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Authors:
Santhoshkumar Ananth (O2C),
Rama Mohan Derangula (Advanced Receipts),
Souvik Mandal (AR Document Sequencing),
Subbarao Nemani (Supplementary Transactions)
Pavan Raparla (Exports)
Change Record
Reviewers
Name Position
Audience
1 – Introduction
"Order to cash" (O2C or OTC) normally refers to the business process for receiving and processing
customer sales. It follows "Opportunity to Order" and covers business-to-business (B2B) and business-to-
consumer (B2C) sales
The Financials for India functionality lets you satisfy all your needs related to Tax calculation required for
a Sales order Transaction
1.1- Scope
This document provides the Functional overview for ‘Oracle Financials for India’ (OFI) product on the
Order to Cash front. The document helps you with the setups required for transacting Order to Cash
Cycle with respect to GST.
Note: The current content has been compiled in reference to the frozen scope of the Phase-I
deliverables (Ref: GST Phase -1 Deliverables.docx)
2. Tax Type
3. Tax Rates
9. Document Sequencing
Steps 10 and 11 are specific to Financials for India Order Management for tax defaultation to AR and
document sequence generation
Global Parameters
Please Note in that GST Solution the significant change is such that there is no specific form by name
Sales Order(Localized)
Users can create sales orders directly Navigating to the base form itself
a) Create a Sales Order. Provide all the required Header and Line Information
Tools
India Tax
Details
6 Tax Point Basis Will get defaulted from the tax type and users No
cannot modify the same.
Taxes,Tax Point
Basis,Currency,Tax
Amount, Customer details,
Invoice Number and date
details are captured in this
block
Status: Booked
(N) Oracle Order Management Shipping Transactions Provide Order Number Click
on Find Delivery Ship Confirm
g) Navigate to Tools India Tax Details to check the taxes and Invoice number
TPB:Delivery
To sequence the invoice number for different transaction types, it is required that to assign a prefix to a
sequence series. And as far as legal requirement, the sequence should be refreshed at the beginning of a
new fiscal year. So we should allow user to assign effective dates for a sequence series
(N) Oracle Financials for India Tax Configuration Define Document Sequencing
2 Start Number You can specify the Start Number for a Yes
specific Sequence
3 Current Number This field will display the current document Yes
sequence that is used.
6 Start date You should pick the start date here. Yes
7 End Date You can give a end date to disable the Yes
sequencing.
1 Tax Regime Name Tax Regime Name that used has already Yes
defined in the Tax Regime. Pick the value
from the LOV
1.Operating Unit
2.Inventory Organization
4 Organization Name You can pick the organization here. LOV Yes
contains Organizations related to the
registration number and Organization Type
selected above
6 Document Type You can pick the document type here. Yes
LOV contains:
1. AR Transactions
2. Corrections
3. Default
4. Inter Org transfer
5. Manual Entry
6.Receipts
7.Return to Vendor
8.Sales Order .
7 Document Category You can pick the document category here Yes
The document category name depends upon
the document type selected above.
8 Item Classification Pick the Item Classification from the LOV Yes
"Order to cash" (O2C or OTC) normally refers to the business process for receiving and processing
customer sales.
The term is most prominent in the design and improvement of Enterprise Resource Planning (ERP)
systems
In the previous chapter we have already covered until Sales Order. The remaining steps are explained
below
AutoInvoice is a concurrent program that interfaces Sales Orders from Order Management to Invoices in
Accounts Receivable.
