OTHER CONCEPTSGST_india for newgst1.pptx

SAP GST

1. PURCHASE AND SALES TAX

2. SAP TAX PROCEDURE SAP provides the majority of the tax configuration by country . There are three SAP areas that work together to determine taxes FI,MM, and SD FI – Base configuration for tax procedures, rates and accounts SD – Configuration/master data to determine output tax code MM – Configuration/master data to determine input tax code Master data such as customer, vendor, and material, as well as transaction data like POs and Sales Orders are key to determining the correct tax . Rates can be maintained in SAP or SAP can call an external system for them (this discussion with focus on rates maintained in SAP) .

3. FI Tax Basics Tax configuration is done by country level. All company codes in the country share those settings . Two Main Components: 1. Tax Calculation Procedure – Provide the method of calculation - normally use SAP standard . 2. Tax Codes – Provide the rates .

4. GST(GOODS AND SERVICE TAX) GST is known as the Goods and Services Tax. It is an indirect tax which has replaced many indirect taxes in India such as the excise duty, VAT, services tax, etc. The Goods and Service Tax Act was passed in the Parliament on 29th March 2017 and came into effect on 1st July 2017. In other words,Goods and Service Tax (GST) is levied on the supply of goods and services. Goods and Services Tax Law in India is a comprehensive, multi-stage, destination-based tax  that is levied on every value addition.GST is a single domestic indirect tax law for the entire country.

5. GST CGST : Stands for Central GST Tax collected by Central Government applicable on supplies within(INTRA) the state. SGST: Stands for State GST Tax collected by State Government Applicable on supplies within(INTRA) the state. UTGST: Stands for Union Territory GST Tax collected by Union Territory Applicable on supplies within(INTRA) the Union Territory. IGST: Stands for Integrated GST Tax collected is shared between Centre and State.Applicable on interstate(BETWEEN) and import transactions . Example: A product worth base price is Rs.100 and after levying excise duty @ 12% value of the product is Rs. 112. On sale of such goods VAT is levied @ 12.5% and value to the ultimate consumer is Rs. 126. In the proposed GST system on base price of Rs.100 CGST and SGST both will be charged, say @ 8% each, then the value to the ultimate consumer is Rs. 116. So, in such a case the industry can better compete in global environment.

6. GSTIN – GST Identification number GST Basic Settings Single registration number 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 . Capture GST registration at Business Place level Multiple business places must be created per the region of operation. The relevant plants must be assigned to their corresponding . Two Types of GST number to be maintained. 1. Company GST number (i.e. Company code in SAP)===> Will maintain under Business place. 2. Customer or Vendor GST number ======> At customer or Vendor master.

7. CUSTOMER /VENDOR GSTIN COMPANY GST NUMBER

8. HSN/SAC Code Maintain HSN/SAC Code for Materials & Service master HSN stands for Harmonized System of Nomenclature which is internationally accepted product coding system used to maintain uniformity in classification of goods. SAC stands for Service Accounting Codes which are adopted by the Central Board of Excise and Customs (CBEC) for identification of the services. HSN/SAC CODE  MATERIAL MASTER IN CONTROL CODE FIELD IN THE FORIGN TRADE

9. GST Configuration -1 Create Condition table combination of fields that defines the key of a condition record .For each condition type, you define an access sequence. The access sequence tells the system where to look for relevant condition records for a particular condition type.

