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Pre-Release Document

Oracle Financials for India (OFI)


Goods and Services Tax (GST)
BOE Functional Flow

Author: Rama Mohan Derangula


Chandra Shekhar
Creation Date: 02-Apr-2016
Last Updated: 06-Jul-2017
Document Ref:
Version: 2.0

Organization: Oracle India Private Limited.

OFI-GST BOE Functional Flow 1


Document Control

Change Record

Date Author Versio Change Reference


n

02-Mar-17 Rama Mohan 1A Initial document


Derangula &
Chandra Shekhar
27-Apr-17 Rama Mohan 1.0 Added changes related to setup(BOE
Derangula agent), BOE with reference sections
06-Jul-2017 Rama Mohan 2.0 Added new process for BOE
Derangula Application on receipt. BOE final
accounting changes

Reviewers

Name Position

Rajnish Kumar Director, Tax Development

V S Baburaj Product Strategy Director

Audience

Name Position
12.1 & 12.2 Implementation team
12.1 & 12.2 Customers

OFI-GST BOE Functional Flow 2


Table of Contents
Pre-Release Document ............................................................................................................................. 1

Document Control .................................................................................................................................. 2

1 – Introduction ........................................................................................................................................... 4

1.1 Scope ........................................................................................................................................... 4

2 – Pre-Requisite Setups .......................................................................................................................... 5

3 –Create BOE Invoice (With Reference) .............................................................................................. 7

3.1 Flow Diagram ................................................................................................................................... 7

3.2 Create BOE Invoice......................................................................................................................... 7

3.3 Update BOE ................................................................................................................................... 18

5.4 Process BOE .................................................................................................................................. 18

4 –Create BOE Invoice (Without Reference) ....................................................................................... 23

4.1 Flow Diagram ................................................................................................................................. 23

4.2 Create BOE Invoice....................................................................................................................... 23

5 –Apply Receipts .................................................................................................................................... 30

5.1 Flow Diagram ................................................................................................................................. 30

5.2 Apply BOE to new Receipt ........................................................................................................... 30

5.3 Apply BOE using Add-to-Receipt ................................................................................................ 33

5.4 Create Receipt and Apply BOE ................................................................................................... 37

5.5 BOE With Third party Taxes ........................................................................................................ 42

5.6 Applied Receipts Form ................................................................................................................. 46

6 –BoE Writeoff......................................................................................................................................... 48

7 –BoE Cancellation ................................................................................................................................ 50

8 –BoE Accounting................................................................................................................................... 52

9 - Summary.............................................................................................................................................. 52

OFI-GST BOE Functional Flow 3


10 - Call to Action ..................................................................................................................................... 53

1 – Introduction

BOE is a legal document in a prescribed format that needs to be submitted to the Customs
Authority by the importer or his authorized agent. BOE contains information of the goods imported
to India, value and other relevant details which is required for assessment of Customs duty.

We do not provide the document in the prescribed format and also do not capture all the
information required for BOE format. Further, calculation of customs duty is rigid. This document
will help the users to understand the product capabilities in regards to BOE requirements.

For imports the relevant taxes applicable are IGST and Basic Customs Duty which will be
settled with Statute.

1.1 Scope

This document provides the details of Functional flow for ‘Oracle Financials for India’ (OFI) Bill
of Entry cycle from GST point of view along with accounting entries.

Note: The current content has been compiled in reference to the frozen scope of the Phase-2
deliverables (Ref: GST Phase -2 Deliverables.docx)

OFI-GST BOE Functional Flow 4


2 – Pre-Requisite Setups
For the BOE cycle to work in the new GST architecture, the below setup needs to be defined

 Regime

 Tax types

 Tax rates

 Tax Categories

 Define the Specific Functionality

 Item Classification

 Claim term definition

 First and Third party Registration

 BOE Agent

Define the Specific Functionality


Once common above mandatory setups are completed, it is required to capture specific
functionality for ‘Bill of Entry’ inorder to consider these taxes as custom taxes.

