Transferring Stock Between Business Units

This chapter provides an overview of stock transfers between PeopleSoft Inventory business units and discusses how to:

• Set up interunit and intercompany transfers.

• Perform interunit and intercompany transfers.

• Stage sales orders and intercompany transfers for PeopleSoft Billing.

• Receive intercompany transfers.

• Identify interunit and intercompany transfers for export and intrastat reporting.

• Cancel in-transit interunit transfers.

• Make interunit stock inquiries.

• Create interunit transfers in India with duties and taxes for India.

• Using bonded customs warehouses within India.

Understanding Stock Transfers Between Business Units

In PeopleSoft Inventory, an interunit transfer is a transfer of stock between two PeopleSoft Inventory business units. You can create interunit transfers using these methods:

• Express Issue component.

• Create/Update Stock Request component.

• PeopleSoft Planning messages.

• PeopleSoft Purchasing Sourcing process.

Note. This chapter discusses transferring stock between two Inventory business units. For information on shipping stock to internal departments or on behalf of another general ledger business unit, see PeopleSoft Cost Management PeopleBook, “Designing Inventory Accounting,” Designing Shipment On Behalf Of and Creating and Reversing Interunit Expensed Issues.

There are three approaches to interunit transfers:

• Interunit transfer using only an in-transit account.

  As you move stock from one business unit to another, you record the cost in an in-transit account. Use this approach when both business units post to the same general ledger.

• Interunit transfer with interunit receivables and interunit payables accounts.

  You use an in-transit account along with due to and due from accounts for each business unit. Use this approach when the two business units post to different general ledgers. This approach can be used when transferring stock between separate legal entities or within the same legal entity.

• Interunit sales.

  The source PeopleSoft Inventory business unit records a sale, and the linked PeopleSoft Billing business unit issues an invoice to the receiving business unit’s PeopleSoft Payable unit. (This is also called an intercompany transfer.) This approach can be used when transferring stock between separate legal entities or within the same legal entity, but it is required if the PeopleSoft General Ledger business units use different currencies.

When you transfer goods between business units, you need to account for transfer costs, currency changes, taxes, and invoicing for the affected business units.

See Also

Managing Transfers

Using Interunit and Intraunit Accounting and ChartField Inheritance

Setting Up Interunit and Intercompany Transfers

This section discusses how to:

1. Select an interunit accounting method for stock transfers.

2. Define transfer parameters based on the interunit accounting method.

   The transfer parameters determine how the system executes stock transfers. The pages used to define transfer parameters differ depending upon which interunit accounting method you select.

3. Define transfer pricing.

   To transfer items using a price other than the source business unit’s cost, define a transfer price (on the Item Transfer Price page) or markup percentage (on the Item Price Markup page). You can also transfer at zero cost using the stock request or the Setup Fulfillment page.

4. (Optional) Enable interunit backorders.

5. (Optional) Establish interunit par quantities.

6. (Optional) Define transfer attributes.

   Define default transfer attributes for the business unit on the Transfer Attributes Defaults page. You can override these defaults for individual items on the Transfer Attributes page. If no item-level transfer attributes exist, the system uses the business unit values.

7. (Intercompany transfers only) Establish billing defaults for source business units.

   Using the Inventory Definition component, define a PeopleSoft Billing business unit, bill type, and bill source. The source business unit uses these values when prompting the PeopleSoft Billing business unit to send the voucher (invoice) to the destination business unit.

8. (Intercompany transfers only) Define destination business units as customers.

   Establish customer attributes using General Information pages.

9. (Intercompany transfers only) Define voucher creation parameters for interunit transactions.

Pages Used to Set Up Interunit Transfers

Selecting an Interunit Accounting Method for Stock Transfers

PeopleSoft Inventory offers two methods for deriving the parameters for PeopleSoft Inventory stock transfers:

• Centralized accounting.

• PeopleSoft Inventory pairs.

You can use either method alone or combine the two methods. Centralized accounting involves less setup and provides more consistent control across business units. The PeopleSoft Inventory pairs method provides more specific parameters for an interunit transfer. Combining the two methods enables you to define specific interunit parameters for some PeopleSoft Inventory business units and use the more general interunit parameters for the remaining business units.