10. GST Configuration CREATE BUSINESS PLACE ASSIGN BUSINESS PLACE TO PLANT GL Accounts Creation===>FS00 Create condition table for FI /MM/ SD Create Access Sequence: OBQ2 Creation of Condition Types===>OBQ1 Creation of Account Keys===>OBCN Maintain Tax Procedure===>OBQ3 Create Tax Codes under GST===>FTXP Assign G/L to Accounting key===>OB40

11. TESTING Post Vendor Invoice (FB60) for input GST Post Customer Invoice (FB70) for Output GST Unit Testing in DEV Server Quality server testing UAT

12. Reverse Charge Machanism in Taxation Reverse charge is a scenario in Taxation, where, the tax paying entity creates a tax liability on it self. One of the examples of this is India GST, where reverse charge needs to be applicable under specific scenarios, such as Purchase from Unregistered Vendors, Import of services and Purchase of specific Goods and Services. To understand it better, let us take the an example. An organization purchases goods from a supplier. That supplier is not eligible/registered to pay taxes to government. The rule in that particular tax regime tells that, in such case, the buyer needs to create a tax liability on itself and submit the tax amount to government . This concept is called R everse C harge Mechanism.

13. RCM ( Reverse Charge Mechanism) Purchase without Reverse Charge (Regular Purchase) . In case of a normal purchase, the accounting entry will be as it below. Vendor Cr 1100 Expenses Dr 900 Input Tax Dr 100 Purchase with Reverse Charge . In case of a reverse charge, the accounting entry will be as below. Vendor Cr 1000 Expenses Dr 1000 Input Tax Dr 100 RCM Tax Cr 100

14. RCM CONFIGURATION GL Accounts Creation===>FS00 Creation of Condition Types===>OBQ1 Creation of Account Keys===>OBCN Maintain Tax Procedure===>OBQ3 Create Tax Codes under GST===>FTXP Assign G/L to Accounting key===>OB40

15. Non- Deductible Tax Eligible tax Purchasing  10 Selling 25 Govt25-10=15 Paid to govt In- elgible Tax(Non deductible tax) Purchasing  10 Selling 25 Govt25 -10 =25 Paid to govt Non deductible taxes transfer to Material /Asset

16. Non- Deductible Tax configuration GL Accounts Creation===>FS00 Creation of Condition Types===>OBQ1 Creation of Account Keys===>OBCN Maintain Tax Procedure===>OBQ3 Create Tax Codes under GST===>FTXP Assign G/L to Accounting key===>OB40

17. ADVANCE CONCEPTS IN GST Assign GL Accounts with Business Place and Tax Codes===>SM30 GST calculation on gross amount for Vendor/Customer Down payment===>OBXB Withholding tax configuration for GST ODN Configuration in GST ISD – Configuration

18. SD TAX CALCULATION PROCESS

19. MM TAX CALCULATION PROCESS

20. E-INVOICE SELL GOODS  SALES INVOICE TO CUSTOMER ( TAX APPLICABLE ) UNDER E-INVOICE: SELL GOODS  REGISTER THAT INVOCIE WITH(TAX APPLICABLE) DEPARTMENT/GOVTSALES INVOICE TO CUSTOMER GOVT ISSUE IRN and QR CODE

21. TAX CODE TRANSPORTATION GENERATE THE TR (EXPORT VALUES INTO TR) MAINTAIN TAX RATES IN THE TARGET SERVER(IMPORT VALUES INTO TR) appropriate tax code for sales documents based on the assigned tax code of the selected Ship To address for the customer. On the purchasing side, the tax code is determined based on selected warehouse. Tax thresholds can be identified for a min/max taxable amount, as well as for flat tax amounts. This will be explained in this guide. Expectations are handled via the Tax Code Determination rules, where you can configure up to 3 conditions for assigning tax codes.

22. Setting Up Tax Jurisdiction Types Upon the creation of a new company database, 3 jurisdictions are created: City, County and State. You can create additional jurisdictions on the path Main Menu → Administration → Setup → Financials →Tax → Sales Tax Jurisdiction Types. Setting Up Tax Jurisdictions The next step is to create jurisdiction values and assign tax rates to each one. For the State jurisdiction, the rates are automatically assigned. For the other jurisdictions, you need to create the ones that are relevant for the company and will be used in tax codes. 1. From the SAP Business One Main Menu, choose Administration → Setup → Financials →Tax → Sales Tax Jurisdiction. Select the jurisdiction type or define a new one.