(N)  Oracle Financials for India  Tax Configuration  Define Specific Functionality

The Tax Point Basis should be 'Delivery ‘while defining the tax type otherwise tax type will not
show while doing the specific functionality setup for custom tax

Note: It is recommended to have separate Regime created for Customs tax.

OFI-GST BOE Functional Flow 5


Define BOE Agent

(N)  India Local Payables  India Localization  Setup  Others BOE Agent

OFI-GST BOE Functional Flow 6


3 –Create BOE Invoice (With Reference)
Below are the steps to be followed to create BOE Invoice from existing Purchase Order as a
reference.

3.1 Flow Diagram

Create BOE Header Details

Capture PO Reference
BOE Line details

Verify BOE Taxes

Confirm BOE

Payment of BOE Invoice

Create Receipt from BOE

3.2 Create BOE Invoice

The BOE Header form used to capture the BOE details and the associated vendor information.
It consists of 4 tabs i.e. Import Details, Currency, Shipment and Others.

(N)  Oracle Financials for India  Transactions  Enter Bill of Entry

Import Details : In this tab, information related to BOE type, nature of transaction, Port type will
be captured. This tab will also show the details of the BOE amounts with respect to Total BOE
amount, Amount applied, written off and any amount remaining.

OFI-GST BOE Functional Flow 7


DEPB amount field is
provided where the user
need to punch the
amount of DEPB credit
they are going to utilize
for this import.

The DEPB credit value captured , it will be reduced from the total BOE amount at AP invoice
workbench in the form of negative distributions once the BOE invoice gets generated.

Tab - Import Details

Field Name Nature Description Query/Enabled

Operating Unit Required The Operating Unit where this import is going NA
to be accounted.

Inventory Required The user defined inventory organization need NA


Organization to be picked up from LOV where this import
is going to be accounted.

Location Required Location for that inventory organization is to NA


be picked from LOV where this import is
going to be accounted.

BOE Number Display Only System generated Number Yes

BOE Type Required Select from the LOV depending upon the Yes
nature of transaction

BOE Date Required System Date will be shown and User can Yes
change the same. This will be used as the
AP Invoice Accounting Date.

OFI-GST BOE Functional Flow 8


Supplier Required Select Supplier Number from LOV, This is Yes
Number used for ensuring PO Number, Releases and
ASBN are restricted based on Supplier
selected

Supplier Name Display Only Supplier Name is displayed based Supplier No


Number selected

Supplier Site Required Select Supplier Site from LOV, This is used Yes
for ensuring PO Number, Releases and
ASBN are restricted based on Supplier
selected

Port code / Required Select the Port Type like Sea, Air and Land Yes
Type from the LOV.

Import Dept Sl Optional The user can enter the Serial Number Yes
No. allotted by the Import Dept.

Import Dept Sl Optional The user can enter the BOE date as Yes
Date specified in the Physical BOE Document.

BOE Amounts Display This block will show Details of Original NA


Amount computed Tax wise along with
Applied Amount, Written off amount and
Remaining Amount.

BOE without Optional You can use this option to create an Item No
reference Flag Independent BOE. You can define a BOE for
a Dummy Item and this can be used to
match the customs liability on any Item.

Agent Code Required Enter the Agent Code who is dealing this No
particular Import Shipment

Customs Required Select the respective Customs Authority Yes


Authority Supplier from the LOV.

Make sure the supplier is defined with


Classification as ‘India Customs Authority‘

Customs Required Select the respective Customs Authority Yes


Authority Site Supplier Site from the LOV.

Currency:

OFI-GST BOE Functional Flow 9


Customs authority provides an Exchange Rate that needs to be used for currency conversion in
calculation of customs duty. This rate is not the normal daily buying or selling exchange rate but a
different rate that is provided by Customs Authority.

User can either Setup the ‘Custom Notified Exchange Rate’ in system (based on what is provided
by Customs Authority) using the base feature of recording Exchange rates in system or enter the
value manually while carrying out BOE Entry.

Feature is provided to capture the Custom Notified Exchange Rate on the BOE that is being
matched to PO or release or ASBN so that the Assessable Value is determined using the Custom
Notified Exchange rate.