Centralized Accounting

The centralized interunit or intraunit processor manages the definition and processing of interunit transactions across all PeopleSoft financial and distribution products. The accounting approach that you select on the Installation Options - Overall/GL page determines how the system derives interunit receivables and interunit payables ChartFields and other interunit transfer parameters. The three centralized accounting approaches are:

• Direct

  Parameters come from the source PeopleSoft General Ledger business unit.

• Indirect

  Parameters come from the destination PeopleSoft General Ledger business unit.

• Pairs

  Parameters come from a definition for the pair of PeopleSoft General Ledger business units involved in the transaction. This approach enables you to vary the settings for different pairs of General Ledger business units.

PeopleSoft Inventory Pairs

The PeopleSoft Inventory pairs method enables you to define the parameters used by interunit transfers at the PeopleSoft Inventory business unit level. You can use the centralized interunit or intraunit processor, inventory pairs method, or both. On the Installation Options - Inventory page, select one of these transaction value options:

• PeopleSoft Inventory business unit settings only.

• PeopleSoft General Ledger business unit settings only.

• Both settings.

See Also

Running the Centralized Interunit and Intraunit Processor

Defining Transfer Parameters Based on Interunit Accounting Method

The following parameters determine how the PeopleSoft system records interunit transfers. These parameters come from either PeopleSoft Inventory or PeopleSoft General Ledger, depending upon whether you’re using centralized accounting or the PeopleSoft Inventory pairs method.

The following table shows the derivation of transfer parameters, based on entries in the Installation Options component. The first column lists the parameters; the remaining columns list the pages on which you define these parameters. Central refers to the interunit method setting on the Installation Options - Overall/GL page (direct, indirect, or pair). IN refers to the InterUnit Transaction Values field setting on the Installation Options - Inventory page.

Note. If the InterUnit Transaction Options field is set to Both, and if a PeopleSoft Inventory pair record exists, the system derives all parameters from the PeopleSoft Inventory level. Failure to set up necessary parameters can result in errors.

Note. If the Customer ID is obtained from the GL business unit record of the destination business unit, then the customer needs to be defined in the SetID of the source business unit as well. If the Ship To Customer ID is obtained from the Inventory business unit record of the destination business unit, then the customer needs to be defined in the SetID of the Source business unit as well.

See Also

Running the Centralized Interunit and Intraunit Processor

Managing Transfers

Understanding General Ledger Business Units and Options

Defining Basic Business Unit Attributes

Defining Basic Fulfillment Defaults

Understanding Receiving and Putaway Processing

Defining Transfer Pricing for Items

In the source PeopleSoft Inventory business unit, you can enter a transfer price for costing the interunit transfer. To transfer items using a cost other than the source business unit’s cost, define a transfer price (on the Item Transfer Price page) or markup percentage (on the Item Price Markup page), or elect to transfer at zero cost.

See Also

Defining Basic Fulfillment Defaults

Defining Transfer Prices

Enabling Interunit Backorders

When you create an interunit transfer, the need for stock is usually immediate. Therefore, unlike with other types of stock requests, PeopleSoft Inventory does not create backorders for interunit transfers unless you select the Allow Interunit Backorders option on the source business unit’s Setup Fulfillment page. When this option is active, the system creates backorders for the remaining quantity when an interunit request can only be partially fulfilled. If you do not enable interunit backorders, PeopleSoft Inventory fulfills as much of the order as possible with the available quantity in the business unit, and then you must request the remaining quantity from another business unit.

See Also

Defining Basic Fulfillment Defaults

Establishing Interunit Par Quantity

An interunit par quantity is the minimum quantity that must be on hand in the source business unit before interunit transfer requests can be fulfilled. A given business unit may need to fulfill numerous stock requests originating from multiple sources. To protect a source business unit from running out of stock to fulfill its own customer order or production requirements, define an interunit par quantity for each business unit-item combination, using the Define Business Unit Item − Inventory: Shipping/Handling page.

