GST- Goods and Services Tax
SAP – SOLUTION APPROACH
INTRODUCTION:
The purpose of this document is to provide an overview of the solution approach given by SAP
to implement the Goods and services tax which will be applicable in India starting 01-Jul-17.
GST at a Glance:
What is GST ? - GST is the newly proposed form of destination based taxation. GST is one
indirect tax for the whole nation, which will make India one unified common market. Applies to
whole of India including J&K.
MODEL OF GST IN INDIA:
GST Model in India is based on a dual structure model.
1. Central component – CGST
2. State component- SGST
3. Integrated component – IGST ( applicable only for Inter state /Imports)
TAX RATES IN GST:
The proposed tax rates are as below
Rate of essential items including food grains
0%
Rate for common use items or the items for mass consumption
5%
Lower standard rate for goods and services
12%
Higher standard rate for goods and services
18%
Rate for demerit/ luxury goods
28%
Rate for goods that are exempt for GST
0%
TAXES SUBSUMED BY GST:
The following central and state level taxes existing will be subsumed by GST.
Central:
1)
2)
3)
4)
5)
Central Excise Duty
Service Tax
Additional EDs
CVD and Special Additional Duty on imports
Surcharge and Cesses
State:
1)
2)
3)
4)
5)
6)
VAT
Luxury Tax
Entry Tax
Entertainment Tax
Taxes on lottery / gambling
States cesses / surcharge
LEGAL REQUIREMENT:
The legal requirement for any company is to have a GST registration number in each state
where the company has a business. There is no monetary limit on the value done in each state.
The GST registration is a PAN based number.
SOLUTION APPROACH IN SAP FOR GST:
The solution given by SAP for GST is based on business place, Tax procedure TAXINN, related
MM and SD pricing procedures and condition records, related tax codes and account
assignments for the tax codes. In the document, solution approach has been documented for
an Indian company with 2 plants in 2 different states – one Maharshtra and one in Andhra.
The company code details are I100 – New Life sciences ltd.
Plant 1 – 1000 – Pune - Maharashtra
Plant 2 – 1100 – Hyderabad - Andhra
LIST OF OSS NOTES APPLIED
SL
NO
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
OSS
NUMBER
2385575
2407980
2415115
2376723
2410105
2417506
2416018
2426581
2378678
2419214
2419215
2405502
2410917
2428495
2405801
PARTICULARS
Master data note for ERP
Tax Configuration Note
GST India - Changes to Transaction data- DDIC
GST IN: BAdI definition for screen enhancement in Enjoy transactions of FI and MM
GST India - Sales related changes for India GST for sales order creation and Invoice posting
GST India – Utilities (Utility Objects for GST)
GST India: Stock Transfer
GST India: Tax calculation based on vendor region and vendor GST classification
GST IN: BAdI implementation in Enjoy transactions of FI and MM
GST IN: Changes to MIRO Invoice item level screen
GST IN: Changes for FI Invoice item level screen
GST India - Changes to Master data- DDIC activities
GST IN: Line item wise tax calculation for sales invoices
GST India: Corrections to note 2416018
GST FAQ Notes
The basic notes for GST related to business place/GST number and other master data related
notes have been implemented
CONFIGURATION SET UP FOR GST
ORGANIZATION STRUCTURE FOR GST
The standard solution given by SAP is based on the concept of BUSINESS PLACE. The
GST registration number is assigned to this business place. If a company has multiple
plants/sales offices etc in one state from where the supply of goods or services is made,
then it is sufficient if it has one business place and have all the plants/sales offices
assigned to that. Every logistics related transaction originating in the plant/sales office –
will have the GSTN in the FI document because these are assigned to that business
place, which in turn has the GST registration number at the tax line item level.
Since the purchases and sales have the corresponding tax amount tracked at the GST
registration number level, the GST amount can be tracked for each and every business
place by configuring separate GL accounts for each business place. This makes the
reporting easy for each business place.