Tab - Currency

Field Nature Description Query/Enabled


Name

Code Required Currency code needs to be mentioned here to


convert the PO amount and the tax amounts to INR
for computation of assessable value.

Rate Required This is to determine the Currency Rate that needs No


Date to be used for Determining the Custom Notified
Exchange Rate

OFI-GST BOE Functional Flow 10


Rate Required This is to determine the Currency Rate that needs No
Type to be used for Determining the Custom Notified
Exchange Rate

Rate Display / This is to determine the Currency Rate that needs No


Required to be used for Determining the Custom Notified
Exchange Rate when the Currency Rate Type is
used as 'USER', else this field would be grayed
out. On query of entered record, this field will show
the actual Currency Rate used for the Transaction.

Shipment:

Tab – Shipment

Field Name Nature Description Query/Enabled

Vessel's Name Optional The user can enter the Vessel's Name for Yes
Reference

Port of Shipment Optional The user can enter the Port of Shipment for No
Reference

Country of Origin Optional The user can enter the Country of Origin and No
and Code Code for Reference

OFI-GST BOE Functional Flow 11


Country of Optional The user can enter the Country of No
Consignment Consignment and Code for Reference
and Code

Bill of Lading Optional The user can enter the Bill of Lading date Yes
Date

Number of Optional The user can enter the Number of Packages No


Packages for Reference

Gross Weight Optional The user can enter the Gross Weight for No
Reference

Others:

OFI-GST BOE Functional Flow 12


Tab – Others

Field Nature Description Query/Enabled


Name

License Optional The user can enter the License Number for No
Number Reference

IGM Optional The user can enter the IGM Number for No
Number Reference

IGM Date Optional The user can enter the IGM Date for Reference No

MAWB Optional The user can enter the MAWB Number for No
Number Reference

MAWB Optional The user can enter the MAWB Date for No
Date Reference

HAWB Optional The user can enter the HAWB Number for No
Number Reference

HAWB Optional The user can enter the HAWB Date for No
Date Reference

Green Optional The user can choose 'Yes' or 'No' for reference No
Channel
Clearance

Rotation Optional The user can enter the Rotation Number allotted No
Number by the Import Dept

Rotation Optional The user can enter the Rotation date allotted by No
Date the Import Dept

DEPB Optional This account will be picked up in accounting of No


Account DEPB credit if provided during the BOE creation.
O
nce the BOE header details are created and Saved , click on Lines. As the BOE is created with
document reference , plesae select the appropriate document type and complete the steps.

User should have created source document they can refer the same in BOE. Following can be
source document:

Purchase Order
Release
Advanced Shipping Billing Notice (ASBN)

OFI-GST BOE Functional Flow 13


Select the
Purchase Order
reference

Note : Make sure the Currency Code is same between BOE Invoice and the Purchase order to be
able to select the PO details.

Click on Add lines to add PO line details to BOE Invoice.

Enter BOE quantity details

OFI-GST BOE Functional Flow 14


Click on “Save” button to default the Source document item details and taxes. Enter the Customs
Tariff code, Customer tariff heading details. This information would be derived from the Item
classification setup.

Defaulting of taxes from source document to BOE:

Taxes from Purchase


Order will be defaulted

Tax Override at BOE level: There can be a requirement to override the source document taxes.
In that case user can navigate to Tax Category field and select tax category.

OFI-GST BOE Functional Flow 15


User also has the option of defaulting on all the lines or lines with no tax category.

They can even apply individual taxes here by clicking on the tax tab. Screen shot showing
overriding the document taxes:

OFI-GST BOE Functional Flow 16


Post clicking on “Yes” button, the taxes will be replaced as per the new tax category selected.
Screen shot showing new taxes:

System will consider the BOE tax amount for the tax lines that have been added to the Specific
functionality UI for Bill of Entry.

OFI-GST BOE Functional Flow 17


3.3 Update BOE

(N)  Oracle Financials for India  Transactions  Enter Bill of Entry

User can update the BOE any number of times as long as the status is “Yet to be assessed”.