See Also

Defining Item Attributes for Shipping and Handling

Defining Transfer Attributes

To define interunit transfer attributes, use the Transfer Attributes component. To define defaults for interunit transfers, use the Transfer Attributes Defaults component.

Access the Transfer Attributes Defaults page or the Transfer Attributes page.

For each PeopleSoft Inventory pair, define default transfer attributes for a combination of destination business unit, source business unit, and ship via. PeopleSoft Inventory uses these attributes to calculate the scheduled and arrival dates for interunit transfers. (These dates become the defaults in the Create/Update Stock Request component.) If you integrate with a planning system, that system also uses these attributes when creating automatic interunit transfers.

Establishing Billing Defaults for Source Business Units

For intercompany transfers, define billing attributes for the source PeopleSoft Inventory business units using the Inventory Definition component:

1. Enter a PeopleSoft Billing business unit for interunit transfers on the Inventory Definition - Business Unit Definition page.

2. Enter a bill type and bill source on the Inventory Definition - Business Unit Options: Revenue and Billing Defaults page.

See Also

Defining PeopleSoft Inventory Business Unit Attributes

Defining Destination Business Units as Customers

For intercompany transfers, define destination PeopleSoft Inventory business units as customers in PeopleSoft customer tables. This enables the system to create an invoice in PeopleSoft Billing for each intercompany transfer and load it into the PeopleSoft Payables business unit linked to the destination Inventory business unit.

To define a destination PeopleSoft Inventory business unit as a customer:

1. Add customers and assign customer roles on the General Info page.

   Although the destination PeopleSoft Inventory business units and your customers represent the same entity, you can use different identifiers for each.

   For intercompany transfers, select the following roles: bill to customer, ship to customer, and sold to customer. (You can set up multiple ship to customers.)

2. Define the primary sold to and ship to address for the goods and the primary bill to address for the invoice, using the General Information page.

3. Establish customer attributes on the General Information - Bill To Options page.

   Define the destination business unit’s currency value and rate type. The currency value must be the same as the base currency assigned to the destination business unit. The Deplete On Hand Qty (Depletion) process uses these values during currency conversion.

   Select the InterUnit Customer option and define a general ledger unit. The general ledger unit must be the same as that assigned to the destination business unit. If you want the bills for this customer to be invoiced automatically in PeopleSoft Billing upon shipment, select the Direct Invoicing option. You can also select the bill by identifier for intercompany transfers that you set up earlier in PeopleSoft Billing. If you do not specify a bill by identifier here, the value from the bill type or bill source defined on the Inventory Definition - Business Unit Options: Revenue and Billing Defaults page becomes the default.

4. To generate export reports, make the appropriate settings at the ship to customer level.

   Select the Flag Orders for Export option on the General Information - Ship To Options page. When you create an intercompany transfer, the system automatically populates the Export field on the Stock Request Summary and Express Issue pages. (The Export field identifies orders as export orders on all relevant shipping documentation and enables you to include intercompany transfer orders when creating bills of lading for foreign orders.)

5. If you have not already established a bill by identifier for intercompany transfers, use the PeopleSoft Billing Bill By Identifier page to do so.

   Select the following bill by fields: BILL_SOURCE_ID, DIRECT_INVOICING, RANGE_SELECTION_ID, SHIP_ID, SHIP_TO_CUST_ID, and SHIP_TO_ADDR_NUM.

See Also

Managing Transfers

Maintaining General Customer Information

Defining Voucher Creation Parameters for Interunit Transactions

For intercompany transfers, identify the correct information for creating a voucher in the payables business unit that is linked to the destination business unit:

1. Define each source general ledger business unit as a vendor, using the Vendor Information component.

   This enables the system to receive an invoice into the payables business unit linked to the destination inventory business unit.

2. On the source general ledger business unit definition page, enter the vendor ID that is used to create vouchers for interunit transactions.

3. On the destination general ledger business unit definition page, enter the payables business unit that receives vouchers from interunit transactions.

