Import

Scenario - Importing from a Third Country

Purpose This scenario describes the processes involved in importing goods into your country from a third country. In this sense, a "third country" is defined as the country of export when no trade agreement exists between your country and the exporter. In this case, you are responsible for compliance with the import laws of your own country. Reasons for Importing Goods There are three primary reasons for importing goods. Trade Production Transit Trade There are three main reasons why you may want to import for trade purposes: Comparative advantage Some foreign manufacturers can make products more cheaply. Availability Some products are only available in foreign markets. Marketability A product may be new and you want to market it in your entire country or in a region of your country. Production It is sometimes advantageous to import raw or semi-finished materials to be used in a manufacturing process. Transit Foreign merchandise with the status "in transit" is exactly that passing through your country on the way to another. At the plant level in the SAP System, this refers to a goods receipt that immediately becomes a goods issue to a country other than the location of your plant. A carnet TIR (document which allows passage of foreign merchandise through a customs territory) may be required for the transfer of goods under bond in your country.

Foreign Trade Data in Purchasing Documents Data that describes the import or arrival characteristics of a purchasing transaction. Structure Foreign trade data appears at the header and in the items themselves in purchase orders and shipping notifications (inbound deliveries). The vendor master records, material master records and purchasing info records propose this data. Foreign Trade Data in Purchase Order, Shipping Notification and Goods Receipt Headers

Data
FT/Customs data

Description
# Mode of transport The technical customs term describing the type of transport (for example, see or air transport) used to take the goods across a national border #Office of entry The key for the border customs office where the goods are unloaded from the mode of transport used for crossing the border

Comments
The system determines this data from the vendor master and uses it as a default value in the purchase order, shipping notification and goods receipt.

Partner data

Vendor The vendor key Delivery vendor Country key The vendor country key

The system copies this data from the purchase order to the shipping notification and goods receipt.

Foreign Trade Data in Purchase Order, Advance Shipping Notification and Goods Receipt Items

Data
Material data

Description
Material The material key for the item Description A description of the item

Comments
The system copies this data from the material master record.

Commodity/Import code
Weight and volume Origin The goods country of origin The goods country and region of destination The system copies the country of origin from the purchasing info record as a default value. It copies the country and region of destination from the ordering plant. With the appropriate settings in Customizing, the system determines the transaction type automatically based on criteria like the importing country or the item category. The system then copies the data to the purchase order

Transaction

Import procedure The procedure by which the goods being imported are declared to customs. This is copied from the purchasing info record.

Transaction type
The classification of the type of transaction contract

In co terms

Value

Statistical value The untaxed value of the goods, including transportation and insurance costs that arise in the importers country

The system calculates the statistical values in pricing in the purchase orders.

Other customs data

Customs quota CAS number Manufacturer number Anti-dumping code Preference rates

The system uses this data to calculate import duties to be levied.

Maintenance of FT Data in Purchasing Documents This function describes the maintenance of foreign trade data required for importing merchandise in purchase orders and shipping notifications (inbound deliveries). Activities To change or display a purchase order from the SAP standard menu, choose Logistics Materials Management Purchasing Purchase Order Change or Display. To change or display an inbound delivery (advanced shipping notification) from the SAP standard menu, choose Logistics Materials Management Purchasing Purchase Inbound Delivery Change or Display. Order To change or display a goods receipt from the SAP standard menu, choose Logistics Materials Management Inventory Management Material Document Change or Display. You can retrieve and check a list of existing purchase orders for completeness from the Import section of the Operative Cockpit. For this procedure, see Scenario - Daily Import Operations. To check a single purchase order for completeness choose the Individual Maintenance tab in the General Foreign Trade Processing Cockpit. From this cockpit, in the Item Overview section of a purchase order, you can simulate an import to check and maintain foreign trade data completeness by choosing Import Simulation. To maintain data in Menu path in document You should know The purchase order header

In the purchase order header, choose the Address and Import tabs You can display all foreign trade data in the purchase order header easily from the General Foreign Trade Processing Cockpit under Individual Maintenance. To display the incompletion log for FT data in the header, choose Log of Incomplete Items. A purchase order item In the purchase order, select the item in the Item Overview section. In the Item section at the bottom of the screen, choose the Quantities/Weights, Delivery, Delivery address and Import tabs You can display a log of all incomplete FT data in the purchase order item easily from the General Foreign Trade Processing Cockpit by choosing Log of Incomplete Items. The inbound delivery (shipping notification) header In the inbound delivery, choose Go to Header Foreign Trade / Customs To check whether the foreign trade data in the header is complete, choose Incompleteness analysis. An inbound delivery item In the inbound delivery, select an item and choose Go to Customs

Item

Foreign Trade /

Choose Incompleteness analysis to determine whether all foreign trade data is complete in an inbound delivery item.

Foreign Trade Data in Master Records Definition Master data relevant to foreign trade that is used throughout the entire logistics chain in Materials Management (MM) and Sales and Distribution (SD) documents. The systems automated foreign trade processing depends on complete master data. To ensure efficient import and export processing, you need to maintain the master data thoroughly. Structure This section provides a detailed list of the data relevant for using SAP's Foreign Trade (FT) application component in the following master records: Vendor master record Purchasing info record Material master record Customer master record Cockpit Access: In addition to checking this data from the SAP standard menu paths described below, you can check whether foreign trade data is complete in master records in one step from the General Foreign Trade Processing Cockpit. From the Master data section of this cockpit, you can create, view and modify each of these master records.

