Understanding Cenvat Credit Offset Against Excise Tax

You use the Credit Distribution program (P75I012) to offset Cenvat credit for excise and services against the excise tax. For imports, you use this program to offset Cenvat credit for countervailing duty (CVD). You can also use this program to issue payments to the tax authority for any excise tax liabilities after offsetting the liabilities against Cenvat credit from excise and services. You can review all invoices for a particular period for which the excise has not been paid. You can make excise tax payments from the Cenvat accounts of raw materials, capital goods, and personal ledger account (PLA).

The excise-to-service transactions update the Credit Distribution table (F75I013). After you issue payments for excise or services, the system displays the voucher number generated when issuing payments to the tax authorities.

Note: You use the Credit Distribution Percentage program to define the percentage for CVD and services.

The Credit Distribution program passes amount and account details to create a pair of credit and debit entries in the Account Ledger table (F0911) for the amounts being redistributed. The system generates and displays a batch number when the F0911 table entries are made.

Important: You generate general ledger entries for the taxes in the F0911 table only after you run the Sales Update program.