For instance if user wants to give the item description, in that case user need to query the BOE
and click on button “line details”

User can provide the value in “Description” and click “Save” button.

Please note this facility was not available in earlier releases. In earlier releases user cannot
modify the BOE this is because the moment user saves the BOE, it gets frozen and AP Invoice
gets generated in AP invoice workbench.

Find below screen shot showing item description update:

5.4 Process BOE

Generating AP Invoice for BOE:

Once BOE details are reviewed or validated by the user, user can click the “Confirm” button.
Once clicked on “Confirm” button, the BOE will not be allowed for any changes/updates.
This action will result in generation of AP Invoice in the name of Customs Authority.
Following decision box will appear while confirming BOE:

OFI-GST BOE Functional Flow 18


Post click on “OK” button the status of the BOE changes from “Not yet assessed” to “Confirmed”.

Find below the screen shot showing status of the BOE as “Confirmed”:

Following concurrent requests will be triggered to import the BOE invoice to invoice workbench:

o Importing BOE Invoices - Localization (Payables Open Interface Import).


o Calling Payables Approval Localization (India - Auto Invoice Approval)
o Payables Approval Localization (Invoice Validation)

OFI-GST BOE Functional Flow 19


User can then query the BOE invoice from AP Invoice workbench taking the invoice number from
previous concurrent request output.

Find below the screen shot of BOE invoice in AP Invoice workbench:

OFI-GST BOE Functional Flow 20


Format of BOE invoice
BOE/Invoice/Org_Id/
BOE_Id

On clicking the “Distributions” button, user can observe the Distributions created by the system.
The distribution account is picked up from the expense account defined at the tax type definition
level.

OFI-GST BOE Functional Flow 21


User can then raise the payment for the BOE Invoice. Post the payment of the BOE invoice, the
status of the BOE will become “Available for Receipt Application”.

OFI-GST BOE Functional Flow 22


4 –Create BOE Invoice (Without Reference)
4.1 Flow Diagram

Create BOE Header Details

with

Capture BOE Line details


manually

Create BOE Taxes

Confirm BOE

Payment of BOE Invoice

Create Receipt from BOE


Invoice

4.2 Create BOE Invoice

BOE Invoice without reference is used when there are no source document details available and
the BOE can be applied against multiple documents like Purchase orders, ASNs etc.

You can create BOE without reference with Item Independent flag enabled or by selecting the
inventory item details while creating BOE

(N)  Oracle Financials for India  Transactions  Enter Bill of Entry

OFI-GST BOE Functional Flow 23


Capture the BOE Item details

OFI-GST BOE Functional Flow 24


Assign the Tax category details to each BOE line or you can default the tax category by selecting
from the list of values.

OFI-GST BOE Functional Flow 25


Click on Yes to default the taxes to the BOE lines

Capture DEPB credit in the columns DEPB amount column if avialable.This DEPB credit will be
reduced from the total BOE amount at AP invoice workbench in the form of negative distributions
once the BOE invoice gets generated.

OFI-GST BOE Functional Flow 26


Click on OK to confirm the BOE

OFI-GST BOE Functional Flow 27


Once the BOE Invoice is created in Payables , query the invoice as below from AP Invoice
workbench

BOE Invoice format: BOE/Invoice/Org_Id/BOE_Id

OFI-GST BOE Functional Flow 28


Click on distirbutions to see the distribution details of invoice. The negative distributions represent
the DEPB credit utilized while raising BOE. The account for DEPB line will be defaulted from the
BOE Invoice.

OFI-GST BOE Functional Flow 29


5 –Apply Receipts
Once BOE invoice payment is done, the BOE will be available for application on Receipt.

Users should decide on the BOE application approach. Currently system will support 2 options

1. Create Receipt from BOE Screen


2. Apply BOE when the standard receipt is created

The process below (section 5.2 and 5.3) explains the process for creation of receipt from Tools >
BOE receipt creation

Section 5.4 explains about the new process of Applying BOE to the Standard receipt

5.1 Flow Diagram


Select the BOE to which the
receipt to be created

Enter PO Information

Capture Receipt Details

Verify and Confirm taxes

5.2 Apply BOE to new Receipt

(N)  Oracle Financials for India  Transactions  Enter Bill of Entry  Tools  BOE Receipt
Creation

Select the Purchase Order details for which the Receipt to be created.