See Also

Maintaining Vendor Information

Defining General Ledger Business Units

Entering and Processing Vouchers Online: General Voucher Entry Information

Performing Interunit and Intercompany Transfers

A stock transfer originates with a transfer request in the source business unit through a material stock request (MSR) entered in the Create/Update Stock Request component or by the PO Sourcing process, or through the Express Issue component. The demand lines then undergo either express issue or standard fulfillment processing, depending upon which component you used to create the request. At this point, if the transfer is an intercompany transfer, it requires additional processing in PeopleSoft Billing.

When the transferred stock arrives at the destination business unit, workers at the receiving dock receive it using the Interunit and RMA Receiving component. After the material has been received, it is inserted into the PeopleSoft Inventory Staging Interface table (STAGED_INF_INV) for putaway processing.

During the putaway process, you specify storage locations for the received items. Only certain locations are eligible for a particular item, depending upon the item’s ownership status in both the source and destination business units. In general, if the item came from an owned location, you must put it into an owned storage location; if the item came from a non-owned location, you must put it into a non-owned storage location. There are two exceptions to this rule:

• If the item was consigned in the source business unit, put it into an owned storage location.

  Consigned items put away through interunit and intercompany transfers are considered to be consumed at the time of shipment and are therefore classified as owned when they are received at the destination business unit.

• If the item was non-owned in the source business unit but is consigned in the destination business unit, put it into an owned storage location.

  To ensure correct costing, PeopleSoft Inventory then sets the transfer price in the staging interface table to zero.

• If the business unit is a VMI business unit, owned items are allowed to be put into a non-owned location. For interunit transfers received into a VMI BU, the putaway location is determined by the ship-to customer.

The complexity of the transaction determines the method by which you transfer stock. Use an express issue to streamline the transfer of goods between warehouses; use an MSR when complete fulfillment processing is necessary.

Express Issue Transfers

In an express issue transfer:

1. Someone at the source business unit adds an express issue transfer on the Express Issue page.

2. The person entering the issue launches the Deplete On Hand Qty (Depletion) process by using the Deplete On Hand Qty link.

   In addition to the regular processing, the Deplete On Hand Qty (Depletion) process assigns a transaction group matching the type of transfer (interunit or intercompany). PeopleSoft Cost Management later uses that transaction group to create accounting lines for the transfer.

   For interunit transfers, this is the final step.

3. For intercompany transfers, run the Interunit Transfer Billing multiprocess job (BIINIU) in PeopleSoft Billing to calculate VAT, generate invoices, create accounting entries, and initiate voucher creation.

   For express issues using direct invoicing, you can launch the Interunit Transfer Billing job by using the Deplete On Hand Qty link on the Express Issue page or by running the Direct Invoicing with Auto-Ship multiprocess job (DIRAUTO) from the Ship and Invoice page.

   For express issues that do not use direct invoicing, generate billing output by performing the steps discussed in the Staging Sales Orders and Intercompany Transfers for PeopleSoft Billing section of this chapter.

Material Stock Request Transfers

In an MSR transfer:

1. Someone at the source business unit records an MSR using the Create/Update Stock Request component.

   The system can also generate an MSR automatically through a planning message or purchase order sourcing request.

2. PeopleSoft Inventory manages the demand lines on the MSR through standard fulfillment processing (reservations, picking, picking confirmation, and depletion).

   You can initiate the Deplete On Hand Qty (Depletion) process from these locations:

   • Shipping/Issues or Express Issue component.

     If the business unit is set up for intercompany processing, the system automatically opens a PeopleSoft Billing job page upon completion of the Deplete On Hand Qty (Depletion) process. You use this page to launch the Interunit Transfer Billing multiprocess job and to select the job server, output destinations and types, and distribution lists.

     For intercompany transfers designated for direct invoicing, the system generates all output immediately. For intercompany transfers without direct invoicing selected, the Billing Interface and VAT Defaults processes (both of which are part of the Interunit Transfer Billing job) create bills, but these bills remain uninvoiced in the PeopleSoft Billing system. To complete processing, change the bill status to RDY (ready) on the Bill Entry pages and then run the Single Action Invoice process (BIJOB03) from the Single Action Invoice page.

   • Depletion page.

     For intercompany transfers, generate billing output by performing the steps discussed in the Staging Sales Orders and Intercompany Transfers for PeopleSoft Billing section of this chapter.

