USER MANUAL

Sub-Contacting Process in GST

Version 1.6
Version Date 14.12.2017
Version Arup Bhattacharjee
Created By
Approved By Anil Bareja
Highlights of Changes in version 1.6
 One step goods issue through transaction YMC242. This will eliminate
MB1B/541 and J1IGSUBCON
 GR Cancellation till weekend
Highlights of Changes in version 1.5
 Auto reconciliation of Goods Receipt & outward delivery challan.
J1IGRECON will be done in background while doing MIGO>GR
 Please be very careful while doing GR for finished goods as reversal of
reconciliation is not possible

1|Page
Indian Oil Corporation Limited, Corporate Information Systems Department, Gurgaon
 Contents

1. Generic process post GST 3

2. Prerequisites 4

3. Subcontracting Process

i. Creation of Purchase Order 5

ii. Issue of Sub contracting components to Vendor 7

iii. Creation of Challan / invoice 9

iv. Receipt of Finished item from Vendor 14

v. Invoice Verification(MIRO) 16

vi. Reconciliation of GST Challan 16

vii. Vendor Invoice for posting consumed component 18

(Finance route FB60)

4. Reversal subcontracting Process

Reversal of Subcontracting Process 19

5. One step Goods Issue YMC242 23

NOTE: To visit a page, press CTRL + click on page no.

2|Page
Indian Oil Corporation Limited, Corporate Information Systems Department, Gurgaon
Generic Process Post GST
1. All prerequisites should be fulfilled as given in this document. Without
Customer creation & Material Sales View extension, Subcontracting Process
cannot be carried out in post GST scenario
2. Creation of Subcontracting PO (same process pre GST, same document type)
with the selection of relevant tax code
3. Issue of material components w.r.t PO using T Code MB1B ( Same process
pre GST)
4. Generation of Challan ( T- code J1IGSUBCON ), if material is expected within
one year(Revenue Items) & Three Years(Capital Items)
5. Generation of invoice ( T- code J1IGSUBCON ), if material is not expected
within one year(Revenue Items) & Three Years(Capital Items)
6. Receipt of finished product – GR - MIGO with 101 or 103/105 Mvt Type with
QA11( Same process pre GST)
7. Reconciliation of Challan (T code J1IGRECON) for Material received within
one year(Revenue Items) & Three Years(Capital Items)-This process will be
done in the background.
8. Once GR has been done, system will put the document in queue for
reconciliation & actual reconciliation will be done in a batch process
scheduled to run in every 30 minutes. User can check progress of the
reconciliation thro transaction YMR247
9. GR once done cannot be cancelled any further as reconciliation process will
be activated immediately. User need to be careful & check the document
(101/105 as well as 543 lines) before final posting of the GR
10.MIRO & payment to Vendor
11.For more than one/three (Revenue/Capital) year case, process vendor
invoice for consumed material through FB60
12.YMR242 report will link PO, 541 Material document & challan/Invoice
13.Details of subcontracting under GST scenario can be found under section 143
of GST Act (Job Work) & relevant circular of divisional taxation departments
14.Transaction YMR245 will provide a download for necessary inputs during
filing of GST return related to Job Work

3|Page
Indian Oil Corporation Limited, Corporate Information Systems Department, Gurgaon
Prerequisites:
A. All Indian Subcontracting Vendors are to be created as Customers and to be
linked to Vendor. Utility YMC197 is provided for the same.
i. For foreign subcontracting vendor, COIS is to be contacted for
corresponding customer code creation. For already existing foreign
subcontracting vendors corresponding customer codes has been
already created from COIS
B. Sales View has to be extended for Component Material Codes through Utility
YMC (Subcontracting Tab). Sales View of Main Material is not required to be
extended.
Without above prerequisites met the process of challan/invoice generation
(Explained in 4&5) will not work. System will not respond
Sales View Extension through YMC

Bulk Materials like Lubes, Butane. Propane etc are to be extended thro normal
extension process YMATX
Component Material and Issuing
Plant Code are to be entered

4|Page
Indian Oil Corporation Limited, Corporate Information Systems Department, Gurgaon
The Subcontracting Process
1.0 Creation of Purchase Order
Purchase Order creation process will not have any changes post GST scenario,
except for selecting proper Tax Codes.