OFI-GST BOE Functional Flow 30


Click on Find and Capture the receipt details

OFI-GST BOE Functional Flow 31


Click on Tools > India Taxes Details to verify/Capture the receipt tax information

Add if any new taxes applicable to the receipts like third party supplier taxes, freight, Insurance
applicable to the receipt

Confirm Taxes if the taxes populated are relevant and complete

OFI-GST BOE Functional Flow 32


System will generate the receipt accounting,
The Non-recoverable Customs taxes will be transferred to Item cost using Inventory/cost
management. Also MTL_TRANSACTIONS_INTERFACE, MTL_TXN_COST_DET_INTERFACE
tables gets updated with non-recoverable tax amount and the same gets added to item cost

For more details on receipt tax processing please refer the document OFI-GST-Functional P2P
flow Phase1& 2.docx

5.3 Apply BOE using Add-to-Receipt


Add on Receipt options are available to use the existing receipt number to apply to BOE.

Using this method, user can keep the single receipt number against the multiple BOE Invoices.

(N)  Oracle Financials for India  Transactions  Enter Bill of Entry

OFI-GST BOE Functional Flow 33


Navigations: Tools > BOE Receipt Creation

BOE Receipt Creation link would be enabled only if BOE amount is available to apply against the
receipt.

OFI-GST BOE Functional Flow 34


Using the "Add to Receipt" option, user can keep common receipt number for multiple
GRN(Goods Received Note) . When user click on ‘Add to Receipt “ option , following form should
pops up and allows user to select the Existing Receipt Number

Once the Receipt Number is selected, User needs to navigate to PO Number filed to get the
respective PO number which is attached as the reference document of BOE

OFI-GST BOE Functional Flow 35


Click on Find Button to create a ‘Add to Receipt’ that will be available to apply to BOE

OFI-GST BOE Functional Flow 36


This form is as it is Receipt Creation form, User has an option to add the taxes, modify the taxes.

By default, Receipt quantity default as available quantity for BOE application. but user can modify
the receipt quantity as per their business requirement .

User need to Navigate to Tolls > India Taxes Details to validate and confirm the taxes against the
receipt.

Note: Per current GST specifications, the expected business requirement for Receipt changes /
Corrections is not yet frozen. Hence in view of this, such relevant requirements (e.g. corrections,
RTV etc...) shall be evaluated further post Phase-2 release.

5.4 Create Receipt and Apply BOE


When the receipt is created in the system, it is mandatory to apply BOE for the receipt if the
receipt is having Custom taxes

Below process illustrates the approach and detailed steps to be followed to implement the same

OFI-GST BOE Functional Flow 37


Select PO for which receipt
is created

Capture Receipt details

Verify and Confirm taxes

Apply BOE

Select the PO for which the receipt is to be created

Enter receipt details

OFI-GST BOE Functional Flow 38


Goto Tools >India tax details. Verify the taxes and confirm the same

OFI-GST BOE Functional Flow 39


Once the taxes are confirmed, click Tools>Receipt Header Application /Receipt Line application to apply
BOE on the receipt.

OFI-GST BOE Functional Flow 40


System will show all available BOEs for application.

Select the BOE to which the receipt Line /Header to be applied. Validate the tax application details. Click
on Apply.

OFI-GST BOE Functional Flow 41


Save the Receipt

5.5 BOE With Third party Taxes

The process explains about how to handle the Insurance, freight and other third party costs when
involved for imported goods.

Create the Purchase Order with the item details and the custom taxes applicable.

Create the BOE Invoice and with/without document reference as applicable

OFI-GST BOE Functional Flow 42


Confirm BOE and complete the payment of BOE to Customs Authority.

