Goods and Service Tax

Create GST Condition Types (Input)

Activity Create Condition Types Type of Change Configuration

Primary FI Impacted FI/MM

Module Modules

Business Requirement: (Why?)

Condition types will determine the Price of a condition record. For example, you can
define a different condition types for each kind of price, discount or surcharge that
occurs in your business transactions.

As a part of the new indirect taxation regime in India (GST) requires the following
Condition Types to capture the GST at every business place as follows:

Condition Name
Type
JICG CGST
JISG SGST
JIIG IGST
JIUG UGST
JIMG IGST
(Imports)

For the cases where the GST paid is non-deductible (i.e. GST Input Credit not available),
we would need 4 separate condition types

Condition Name
Type
JICN CGST
JISN SGST
JIIN IGST
JIUN UGST
JIMN IGST
(Imports)

Solution Design section: (Why/How)

In order to fulfill business requirement following configuration changes will be required

in the system.

 Create Different Condition types for GST

Data Migration impacts: (Manual or LSMW)

Condition types will be created manually from the IMG

(IMG)  Financial Accounting (New) Financial Accounting Global

Settings(New) Tax on Sales/Purchases Basic Settings Check Calculation
Procedure Define Condition Types

For Example, we show the Input side CGST Condition Type Settings. Other Condition
Types are to be created accordingly
Note: -Kindly note that the above condition types are reference condition types,
customers can create their own condition types.

Create GST Condition Types (Output)

Activity Create Condition Types Type of Change Enhancement /
Configuration /
Master Data

Primary SD Impacted FI/SD

Module Modules

Business Requirement:

A condition type is a representation in the system of some aspect of your daily pricing
activities. For example, you can define a different condition type for each kind of price,
discount, Taxes or surcharge that occurs in your business transactions.

Under GST regime, we would need 4 separate condition types for GST, similar to MM
Module

Data Migration impacts: (Manual or LSMW)

It manual Configuration in the system as per customer requirements.

Configuration Details:

(IMG)  Sales and distribution  basic Functions  Pricing  pricing control

Define Condition
types.

Condition type Description

JOCG IN:CGST

JOSG IN: SGST

JOIG IN: IGST

JOUG IN: UGST

The below screen shows one of these condition types. Other condition types have to be
created accordingly
Create Accounting Keys
Activity Create Accounting Keys Type of Change Enhancement /
Configuration /
Master Data

Primary FI Impacted FI/MM/SD

Module Modules

Business Requirement: (Why?)

When we add GST related condition types, it must be posted to separate G/L accounts.
The accounting keys will help to achieve the purpose. Both the input GST as well as
output GST must be assigned to separate accounting keys

Solution Design section: (Why/How)

Accounting keys will determine the right GL Accounts to post the amounts in the system

For example: Freight charges, Discounts Etc. In the same way as a part of the new
indirect taxation regime in India (GST) requires the following Accounting keys to enable
the amounts posted in the respective GL accounts as follows:

In order to fulfill business requirement following configuration changes will be required

in the system.

 Create required accounting keys for GST

Note: NVV- is an existing accounting key for non-deductible

Condition Condition Account Condition Condition Account

Type Name Key Type Name Key
A/P Output Condition Types A/R Output Condition Types
JICG CGST JIC JOCG CGST JOC
JISG SGST JIS JOSG SGST JOS
JIIG IGST JII JOIG IGST JOI
JIUG UGST JIU JOUG UGST JOU
JICN CGST NVV
JISN SGST NVV
JIIN IGST NVV
JIUN UGST NVV

Data Migration impacts: (Manual or LSMW)

Accounting keys will be created manually from the IMG

(IMG)  Financial Accounting (New) Financial Accounting Global
Settings(New) Tax on Sales/Purchases Basic Settings Check and Change
settings for Tax Processing

The following screen shows JIC accounting key. JII, JIS, JIM and JIU are to be created
accordingly

The following screen shows JOC accounting key. JII, JIS and JIU are to be created
accordingly

NOTE: For input Tax type should be 2 and for Output tax type should be 1
Change Tax Procedure
Activity Create Tax Procedure Type of Change Configuration

Primary FI Impacted FI/MM

Module Modules

Business Requirement: (Why?)

Taxes must be calculated on relevant purchase and sales transactions, as and when
applicable

Solution Design section: (Why/How)

The Tax Procedure is defined for each country, containing the specifications required to
calculate and post the tax on sales/purchases. Each calculation procedure contains
several tax types, which are called condition types in the procedure. The system defaults
condition types when you define a tax code.

