Implementation of GST in SAP
- 1. GOODS & SERVICE TAX The New Tax Regime
- 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 Service Tax Purchase tax Add. Customs Duty (CVD) Luxury Tax Special Additional Duty of Customs State Cesses & Surcharges Surcharges & Cesses Octroi & Entry Tax IGST=CGST + SGST on all inter-state transactions of supply of taxable goods & services
- 8. CALCULATION EXAMPLE WITHIN THE SATE
- 10. 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
- 11. 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.
- 12. 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
- 13. 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
- 14. 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.
- 15. 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
- 16. 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
- 17. 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
- 18. SAP’S ROADMAP Wave 1 : (SAP Notes and System Level Changes) 30th Nov 2016 –Development will be completed 9th Dec – Test Wave 1 16th Dec – Release Wave 1 Wave 2 : ( Changes for GSTN Portal) 3rd Feb 2017 –Development 10th Feb 2017 – Test Wave 2 17th Feb 2017 –Release Wave 2
- 19. 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