Definition of business place : The path for configuring business place is
SPRO > CROSS APPLICATION COMPONENETS > GENERAL APPLICATION FUNCTIONS >
BUSINESS PLACE
ASSIGNMENT OF BUSINESS PLACE TO PLANT
TAX PROCEDURE:
The recommended tax procedure is TAXINN for GST. The tax procedure will contain the
conditions relevant for GST .This is a condition type based tax calculation procedure. If
the earlier TAXINJ is used, then migration to TAXINN is a prerequisite for the GST
solution.
TAX CODE CONFIGURATION:
The tax codes are configured using transaction code FTXP. The following are the tax
codes configured for GST. Both Input and Output tax codes need to be configured. The
rates of the tax codes can be maintained only in the relevant condition record or pricing
procedure in MM/SD respectively.
Input Taxes –
I0
Only 0% GST
I1
0% Input for Essential goods
I2
5% Input for common goods and Services
I3
12% Input for lower standard rate
I4
18% Input for Higher standard rate
I5
28% Input for Luxury items
Output Taxes –
O1
0% Output for Essential goods
O2
5% Output for common goods and Services
O3
12% Output for lower standard rate
O4
18% Output for Higher standard rate
O5
28% Output for Luxury items
In order to use the Tax codes in direct FI posting,access sequence MWST should be used
in the condition type, so that the tax rate can be maintained.
ACCOUNT ASSIGNMENT :
The account assignment for the tax codes need to be done in OB40 and also in table
J_1IT030K_V.
OB40:Transaction Key JIC:
Table J_1IT030K_V
CONFIGURATION OF CONDITION TYPES IN MM
SPRO->SAP Reference IMG->Materials Management->Purchasing->Conditions->Define
Price Determination Process->Define Condition Types
The condition types are used to represent pricing elements such as prices, discounts,
surcharges, taxes, or delivery costs in the SAP System. We have defined new condition
type for new GST tax structure which are as below
1. Central GST – This will be levied for intra-state purchase
2. State GST- This will be levied for intra-state purchase
3. Inter-State/Import GST - This will be levied for inter-state/Import purchase
Central GST condition type
State GST condition type
Integrated /Import GST
GST Non-Deductible condition type: - These conditions will not undergo for Cenvat.
These condition type are loaded directly on inventory.
Central GST Non-Deductible
State GST Non-Deductible
Integrated/Import GST Non-Deductible
MM ACCESS SEQUENCE
An access sequence is a search strategy with the aid of which the SAP System searches
for valid condition records of a certain condition type.
Access sequence JGSI is created with multiple condition table as shown below with their
key fields.
ACCOUNT DETRMINATION IN OBYC and OB40
Created a transaction event key ZFR for import and assigned the GL of
interstate/import. Additionally, created multiple account key for Central, State and
Integrated GST which are as below.
Integrated/Import GST account keys for pricing
Central GST account key
State GST account key
Integrated/Import GST
SCENARIOS IN MM
1. INTRA-STATE PURCHASE: - This kind of purchase basically takes place when the
material is purchase within state. There are two different taxes involved for this kind of
purchase i.e. Central GST and State GST.
2. INTER-STATE PURCHASE: This kind of purchase basically takes place when the
material is purchase among two different states. There is only one tax applicable i.e.
Integrated GST.
3. IMPORT PURCHASE: - The name itself tells the material is procured from other
country. In this process once the material is received at India port it needs to be cleared
for custom duties to release the material from customs.
4. STOCK TRANSFER ORDER WITH GST BILLING: - In this stock transfer process the
material is transferred from one plant to other plant within a company code. Once the
goods are delivered from supplying plant a Billing is generated at the supplying plant.
GST Incoming invoice booking is in development mode.
5. SERVICE PROCUREMENT: - In this kind of process we avail services from vendor.
6. SUBCONTRACTING PURCHASE
The existing Subcontracting process will remains the same. It is mentioned in SAP
solution proposal they may develop new transactions (similar to J1IF01-Creation of
Challan 57F4 and J1IFQ- Reconciliation of Challan) for GST. Once this is finalized will
complete subcontracting process.
CONFIGURATION OF PRICING PROCEDURE IN SD
ACCESS SEQUENCE IN SD
SCENARIOS IN SD