The new indirect taxation regime in India (GST) requires to add the new Condition
types along with respective accounting keys to enable to calculate the new taxes (GST)

In order to fulfill business requirement following configuration changes will be required

in the system.

 Update the Tax Procedure with required condition types along with accounting
keys for GST
 All the input and output GST conditions created earlier must be assigned here.

Data Migration impacts: (Manual or LSMW)

Tax Procedure will be updated manually from the IMG

(IMG)  Financial Accounting (New) Financial Accounting Global
Settings(New) Tax on Sales/Purchases Basic Settings Check Calculation

Procedure Define Procedures

For imports, the following changes must be made in the Tax Procedure

1. Select the procedure (in this example ‘ZTAXIN’), and choose Control (it is
available under Dialog Structure). Refer to the below screen shot for the
same.
 2. Click on new entries and enter the details as mentioned in the below
screenshot.

Kindly note that the Condition base formula (‘800’) which is entered
in the below screen shot is for indicative purpose. Choose a number
which is available in your namespace / landscape & implement the
routine with the logic mentioned in the SAP Note 2458404.

3. Press enter and then save the details.

Classify the Tax Condition Types

Activity Change Pricing Procedure Type of Change Configuration

Primary MM Impacted FI/MM

Module Modules

Business Requirement: (Why?)

Relevant taxes must be determined during purchase and STO transactions.

Solution Design section: (Why/How)

The new condition types together with their relevant pricing and tax procedures must
be classified in the customizing table J_1IEXCDEFN
Data Migration impacts: (Manual or LSMW)

Tax Conditions will be updated manually from transaction SM30

Configuration

Similarly, for Imports, you must classify your custom duty condition (from MM pricing
i.e.

Your basic custom duty), import IGST condition, and import Nondeductible IGST
condition.

Enter the details as mentioned in the below screenshot.

Creation of Tax Codes
Activity Create Tax Codes Type of Change Configuration

Primary FI Impacted FI/MM/SD

Module Modules

Business Requirement: (Why?)

The applicable tax rates under GST must be maintained in the system

Solution Design section: (Why/How)

In order to fulfill business requirement following configuration changes will be required

in the system.

 Create Tax Codes

Tax code is two-digit code that represents the specifications used for calculating and
displaying tax. Examples of the specifications defined under the tax code are:

 Type of tax (input tax or output tax)

 Percentage rate

The applicable tax rates under GST must be created as a tax code.

Data Migration impacts: (Manual or LSMW)

Tax Codes will be created manually from the IMG or Transaction: FTXP

Configuration Details:

(IMG)  Financial Accounting (New) Financial Accounting Global

Settings(New) Tax on Sales/Purchases Define Tax Codes for Sales and
Purchases

Give the Country: IN

Give the Tax Code. Example: G1

Update the below details

For all Input Taxes, Tax Type = V and

For all Output Taxes, Tax Type = A

In the below screen, we show Tax Code G1, which is an Input tax. Similarly, other tax
codes are to be maintained
Tax Codes assignment to Company Code
Activity Tax Codes assignment to Type of Change Configuration
company code

Primary FI Impacted FI/MM/SD

Module Modules

Business Requirement: (Why?)

Multiple Tax codes can be created under the Tax Procedure assigned to a country, but
the tax codes which are relevant for the entity are to be assigned to the respective
company codes.
Solution Design section: (Why/How)

In order to fulfill business requirement following configuration changes will be required

in the system.

 Assign Tax Codes to Company Code

Data Migration impacts: (Manual or LSMW)

The assignment of Tax Codes to company code will be done manually from the IMG

(IMG)  Logistics Generel Tax on Goods Movement India Basic Settings

Determination of Excise duty Condition Based Excise determination Assign Tax
Codes to Company Codes

Create GL Accounts for GST

Activity Create GL Account Type of Change Master Data

Primary FI Impacted FI/MM/SD

Module Modules

Business Requirement: (Why?)

GL Accounts are required to post the Business Transactions

As a part of the new indirect taxation regime in India (GST), one needs to create the
required GST accounts for each accounting key under each business place.