Sales
Order 46
AutoInvoice Import
Program Completed
Normal
c) Find Transactions
f) Taxes from Sales order has got defaulted and the Invoice number is also defaulted
NOTE: As TPB for the tax type is Delivery, there will not be any accounting entries passed specifically by
Oracle Financials for India
As TPB for the tax type is Delivery, there will not be any accounting entries passed specifically by Oracle
Financials for India
NOTE: Two taxes are added with different Tax Types to illustrate accounting based on TPB
Tax Point Basis will get defaulted after ship confirm for TPB as “Delivery” and after AutoInvoice for TPB
as “Invoice”
During Ship Confirm accounting and Invoice Number Generation will happen only for the Tax Type with
TPB as “Delivery”
Invoice Number
GST-O2C5
5.2 – AutoInvoice
a) OFI Inserts Tax Distributions for below taxes with below accounts and generates Invoice Number
for Tax Type with TPB as “Invoice”
NOTE: OFI just inserts the tax distributions with respective accounts but the accounting will be done for
above from Base “Create Accounting”
Please Note in that GST Solution the significant change is such that there is no specific form by name
Transactions (Localized)
Users can create AR Transactions directly navigating to the base form itself
a) Create the Header, Bill-To, Ship-to etc and save the transaction
On completion of invoice
the Invoice number gets
generated from the
Document Sequencing
setup
OFI-GST Order to Cash Flow 43
g) Account and view the accounting
Eg : If you buy a Warranty for a product in this case there is not physical shipment needed
If you have requested for a service of any product , in this case you are requesting the visit of a technician
to come and service , no physical shipments might be involved
On booking the Order the line status changes to BOOKED Please make not that line does not go into
Awaiting Shipping status
Click on Line
Items and fill
the line level
details
Taxes gets
defaulted and
Invoice number
GST-O2C13 gets
created
Apart from above entries which are created by Base, OFI creates below accounting as well as
TPB is “Delivery”
Case1
a) NOTE : Tax rate is 16% till 14-APR-2016 and the same is 20% starting from 15-APR-2016
Tax : O2C_REC_16%
Invoice Date
15-APR-2016
OFI-GST Order to Cash Flow 57
e) After running autoinvoice import the taxes on fulfilled orders gets carried forward to the AR
invoice as well
a) NOTE : The tax rate is 14% on 05-MAY-2016 to 06-MAY-2016 for Tax rate code
GST_O2C_INVOICE_12 which has TPB as “INVOICE” and the same is 7% starting from 07-
MAY-2016
9 – Introduction
"Order to cash" (O2C or OTC) normally refers to the business process for receiving and processing
customer sales. It follows "Opportunity to Order" and covers business-to-business (B2B) and business-to-
consumer (B2C) sales
The OFI functionality lets you satisfy all business needs related to Tax calculation required for a Sales
order Transaction and also the relevant extended O2C flows ( eg: Advanced Receipts , Exports).
9.1 - Scope
The below content provides the Functional overview in terms of setups & transactions flows of following
functional areas.
Note: The current content has been compiled in reference to the frozen scope of the Phase-2
deliverables (Ref: GST Phase-2 Deliverables.docx)
10.1 - Setups
Find below the details which gives a quick understanding of the setups to be performed for
mapping the Advance Receipts requirement:
Tax type
The Reporting codes will help to enable HSN,SAC details required to attach in Receipt / AR
transaction tax forms.
You must use below three seeded reporting type codes for setup.
GST_HSN_CODE
GST_SAC_CODE_ITEM
GST_SAC_CODE_TP
These codes are user configurable and values to be provided as applicable to your business.
GST_HSN_CODE: Create the HSN codes at Inventory Item level for applicable goods.
(N) Oracle Financials for India Item Definition Define Item Classification
Reporting Codes
GST_SAC_CODE_ITEM: Create the SAC codes at Inventory Item level for the applicable
goods.
(N) Oracle Financials for India Item Definition Define Item Classification
Reporting Codes
GST_SAC_CODE_TP: Create the SAC codes at third party level. This option will be used when
you have the services applicable but do not have inventory module installed. SAC Codes defined
under third party will take precedence in defaulting the codes on to the transaction i.e AR Transaction
/ Receipt.
Note: It is possible to assign only one SAC code in the third party registration form for any
specific customer.
a) Create the AR Receipt using below navigation whenever the amount is received from
customer
b) Once the Receipt details are saved, goto Tools > India Tax Details to attach taxes on the
receipt .we can create multiple/single receipt lines based on HSN, SAC applicability. These
codes are mutually exclusive and it is not possible to define both HSN, SAC codes together
on single receipt line.
2 Organization Name You can pick the organization here. LOV Yes
contains Organizations related to the
registration number and Organization Type
selected above
3 Location You can pick the location related to the Yes
organization selected above
4 Currency Receipt Currency Yes
5 Line No Enter the receipt Line number. You can add Yes
multiple Lines if the advance need to breakup
with multiple lines
6 HSN Code Enter Applicable HSN Code Yes
7 SAC Code System will default the Third party SAC code Yes
if it is defined in Third party registration.
You can override the SAC code manually
here
8 Tax Category User can manually attach the tax category Yes
here. Or Define Rules to default tax category.
