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Solution Proposal
2016-10-10
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Goods and Services Tax - India
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Goods and Services Tax - India
Typographic Conven...
Goods and Services Tax - India
Contents
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Contents
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Introduction
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Master Data
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2 Mast...
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Master Data
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Master Data
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 Type...
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Master Data
2.3 Ve...
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Master Data
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2.4 Ma...
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Master Data
For S...
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Master Data
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2.5 B...
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Master Data
2.6 T...
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Tax Configuration and Computation
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Tax Configuration...
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Document Numbering
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Business Transact...
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Business Transactions
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Pricing
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Pricing
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6.1.2 Dom...
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Pricing
Tax Proce...
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Pricing
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Pricing
The tax l...
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Pricing
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6.1.5 Sto...
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Pricing
Stock tra...
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Pricing
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Outbound ...
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Goods Rec...
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Pricing
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Purchase ...
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6.1.7 Ser...
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6.2 Sales...
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Pricing
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GST Tax Postings
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Utilization
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Reporting
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9 Repor...
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SAP Draft Solution for GST India

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SAP GST - India

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SAP Draft Solution for GST India

  1. 1. Solution Proposal 2016-10-10 PUBLIC Goods and Services Tax - India
  2. 2. 2 PUBLIC © 2016 SAP SE or an SAP affiliate company. All rights reserved. Goods and Services Tax - India Typographic Conventions Typographic Conventions Type Style Description Example Words or characters quoted from the screen. These include field names, screen titles, pushbuttons labels, menu names, menu paths, and menu options. Textual cross-references to other documents. Example Emphasized words or expressions. EXAMPLE Technical names of system objects. These include report names, program names, transaction codes, table names, and key concepts of a programming language when they are surrounded by body text, for example, SELECT and INCLUDE. Example Output on the screen. This includes file and directory names and their paths, messages, names of variables and parameters, source text, and names of installation, upgrade and database tools. Example Exact user entry. These are words or characters that you enter in the system exactly as they appear in the documentation. <Example> Variable user entry. Angle brackets indicate that you replace these words and characters with appropriate entries to make entries in the system. EXAMPLE Keys on the keyboard, for example, F2 or ENTER .
  3. 3. Goods and Services Tax - India Contents PUBLIC © 2016 SAP SE or an SAP affiliate company. All rights reserved. 3 Contents 1 Introduction ...................................................................................................................................4 2 Master Data....................................................................................................................................5 2.1 Tax registration (GSTIN: GST Identification Number) .......................................................................5 2.2 Customer Master...................................................................................................................................6 2.3 Vendor Master........................................................................................................................................8 2.4 Material Master ......................................................................................................................................9 2.5 Business Place ......................................................................................................................................11 2.6 Tax Account.......................................................................................................................................... 12 3 Tax Configuration and Computation ........................................................................................ 13 4 Document Numbering................................................................................................................. 15 5 Business Transactions................................................................................................................16 5.1 Procurement ........................................................................................................................................ 16 5.2 Sales...................................................................................................................................................... 17 6 Pricing........................................................................................................................................... 18 6.1 Procurement ........................................................................................................................................ 18 6.1.1 Domestic Procurement Intrastate..................................................................................... 18 6.1.2 Domestic Procurement Interstate..................................................................................... 19 6.1.3 Procurement- for capital goods......................................................................................... 19 6.1.4 Procurement – Import....................................................................................................... 20 6.1.5 Stock Transfer Order ..........................................................................................................23 6.1.6 Subcontracting/Job Work..................................................................................................26 6.1.7 Services................................................................................................................................28 6.2 Sales......................................................................................................................................................29 6.2.1 Domestic (Inter and Intra state) ........................................................................................29 6.2.2 Sales - Exports.................................................................................................................... 30 7 GST Tax Postings ........................................................................................................................ 31 8 Utilization .....................................................................................................................................32 9 Reporting......................................................................................................................................33
  4. 4. 4 PUBLIC © 2016 SAP SE or an SAP affiliate company. All rights reserved. Goods and Services Tax - India Introduction 1 Introduction Disclaimer: This document is a draft, and provided as a courtesy. This document is not to be considered final, and all information contained herein is subject to change. As such, this document is not to be quoted, cited in any reference, or used by anyone for any purpose other than as a draft document. The introduction of Goods and Services Tax will replace the existing indirect taxes in India. One Support has been updated with the GST Legal change announcement details. https://launchpad.support.sap.com/#/legalchangenotification/detail/GSCBIN-348 The GST solution will be made available in the following releases:  SAP ERP 6.0  SAP Enhancement Package 2 for SAP ERP 6.0  SAP Enhancement Package 3 for SAP ERP 6.0  SAP Enhancement Package 4 for SAP ERP 6.0  SAP Enhancement Package 5 for SAP ERP 6.0  SAP Enhancement Package 6 for SAP ERP 6.0  SAP Enhancement Package 6 for SAP ERP 6.0, Version for SAP HANA  SAP Enhancement Package 7 for SAP ERP 6.0  SAP Enhancement Package 8 for SAP ERP 6.0  SAP S/4HANA, on-premise edition 1511 The mandatory prerequisites to consume the GST solution to be provided by SAP are:  Minimum Support Package that the customer should be on is provided in the following note https://launchpad.support.sap.com/#/notes/1175384  TAXINN is the default tax procedure. Please refer to the FAQ note related to the migration of the tax procedure. https://launchpad.support.sap.com/#/notes/2252781
  5. 5. Goods and Services Tax - India Master Data PUBLIC © 2016 SAP SE or an SAP affiliate company. All rights reserved. 5 2 Master Data 2.1 Tax registration (GSTIN: GST Identification Number)  Single registration for CGST, SGST and IGST  Individual registration to be obtained in each state of business establishment  PAN based registration number – Up to 15 characters in length Multiple business places must be created per the region of operation. The relevant plants must be assigned to their corresponding business places i.e. region wise association. A new field will be provided to store the GSTIN of the business.
