GST IT Process

Contents

1 Overview
2 Impact on master data

3 Impact on configuration
4 Impact on Documentation

5 Sample Report Formats

6 Migration plan

2
01
Overview

3
 Overview
Document Changes

• Draft Rules have been released outlining probable compliance requirements

in terms of payments, returns, etc.
• Accordingly, would have to undertake changes in the documentation
process. Such changes could broadly include:
- Changes in tax codes, GL codes for procurement and sales
- Changes in procedure for processing vendor invoices
- Changes in the purchase reports basis the GSTN format
- Changes in the sales report basis the GSTN format
- Reconciliations on a periodical basis between vendor sales and
procurements
- MIS reports to be generated periodically

4
 Overview

GST Impact on IT System can broadly be classified into following heads

Customized
Master Data Configuration Documentation
Report
Changes
Developments

5
02
Impact on
Master data
 GST Impact on Master Data

Following masters need to be modified post GST

● GST reg. no & relevant address is to be

maintained for each Registered Customer and
Vendor state wise
Customer Master Tax Codes
● New Condition Type and Records needs to be
created for CGST, SGST and IGST

● Tax rate to be mapped with appropriate SAC

and HSN codes
Vendor Master GL Accounts
● New Tax Code, GL Accounts needs to be created
for CGST, SGST and IGST

● HSN/SAC to be maintained for Materials and

Materials and Service Masters
Services Master
GST Impact on Master Data
Illustrative List of changes to be modified post GST

Changes in Vendor master Changes in Tax master Changes in Material

master / Service master

• Vendor master to now • Tax master to be • Updation of Material

include new details like amended / updated to master to separately tag
GSTIN, State, tax rate (in include- inputs / capital goods – to
case of single supplies). - Tax codes of CGST / be linked with HSN code
• Same vendor in SGST / IGST / (for the purpose of
multiple locations – UTGST/ GST reporting in GSTR 2)
different vendor code Compensation Cess • Service master to be
• Unregistered / - Rate updated and linked with
composition vendors to Service Accounting Code
- Credit eligibility (for the purpose of
be identified
separately • State-wise combination of reporting in GSTR 2)
tax codes may be
• Liability under reverse
incorporated
charge to be linked with
vendor code • Credit pool to be
maintained State-wise
• In case vendor payment is
subject to TDS, it should
be appropriately recorded
in the PO (TDS
provisions to be notified)
03
Impact on
Configuration
GST Impact on Configuration (Illustrative)

Procurement Process (Pricing, Service procurement,

1
Local Purchasing, Imports)

2 Sales Process (Pricing, Sales Order, Invoice)

3
Financial Entries (New tax codes, Tax procedures)

4 Document numbering (Probable change in criteria for

legal compliance)
04
Impact on
documentation
 Documentation Changes (Illustrative)
Particulars Stakeholders Changes
Customer Master Procurement Team GST Reg. No to be maintained
Vendor Master Supply Team state-wise;
Accounts & Finance Team B2B/ B2C suppliers to be
IT Team identified
GL Master Accounts & Finance Team GL Codes for CGST, SGST, IGST,
IT Team respective interest, penalty, fees,
if any

Tax Masters Accounts & Finance Team New tax codes as per GST
IT Team

Product Masters Procurement Team HSN Codes for goods and SAC
Supply Chain Team for services
IT Team
Documentation Changes (Illustrative)
Particulars Stakeholders Changes
Purchase order - Procurement Team Updated HSN Code, vendor
Goods IT Team master
Purchase order – Procurement Team Updated SAC, vendor master
Services Accounts & Finance Team
IT Team
Invoices Supply Team Updated GST No, updated HSN
Accounts & Finance Team Codes, State Code, GST taxes,
IT Team condition types and layouts
Reports related to Procurement team Updated GST No., GST taxes,
Purchase/ Purchase Accounts & Finance Team Vendors’ returns matching
Register IT Team mechanism with original invoice
Reports related to Supply Team Updated GST No., GST taxes
Sales/ Sales Register Accounts & Finance Team
IT Team

Sales Return/credit Supply Team Updated GST No., GST taxes,

note Accounts & Finance Team matching mechanism with
IT Team original invoice
GST Impact on Master Creation
Impact on Customer Master Creation

● Customer Master

• Invoices to the customers on dispatch of coal. In this regard

the customer master is required to capture the following:

• Party GSTN/UIN
• PAN of the Party
• HSN / SAC code for products/services
• GST Registration details – details of registering office
• Bill to/Ship to with GST Numbers
GST Impact on formats
General Invoice format (Including Self Billing)

GST 1) The invoice shall be prepared in

Identification triplicate, in case of supply of goods, in
number the following manner:–
• the original copy being marked as
Alphanumeric ORIGINAL FOR RECIPIENT;
unique invoice
number and • the duplicate copy being marked
date of issue as DUPLICATE FOR
TRANSPORTER; and
Party • the triplicate copy being marked
GSTIN/Unique as TRIPLICATE FOR SUPPLIER
ID and state 2) The invoice shall be prepared in
codes
duiplicate, in case of supply of services,
in the following manner:–
Tax rate and • the original copy being marked as
tax amount for
CGST/SGST/I ORIGINAL FOR RECIPIENT;
GST • the duplicate copy being marked
as DUPLICATE FOR SUPPLIER;
HSN code or
3) Bill of supply to be issued in case of no
Account code tax (Heading should read Bill of Supply)
of services
GST Impact on formats
Impact on Purchase Order 1/2
Particulars Revised clauses (illustrative)