Vendor Master Record To go to a vendor master record from the SAP standard menu, choose Logistics Materials Management Purchasing Master data Vendor Purchasing You can maintain data relevant to foreign trade on the following screens of the vendor master: Address Vendors city Postal code Country Region The vendors country helps indicate import transactions in MM documents. You need the vendors region for declarations to the authorities. Control This screen contains accounting data including the vendors VAT registration number. The system copies the vendors VAT registration number from the vendor master record to the purchase order as a default value.

Purchasing data Order currency Terms of payment In co terms and Schema Group vendor for import pricing procedure

The mode of transport indicates how the imported goods cross the border. Office of entry (at the border) The border customs office code specifies the office through which goods usually arrive in the country. The vendor master record supports only one Office of entry. Purchasing group To display or maintain data for preference processing from this screen, choose Extras Tariff preference.

Purchasing Info Record The purchasing info record represents the link between the vendor and the material delivered and overrides the vendor master record. Communication between the vendor and your plant can be made easier using purchasing info records. To go to a purchasing info record from the SAP standard menu, choose Logistics Materials Management Purchasing Master data Info record. You can maintain data relevant to foreign trade on the following screens: General data Country of origin Region of origin Certificate category (the type of certificatefor example, a certificate of originissued by the vendor) Certificate number Date until which the certificate of origin is valid Confirmation control key Export/import procedure

Material Master Record To go to a material master record from the SAP standard menu, choose Logistics Materials Management Material Master Material. You can display or enter data relevant to foreign trade in the following views of the material master record: Foreign Trade: Import data Import code number (or commodity code) Export/import group (a grouping of similar materials for export or import transactions) Country of origin Region of origin

Create Purchase Order (ME21N)

A purchase order is a legal document used to record an individual purchase with the vendor. It also provides the vendor with a reference document to link to goods receipt and invoice verification processes. The purchase order is a commitment to a vendor for a given material, in a specified quantity at a predetermined price and delivery date Enter import vendor, Purchase Organization, Purchasing Group, Company code, Material Number, PO qty, and Delivery date

Enter Office entry in geography tab

Condition tab

Enter commodity code and import code number

In Purchase Order of main imported vendor GR-based invoice verification tick should not be there on invoice tab.

Since the purchase order vendor is 300103 who is imported vendor and he is nothing to do with the customs duty, special customs duty and countervailing duty. These three duties are paid to the local Commissioner of Customs, vendor code 300104 in our case. The Customs Agent Charge is paid to the Customs Agent, Vendor Code 300104 Normally the Freight is also paid to the Customs Agent who in turn would have had paid to the respective Transport Operator (if different. Normally the CFA owns a transport company) and the Port Authorities. It is recommended to change the vendor code 300104 for this three-condition types viz., JCDB, JCV1, JECV, and JEBC. To change the vendor for condition type select JCDB condition type and choose on Condition detail icon located at left bottom side of your screen. System will take to new Item Conditions Detail: screen. In this screen at right bottom of screen you can find the vendor code 300103 the main imported vendor is defaulted here. You have to replace this vendor code with commissioner of customs code 300104 and choose enter and green arrow to come back to condition tab of purchase order.

To change the vendor for condition type select FRB1 condition type and choose on Condition detail icon located at left bottom side of your screen. System will take to new Item Conditions Detail: screen. In this screen at right bottom of screen you can find the vendor code 300103 the main imported vendor is defaulted here. You have to replace this vendor code with Freight vendor code 300105 and choose enter and green arrow to come back to condition tab of purchase order.

Change the currency at header level because the custom have to pay to Indian custom office that should in INR and gross price should be in USD

Invoice Verification for CVD, Customs Duty, Educational Cess on CVD, Customs Educational Cess Use Subsequent to the purchase order placed on imported vendor, the goods arrive in India, they go through customs formalities. The customs officers issue a bill of entry for the goods, after payment of necessary duties like basic customs duty, special customs duty and countervailing duty. This is like invoice for the CVD on the goods. This process is dealt with logistics invoice verification. Select Custom vendor

Enter Qty and Amount of Basic Customs, CVD, Ecess on Basic Customs

Create Invoice verification for Freight

Goods Receipt With Reference to Purchase Order

Goods are received from the Vendor as a result of a Purchase Order at the receiving plant. A goods movement is entered into the system referencing this PO and a goods receipt material document is posted. Appropriate general ledger accounts are also posted and stocks are updated.

You will get Excise Invoice tab at Header Data for capturing bill of lading details and for posting Part I and Part II. On the Excise Invoice tab at Header Data make the following entries. Capture & Post Excise invoice, Excise, Excise invoice, Excise Invoice Date, BED, AED, SED, Close Header Detail data to enlarge the Detail data. Select Excise Item tab at Detailed Data (at the last).Chapter ID, EI Quantit, Please cross check the BED, ECS (CVD in this case) amount of item, as per the bill of lading, legally you cannot avail more than what mentioned in Vendor Excise Invoice. In case of imported purchase order in normal case system will default CVD and ECess (invoice verification made on commissioner of customs) amount as BED and ECS i.e. CENVAT amount. It is observed some times system is not doing this operation. In this case please input CVD and ECess amount in place of BED and ECS amount so that you can avail CVD and ECS as CENVAT amount.

Invoice Verification
In this process of Logistics Invoice Verification all the Incoming Invoices are verified in terms of their content, prices and arithmetic. When the invoice is posted, the invoice data is saved in the system. The system updates the data saved in the invoice documents in Materials Management and Financial Accounting. Select indicator:Goods/Service items Enter Purchase Order number. Base line date.

Purchase Order History (ME23N)

Delivery Cost Logistic Invoice-Customs Delivery Cost Logistic Invoice-Freight Logistic Invoice Receipt-imported item Goods Receipt of imported item