  6. 6. 6 PUBLIC © 2016 SAP SE or an SAP affiliate company. All rights reserved. Goods and Services Tax - India Master Data 2.2 Customer Master To identify and manage the various registration numbers (GSTIN) of the customer regions, the main customer must be extended using a Goods Recipient account group, per region of business. Each of these will have the region and the corresponding registration number. Data relevant for GST which is to be captured in customer master are mentioned below.  GSTIN The registration number to be saved in the Tax number 3(KNA1-STCD3) field of customer master. This field will be enabled for one time customers as well.
  7. 7. Goods and Services Tax - India Master Data PUBLIC © 2016 SAP SE or an SAP affiliate company. All rights reserved. 7  Type of customers (Non-registered Govt entities, Compounding etc.): The standard tax classification field will be used for categorizing the customers. Together with the Tax classification of the material, pricing can be controlled.
  8. 8. 8 PUBLIC © 2016 SAP SE or an SAP affiliate company. All rights reserved. Goods and Services Tax - India Master Data 2.3 Vendor Master The vendor master has to be extended as Goods Suppliers based on their region of operation. This will ensure in storing GSTIN for each of these regions. Data relevant for GST to be captured at vendor master are mentioned below.  GSTIN The GST registration number to be saved in the Tax number 3(LFA1-STCD3) field of vendor master. This field will be enabled for one time vendors as well.  Types of Vendors (Compounding, Non-registered, etc.) A new field/table will be provided under CIN details Tab (Vendor master data) for identification.
  9. 9. Goods and Services Tax - India Master Data PUBLIC © 2016 SAP SE or an SAP affiliate company. All rights reserved. 9 2.4 Material Master  Classification of materials: The fields Tax indicator for material and/or material group under Purchasing tab may be used.  Capital/Raw classification A new indicator may be introduced based on further clarity by Govt.  HSN/SAC code For Goods the HSN code will be stored in Control code field of foreign data Tab.
  10. 10. 10 PUBLIC © 2016 SAP SE or an SAP affiliate company. All rights reserved. Goods and Services Tax - India Master Data For Services, the SAC code will be stored in Tax tariff code of Service master.  Classification of Services: The fields Tax indicator for services and/or services group under Basic Data tab may be used.
  11. 11. Goods and Services Tax - India Master Data PUBLIC © 2016 SAP SE or an SAP affiliate company. All rights reserved. 11 2.5 Business Place Multiple business places must be created based on the region/state of operation. The relevant plants must be assigned to their corresponding business places i.e. region/state wise association. A new field will be provided to store the GSTIN of the business. As the GST registration is unique to each state, the plant(s) in the same region must be assigned to state specific business place. The plants can be assigned to the business place.
