INDIA LOCALIZATION – INTERVIEW QUESTIONS - 01

INDIA LOCALIZATION – INTERVIEW QUESTIONS - 01

1. Can we create multiple regimes for service tax? Can we have the same registration value for n number of organization?

• No we can not create multiple regimes for service tax.
• Yes we can have same registration numbers for multiple inventory organization.

2. Whether tax is created against inventory org or operating unit?

• Tax is created against operating units.
• But against inventory organization only we can enter the form as transactions happen at inventory organization level.
  
  

3. Which register report is used for finished goods?

• RG-1 register is used for finished goods
  
  

4. Where the MODVAT Flag & the recoverable Flag are available? What will happen if both Flags are disabled and write their localized accounting entries?

• MODVAT Flag available at PO level & recoverable Flag available at the receipts level. If both the Flags are disabled, claim can not be made.

Localized accounting entry if claimed:

Excise Duty Dr.

Cess Dr.

SHE Cess Dr.

VAT Interim recovery a/c. Dr.

To Inv AP accrual a/c. Cr.

If not claimed:

Material A/c. Dr.

To Inv. AP Accrual a/c. Cr.

4. What are the basic registers we use for excise?

• RG-23A part-I - Raw Material (Quantity)
• RG-23A part-II - Raw Material (Value)
• RG23C part I - Capital Goods (Quantity)
• RG23C part II - Capital Goods (Value)
• RG-1 - Finished Goods (Value)
• PLA -
  
  
  

6. Can we see the register while creating the receipt

• Yes we can see. Tools → View Register

7. Can we see the localized accounting entry in PO receipt before importing?

• No we can not see the localized accounting entry in PO before importing.
• It is seen only after importing
  
  

8. A client issue is that he has made a receipt with excise & VAT and forgotten to claim them. What will be the solution to claim both excise & VAT?

• He can claim excise by going thru “Claim MODVAT on Receipt” form. VAT claim entry form is available for claiming VAT.
• (Nav: India TCS/VAT/Service Tax/FBT–> Transaction –> VAT Tax Claim.

9. Why I’m not able to see anything in the VAT claim form?
   
   There may be the following reasons for that:

1. MODVAT & recoverable Flag are not enabled
2. Supplier additional information not given with site
3. In item classification, we have given finished goods instead of raw material
4. In regime registration we have not defined inventory organization
5. Tax type we selected VAT instead of Value Added Tax

10. In TB the balance for ST interim recovery account & VAT interim recovery account is available. How to reconcile and what steps to be made?

The following are the reconciliation steps:

For service tax:

1. Payment should be checked. If not, make the payment & run the concurrent “India – Service Tax Processing”.
2. Check manual Jvs
3. Check the invoices whether accounted or not
4. Check & post Jvs
5. Check with PO-PO receipt
6. In GL import, “Service Tax India”
   
   

For VAT:

1. Check the manual Jvs
2. In GL, import, “VAT India”
3. Check for VAT claimed in PO receipt stage
4. If claimed then import
5. Check the receipt entries are posted

11. Can we select the excise & VAT taxes in payable invoice?
    We can select VAT but not excise.

12. Do we have localization payable invoice?
    No.
    
    
    

13. Can we make partial claim for VAT & excise, how?

• Yes we can make partial claim.
• Partial claim can be made through “VAT – Claim Terms Definition form”
  (India TCS/VAT/Service Tax/FBT → Setup → VAT – Claim Terms Definition)

14. What is the setup determining the GL date for TDS certificate generation? How to create the TDS section code? What will be prefix for the automated TDS invoice?
    From TDS year info, we get the GL date.

• Creation of TDS Section Code: In India Localization, Asia Pacific Look-up: The name of the look-up is JAI_TDS_SECTION

• Prefix will be the Standard Invoice Number

15. What will be the accounting entry for the TDS invoices? What will be the payment accounting entries for the TDS invoices?

At the time of invoice generation:

a. Standard Invoice for supplier:

Expense a/c. Dr.

To Sundry Creditor Cr.

b. Credit Memo for supplier:

Supplier a/c. Dr.

To TDS Payable a/c. Cr.

c. Standard invoice for tax authority:

TDS Payable a/c. Dr.

To Tax authority Cr.

At the time of making payment:

a. Payment to supplier:

Sundry Creditor a/c. Dr.

TDS Payable a/c. Dr.

To Bank a/c. Cr.

b. Payment to tax authority:

Tax Authority a/c. Dr.

To Bank a/c. Cr.

