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GST India

Rajesh Sharma
AGM-IT
Dainik Bhaskar Group
rajeshjpr@gmail.com
rajeshjpr@gmail.com
GST Overview - history
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.

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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

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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

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GSTIN-GST Identification number

GST Unique Single registration for CGST, SGST and IGST


Individual registration to be obtained in each state of
business establishment
Number PAN based registration number Up to 15
characters in length

2 - Digit represents
State

Next 10 - Digit
represents PAN
Number

15 digit number 13th. digit number


Consist of registration
number of assesse,

14th digit is Z, for all


number

15th. digit number is


correction number
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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.

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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.

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Tax registration (GSTIN: GST
Identification Number)

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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.
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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. rajeshjpr@gmail.com
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.
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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.
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Material Master

For Services, the SAC code will be stored in Tax


tariff code of Service master.

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

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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.

The plants can be assigned to the business place.

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

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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

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SD Pricing Procedure

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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

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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 suppliers 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.

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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

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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

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Domestic Procurement Interstate
Access Sequence Tax Procedure

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Procurement- for capital goods
Access Sequence Tax Procedure

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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.
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Incoming Invoice

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Incoming Invoice

The tax lines will be posted to BSET table.

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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.

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Stock Transfer Order
Stock transfer order

Outbound Delivery

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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

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

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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.

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Purchase Order Taxes

Transfer Posting

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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.

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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.

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Services

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Sales - Domestic (Inter and Intra state)
Access Sequence

Pricing Procedure

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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.

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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

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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

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Utilization
New Utilization program to handle GST credit utilization

Cross utilization as per GST rules

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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)

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