itelligence GST implementation - SAP

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GST Implementation in India SAP

What we know so far about GST?
 India is slated to adopt GST from Apr 1, 2017. Hence, businesses need to be technologically-
ready
 GST is a comprehensive indirect tax levied on Sale, Manufacture and Consumption of Goods and
Services at the National level.
 GST would apply to all goods other than crude Petroleum, Motor spirit, Diesel, Aviation Turbine
fuel and Natural gas.
 GST would apply to all services barring a few to be specified
 Export and Direct taxes like Income Tax, Corporate Tax, Capital gains tax will not be affected by
GST.
 Imports will be subject to GST, but exports will be GST-exempt
 Where the output is GST exempt, the GST paid on the input will be a cost to the business
12/13/2016©2015itelligence
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What we know so far about GST? (2)
 GST in India is slated to have the following components:
 Central Goods and Services Tax (CGST) – Levied by Centre
 State Goods and Services Tax (SGST) – Levied by State
 Integrated Goods and Service Tax ( IGST) - Levied by Central Government on Inter-state supply of Goods
and Services
 GST would apply to all services barring a few to be specified
 Export and Direct taxes like Income Tax, Corporate Tax, Capital gains tax will not be affected by
GST.
 Imports will be subject to GST, but exports will be GST-exempt
 Where the output is GST exempt, the GST paid on the input will be a cost to the business
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Registration
 The following existing registrations will subsume into GSTIN (GST Identification Number):
 Excise registration for Plant / Depots
 Service Tax registration
 VAT registration
 There will be single registration for CGST, SGST & IGST
 However, individual registration is expected to be obtained in each state of establishment
 The GSTIN is expected to be 15 character long, and would include the existing PAN Number
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Possible Scenarios in GST
 Intra-State transactions: Seller collects both CGST and SGST from the Buyer and deposit CGST to the
Central Govt. and SGST to the State Govt.
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Possible Scenarios in GST (2)
 Inter-State transactions: The Centre would levy and collect the Integrated Goods and Services Tax (IGST) on
all inter-State supplies of goods and services (and on imports too)
 The inter-State seller would pay IGST on the sale of his goods to the Central Government after adjusting credit
of IGST, CGST and SGST on his purchases
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Possible Scenarios in GST (3)
 Inter-State sale and Re-Sale
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Utilization of GST
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O/P - IGST O/P - CGST O/P - SGST Remarks
I/P - IGST In the same order
I/P - CGST
I/P - SGST
 GST paid on the inputs can be offset against the GST payable on output, in the manner and
sequence (if applicable), stated here-in

 Common return for Centre and State Government
 There are eight forms provided for in the GST business processes for filing returns.
 Most of the tax payers are expected to be using only four forms
 Example: return for supplies, return for purchases, monthly returns and annual return
 Small taxpayers: Small taxpayers who have opted composition scheme shall have to file
return on quarterly basis.
 Filing of returns shall be completely online.
Returns filing procedures under GST

 Any tax liability, after offsetting the input GST, can be paid in one of the following ways
 Electronically (Online)
 Across the bank counter
Proposed payment procedures

Proposed Approach
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Steps Details
Technical Assessment
1 SAP System version must be ECC 6.0 (If not, upgrade to ECC 6.0)
2 SP level as per Note 1175384 (If not, apply the relevant SP)
3 TAX Procedure TAXINN must be used (If not, migrate to TAXINN)
GST Impact Assessment & way forward
1 Understand how GST impacts the business and assess the capability of existing systems to cater
for GST
2 Identify a GST implementation strategy and create a project team to manage implementation
3 Undertake an initial review and determine a plan / timeline for implementation
4 Identify contractual arrangements that need action (“prices inclusive or exclusive of GST” clause)
5 Identify the various business transactions including intra / inter state, inter company, sub-
contracting transactions
6 Where customers are consumers, consider making relevant changes to the existing POS systems
7 Get key resources trained and appoint a GST champion in your organization

What the businesses should do?
 Key conversations are around % rates, Centre Vs State Challenges, Implementation date, etc. But
they should, ideally, be around Systems readiness, Business awareness, Eco-system readiness, etc.
 Partner with Customers and Vendors
 Close working relationships with business partners
 Ensure your customers are GST-registered
 Ensure your vendors and vendors’ vendor are GST-registered too
 See if existing contracts need to be restructured
 Plan the pipeline during cutover, blackouts
 Rewire Accounting and Reporting processes
 Rewriting the systems to capture taxes and credits
 Changes to inventory valuation
 B/S Accounting of taxes
 Migration of open balances and orders
 Rewrite Business processes
 Business processes and controls to be re-written
Traditional P2P and O2C process will become Procure-2-Credit and Order-2-Credit
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Changes to be carried out in SAP
 Organization Set-up: Create Business Place and assign to Plants
 Master Data Set-up: Vendor Masters, Customer Masters, Material & Service Masters
 Tax and Pricing changes: Adjustments in Tax Procedures and Pricing Procedures
 RICEFs: Forms, Layouts, Modifications to EDIs and Upload programs
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Itelloigence India Software Solutions Pvt. Ltd.
Email : sales.india@itelligencegroup.com
We make the most of SAP® solutions!

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itelligence GST implementation - SAP

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