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07/12/2015

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SuccessFactorsNamesYvetteCameron
GlobalVPofStrategy

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SAPGSTPreparedness
GoodsandServicesTax(GST),isacomprehensivetaxlevyonmanufacture,saleandconsumptionof
goodsandserviceswithcomprehensivechainofsetoffbenefitsfromtheproducerspointandservice
providerspointuptotheretailerslevel.
Whilethetaxableeventissupplyofgoodsandsupplyofservices,GSTisessentiallyataxonlyonvalue
additionateachstage,andasupplierateachstageispermittedtosetoff,throughataxcreditmechanism,
theGSTpaidonthepurchaseofgoodsandservicesasavailableforsetoffontheGSTtobepaidonthe
supplyofgoodsandservices.ThefinalconsumerwillthusbearonlytheGSTchargedbythelastdealerin
thesupplychain,withsetoffbenefitsatallthepreviousstages.
InaGSTregime,goodsandservicesarenotdifferentiatedastheymovethroughthesupplychain.Beinga
destinationbasedconsumptiontaxGSTisusuallyleviedonimportofgoodsandserviceswithexport
transactionsbeingzeroratedundertheGSTscheme.
GSTModel:AsproposedforINDIA
DualGSTModel:
TheproposedGoodsandServicesTaxwillbeadestinationbasedtaxmeasure,withtaxsetoffsavailable
acrosstheproductionvaluechain.ConsistentwiththefederalstructureofthecountryGSTstructureis
expectedtohavetwocomponents:oneleviedbytheCentre,CentralGST(CGST)andtheotherleviedby
theState,StateGST(SGST).Bothcomponentswouldbeapplicableonalltaxabletransactionsofgoods
andservices.TheCentreandtheStateswouldhaveconcurrentjurisdictionfortheentirevaluechainforall
taxpayersonthebasisofthresholdsforgoodsandservicesprescribedfortheStatesandtheCentre.
TheCentralGSTandtheStateGSTwouldbeleviedsimultaneouslyoneverytransactionofsupplyof
goodsandservicesexcepttheexemptedgoodsandservices,goodswhichareoutsidethepurviewofGST
andthetransactionswhicharebelowtheprescribedthresholdlimits.Further,bothwouldbeleviedonthe
samepriceorvalueunlikeStateVATwhichisleviedonthevalueofthegoodsinclusiveofCENVAT.
ItisalsoproposedthatanIntegratedGSTmodel(IGST)modelbeadoptedfortaxationofinterstate
transactionsofgoodsandservices.
Disclaimer:Theaboveinformationisbasedonthevariousinformationsourcesthatweremadeavailable
forpublicin2010duringvariousforumsanddocuments
SAPSolutiontoGST
TheintroductionofGoodsandServicesTax(GST)willusherinaneweraoftaxreformsinIndia.GST,
applicableonbothgoodsandservices,willreplacetheexistingconsumptionbasedindirecttaxes.Taxwill
becollectedonvalueaddedgoodsandservicesateachstageofsupply.
InIndia,theGSTwillbeadualtaxregimecomprisingoftheCentralGoodsandServicesTax(CGST)and
StateGoodsandServicesTax(SGST).Allgoodsandservices,barringafewexceptions(suchas
petroleumandalcoholforhumanconsumption)willbeboughtundertheGSTumbrella.Thetaxburdenis
expectedtobedividedequitablybetweenmanufacturingandservices,withtheintroductionofGST,along
withtheaddedbenefitsofexportspromotion,raiseinemployment,andgrowthboost.
WhatisSAPdoing?
SAPSE,theleaderinenterpriseapplications,hasalwaysstrivedtowardsunderstandingitscustomers
globalandlocalbusinessneedsbydeliveringsolutionsthathelpthemruntheirbusinessesbetter.
GlobalizationServices(GS),thelocalizationwingofSAPSE,islookingindetailattheGSTimpacton
businessprocesses.Tofurtherdwellintoareasthatrequireclarity,GlobalizationServiceshasinitiateda
workingmodelwithcustomersbysettingupindividualworkgroups.Eachoftheseworkgroupsfocuson
GSTscenarios(includinglegalaspects)withrespecttovariousindustries,toensureasmoothtransitionto
GST.
Thedifferentworkgroupsincludethefollowing:
Automotive/Manufacturing/Engineering

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