See Also

Managing Transfers

Understanding Order Fulfillment Processing

Understanding Receiving and Putaway Processing

Staging Interunit Transfer and RMA Receipts

Creating Online Orders Using Express Issue in PeopleSoft Inventory

Creating Bills of Lading and Shipping Manifests

Managing Consigned Purchases Inventory

Staging Sales Orders and Intercompany Transfers for PeopleSoft Billing

To stage orders manually for PeopleSoft Billing processing:

1. For sales orders, run the OM Billing Interface process (OMBILL). This process populates the interface tables in PeopleSoft Billing with the shipment history from PeopleSoft Inventory.

   For intercompany transfers, run the Transfer Order Billing Load process (INS6300), using the InterUnit Bill Load page. This process extracts intercompany transfer information from the PeopleSoft Inventory demand table (IN_DEMAND) and loads it into the PeopleSoft Billing interface tables (INTFC_BI, INTFC_BI_AEDS, and INTFC_BI2). PeopleSoft Billing then uses this information for the remaining processing.

   To complete processing, you must know the interface ID created by the Transfer Order Billing Load process. You can find this ID in either the message log or Process Monitor.

   Note. If the process terminates abnormally, go to the message log to investigate the error. After fixing the problem, restart the process where it stopped, using the InterUnit Bill Load Restart page.

2. Run the Interface & VAT Defaulting multiprocess job (BIJOBI01), using the Billing Interface page in PeopleSoft Billing.

   This job runs both the Billing Interface process (BIIF001), which creates bills from the order information in the PeopleSoft Billing interface table, and the Process VAT Defaults process (BIPVAT00), which calculates VAT.

   For intercompany transfers designated for direct invoicing, the Interface & VAT Defaulting job creates bills in RDY (ready) status. For intercompany transfers without direct invoicing selected, the job creates bills according to the status defined on the PeopleSoft Billing Bill-By Identifier page: New, Hold, or Pending.

3. Run the Single Action Invoice multiprocess job (BIJOB03), using the Single Action Invoice page in PeopleSoft Billing.

   This job finalizes and prints bills, generates accounting entries, and initiates voucher creation. Only bills in RDY status are eligible for this step.

4. For Crystal invoices, run a Crystal report to print the invoices.

   Note. If you launch the Deplete On Hand Qty (Depletion) process from the Express Issue page or from the Shipping/Issues component and the order is set up for direct invoicing (on the General Information - Bill To Options Page), you do not need to perform these manual steps.

See Also

Understanding the Direct Invoicing Jobs

Running Single-Action Jobs for Regular and Consolidated Invoices

Setting Billing Interface Parameters

Setting Up Bill-By Identifiers for External Sources

Pages Used to Stage Sales Orders and Intercompany Transfers for PeopleSoft Billing

Receiving Intercompany Transfers

Once the series of processes in PeopleSoft Billing is completed (either as part of the Interunit Billing Load multiprocess job or individually), the intercompany transfer business process is the same for both express issues and material stock requests:

1. Someone in the destination business unit receives the stock, using the InterUnit and RMA Receiving page.

   If the actual quantity received differs from the expected receipt quantity (the quantity shipped for the MSR), the worker enters the quantity, sets the receipt status to Closed, and saves the page. Upon completion of the Complete Putaway process, the system creates an intercompany receipt using transaction group 025.

   If the received quantity differs from the shipped quantity, the system writes an adjustment entry (Interunit Business Transfer Adjustment - Transaction Group 042) to the transaction history record (TRANSACTION_INV). You must then make a manual financial adjustment at the PeopleSoft Inventory source business unit using the Adjust Entire Bill page in PeopleSoft Billing. The PeopleSoft Billing adjustment automatically removes the VAT entries.

2. When the invoice for the shipped MSR arrives at the destination business unit’s bill to customer address, the accounts payable business unit (indirectly associated with the destination business unit because it shares the same general ledger business unit) uses the matching process in PeopleSoft Payables to compare this invoice to the voucher for the shipped request.

3. The accounts payable business unit creates a voucher using the information sent by the Interunit Transfer Billing job or the Single Action job to the PeopleSoft Payables interface staging tables.