9 Amount Enter the Receipt line amount Yes
1 Tax Rate Name Attach the advance tax rate applicable. The Yes
tax rate can be Recoverable / Non
recoverable tax rate.
d) Confirm the Receipt taxes once you review the details captured
e) Once the Receipt taxes are confirmed , system will create the receipt tax accounting and also
the tax repository will be populated with the tax Liability details
(N) Oracle Financials for India Settlement Management Review Tax Repository
f) Click on transaction details to review the associated tax details against receipt. If the GST
acknowledgment details are available, capture the same on the receipt and save it.
NOTE: Acknowledgement details can be captured from the AR Receipt screen or can
navigate from the “Transaction details” form in review tax repository.
a) Create the AR transaction with Transaction Source, Bill to, Ship to etc with required details.
Note: This being final bill / AR transaction, the tax applicable will be normal GST (
IGST/CGST/SGST) taxes which will be non self-assessed tax type.
d) Complete AR Invoice.
(N) Oracle Financials for India Settlement Management Review Tax Repository
Click on Find to check the tax repository entries for Document type “AR Transaction”
Accounting
c) Save the application /unapplication details. Make sure the HSN/SAC Code, Tax rate code
details are same between the AR Transaction and Receipt to have offset accounting
generated.
India –Period Ending Process is the key concurrent introduced in GST for generating offset tax
accounting.
8. Once the accounting is generated and Reporting Status =’Ready to File”, It is not
possible to modify/reverse the accounting. i.e If the accounting entries for “AR
transaction application” is generated and filed to GST, It is not possible to
offset/reverse this accounting incase the transaction is unapplied.
(N) Oracle Financials for India Settlement Management Review Tax Repository
Click on Find to check the tax repository entries for Document type “AR Receipt”
Accounting
Navigation: - (N) Oracle Financials for India Tax Configuration Define Document
Sequencing
i. Query for the document sequence which you want to use for AR Debit
Memo.
ii. Assign the transaction type of AR Debit Memo for which you want to
generate document sequencing.
iii. Ensure that base transaction type used for creating AR debit memo is
being mentioned as Document Category while assigning the document
sequence as shown in the below screen shot.
i. Navigate to Tools India Tax Details window to check whether Tax Invoice Number
has got generated or not.
Tax Invoice Number and date has got generated and is being displayed in Tax
details Section.
In Business case, customer balances are largely affected with changes in price rate for transactions of a
retrospective period. For all these, you can use the feature of Supplementary Transactions in Oracle
Financials for India. Using these Supplementary Transactions Feature you can identify the source
documents affected by these changes, calculate the amount of Invoice or a Credit Memo has to be
raised.
The Supplementary Transaction feature in Oracle Financials for India helps to identify, track and account
the price changes i.e.
Identify the transaction for which Supplementary Invoice or Credit Memo are to be raised
for changes in Price/Tax/Assessable Price Change.
Identify the source documents which are affected by price , rate change for a
retrospective period
Verify the calculation of amount to arrive for the Supplementary Invoice or Credit memo
which is raised for changes
In this release, Define Price, Tax UI is extended from the existing architecture.
There is an option to raise a supplementary invoice for the identified transactions. The option of
not raising the invoices would be useful in scenarios where you would not be raising supplementary
invoices for some customer transactions. And also have an option of creating Manual Invoices and credit
notes for price revisions and tax rate changes.
Mapping Screen can be used to track the previous Price lists and Tax Codes.
For Standalone AR invoices, it is necessary to enter a Separate Revised Price List into the system from
Price List Menu.
In both cases either a supplementary Invoice or Credit Memo will be raised basing on the retrospective
changes. The transactions which will have an effect on change of price changes are listed under the
Mapping type.
Price List
This is used for both Order Management and Accounts Receivables instance are available.
Assessable Value
It can also be called as Transaction Value Price list where there is change in the Assessable
Value.
12.4 – Setups
To import the generated Supplementary Invoices or the Credit memo as AR Transactions in Transactions
form it’s source should be defined in.
And the defined source should be picked up when running the AutoInvoice Import Concurrent program.
a. Define Transaction Source in the above navigation with Name as “INDIA INVOICES”.
b. At the Description field, you may enter “India Localization Supplementary Invoices / TDS Credit
Memos” and save the record.
Transaction
Source
Defined for .
We need to define the Transaction type for the generated Supplementary Invoice or the Credit Memo.
And these details will be populated in the “Supplementary Transactions” Form for the eligible transaction.