Item Category ‘L’ is to

be selected

Go to Material Data Tab in Line Item

Click Components & Enter the Components to be issued to Sub-Contractor

5|Page
Indian Oil Corporation Limited, Corporate Information Systems Department, Gurgaon
 Plant from where
component material
will be issued

A logical relation will exist between Material Quantity (Mentioned as Quantity in the above
screen shot) and Component quantity (Mentioned as Requirement Quantity in the screen shot).
The logic is on the quantity of component required to produce the finished material to quantity
mentioned in the PO
In the example given in screen shot above means 5 TO each of material 6702720804 &
6702721274 is required to produce 2 EA of 0840011104
It will be in this ratio system will suggest proportionate component quantity consumption in
Vendor’s stock during GR. Any illogical relationship maintained will lead to anomaly in Vendor
as well plant stock
For LPG equipment scenario (Testing/HT Repair) the ratio will be always 1:1, irrespective of
sound cylinder line or defective cylinder line

Once done click to save the PO

2.0 Issue of Sub contracting components to Vendor

The issue process through MB1B with movement type 541 will be exactly
similar as done in pre GST scenario
Components are to be issued with reference to the Purchase order & posted
material document no to be noted
In the event that Purchase order number & vendor code is entered in the next
screen, system will validate the vendor code

6|Page
Indian Oil Corporation Limited, Corporate Information Systems Department, Gurgaon
 Enter Movement Type 541 and
Component Issuing Plant & Click
on To Purchase Order button

Enter PO Number & Click on

To Adopt + Details button

7|Page
Indian Oil Corporation Limited, Corporate Information Systems Department, Gurgaon
In the next screen, maintain Quantity, Stor. Loc. & Enter (Repeat for next Component if any)

Enter Issuing Component

Material Quantity & Stor. Loc.

Check the Qty, Materials,

Plant, SLoc & Mvt Type are OK

Click on Save Button if OK and note down the Document No.

8|Page
Indian Oil Corporation Limited, Corporate Information Systems Department, Gurgaon
 (W.e.f 15.12.2017 a new transaction YMC242 is available thro which both goods issue &
challan creation can be done in one step. Please refer to page 23 for details of YMC242. From
1.1.2018 YMC242 will be mandatory for issue of GST material in subcontracting)

3.0 Creation of Challan / Invoice (Not required if YMC242 is satisfactorily done)

The Subcontracting Process post GST is being classified into two categories as
With Challan or Without Challan
1. With Challan - Those Components Issued to Vendor & Finished Product is
Delivered to the Plant within one year (Revenue Items) & Three Years
(Capital Items) of issue. In such cases Challan will be created.
2. Without Challan (Invoice) - Those Components Issued to Vendor & Finished
product is expected not to be Delivered to the Plant within one year
(Revenue Items) & Three Years(Capital Items)of Issue. In such cases Invoice
will be created.

New Transaction Code J1IGSUBCON is provided for Creation of Challan or

Invoice (Without Challan)

Enter Co Code, Plant, Material Doc. No

(MB1B) & select Create Challan & Execute

9|Page
Indian Oil Corporation Limited, Corporate Information Systems Department, Gurgaon
On Execution the following screen will appear

Select the item and click on

Create Challan Button

Option “Create Challan” is to be used in case if Material is expected to be

received within 1 Year(Revenue)/ 3 Year (Capital)

Select the item and click on Create

Invoice Button in case if Material is
not expected to be received within
1 Year (Revenue)/ 3 Years (Capital)

Option “Create Invoice” is to be used in case if Material is to be received after

1 Year

10 | P a g e
Indian Oil Corporation Limited, Corporate Information Systems Department, Gurgaon
By clicking Challan or Invoice, system will generate Challan No. as given below:

Challan No / Invoice No created by

clicking Create Challan / Invoice

The document can be displayed by double clicking the Challan Number

In Challan cases the Net value will be Nil although each individual item in
detailed item condition will indicate the base value (MAP) & applicable GST
value. These are for statistical purpose only

11 | P a g e
Indian Oil Corporation Limited, Corporate Information Systems Department, Gurgaon
Documents in Without Challan cases will indicate the net value. An accounting
document will be generated against subcontracting invoice

The Challan/invoice number is to be printed using transaction YM35.