   The PeopleSoft Payables Voucher Build process then loads and edits the voucher information.

4. The destination accounts payable business unit sends payment to the receivables business unit that is linked to the billing business unit assigned to the inventory source business unit.

   (The association between inventory and receivable business units is made on the Inventory Definition - Business Unit Definition page).

5. The receivables business unit linked to the billing business unit that is defined for the inventory source business unit receives the payment and posts it using the Receivables Update process.

See Also

Defining PeopleSoft Inventory Business Unit Attributes

Staging Interunit Transfer and RMA Receipts

Adjusting Bills

Establishing PeopleSoft Billing Business Units

Identifying Interunit and Intercompany Transfers for Export and Intrastat Reporting

Interunit and intercompany transfers may require specific shipping documentation. To produce the relevant documentation, you must identify the intercompany transfer as an export order and, where relevant, set the correct options to enable Intrastat reporting for interunit transfers between two European Union countries.

Export Reporting

Once you have established on the Interunit Ownership page that the business unit relationship requires intercompany processing, select Flag Orders for Export on the General Information - Additional Ship To Options page for the ship to customer associated with the destination business unit. When this option is active, the system identifies any intercompany transfer you create for the ship to customer as an export order. You can override this designation at the MSR or Express Issue header level (but not at the line level).

Intercompany transfer export orders are available for selection when you create a foreign or foreign and domestic bill of lading. Any relevant shipping documentation (for example, the Picking Plan report, Packing Slip report, Bill of Lading report, and Shipper’s Export Declaration report) identifies export orders as such.

Intrastat Reporting

If both the source and destination business units are members of the European Union, the interunit transfers may require Intrastat reporting. When Intrastat reporting is required, the system sets the Intrastat Distribution Status option to N (not distributed) in the demand table (IN_DEMAND), to allow the Intrastat Transaction Loader process (FS_ISTLD) to pick up the demand lines in preparation for running the Intrastat report. If the Intrastat report has already been run for this intercompany transfer, the system sets the option to D (distributed). If the interunit transfer does not require Intrastat reporting, the system sets the Intrastat Distribution Status option to I (ignore).

Note. Once the interunit transfer is set to Distributed, the Shipping/Issues component treats it like a depleted order.

See Also

Setting Up and Running Intrastat Reports

Creating Shipping Documentation

Processing Intrastat Replacements and Returns

To produce accurate Intrastat reporting, the interunit transfer must be identified as either a return or a replacement for goods (returned or not). The Intrastat Interunit Returns and Replacement fields are available for entry on the following pages:

• Shipping/Issues - Order Details

• Accounting/Interunit Detail (Create/Update Stock Request component)

• InterUnit and RMA Receiving - Receipt Line

  The default values are derived from the source business unit’s entries on the first two pages of the component.

• Express Issue

Note. The system selects interunit receipts for Intrastat reporting only if they are entered using the pages in the Interunit and RMA Receiving component. However, because you can bypass the receiving process for interunit transfers, use of these pages is required only for intercompany transfers. Therefore, you must ensure that all interunit receipts requiring Intrastat reporting are always entered using the interunit receiving pages, whether or not they require intercompany processing.

Canceling In-Transit Interunit Transfers

You can use the Interunit Cancellations page to cancel a shipped and depleted interunit transfer at any time before the destination business unit receives the order. When you cancel an intransit transfer, the system posts an adjustment transaction (Interunit Business Transfer Adjustment - Transaction Group 042) to debit the intransit stock owner established on the Interunit Ownership page.

Note. You cannot cancel interunit transfers that require intercompany processing. These goods must be received at the destination business unit using the Interunit and RMA Receiving component and then returned to the source business unit using the Express Issue component. In addition, you cannot cancel an order that has been partially or fully received by the destination business unit. If the destination business unit is a VMI business unit, you cannot cancel interunit orders created from sales orders.

Page Used to Cancel In-Transit Interunit Transfers

Canceling Transfers

Access the Interunit Cancellations page.