Below are the steps for defining Transaction Type, if it doesn’t exist in the system.
vi. Enter the Accounts for this Transaction type under the Accounts tab.
vi. Enter the Accounts for this Transaction type under the Accounts tab.
Supplementary
Invoice
JAIRMIN 100 --
IGST 10%
AR Invoice with Original price of 10 Quantity of item JAIRMIN . raised on 10-FEB-2017 with per unit price
as 150(INR) and a revised price list introduced with retrospective effect from 09-FEB-2017 (value as 200
INR) and in this case the user needs to raise a Supplementary Invoice.
GST Tax
Type
Batch Id generated on
Saving record.
For
Standalone
AR Invoices Price List
attached
6. From the screen, we find that the AR Invoice raised before revision is for amount Rs 1650 and Rs
2200 raised for the revised with the newly changed price list where per unit price is 200.
7. So, for the difference of 2200-1600 i..e Rs 550 , supplementary Invoice is generated.
8. On selecting “Raise Invoice” Checkbox, and Clicking on “Export” Button, the record is eligible for
generation of AR Credit memo.
10. On running “AutoInvoice Import” Program, the record will be appearing in the AR Transactions
form.
11. For importing the record the Transaction Sources have to be defined in.
12. On successful completion of AutoInvoice Import Concurrent, to know the created Credit Memo,
follow the below navigation.
Source for
Supplementary Invoices
14. Screen shot of the AR Supplementary Invoice.
AR Invoice
Number
For Supplementary , it is
Class is Invoice
Since it is supplementary
invoice , it is positive
AR Invoice with Original price of 10 Quantity of JAIRMIN raised on 10-FEB-2017 with per unit price as
250(INR) and a revised price list introduced with retrospective effect from 09-FEB-2017 (value as 200
INR) and in this case the user needs to raise a Credit Memo.
Used for
standalone
AR invoices
Select the
Price List
(Existing – Revised
Amount) = 550
AR Invoice where
Credit memo created
6. Since there is a difference which is necessary to be paid, a Credit memo is generated for the
portion of Rs.550.
7. On selecting “Raise Invoice” Checkbox, and Clicking on “Export” Button, the record is eligible for
generation of AR Credit memo.
9. On running “AutoInvoice Import” Program, the record will be appearing in the AR Transactions
form.
10. For importing the record the Transaction Sources have to be defined in.
11. On successful completion of AutoInvoice Import Concurrent, to know the created Credit Memo,
follow the below navigation.
Click on
“Line Details
“
d. Transaction Line form opens. In here, scroll to the extreme right, where we find field
“Supplementary Invoice Num”.
Scroll to
Right
AR Invoice
e. This is the AR Credit Invoice created. Number
Source For
Supply.
Transactions
Invoice Amount
Sales Order with Original price of 10 Quantity of JAIRMIN raised on 10-FEB-2017 along with AR Invoice
with per unit price as 509.15 (INR) and a revised price list introduced with retrospective effect from 09-
FEB-2017 (value as 600 INR) and in this case the user needs to raise a supplementary invoice.
1090.5
Taxes 20 % 20%
1. Raised Sales order with Qty 10, unit selling price as 509.15.
For OM to AR
transactions
Supplementary
Invoice
Order is created with amount INR 6109.15 ( inc. Taxes ) for 10 Qty.
Now, with revised price list, where unit price is 600 for 10 Qty it is 6000 and 20 % tax is 1,200
INR. Now the total revised amount is 7,200 INR.
For the difference portion, this is raised in.
Generated Supplementary
invoice
10. Below is the generated Supplementary Invoice, which is generated for the difference portion.
Supplementary
transactions source
Supplementary invoice
positive amount
Sales Order with Original price of 10 Quantity of JAIRMIN raised on 10-FEB-2017 along with AR Invoice
with per unit price as 509.15 (INR) and a revised price list introduced with retrospective effect from 09-
FEB-2017 (value as 200 INR) and in this case the user needs to raise a Credit memo.
1. Raised Sales order with Qty 10, unit selling price as 510.
4. AR Invoice 62 generated.
Credit Memo
generated
Source and
Type entered
9. Generated AR Invoice
Credit memo
amount
The "Constitution (122nd Amendment) Bill, 2014" was introduced in the Lok Sabha (House of
People) by Finance Minister Arun Jaitley on 19-Dec-2014, and passed by the House on 6-May-
2015. In the Raja Sabha (Council of States), the bill was referred to a Select Committee on 14-
May-2015. The Select Committee of the Rajya Sabha submitted its report on the bill on 22-Jul-
2015. The bill was passed by the Rajya Sabha on 3-Aug-2016, and the amended bill was passed
by the Lok Sabha on 8-Aug-2016.