Transaction YM58/58D/59/96 cannot not be used any more .
In Challan print the taxable value, GST rate & value and total value mentioned
will be for indicative purpose only. No accounting entry will be created in the
system
Business processes (Mainly Lube Packing) where subcontracting involves stock
transfer of components to a logical location from the main location & then
execution of subcontracting process from the logical location and concerned
location wishes to put a reference of the STO in subcontracting challan print
,can use transaction YM35L in place of YM35
 Here the STO GST Invoice number (ODN Number Example
WB2000000174) along with date is to be entered manually by the user
 Alternatively if instead of stock transfer, the component material is
received from another supplier and entire lot is issued to the
subcontractor as received, the GST invoice no of the supplier’s invoice
can be entered in YM35L

12 | P a g e
Indian Oil Corporation Limited, Corporate Information Systems Department, Gurgaon
 This special feature in YM35L is only for printing the number in the
subcontracting challan only. System will not link the invoice & challan
anywhere
 User has to be very careful while giving the entries in YM35L

13 | P a g e
Indian Oil Corporation Limited, Corporate Information Systems Department, Gurgaon
4.0 Receipt of Finished item from Vendor
The process of receipt of finished goods will be similar to the receipt process carried
out pre-GST scenario with Transaction MIGO, Goods Receipt against Purchase
Order, Movement type 101, or 103/105 with or without QA11.
However the reconciliation of the GR with outward component material supplied
against 541 document (As described in 2.0 above) is now combined with Goods
Receipt
The process is irreversible & user has to pay utmost attention & be careful while
posting the document
While posting GR, system will first give a warning pop up. If post button is clicked
accidentally or user is not confident, then click NO & go back to the document to
recheck

14 | P a g e
Indian Oil Corporation Limited, Corporate Information Systems Department, Gurgaon
If opted for posting, system will give further pop ups as per component items of
the GR document
Here user has to key in the corresponding outward Challan/Invoice no OR Outward
541 material document with year. Depending on number of 543 lines in the GR,
prompt will come as many times
It is advisable to open the transaction YMR242 in a parallel screen so that exact
challan/invoice or material document number is readily available for a particular
material
System will accept the challan, only if it is relevant to the issuing plant & component
material and also if the open challan quantity is more than or equal to the GR
component quantity (543)
Instead of challan, user can also put the outward 541 material document along with
year. System will accept all documents after validating issuing plant, material &
open quantity subject to availability of corresponding delivery challan, if issue was
done on or after 1.7.2017 (GST effective date). For issues done prior to 1.7.2017,
system will not look for the corresponding delivery challan

15 | P a g e
Indian Oil Corporation Limited, Corporate Information Systems Department, Gurgaon
Once all challan numbers or material document numbers are entered, system will
give further warning to the user . This will be the final warning for the user to roll
back & recheck the document if not confident to post

The GR document no against 101 or 105 is to be noted

At this stage the GR document will be taken to a queue & await reconciliation in a batch process
which has been set to be executed every week end
The progress of the reconciliation can be monitored thro transaction YMR247

The reversal of the GR can be done till weekly reconciliation is finally posted. Say if a GR for finished
goods from the subcontractor is done on a Monday, reconciliation of the GR document with the
outgoing 541 document challan will be done at 00:00:00 hours of next Sunday after which system will
not allow cancellation of the GRN document as well as that of the challan document

16 | P a g e
Indian Oil Corporation Limited, Corporate Information Systems Department, Gurgaon
5.0 Invoice Verification(MIRO)/Payment to the Vendor

The payment process to the vendor by Finance will be similar to the pre GST
scenario except for changes w.r.t GST tax codes

6.0 Manual reconciliation of GST Challan issued

For cases where background reconciliation as described in 4.0 has failed due to
some error & YMR247 has returned with a message
, then please follow the manual route &
put the 101 or 105 GR document no & the challan no issued during 541 Goods issue

On execution it will lead to the following screen which is to be saved

17 | P a g e
Indian Oil Corporation Limited, Corporate Information Systems Department, Gurgaon
7.0 Vendor Invoice for posting consumed component (Finance route FB60)