See Also

Understanding Stock Transfers Between Business Units

Inventory PeopleBook, Using Vendor Managed Inventory, Processing Vendor Managed Inventory

Making Interunit Stock Inquiries

You can determine whether a business unit has enough stock to fulfill an interunit transfer request and monitor the interunit transfer order’s progress through receiving.

Pages Used to Make Interunit Stock Inquiries

Viewing Interunit Transfer Item Availability

Access the InterUnit Stock Level page.

See Also

Managing Inventory by Item Status

Creating Interunit Transfers in India with Duties and Taxes

When inventory stock is transferred between two PeopleSoft Inventory business units in different tax locations within India, then excise duty must be calculated and posted by each business unit. The tax location is defined and attached to the PeopleSoft Inventory business unit using the BU Tax Applicability (business unit tax applicability) page. If both business units are linked to the same tax location, then no excise duty is recorded.

To send an interunit transfer with excise duty:

1. In the source PeopleSoft Inventory business unit, create a stock order for the interunit transfer by using the Create/Update Stock Request component or the Express Issue component.

   No excise duty is calculated on the material stock request.

2. If you used the Create/Update Stock Request component, reserve, pick, and create a shipping ID, then run the Deplete On Hand Qty (Depletion) process.

3. Create the shipping excise invoice for the stock request using the Shipping Excise Invoice page. The excise duty payable is determined and calculated on this invoice.

4. Run the Register Update process.

   This process performs these actions:

   1. Updates the quantity shipped in the Daily Stock Account register for finished goods.

      This is completed by the Excise Quantity Register Update subprocess.

   2. Allocates the excise duty amount due to the CENVAT - Raw Material, CENVAT - Capital Goods, and PLA registers.

      This is completed by the CENVAT Utilization subprocess. The Online CENVAT Utilization page can be used to manually allocate excise amounts for a small number of shipping excise invoices. If you decide to use the Online CENVAT Utilization page instead of the CENVAT Utilization subprocess, you must still run the Register Update process for the Excise Quantity Register Update subprocess and then again for the Excise Invoice Posting subprocess.

   3. Creates accounting entries to record the excise duty amounts payable.

      The Excise Invoice Posting subprocess records the excise tax for each shipment by debiting the CENVAT expense account and crediting the appropriate CENVAT accounts. The accounting entries allocate amounts to the CENVAT accounts based on the amount allocation of the CENVAT Utilization subprocess.

To receive an interunit transfer with excise duty:

1. In the destination PeopleSoft Inventory business unit, use the InterUnit and RMA Receiving component to receive the items into the inventory staging interface table (STAGED_INF_INV).

   Run the Load Staged Items and Complete Putaway processes.

2. Create the vendor excise invoice for the receipt.

   The category of IUT receipt is used when creating the vendor excise invoice. This category limits the selection criteria to interunit receipts. Once a receipt is selected, the system retrieves the receipt quantity from the interunit receipt and identifies the shipping ID (from the source business unit) by the interunit receipt. The excise tax amounts and details are retrieved from the shipping excise invoice related to the shipping ID and placed on the vendor excise invoice. This ensures that the excise duty recorded during shipment from the source business unit is the same as the excise duty recorded when the shipment is received in the destination business unit. The excise duty details cannot be manually changed. If the quantity shipped is more than the quantity received, then the excise duty amounts are proportionately applied to the vendor excise invoice. When the vendor excise invoice is saved, it is assigned a serial number based on the number series group for IVEI interunit receipts. No values can be changed on the vendor excise invoice if the status is Ready.

3. Run the Register Update process.

   The process performs these actions:

   1. Updates the quantity received in the Raw Material or Capital Goods Quantity registers depending on the tax item type.

      This is completed by the Excise Quantity Register Update subprocess.

   2. Allocates the CENVAT credit amount to the CENVAT Raw Material or CENVAT Capital Goods registers, depending on the tax item type.

      This is completed by the Value Register Update subprocess.

   3. Creates accounting entries to record the CENVAT amounts.

      The Excise Invoice Posting subprocess records the excise duty for each receipt by debiting the appropriate CENVAT account (for raw materials and capital goods) and crediting the CENVAT Clearing account.