The bill needs to get ratified at least by 15 state assemblies, which is a mandatory pre-requisite
for rolling out the GST regime in India.
The main objective of GST implementation is to transform India into a uniform market by breaking
the current fiscal barrier between states and facilitate a uniform tax levied on goods and services
across the country.
GST Structure
GST
13.2 - Definitions
1. Deemed Exports: as notified by the Central Government/State Government on the
recommendation of the Council, refer to those transactions in which the goods supplied do not
leave India, and payment for such supplies is received either in Indian Rupees or in convertible
foreign exchange;
2. Export of goods: It means taking out of India to a place outside India. The supply or any such
service shall be treated as ‘export of service’ when
d. the payment for such goods/service has been received by the supplier of goods/service
in convertible foreign exchange
4. GST: GST stands for "Goods and Services Tax". It is a comprehensive indirect tax levy on
manufacture, sale and consumption of goods as well as services at the national level. All the
existing indirect taxes levied on goods and services by the Indian Central and State
Governments would be subsumed under GST.
5. IGST (Integrated Goods and Services Tax): Tax levied under the Integrated Goods and
Services Tax Act, 2016.
6. Import of Goods: It means bringing into India from a place outside India. The supply of any
service/goods shall be treated as an “import” if,
d. the supplier of goods/service and the recipient of goods/service are not merely
establishments of a distinct person
7. Input tax: in relation to a taxable person, means the (IGST and CGST)/(IGST and SGST)
charged on any supply of goods and/or services to him which are used, or are intended to be
used, in the course or furtherance of his business and includes the tax payable under sub-
section (3) of section 7
8. Input tax credit (ITC): Credit of input tax as defined in Section 2(56)
9. Output tax: in relation to a taxable person, means the CGST/SGST chargeable under this Act
on taxable supply of goods and/or services made by him or by his agent and excludes tax
payable by him on reverse charge basis
10. TDB: Tax Determination Basis, based on which, the tax defaulting can be setup in the system.
11. Zero rated supply: a supply of any goods and/or services on which no tax is payable but credit
of the input tax related to that supply is admissible;
12. First Party: The Organization or business unit which is depositing the tax and which is
configuring the system.
13. Third Party: Supplier or Customer having business transactions with the Organization.
The main objective of this document is to help understand the procedure to be followed so to map
the Customer requirements in reference to the Goods and Services tax (GST) - Exports being
introduced in India.
Zero Rated: GST shall not be charged on goods/services exported from India. In Case,
the supply of goods/services qualifies as export out of India as per the Place of Supply
Rules the transaction shall be treated as “zero rated supply”.
GST Under Rebate: If the business is required to make any payment towards statutory
liability (e.g. IGST) for the relevant Exports transaction, then it requires booking the
liability but the liability would not be charged to the Customer. In this case, business is
required to claim the refund of the tax paid per relevant procedural guidelines.
o Note: This business case is still being evaluated further by the Product
development team and hence is not being covered as part of the current scope
of the exports functionality.
13.4 - Setups
Find below the details which gives a quick understanding of the setups to be performed for
mapping the India GST Exports requirement:
GST shall not be charged on goods/services exported from India. In Case, the supply of
goods/services qualifies as export out of India as per the Place of Supply Rules the transaction shall
be treated as “zero rated supply”.
Shipment Delivery
o Note: Though it is a zero rated transaction, the accounting entries are being generated
for tracking purposes.
User is required to run the Journal Import with following values to import the accounting entries from
GL interface to GL.
AR Transaction:
Note:User can generate/maintain a separate tax invoice numbering sequence for the Exports
transactions by defining a separate transaction type and defining the document sequence setup for
this transaction type.
15 - Call to Action
Please do the order to cash , Advanced Receipts, AR Debit Memo Document Sequencing,
Supplementary transactions, Exports related setup according to the above documentation and perform
Transactions according to your business scenarios.
This is not the final document and we will incorporate further changes in this document according to
your queries and Business Scenarios.
You can also refer the documents in GST Info Center (Documentation Tab) released as part of
Phase2 deliverables.
E-Business Suite Release 12: India Goods and Service Tax (GST) Info Center (Doc ID 2176820.2)