16. For the tax authority invoice from where the tax authority name & the TDS account is taken?

• From tax form itself we get tax account information and tax authority information.

17. Why the credit percentage is not given for TDS tax? What is the difference between single & cumulative threshold type?

• TDS is not recoverable tax. Hence we don’t give credit percentage.
  • Threshold types:
    • Single: Applicable to a single transaction.
    • Cumulative: In this case TDS is applicable only when the cumulative purchases made from the supplier in one financial year exceeds the specified limit.

18. What are the concurrent used to generate the TDS certificate?

The concurrent programs are:

1. India – Process TDS Payment

2. India – Generate TDS Certificate

3. India – TDS Certificate

19. The claim VAT button in the PO receipt is grayed out. What is the solution to enable this?
    You would have selected VAT instead of Value Added Tax in the tax type creation.

20. Is Excise invoice generation mandatory in India Localization?
    Yes, it is mandatory
    
    
    
21. For VAT, is document sequencing mandatory?
    Yes, it is mandatory

22. When the shipment of FG over, does it affect PLA Register or RG23A register?

• It will search in RG23A register first.
• In organization additional information we give 1, 2, 3 sequence so that it looks into the sequence which we mentioned.
  
  
  

23. What is the difference between CENVAT Flag and Excise Flag while defining item?
    CENVAT Flag is for PO while Excise Flag is for Sales.

24. For a shipment the excise invoice number is not generated. What could be the reason for this?

The following could be the reasons

1. Customer additional information (check for without site & with site)
2. We have not defined order types where we define the excise invoice number generation
3. Bond register
4. Bonded sub-inventory
5. Organization additional information

25. What is Regime Registration? Why we are not able to select Inventory Organization in Regime Registration?

• It used to define rules applicable to all taxes assigned to it. We need to complete this setup before we move ahead with other setups.
• It is because we don’t have inventory org additional information

26. What is Bond Register?
    The calculation of ED & updates of excise registers are based on the setup made in the define bond register. Before making this setup, you need to define the order types & transaction sources. Excise transactions are classified into the following categories:
    1. Domestic with Excise
    2. Domestic without excise
    3. Export with Excise
    4. Bond Register (Export under bond)

27. Why to create Excise invoice number and document Sequence? What are the concurrent programs involved and to run the same for a shipment what details are you giving?

• We can not claim excise & VAT in their absence.
• For excise, “India – Excise Invoice Generation” & we give delivery number for generation for VAT, “India – VAT Invoice Generation / Accounting” & we give registration value

28. How to insert taxes in AP and AR invoice?

We run the following concurrent programs:

• For AP: “India to insert tax for pay on receipt”
• For AR: “Local concurrent for processing order lines to AR”

29. What is Bonded Sub-inventory and what is the use of it?

• Excise related transactions & records will be updated only for those sub-inventories which are identified as bonded for manufacturing organizations.
• For example, if we have not defined bonded sub-inventory, claim can not be made and the excise & VAT recoverable will go into the material cost. As a result, the cost of material will rise.
  
  
  

30. What is RG Consolidation?

• We perform RG consolidation (excise) to make sure that our balances available in RG registers are adjusted against PLA register & to find out the liability to be paid to the tax authority of excise.

31. What are the sources we use to import Excise, Service Tax and VAT into GL?

• For excise: Purchasing India
• For VAT: VAT India
• For ST: Service tax India

32. During the PO Return will the taxes be reversed? If yes what are the reversal accounting entries?

• Yes, the taxes will be reversed.

33. Where to see the receipt accounting entry and delivery accounting entry?

• Receipt accounting entry is viewed in the Receiving Transaction Summery

(after the receipt and the delivery).

Nav: Oracle Purchasing → Receiving → Receiving Transaction Summary

• Delivery Accounting Entry is viewed in Material Transaction.

Nav: Oracle Inv → Transaction → Material Transaction

34. Can we have the same invoice number for excise and VAT & how?

• Yes we can have the same invoice number for excise & VAT

35. How do you differentiate between your manufacturing org and trading org?

• When you go to the org additional information, the accounting information will be grayed out for trading org while the trading information will be grayed out for manufacturing org.

36. What is BOE invoice?

• During customs accounting process, BOE invoice is the one through which we make payment to the customs authority.

37. What are the setups for TCS?

• Tax
• Tax Category
• Item Category
• Item classification
• Transaction type
• Transaction source
• Receipt class
• Regime registration
• Tax calendar
• Tax authority & Tax authority additional information
• Customer & Customer additional information

38. What is the difference between Accrual Basis and Cash Basis?

• The accrual accounting method recognizes the revenue when it is earned & expenses when they are incurred.
• While cash basis accounting recognizes revenue & expense when cash is actually spent or received.