Law clause  In the event of a change in the law, post signing of contract, including the introduction of the
GST, the supplier and our org agree to renegotiate the contract price such that the net impact
of the GST gets factored in the price.
To this end, the incidence of any cost increase / benefit of cost reduction, on account of GST,
shall be passed on to the buyer.
 Tax exclusive contract – the contract value is exclusive of all applicable Indirect taxes, levies,
duties, cess and surcharges. Any Indirect tax (such as Service tax, VAT / CST, Entry tax,
Customs duty, Excise duty or any other tax or proposed tax such as GST) will be charged and
recovered over and above the contract price.
 Tax inclusive contract – the contract value is inclusive of all applicable Indirect taxes, levies,
duties, cess and surcharges (such as Service tax, VAT / CST, Entry tax, Customs duty, Excise
duty or any other tax as applicable on date of signing of contract).

Tax refund  If, on account of any change in the law post signing of contract, including the introduction of the
Goods and Services Tax (GST), any tax/ duty exemption which is directly allowed to the supplier
or its vendors/ sub-contractors and is converted to a refund to the supplier, the impact of such
refund would be factored in the contract price.
 It is expressly agreed between the parties that they would provide all documents, challans,
returns, certificates, etc. as may be reasonably required by the other party to support the claim
for refund.
GST Impact on formats
Impact on Purchase Order 2/2

Particulars Revised clauses (illustrative)

Penal  In case any credit, refund or other benefit is denied or delayed to the buyer due to
clause any non-compliance by the seller (such as failure to upload the details of the sale on
the GSTN portal, failure to pay GST to the Government) or due to non-furnishing or
furnishing of incorrect or incomplete documents by the seller, the seller would
reimburse the buyer the loss to the buyer including, but not limited to, the tax loss,
interest and penalty.

Transition  In the event of a change in the law post signing of contract, including the introduction
and spill of the GST, the supplier and our org. would discuss and agree upon a transition plan
over which would allow for optimization of the taxes applicable under the contract.
05
Sample Report
Formats

28
GST Impact on Reporting
Impact on Reporting

● Reports can be classified as following

● Document Reports
 Purchase orders and Stock transfers
 Sales Orders
 Sales invoice
 Various payment vouchers

● Statutory Reports
 Tax registers to be prepared as per new format. Existing Excise, VAT and service
tax registers will not be used now.
 Returns -
• Form GSTR – 1 (outward supplies)
• Form GSTR – 2 (inward supplies)
• Form GSTR – 3 (monthly return)
• Form GSTR – 6 (ISD return)
• Form GSTR – 9 (Annual return)
• Form GSTR – 10 (Final return)

19
GST Impact on Reporting
Output Tax Registers

● Tax registers will need to be maintained in System which will be used for filing
returns Tax registers will need to be populated for all invoices/credit/debit notes

● Invoices
Invoice IGST CGST SGST POS (if different
Customer Goods/Servic Taxable from location of
GSTIN/UIN No Invoice date State code es Invoice value HSN/SAC value Rate Amt Rate Amt Rate Amt receipient)

● Credit/Debit notes -

Customer Credit/Debit note Goods/servic Original Invoice Taxable IGST CGST SGST
GSTIN/UIN No Date State code es No Date value Rate Amt Rate Amt Rate Amt
GST Impact on Reporting
Inward tax registers

● Tax registers will need to be maintained in System which will be input for filing
returns Tax registers will need to be populated for all invoices/credit/debit notes
● Invoices

Invoice IGST CGST SGST POS (if different

Vendor Goods/Servic Taxable from location of
GSTIN/UIN No Invoice date State code es Invoice value HSN/SAC value Rate Amt Rate Amt Rate Amt receipient)

● Credit/Debit notes –
Customer Credit/Debit note Goods/servic Original Invoice Taxable IGST CGST SGST
GSTIN/UIN No Date State code es No Date value Rate Amt Rate Amt Rate Amt

● Goods/capital goods received from overseas –

Bill of Entry IGST
No Date Value HSN Taxable value Rate Amount
06
Migration Plan

33
 GST IT Migration Plan

Cutover action plan for all Open Items like open Purchase Orders, Sales Orders etc.
● Transactions till the cutover date will be posted in previous GL Accounts and transactions post
that date will go in the new GL accounts.
● All open POs and PRs should be closed and new POs should be created for the
remaining partial/full quantity
● All open Sales Order where no billing has happened yet should be closed and new Sales
Order
should be created.
● Partial Sales Orders should be invoiced or new Sales Order should be created for the remaining
quantity.

26
Thank you..

Sudarshan
Tamminedi