  12. 12. 12 PUBLIC © 2016 SAP SE or an SAP affiliate company. All rights reserved. Goods and Services Tax - India Master Data 2.6 Tax Account Business Place based G/L account determination: For Input and output, condition type wise transaction key to be created and business place wise G/L to be created and assigned. Expected transaction key and description Transaction Key Description JIC Input CGST JII Input IGST JIS Input SGST JIR Input GST Reverse Charge JOC Output CGST JOI Output IGST JOS Output SGST
  13. 13. Goods and Services Tax - India Tax Configuration and Computation PUBLIC © 2016 SAP SE or an SAP affiliate company. All rights reserved. 13 3 Tax Configuration and Computation Condition Types required  Intra-state transactions o CGST and SGST applicable  Inter-state/Import transactions o IGST applicable  Deductible and Non Deductible  Reverse Charge Conditions  Export Transactions o Zero rated (Expected)  Region level rate variations may exist New condition types/access sequences for pricing and account determination planned detailed below. Tax Procedure
  14. 14. 14 PUBLIC © 2016 SAP SE or an SAP affiliate company. All rights reserved. Goods and Services Tax - India Tax Configuration and Computation SD Pricing Procedure
  15. 15. Goods and Services Tax - India Document Numbering PUBLIC © 2016 SAP SE or an SAP affiliate company. All rights reserved. 15 4 Document Numbering Unique sequential numbering may be required for outgoing GST invoices  Criteria for legal numbering may be specified by Govt.  It could be for example o Registration level o Plant level o Document type (Invoice / Credit Memo) o A combination of above o Any other criteria This can be achieved by using the existing ODN (Official document Numbering) functionality. Assign Document class to Document Types Assign Number Range to Business Place
  16. 16. 16 PUBLIC © 2016 SAP SE or an SAP affiliate company. All rights reserved. Goods and Services Tax - India Business Transactions 5 Business Transactions 5.1 Procurement In normal procurement scenario based on the Goods Supplier (GS) partner and receiving plant that you select in the Purchase Order, system identifies transaction as intrastate or interstate, and calculates the taxes accordingly. Goods supplier partner selected flows in the Goods Receipt document, which will then be passed on to invoice verification to identify their GS Region and receiving plant region, and then taxes are calculated accordingly. At the time of Invoice creation, if the captured goods supplier partner differs from the Purchase Order goods supplier, the user can change the goods supplier in the relevant invoice verification (MIRO) transaction. To do so, we plan to introduce a new editable field (called GST Partner) in the header data under the Basic Data tab. This new field will default the goods supplier partner vendor that you select in the purchase order. If the user wants to change this, the user will have the provision to search for the correct vendor code in the field help search. Note This design may change depending on the technical feasibility. In the case of service purchase orders, we also expect a requirement to change the receiving plant region. That is, if the service offered region is different to that of the receiving plant region maintained in the service order, the user will be provided with a new editable field (called Actual Place of Supply) in the header data to select service provided region in the field help search. Note This design may change depending on the technical feasibility and more clarity on the law in this area. The business transactions are classified as intrastate or interstate, and based on the region of the selected GST partner and the receiving plant, the taxes are calculated in the relevant invoice verification transaction,
  17. 17. Goods and Services Tax - India Business Transactions PUBLIC © 2016 SAP SE or an SAP affiliate company. All rights reserved. 17 5.2 Sales As per the standard SAP partner determination technique, the sales order line items will be assigned an appropriate Ship-to party, which will be used for creating individual delivery documents. These deliveries/orders can then be used for billing per region. Line item 10 Line item 11
  18. 18. 18 PUBLIC © 2016 SAP SE or an SAP affiliate company. All rights reserved. Goods and Services Tax - India Pricing 6 Pricing The proposed sample access sequences / condition types/ accounting keys/ tax codes for major business transaction are listed below. 6.1 Procurement 6.1.1 Domestic Procurement Intrastate Access Sequence Tax Procedure
  19. 19. Goods and Services Tax - India Pricing PUBLIC © 2016 SAP SE or an SAP affiliate company. All rights reserved. 19 6.1.2 Domestic Procurement Interstate Access Sequence Tax Procedure 6.1.3 Procurement- for capital goods Access Sequence
  20. 20. 20 PUBLIC © 2016 SAP SE or an SAP affiliate company. All rights reserved. Goods and Services Tax - India Pricing Tax Procedure 6.1.4 Procurement – Import Tax setup will be similar to that of Domestic Procurement - Access Sequence Tax Procedure Maintain condition record for condition JIIG (inter-state GST) at a zero rate, for such a combination that it only triggers for import scenario. To CVD line (IGST in GST scenario), add your non-zero tax code.
  21. 21. Goods and Services Tax - India Pricing PUBLIC © 2016 SAP SE or an SAP affiliate company. All rights reserved. 21
  22. 22. 22 PUBLIC © 2016 SAP SE or an SAP affiliate company. All rights reserved. Goods and Services Tax - India Pricing The tax lines will be posted to BSET table.