Note. The intercompany transfers and interunit billing feature does not support excise duty and sales tax.

Pages Used to Create Interunit Transfers in India with Duties and Taxes

Using Bonded Customs Warehouses Within India

PeopleSoft enables you to define and use bonded customs warehouses in India to import non-exempt items. Using a bonded warehouse, Indian customs duties are not payable when goods are deposited into the bonded warehouse located in India. Customs duties are paid when the items are removed (de-bonded) from the bonded warehouse. Bonded warehouses are used when you do not need to take immediate delivery in India of the non-exempt, imported items. Your premises are considered a bonded warehouse when you are registered under one of the following Indian benefit schemes:

• Export Oriented Unit (EOU)

• Export Processing Zone (EPZ)

• Software Technology Park (STPI)

• Electronic Hardware Technology Park (EHTP)

In order to have the non-exempt items bonded, you must register a bond with Indian customs authorities by paying an amount equal to twice the assessable value of the items. This can be done by a bank guarantee. When the goods have cleared the bonded warehouse, then the bond is canceled.

To use a bonded warehouse process:

1. Create and dispatch a purchase order with a tax transaction type of DIMP (direct import).

2. When the imported items arrive at customs, create a bill of entry with the BOE type of Warehousing.

   Set the BOE status to Ready and print the BOE worksheet. The setup for the warehousing BOE is the same as for a home consumption BOE. Submit this warehousing BOE to customs authorities along with the original shipping documents.

3. Customs authorities review the warehousing BOE against the imported items, making corrections and identifying items exempt from customs duties.

4. Update the warehousing BOE with the information from the customs authorities.

   The system then recalculates the customs duties. Change the status of the BOE to Assessed.

5. Receive the imported items using PeopleSoft Purchasing.

   You must associate each receipt lines with an assessed BOE line.

6. Use the putaway processes in PeopleSoft Inventory to place the imported items into a warehouse.

   Put away the exempt items into a standard PeopleSoft Inventory business unit (warehouse). Put away the non-exempt items into a bonded warehouse defined as a separate PeopleSoft Inventory business unit. When you place goods in a bonded warehouse, they are considered to be the property (the importer) and are booked into PeopleSoft Inventory.

7. Once you are ready to move the non-exempt items from the bonded warehouse, create a third-party voucher and pay the customs authorities using PeopleSoft Payables.

8. Update the BOE (with the BOE type of Warehousing) to a status of Closed.

9. Reopen the third-party voucher and enter the receipt ID associated with each voucher line.

   This enables the system to calculate and apply any variance between the estimated and actual non-recoverable customs duties. This variance is applied to the item in PeopleSoft Inventory.

10. Create a new BOE, using the BOE type of Ex-Bond, to de-bond the imported items.

    An ex-bond BOE is built on a closed warehousing BOE. When you add an ex-bond BOE, you must select a warehousing BOE reference from a list of closed warehousing BOEs that have not been previously used to fulfill other ex-bond BOEs. Information from the warehousing BOE provides the default values for the new ex-bond BOE. All other setup for the ex-bond BOE is the same as for a home consumption BOE. Print the ex-bond BOE and submit it to the customs authorities.

11. Using PeopleSoft Inventory, create an interunit transfer to move the bonded items from the bonded warehouse to a standard warehouse.

    At the point of debonding, the exchange rate for determining the assessable value could be different from the exchange rate while bonding. When performing the interunit transfer from the bonded location to the factory premises, you might need to change the inventory value due to the impact of exchange rate fluctuation on customs duties. Receive the interunit transfer into the destination business unit.

12. Close the ex-bond BOE.

13. Create an internal vendor excise invoice based on the ex-bond BOE.

    If the importer takes delivery of the items from the bonded warehouse in batches, then the customs duty credit is allowed only upon clearance of the last consignment covered by the BOE for warehousing.

14. Run the Register Update process to update the Indian tax registers and create accounting entries for customs duties.

    Only internal vendor excise invoices with a transaction type of BOE are picked up by this process to create customs duties entries.

See Also

(IND) Processing Customs, Excise Duties, and Sales Tax for India

Receiving and Putting Away Stock

Processing Taxes for India