup.
Receive Upto displays the cutoff date for receiving the OSP material from the delivery date from the vendor. Line Level.
Job Name displays associated with PO.
Displays Assembly attached to a Job.
Description of Assembly attached to job displays.
Item displays the Component item as per released Job.
Description of BOM item displays.
Displays the Unit of Measure of the item being dispatched. Primary UOM of the item is defaulted. If the UOM conversion is defined for an item, then the other UOM is used.
HSN Code displays the code assigned.
SAC Code displays the sac code attached to the item.
Displays the Original quantity which is required quantity of BOM component.
Dispatched Quantity displays the total dispatch quantity for the challan.
From Dispatched Qty displays Item quantity which you want to dispatch for outside processing,
Item Rate displays list price. This can be updated as per the valuation of OSP item.
Dispatch Value calculates the following, Dispatch value = Dispatch quantity * item rate.
Processing Nature displays the Operation description of OSP operation from the related Job and this can be edited, if needed.
Return Quantity is updated once the receipt completes processing the OSP item.
Return Value is calculated as Return Value = Return quantity * item rate. After entering data on primary challan click on View Taxes to validate the tax details on challan window gets default as per tax attached to PO Now, click on Approve Dispatch button to approve the challan then the window number is generated automatically for future reference.