Create the Receipt from BOE Invoice > Tools > BOE receipt creation

OFI-GST BOE Functional Flow 43


Verify/amend if any taxes to be applied and modify at receipt level

Confirm taxes

System will launch set of concurrent programs as shown below

OFI-GST BOE Functional Flow 44


In the above request set, the program ‘Third party Invoices - Payables open interface Import
(Payables Open Interface Import)’ creates the Third party invoice against the Non –PO vendor

OFI-GST BOE Functional Flow 45


5.6 Applied Receipts Form

This form will be used to check the list of receipt details applied against a BOE Invoice.

(N) Oracle Financials for India > Transactions > Bill of Entry > Tools > Receipts Applied

The option drill down will show the breakup of taxes applied/used against this receipt.

OFI-GST BOE Functional Flow 46


:

OFI-GST BOE Functional Flow 47


6 –BoE Writeoff
If the BOE is fully consumed, then the Status of BOE will come “Closed “automatically, following
is the screen shots

However there will be scenarios where the BOE may not be fully consumed and users need to
writeoff the remaining amount

Navigation: Oracle Financials for India > Transactions > Bill of Entry > Tools > BOE writeoff

User should provide the details of write off amount, date and the reason to perform writeoff

You will be allowed to perform write off only when BOE Status is Applied.

OFI-GST BOE Functional Flow 48


After processing this event, Write off Accounting would be generated and balance amount would
be reduced that can be validated as per following script shots :

OFI-GST BOE Functional Flow 49


7 –BoE Cancellation

BOE Invoice will be allowed to cancel when the invoice status is as below:

i) ‘Not Yet Assessed’ : At this stage if the BOE is cancelled , No accounting entry is
generated because accounting entry is generated at the time of ‘Confirmation’ of BOE.
User should navigate to Tools >Cancel BOE from BOE form to cancel BOE Invoice .After
cancellation ,Invoice status will be change to “Cancelled”

ii) Confirmed : At this stage , Tools > Cancel BOE from BOE form would be disable
.However user can cancel the AP invoice that is generated by marking the BOE as
‘Confirmed’ prior to payment of such invoice .After the cancellation of AP Invoice, BOE
status will be change to “Cancelled’

If the AP Invoice is paid then user must void the payment if none of the receipt is applied
to BOE

Following is the screen showing the BOE status after cancellation

If the Receipt is applied to BOE, BOE Invoice payment cannot be voided. Application will stop to
do the void payment of invoice and will pops up following message:

OFI-GST BOE Functional Flow 50


OFI-GST BOE Functional Flow 51
8 –BoE Accounting

Event Account Debit Credit


BOE Invoice Expense account in BOE BOE Amount
Accounting tax rate setup
Customs Authority Liability BOE Amount
Account
Payment of BOE Customs Authority Liability BOE Amount
Invoice Account
Bank Account BOE Amount
Loading of Duty Inventory Receiving BOE Amount (Non
to Item Cost Account Recoverable)
Expense account in BOE BOE Amount
tax rate setup (Non
Recoverable)
On Recovering Tax Interim Recovery BOE Amount
the taxes Account in BOE tax rate (Recoverable)
setup
Expense account in BOE BOE Amount
tax rate setup (Non
Recoverable)
On Claim the Tax Recovery Account in BOE Amount
Recovering taxes BOE tax rate setup (Recoverable
claimed amount )
Tax Interim Recovery BOE Amount
Account in BOE tax rate (Recoverable
setup claimed amount )

9 - Summary
The above document will provide the below benefits:

 Setups related to BOE functionality


 BOE Invoice creation with reference ,without reference , processing of BOE
 Applying new receipt to BOE
 BOE accounting.

OFI-GST BOE Functional Flow 52


10 - Call to Action
Please do the BOE related setup according to the above documentation and perform transactions
according to your business scenarios.

This is not the final document and we will incorporate further changes in this document according to
your queries and Business Scenarios.

You can also refer the documents in GST Info Center (Documentation Tab) released as part of
Phase2 deliverables.

E-Business Suite Release 12: India Goods and Service Tax (GST) Info Center (Doc ID 2176820.2)

OFI-GST BOE Functional Flow 53