39. How to create tax code for VAT?

• Through Asia pacific look-up, the look-up name is JAI_TAX_TYPE

40. What is the link between the MODVAT Flag & Recoverable Flag?

• If MODVAT Flag is disabled Recoverable Flag is also disabled.
• The recoverable Flag can be disabled even after enabling the MODVAT Flag (in this case the register is not updated & we can not make claim)

41. What is the localization entry if you have not enabled the MODVAT & Recoverable Flag.

Material a/c. Dr.

To Inv. AP accrual a/c. Cr.

42. After receipt how will you confirm whether VAT & excise has been claimed or not?

• For excise, by going to Tools → view register.
• For VAT, we click the option → claim VAT in the receipt (localized) form

43. What are the procedures for claiming excise & VAT if we forgot to claim the same.

Excise:

• We can claim excise by going through “Claim MODVAT on Receipt” form.

VAT:

• VAT claim entry form is available for claiming VAT.

(Nav: India TCS/VAT/Service Tax/FBT–> Transaction –> VAT Tax Claim.)

• Also for claiming VAT, we run the concurrent “India Receiving Transaction Processor”

44. What are the tax types for service tax?

Types are,

• Basic – Service tax
• Cess – Service Tax Edu Cess
• HSE CESS – Service Tax higher secondary Edu Cess

45. What will be the item class for finished goods when you are defining in excise regime & VAT regime?

• In excise, for domestic sales, “Finished Goods India” and for export, “Finished Goods Export.
• In VAT, “Finished Goods”

46. In which form you can see VAT & excise invoice number?

• The name of the form is “Fulfilled orders” in order management responsibility.

47. What is the outcome if we give the concurrent “India – VAT invoice generation / accounting” in precedence to “India-Excise invoice generation”?

• The error flashed is “You have not run the excise invoice generation”.

48. What is the setup for excise invoice number generation? Also give the steps involved.

The setup for excise invoice number generation,

1. Creation of transaction type
2. Creation of transaction source
3. Creation of Order types (Header & Line)
4. Creation of Bond Register (here we attach transaction source & transaction type – order)

Steps:

1. In excise generation (India Localization) we choose the type of transaction types as given in LOV (Invoice, Order, Return to Vendor, Return Material Authorization, Domestic & Export)
2. In order / invoice type, we give the transaction type & source as well as other details on the basis of the LOV as selected in 1^st step.

• If you select domestic, export, Return to Vendor or RMA, the value in step 2 is by default.
• If you select invoice, the value is step 2 is transaction source
• If you select order, the value in step 2 is transaction type order

3. We give the start number of the invoice along with the prefix (not mandatory).

(In org additional information, in tax calendar you have excise generation button. By clicking the same, we have to link our transaction type with your order.)

49. When do you come to a conclusion that excise & VAT have been claimed?

• After generation of VAT & excise invoice number we come to a conclusion that VAT & excise have been claimed.

50. What is supplementary invoice?

• There may be instances in business where the customer balances are affected by price and tax rate changes for a retrospective period. For all such changes we raise supplementary invoice or a credit memo.

51. What is the name of the auto concurrent that runs after you click the “claim VAT” option and before the VAT is claimed / recovered.

• India-VAT claim processor (India-VAT claim processor)

52. How to create pre-validated TDS invoice and credit memo? TDS invoice gets generated even after not attaching the TDS tax in invoice generation. What is the setup for this?

• In supplier additional information, we can enable the option, “Create pre-validate TDS invoice and credit memo”
• By selecting the “default TDS section” in the supplier additional information.

53. How to attach the TDS tax in the invoice after it is validated?

• We can make some changes in the line amount and then the system asks for re-validation. At this point we can attach the TDS tax, make necessary corrections & then validate the invoice.

54. What is the exception setup in TDS?

• This is for using particular tax for particular supplier.

55. What is the reason if we are not able to attach the TDS tax in invoice?

• Supplier additional information is not there

56. What are the two ways you can rectify the incorrect PAN given in TDS?
    1. Run the concurrent, “India – PAN Number Update”
    2. Delete the supplier additional information & create afresh.

57. What are the Types of Calendar in Indian Localization?

• TDS Year Info and Tax Calendar

*Disclaimer: 

Please be informed that the above details are collated from various sources like Oracle Apps related blogs, Sr. Consultants and knowledge acquired over experience. This is done solely for educational and reference purposes and does not hold any other commercial benefits.