For cases where finished product is not expected to be returned to the plant within
one year(Revenue)/Three year (Capital) of issue & invoice was issued during GI
with 541 movement (Without Challan) will not be reconciled as explained in 4.0 &
6.0 above
For such case Vendor invoice will be posted thro Finance route using transaction
FB60

Linking of Subcontracting PO, Goods Issue Material document & Invoice/challan

no can be found thro transaction YMR242. Open Quantity for further
reconciliation against each invoice is also shown in the report
Details of subcontracting issue & receipts w.r.t Challan is available in report
YMR245. The report can be utilized for quarterly return submission also

18 | P a g e
Indian Oil Corporation Limited, Corporate Information Systems Department, Gurgaon
Reversal subcontracting Process

In the event for any reason Goods issue (Components) needs to be reversed or the
challan or invoice is not correctly created & needs correction, the reversal cycle will
follow as detailed below. Irrespective of whether goods issue has been done thro
one step process YMC242 or MB1B followed by J1IGSUBCON, cancellation process
will remain the same
1.0 Reversal of Challan or Invoice
Please find out the invoice number (If not recorded) thro transaction YMR242
Note down the billing document no and do transaction VF02

19 | P a g e
Indian Oil Corporation Limited, Corporate Information Systems Department, Gurgaon
Being on the same screen Do Billing document > Complete

Click “YES”

20 | P a g e
Indian Oil Corporation Limited, Corporate Information Systems Department, Gurgaon
 Delivery Challan will be cancelled & System will allow to create a new delivery challan against the
same original material issue document
2.0 Reversal of Goods Issue (Components) done through MB1B/541

Transaction MIGO (Transaction MBST cannot be used for cancellation of 541

document)
MIGO>Cancellation>Material Document. Enter the material document to be
reversed
Please find out the material document number (If not recorded) thro transaction
YMR242

21 | P a g e
Indian Oil Corporation Limited, Corporate Information Systems Department, Gurgaon
After cancellation of Goods Issue if material is to be issued again to the
subcontracting vendor carry out MB1B/541 again. Challan/Invoice preparation
against J1IGSUBCON is to be against the new material document posted

22 | P a g e
Indian Oil Corporation Limited, Corporate Information Systems Department, Gurgaon
 One Step Transfer Transaction YMC242

1.0 Enter Subcontracting PO

no & PO line item number
(Line item is not
manadatory)

3.0 Enter
Enter Vehicle
Vehicle No used
No used in dispatch
in dispatch(Not
(Not Mandatory)
Mandatory) 5.0 Enter Quantity to be issued (As
per Unit of measure indicated)

4.0 Storage 2.0 All Components included in the

Location (If not PO will be displayed under heading of
mentioned in PO) the main material (Finished item) &
will be active for issue (Selected All by
default). Deselect lines not required
for issue

6.0 For IS-OIL active materials (Example BULK material),

a button “Add, Det.”(Additional details) can be seen.
These material require temperature & density details to
calculate the exact volume issue

The button will not appear for materials like plates,

additives, Cylinders, cartoons, pouches etc

Click this button to enter additional details like 23 | P a g e

Indian Oil Corporationtemperature,
Limited, Corporate
densityInformation Systems Department, Gurgaon
wherever required
 7.0 Enter Batch, Temperature & Density details.
“Clicking “Get Defaults” will bring the default
data maintained in O3C1 (This is not required
materials like plates, additives, Cylinders,
cartoons, pouches etc)

8.0 After updating Additional details, click the check button to validate all pre-requisites required for
creating subcontracting challan. Missing linked customer, extension of sales view etc will get validated &
will return with “No messages” if successful

For materials like plates, additives, Cylinders, cartoons, pouches etc, check button can be clicked after
step 5.0

24 | P a g e
Indian Oil Corporation Limited, Corporate Information Systems Department, Gurgaon
 9.0 Click Post Document & accept to
proceed if OK

25 | P a g e
Indian Oil Corporation Limited, Corporate Information Systems Department, Gurgaon
 10.0 Click

11.0 Option to create Challan or

Invoice

Default option kept in Challan only

since in almost all cases challan is
created

26 | P a g e
Indian Oil Corporation Limited, Corporate Information Systems Department, Gurgaon