Import Procurement Process in SAP MM

When we procure materials or services from outside the country for India, we have to pay the Custom Duty to the Government. We create the Import Purchase Order against the Foreign Vendor with the foreign currency. We also maintain some condition type in the PO conditions like Custom and Countervailing Duty in the Purchase Order. Now CVD  and AED is replaced with IGST after GST implementation.
We also define the Custom Vendor/ Commercial Vendor in these condition type and Tax Code will be zero in the Import Purchase Order. In Import cases, the GR-Based IV should not be checked as we are posting Commercial Invoice before the Goods Receipt.
Once the material is received in the Airport or Dockyard then we have to go clear the material for Custom Clearance. For this we have to pay the Custom Duties to the Indian Government. We post the Commercial Invoice (Bill of Entry) against the Custom Vendor. After the clearance of Custom Duty we received the goods in Company premises. And then Commercial Invoice reference is captured at the time of Goods Receipt at Company Storage Location. After GST Implementation, there is no pop-up appears for Commercial Invoice while doing Goods Receipt.
And then we post the Invoice Receipt against the Foreign Vendor.

As per the model GST law for Imports:
- to clear the goods from the customs, custom duties has to be paid for custom clearance.
- the custom invoice consists of the Basic Custom Duty (BCD), CESS and IGST in the GST regime.
- to create the customs invoice in MIRO, Basic Customs Duty is derived from the delivery cost line.
- IGST is computed on the Basic customs duty and the assesseble value.
- CESS quantity based is calculated on quantity in Custom Invoices.

SAP Notes for Import:
Customers have implemented below GST notes for Imports Scenario:
2458404 - GST India: Import
2491302 - GST India: Import Cess
2482200 - GST India - DDIC activity and configuration for GST Compensation CESS
This document covers the configuration to set up Imports Process for GST

Configuration Changes for GST: 

1. Create Condition Types (T. Code - OBQ1)
     a. Create JIMN (Non-deductible reference) and JIMD (Deductible reference) condition types
     b. Create JINC (Non-deductible reference) and JIDC (Deductible reference) condition types for Compensation Cess.
     c. Create ZIQN (Non-deductible reference) and ZIQD (Deductible reference) quantity based condition types for Compensation Cess.
*Note - Kindly note that the above condition types are reference condition types, customers can create than their own condition types.

2. Classify Condition Types
     a. For TAXINN tax procedure, assign Condition Types (JIMD, JIMN, JIDC, JINC, ZIQD, ZIQN) in the below path:-
SPRO > Logistics-General > Tax on Goods Movement > India > Basic Settings > Determination of Excise Duty > Maintain Excise Defaults (J_1IEXCDEF table)
    b. For JIMPOR Imports Pricing Procedure, classify your Custom Duty Condition (JCDB) in the below path:
SPRO > Logistics-General > Tax on Goods Movement > India > Basic Settings > Determination of Excise Duty > Maintain Excise Defaults (J_1IEXCDEF table)

3. Create Account Key
    a. Create JIM Accounting Key for deductible import GST condition and Compensation Cess in T. Code OBCN

4. Change the Tax Procedure
    a. Maintain the new entries for these Condition Type, Account Key JIM for Deductible and NVV for Non-detuctible and maintain 800 Routine in Condition Based Formula
    b. For Routine configuration please follow SAP Note 2491302.

5. Imports Pricing Procedure
    a. Custom Duty condition types in import pricing procedure remain as it is.


Process Step  By Step - 

1. Create Purchase Order (T.Code - ME21N): Create Import Purchase Order against Foreign Vendor with zero tax code and maintain the Custom Duty in the Condition Tab at the Item Level and maintain the Custom vendor in the Condition Type.

2. Post Commercial Invoice (T. Code - MIRO): Create Custom Invoice for Custom Vendor, enter details as required with the INR Currency as we are paying to Government. Enter the Custom Duty value and Qty.
And there will be a new field added Assessable Value in the Item level of MIRO, enter the Total Value (PO Value = net price *qty) here, enter the IGST Import Tax Code. The IGST calculation is based on the Custom Duty + Assessable Value
Accounting Entries
Custom Clearing A/C        Dr.
IGST Receivable A/C        Dr.
          Custom Vendor A/C        Cr.

3. Goods Receipt (T. Code - MIGO): Post Goods Receipt with reference to PO and received the quantity.
Accounting Entries:
Inventory A/C        Dr.
    Custom Clearing A/C     Cr.
    GR/IR Clearing A/C       Cr.

4. Post Invoice Receipt (T. Code - MIRO): Post Invoice Receipt for Foreign Vendor with reference to Import Purchase Order in the system.
Accounting Entries:
GR/IR Clearing A/C        Dr.
     Vendor A/C                Cr.

*Note-

• No more CVD and AED in Import Process after GST.
• Now only Custom Duty, Social Welfare Surcharge in PO Pricing Condition in GST
• No pop-up for Commercial Invoice at the time of Goods Receipt after GST. 
• There is configuration for the pop-up to display at the time of GRN.
• SPRO - SAP Ref. IMG - Logistics - General - Tax on Goods Movements - India - Basic Settings - Determination of Excise Duty - Maintain Excise Defaults