GST-SAP.pptxGST-SAP.pptxGST-SAP.pptxGST-SAP.pptx

GST-SAP.pptx

1. GST – India Rajesh Sharma AGM-IT Dainik Bhaskar Group [email protected]

2. In the year 2000 Vijpayee Government started discussion, for introduction of GST, Committee set up under Asim Dasgupta (Finance Minter of West Bengal), role of committee was design GST model as well as check IT preparation for same. In his in budget speech of 2004-05, the then finance minister P .Chidambaram says: “In the medium-to-long term, it is my goal that the entire production-distribution chain should be covered by a national VAT (value added tax), or even better, a goods and services tax, encompassing both the centre and the states.” GST – Overview - history

3. GST – Area of impact Tax Registration Define GST Registration Level Master Data Maintenance Business Partner Tax Data, GST Accounts Tax Configuration & Computation Configure Tax and Pricing procedures ; Tax computation Document Numbering Outgoing Invoice Numbering Business Process Localization Extend to currently localized Business Processes GST Tax Postings GST Input and Output Tax postings Utilization Input tax credit utilization against payable for GST Taxes Reporting Tax Register

4. GST – Present Status GST Bill, which is passed in 2016 Sep. Question in front of Ruling Government is, are we going to introduce as Money Bill or Finance Bill, Speaker of house will decide. To Bring IT set up, 30,000 square feet areas has been set up in Delhi Digital Platform Customers Centre GST

5. GST – Unique Number 15 digit number 2 - Digit represents State Next 10 - Digit represents PAN Number 13 th . digit number Consist of registration number of assesse, 14 th digit is Z, for all number 15 th . digit number is correction number 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

6. 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.

7. GST – Rates The four GST slabs have been set at 5%, 12%, 18% and 28% for different items or services. To keep inflation in check, essential items including food, which at present constitute roughly half of the consumer inflation basket, will be taxed at a zero rate. The lowest rate of 5 per cent would apply to common use items. The peak rate of 28% will apply to luxury goods. Luxury cars, tobacco products and aerated drinks will attract an additional cess on top of the highest tax rate. The additional cess and a clean energy cess will create a revenue pool which will be used to compensate states for any loss of revenue during the first five years of the implementation of GST, Mr Jaitley said. Service Tax will go up from 15% to 18 %, said Revenue Secretary Hasmukh Adhia.

8. Tax registration (GSTIN: GST Identification Number)

9. 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.

10. Customer Master 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. 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.

11. 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. The vendor master has to be extended at Goods Suppliers based on their region of operation. This will ensure in storing GSTIN for each of these regions. Types of Vendors (Compounding, Non-registered, etc.) A new field/table will be provided under CIN details Tab (Vendor master data) for identification.

12. 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.

13. Material Master For Services, the SAC code will be stored in Tax tariff code of Service master.

14. Material Master Classification of Services: The fields Tax indicator for services and/or services group under Basic Data tab may be used.

15. Business Place The plants can be assigned to the 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.

16. Tax Account Business Place based G/L account determination – Both for MM and SD View: J_1IT030K_V

17. Tax Configuration and Computation Intra-state transactions CGST and SGST applicable Inter-state/Import transactions IGST applicable Export Transactions Zero rated (Expected) Region level rate variations may exist New condition types/access sequences for pricing and account determination Tax Procedure

18. SD Pricing Procedure

19. 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 Registration level Plant level Document type (Invoice / Credit Memo) A combination of above 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

20. Business Transactions - Procurement Actual Goods supplier will be captured in the Goods Receipt document, which will then be passed on to invoice verification to identify the actual place of supply and for calculation of taxes accordingly. To store the Goods supplier’s region, we intend to introduce a non-editable field on header details (Basic data tab) for the relevant IV transactions. This design may change depending on technical feasibility. Based on the region of the Goods supplier and the receiving plant, the business transaction will be classified into intra or interstate and the taxes will be determined.

21. Business Transactions - 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

22. Pricing The proposed sample access sequences / condition types/ accounting keys/ tax codes for major business transaction are listed below. Procurement-Domestic Procurement Intrastate Access Sequence Tax Procedure

23. Domestic Procurement Interstate Access Sequence Tax Procedure

24. Procurement- for capital goods Access Sequence Tax Procedure

25. 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.

26. Incoming Invoice

27. Incoming Invoice The tax lines will be posted to BSET table.

28. Stock Transfer Order NOTE: Need of an account posting of intra-company STO is still under discussion. 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.

29. Stock Transfer Order Stock transfer order Outbound Delivery

30. 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

31. Goods Receipt Next step will be to capture the GST invoice. The GST Invoice with an account payable line.

32. 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.

33. Purchase Order Taxes Transfer Posting

34. 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.

35. 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.

36. Services

37. Sales - Domestic (Inter and Intra state) Access Sequence Pricing Procedure

38. 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.

39. GST Tax Postings Separate accumulation of credit and payables for CGST SGST IGST Separate accumulation at Registration level Automatic Tax posting to respective accounts from business processes

40. Utilization of Input tax credit would be as under Input CGST to be utilized against output CGST and IGST Input SGST to be utilized against output SGST and IGST Input IGST to be utilized against output IGST, CGST and SGST in the order of IGST, CGST and SGST

41. Utilization New Utilization program to handle GST credit utilization Cross utilization as per GST rules

42. Reporting The reporting for GST is to be made to GSTN (Goods and Services Network) via GSP (GST Suvidha Provider). The most important forms to be reported to GSTN are: GSTR-1 (Outward supplies made by the taxpayer) GSTR-2 (Inward Supplies/Purchases received) GSTR-8 (Annual return)