  23. 23. Goods and Services Tax - India Pricing PUBLIC © 2016 SAP SE or an SAP affiliate company. All rights reserved. 23 6.1.5 Stock Transfer Order In GST regime major process change expected in Stock Transfer process. The STO would require a Tax Invoice if stock transfers are happening between two GST Registration numbers. NOTE: Need of an account posting of intra-company STO is still under discussion. We recommend STO to be handled through SD route only. STO via SD For stock transfer between the various plants (belonging to different GSTIN), a GST invoice will be created along with the Goods issue document. Sender Receiver STO OBD Billing (VF01) Outgoing GST Invoice Goods Receipt Capture Incoming GST invoice
  24. 24. 24 PUBLIC © 2016 SAP SE or an SAP affiliate company. All rights reserved. Goods and Services Tax - India Pricing Stock transfer order Outbound Delivery
  25. 25. Goods and Services Tax - India Pricing PUBLIC © 2016 SAP SE or an SAP affiliate company. All rights reserved. 25 Outbound GST invoice creation Billing details screen (Tcode: VF01) A new billing document type may be provided for these invoices. Outgoing GST invoice accounting entry G/L Acc. Description Amount Currency Debit/Credit Inter site sales 1100 INR DR GST Control 1000 INR CR IGST Payable 100 INR CR
  26. 26. 26 PUBLIC © 2016 SAP SE or an SAP affiliate company. All rights reserved. Goods and Services Tax - India Pricing Goods Receipt Next step will be to capture the GST invoice. The GST Invoice with an account payable line. G/L Acc. Description Amount Currency Debit/Credit Inter site sales 1100 INR CR GST Control 1000 INR DR Input IGST 100 INR DR 6.1.6 Subcontracting/Job Work Purchase Order components The existing Subcontracting process remains the same. We may develop new transactions (similar to J1IF01- Creation of Challan 57F4 and J1IFQ- Reconciliation of Challan) for GST requirements.
  27. 27. Goods and Services Tax - India Pricing PUBLIC © 2016 SAP SE or an SAP affiliate company. All rights reserved. 27 Purchase Order Taxes Transfer Posting Good Receipt NOTE As an alternate solution for subcontracting, the subcontractor can be defined as an additional place of supply. For such scenarios, the STO process can be followed.
  28. 28. 28 PUBLIC © 2016 SAP SE or an SAP affiliate company. All rights reserved. Goods and Services Tax - India Pricing 6.1.7 Services Existing process of Service Order Creation  Service Entry Creation continues. SAC Code will be fetched from the Service Master and Tax classification indicator would be used to determine the tax. Based on the Plant Region and Goods Supplier Region, intra state or Interstate would be determined.
  29. 29. Goods and Services Tax - India Pricing PUBLIC © 2016 SAP SE or an SAP affiliate company. All rights reserved. 29 6.2 Sales 6.2.1 Domestic (Inter and Intra state) Access Sequence
  30. 30. 30 PUBLIC © 2016 SAP SE or an SAP affiliate company. All rights reserved. Goods and Services Tax - India Pricing Pricing Procedure 6.2.2 Sales - Exports It is anticipated that the exports will be zero rated. Export with GST More clarity is awaited regarding the ARE-1, Excise bond and Proof of exports. Export without GST Taxes to be determined but at zero rate.
  31. 31. Goods and Services Tax - India GST Tax Postings PUBLIC © 2016 SAP SE or an SAP affiliate company. All rights reserved. 31 7 GST Tax Postings  Separate accumulation of credit and payables for o CGST o SGST o IGST  Separate accumulation at Registration level  As accounting key are part of the procedure, automatic tax posting to respective accounts from business processes.
  32. 32. 32 PUBLIC © 2016 SAP SE or an SAP affiliate company. All rights reserved. Goods and Services Tax - India Utilization 8 Utilization  Utilization of Input tax credit would be as under o Input CGST to be utilized against output CGST and IGST o Input SGST to be utilized against output SGST and IGST o Input IGST to be utilized against output IGST, CGST and SGST in the order of IGST, CGST and SGST New Utilization program to handle GST credit utilization is planned. Selection criteria for reporting would be as above. Cross utilization as per GST rules
  33. 33. Goods and Services Tax - India Reporting PUBLIC © 2016 SAP SE or an SAP affiliate company. All rights reserved. 33 9 Reporting  Reporting for GST comprises of several GSTR Reports (from GSTR 1 till GSTR 12). These reports are supposed to be generated by GSTN system based on data submitted by Tax Payers and their business partners.  Standard Tax Registers are available in SAP system to view the summary of GST Input and output taxes via Advance Return for Tax on Sales/ Purchases ( Tcode : F.12)
  34. 34. www.sap.com/contactsap © 2016 SAP SE or an SAP affiliate company. All rights reserved. No part of this publication may be reproduced or transmitted in any form or for any purpose without the express permission of SAP SE or an SAP affiliate company. SAP and other SAP products and services mentioned herein as well as their respective logos are trademarks or registered trademarks of SAP SE (or an SAP affiliate company) in Germany and other countries. All other product and service names mentioned are the trademarks of their respective companies. Please see http://www. sap.com/corporate-en/legal/copyright/index.epx#trademark for additional trademark information and notices. Material Number:

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