Application of CIN In Subcontracting

scenario
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Created by Rahul Nayak on Oct 27, 2013
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In subcontracting, the vendor is provided with materials, which he uses to produce the finished
product. From the point of view of materials planning, subcontracting is initiated by the special
procurement key subcontracting. The special procurement key is allocated to the finished product or
the assembly in the material master in MRP 2 view.

The subcontracting attributes help determine conditions for a combination of an excise group, a
transaction type and a sub transaction type. The conditions such as the number of excise items per
subcontracting challan, if the non excisable materials have to be filtered or not when the
subcontracting challan is created, the movement type groups for issues and receipts and the
hierarchy of determining the excise base value are mentioned here. Configuration settings are
maintained in IMG Activity path IMG > LOGISTIC GENERAL > TAX ON GOODS MOVEMENT >
INDIA > BUSINESS TRANSACTIONS > SUBCONTRACTING > SUBCONTRACTINGATTRIBUTES

The maximum number of days that the material can be with subcontractor without us having to
reverse the excise on the CENVAT account. This information is used when we create a
subcontracting challan to determine on exactly which date the materials have to be returned by.

Document that we use to issue and track subcontracting work. It allows us to make sure that all the
materials we have sent to the subcontractor for processing are returned. The challan consists of a
header and line items. The header, in addition to organizational data, we should enter-

Preprinted number

Additional data

Identification marks

Nature of processing.

Each challan has two numbers, an internal document number and a challan number, which the
system assigns to the challan when we save it. From a business perspective, this is the most
important number. Each challan also has a status, which shows us what stage in processing it is at.
The line items are copied across from the transfer posting when we create the challan. We can also
enter additional data for each item.