Solution Design section: (Why/How)

In order to fulfill business requirement following configuration changes will be required

in the system.
  Create the new GL Accounts for GST

Data Migration impacts: (Manual or LSMW)

GL Account creation will be done manually from the Transaction: FS00

Below are the Sample Input and output GL Accounts in each business place wise

Input Tax GL Accounts Output Tax GL Accounts

Plant – 1000 Plant – 1000
Acc GL Acc GL
Plant Condition Key Account Plant Condition Key Account
G1 1000 IGST JII 24900010 O1 1000 IGST JOI 14900010
G2 1000 CGST JIC 24900020 O2 1000 CGST JOC 14900020
G3 1000 SGST JIS 24900030 O3 1000 SGST JOS 14900030
G4 1000 UGST JIU 24900040 O4 1000 UGST JOU 14900040
Plant – 1100 Plant – 1100
Acc GL Acc GL
Plant Condition Key Account Plant Condition Key Account
G1 1100 IGST JII 24900050 O1 1100 IGST JOI 14900050
G2 1100 CGST JIC 24900060 O2 1100 CGST JOC 14900060
G3 1100 SGST JIS 24900070 O3 1100 SGST JOS 14900070
G4 1100 UGST JIU 24900080 O4 1100 UGST JOU 14900080
Tax Account determination for automatic posting during A/P Invoices

Activity GL Account assignment Type of Change Configuration

Primary FI Impacted FI/MM

Module Modules

Business Requirement: (Why?)

The applicable GST must be posted into respective GL accounts.

Solution Design section: (Why/How)

In order to fulfill business requirement following configuration changes will be required

in the system.

 Assign Dummy Tax GL Accounts and Tax Codes for Automatic Account
determination (OB40). These will not be used for posting the GST
 Assign Business Place and tax code wise GL accounts in Table J_1IT030K

Data Migration impacts: (Manual or LSMW)

The Account determination OB40 will be done manually from the IMG

The account determination in Table J_1IT030K will be done manually from SM30

(IMG)  Logistics Generel Tax on Goods Movement India Basic Settings

Account Determination Define GL Accounts for Taxes (OB40)
Double Click on JIC - > Give the Chart of Accounts Example: CAIN and Press ENTER
Similarly, the GL accounts must be maintained for all other accounting keys like JIS, JII,
JIU, JOS, JOC, JOI and JOU

Note: The GL accounts maintained under OB40 are only Dummy GL Accounts. The
actual posting of GST will happen in the GL Accounts maintained under below table

Use Transaction SM30 to access the Table J_1IT030K

Update the details as per the below screen and press ENTER
Repeat the above process for all other accounting keys JIS, JII, JIU, JOS, JOC, JOI and JOU

Tax Account determination for automatic posting during A/R invoices

Activity GL Account assignment Type of Change Configuration
(VKOA)

Primary SD Impacted FI/SD

Module Modules

Business Requirement: (Why?)

The applicable GST must be posted into respective GL accounts, at the time of posting a
customer invoice

Solution Design section: (Why/How)

In order to fulfill business requirement following configuration changes will be required

in the system.
  Assign GST output Tax GL Accounts in SD-FI account determination (VKOA)

Data Migration impacts: (Manual or LSMW)

The relevant GL accounts must be manually configured in the system

(IMG)  Sales and distribution  Basic Functions  Account asignment and

Costing  Revenue account derterminationl Assign GL Accounts

HSN / SAC Codes

Activity Create HSN /SAC Codes Type of Change Configuration /
Master Data

Primary MM Impacted FI/MM/SD

Module Modules

Business Requirement: (Why?)

The new indirect taxation regime in India (GST) requires the businesses to classify the
materials and services into HSN Code / SAC Code. These HSN Codes and SAC Codes will
be used to determine the applicable rate of GST

Solution Design section: (Why/How)

In order to fulfill business requirement following configuration changes will be required
in the system.

 Activate the HSN / SAC Code feature, if not already active

 Create HSN/SAC code
 Maintain the HSN/SAC Code in the Material Master (field Control Code) and in
the service master (field Tax Tariff Code )

Data Migration impacts: (Manual or LSMW)

The HSN/SAC Code will be created manually from the IMG

Configuration Details:

(IMG)  Logistics General  Material Master  Material IDs  Maintain PKWiUs

Below screen shows the Control Code maintained for Country Key IN:
NEXT

Create Business Partner

Extend To Company Code

Vendor no Generates

Post a Transaction inF-02

And You Can see the Result

FB00

Here you Activate

Calculate taxes on Net Amount

So that it will calculate taxes in exclusive manner