1 GOODS & SERVICE TAX The New Tax Approach

2. TOPICS
 What is GST

 System of Administration

 Benefits

 GST Structure

 Sample Calculation

 Impact

 Solution Approach & System Changes(SAP)

 Challenges

3. WHAT IS GST ?
 Stands for Goods & Service Tax

 One Unified tax for the whole nation

 Destination based Tax

 Credit available at every stage

 Substitution of all indirect taxes levied by State and Centre

 Proposed system will take the form of Dual GST ,which is concurrently charged
by Centre as well as State.

4. SYSTEM OF ADMINISTRATION-GSTN NETWORK

 A common and shared IT infrastructure

 A G2B portal (Government to Business)

 All the core functions will take place here

(Registrations,Returns,Challans,Payments)

 System of Truth
  One stop shop for the tax payer

 Tax payers will need upload invoices by 10th of every month

5. BENEFITS
 Easy Compliance – A single platform to view registrations ,returns and payments
for the tax payers

 Uniformity – A uniform tax structure all through out the supply chain • Removal of
Cascading

 Improved Competition

 Relief in overall tax burden

 Single and transparent tax proportionate to the value of goods & services

 Better control

 Improved Tax Revenue

 Cross Utilization Allowed

6. STRUCTURE
CGST(Centre) SGST(State)

Central Excise Duty VAT/Sales Tax

Add. Excise Duty Entertainment tax

Add. Customs Duty (CVD) Luxury Tax

Special Additional Duty of State Cesses & Surcharges

Customs

Surcharges & Cesses Octroi & Entry Tax

Service Tax Purchase tax

IGST=CGST + SGST on all inter-state transactions of supply of taxable goods &

services
7. CALCULATION EXAMPLE WITHIN THE SATE

8. CALCULATION EXAMPLE :INTERSTATE

9. IMPACT
  Existing Registrations

 Vendors (Vendor’s vendors)

 Customers (Customer’s Customer)

 Logistic Network

 Purchase Scenarios

 Sales Scenarios

 Utilization

 Inter-Company Transfers

 Various Reporting Requirements

 Infrastructure change in order to connect with GSTN Portal

10. SOLUTION APPROACH

 Need to get the registrations for your plants in various states

 Gather registration data as well as classification data for vendors as well as

customers

 Gather HSN codes/SAC codes as well as classification data for material /services

 List down all existing purchasing processes and Sales processes

 List down all the outputs used in the current processes

 Need to access impact on the third party applications used in Procurement, Sales
/ Logistics

 Gather data about the applicable GST rates

 Need to check the infrastructure for connectivity between the system and GSTN
portal

 Assess Reporting requirements, since the reporting needs to be done at Item

level.

11. PRE-REQUISITES
  • SP Level as per SAP Note 1175384

 • Default Tax Procedure should be TAXINN Other related SAP Notes:

 • 2014164 –TAXINJ to TAXINN • 2039117-Master Note

 • 2167294 –Upload Tools • 2252781 –FAQs on TAXINJ & TAXINN

 • 2194689 – IN:GST • 2386062 – SAP ASP for GSTN Portal

12. SYSTEM CHANGES

Master Data Changes
Vendors:
• GSTN numbers to be captured (15 CHARS)-This will be done under CIN tab ,in a
new field “GSTN Number". Incase of multiple registrations , the partner function
Goods Supplier (GS) can be used.

• Vendor Classification- A new field under CIN tab to classify vendors

Customers:
• GSTN Numbers- A new field ,same as Vendor Master

• Customer Classification – Will be done under tax Classification

• A new partner function called GST Partner to map multiple locations for customers
(Ship to)

Material Master:
• Purchasing View – Tax Indicator to classify the materials

• Control Code – To map the HSN numbers.

• Sales View- Tax Classification to be used to classify the materials.

Service Master:
• Tax Tariff Code – Will be used to map the SAC codes.

• Tax Indicator – Classification of Services

13. SYSTEM CHANGES
Tax Configuration:
• New Conditions types to be mapped in the existing procedure

• New Access Sequences

• Separate Transaction keys

Account Determination:
• Needs to be set for business place

• Separate Ledgers for the different tax components per business place.

14. SYSTEM CHANGES

Processes:
• Local Purchase - GST needs to be captured during goods receipts

• Subcontracting – Need to pay GST while transferring the material to the Vendor

• Services – Here the SAC codes need to be reported at line item level. Hence there
will be a change

• Stock Transfers – GST impact needs to captured during goods receipts in the
receiving plant.There will be different Billing Type in VF01

• Imports – BCD + IGST

• Tobacco,Alocohol,Petroleum excluded

• Zero Rating for Exports

15. SYSTEM CHANGES -REPORT

• GSTR1 – Outward supplies made by tax payer , to be reported by 10th of every
month

• GSTR2- Inward supplies received by a tax payer , 15ht of the month

• GSTR3 – Monthly return,20th of the month

16. UTILIZATION
• New Transaction to be build for the GST utilization

• The system of truth will be the GSTN Portal ,and not SAP .

Credit of Can be utilized against

CGST CGST&SGST

SGST SGST & CGST

IGST IGST,SGST & CGST

17. SAP’S ROADMAP

• SAP Notes and System Level Changes

18. CHALLENGES
• Connectivity between the ERP systems and GSTN Portal

• Understanding the working of GSTN Portal • Cutover Data Strategy

• Change Management for the User community

• Need information on reverse charge for Service Tax in the GST Regime

• Cesses and Surcharges if any