I n d i a GS T

Solution Approach and Roadblocks

Author : Milind Joshi

Page 1 of 30
Table of Contents
Introduction Functional Design ...................................................................................................................................3
Scope and references ................................................................................................................................................3
Scope / Reference..................................................................................................................................................3
Prerequisites..........................................................................................................................................................4
Assumptions ..........................................................................................................................................................4
Functional Requirements...........................................................................................................................................4
Understanding for India GST .................................................................................................................................4
OSS Implementation Steps ....................................................................................................................................5
Area of Impact for India GST..................................................................................................................................6
Solution Approach for India GST............................................................................................................................6
Data Migration for India GST ...............................................................................................................................22
Utilization.............................................................................................................................................................25
Reporting for India GST .......................................................................................................................................26
GSTN Portal..........................................................................................................................................................27
GST Implementation Roadblocks.........................................................................................................................28
Reference document for GST ..............................................................................................................................30

Author : Milind Joshi

Page 2 of 30
Introduction

Functional Design

Scope and references

Scope / Reference

The Constitution (One Hundred and Twenty Second Amendment) Bill, 2014, or the Goods and Service Tax (GST) bill
in India has been passed by the lower and upper house of the Parliament on August 03, 2016. The expected GST
implementation is 1st April, 2017.
At present,
1. More than 50% of the states have ratified the bill
2. The President has provided his assent to the bill
3. GST council is formed
The next steps:
Legislations for CGST, SGST, and IGST acts
Final details of the law need to be published
The model GST law is currently available for public consumption and we are expecting the details of the law to be
available soon, along with the details of GSTN. SAP is currently working on a solution design based on the Model
GST law. However, the final solution from SAP can be made available only after the final law is available.
This contains information about the legal change of The Goods and Service Tax for India
This information is based on legislation and regulations which is subject to change at any time by the respective
authorities and are therefore not binding. The information will be updated if necessary.

Business Background/Impact

The introduction of the Goods and Service Tax will replace the existing indirect taxes in India
The Mandatory Prerequisites to consume the GST solution provided by SAP are
1. Minimum support pack that the customer should be on is provided in the following note -
https://launchpad.support.sap.com/#/notes/1175384
2. TAXINN is the default tax procedure. Please refer to the following FAQ note related to the migration of the tax
procedure - https://launchpad.support.sap.com/#/notes/2252781.

Author : Milind Joshi

Page 3 of 30
Prerequisites

Assumptions

References

Legal change is currently not yet published. However, a model law is available in the following link.
http://www.cbec.gov.in/htdocs-cbec/deptt_offcr/model-gst-law.pdf

Functional Requirements

Understanding for India GST

The high level things you would probably need to do for a customer:
1. Ensure a condition based tax procedure is used. SAP's proposed roadmap is for TAXINN.
2. The Govt has said that the Outgoing invoice will be validated by GST Network, so the same
would probably be an interface to GST Network, something like a Golden tax in China
3. The GST in india will be a dual structure tax regime, so you will need to set up the requisite
condition types in your tax procedure and in your sales schema.
4. If we are not on TAXINN, you will need to migrate to TAXINN given as per roadmap by SAP.
5. Every GST No will be at state level, so configuration change will be required for the same to
be set up as Business Place in SAP.
6. We will have to be on the required SP Level as per the details which will be provided by SAP.
7. There will be some amount of overlap for VAT and GST Regime expected, so we need to plan
for a transition time for the tax applicability and how to migrate the open documents from VAT
to GST. Of course, this will also depend on legal guidance on GST from the Govt and it is still
under works.
8. The GST will have three components: CGST, SGST and IGST. The transaction within a state will
attract CGST+SGST. The transaction between two states will have IGST. For Imports into India,
Custom Duty+IGST will be applicable.
9. Every state will have a unique GST Registeration No and that will be the basis for taking the
GST credit.

Author : Milind Joshi

Page 4 of 30
10. All other indirect taxation like Excise, Service Tax, Entry Tax, Octroi etc will be subsumed by
GST
11. There are eight returns which are proposed as part of GST right from GSTR -1 uptill GSTR-8.
GSTR -1 will contain details of Sales from Commercial Invoices and GSTR -2 will contain details
from Purchases made. GSTR-3 will provide details for monthly credit or liability.
There are still lot of open points from a functional perspective where Supplier and seller are
listed in State A and State B, but the goods are supplied in State C, so how the credit
mechanism will work. Additionally, certain products like Petroleum Products are outside the
scope of GST, so how to track such goods in GST returns. Additionally, there is no clarity on the
details of invoices if they can be sent from SAP to GSTN Network through an automated utility.
Some of the states are also contemplating removal of SGST component for certain industries
which in my view negates the purpose of one tax and brings back the same old tax structure
with a new name, but again these are nitti griti we will have to wait and see.

OSS Implementation Steps

Below are the steps for GST India Implementations.

1. OSS Note : 1175384 Minimum Support Pack to obtain Support for legal Change in india (CIN)
2. OSS Note : 2167294 : DDIC Change
3. OSS Note : 2153807 Improvement in Tax Code Update Program for PO/ SLA and Contracts
4. OSS Note : 2161911 : Purchase Order / Invoice Display or Cancel Issue
5. OSS Note : 2014164 : TAXINJ to TAXINN Migration.
6. OSS Note : 2252781 : FAQ on Tax Procedure Migration for TAXINJ to TAXINN.

Author : Milind Joshi

Page 5 of 30
Area of Impact for India GST

 GSTIN :- Goods and Services Tax Identification number

Single Registration for CGST, SGST and IGST
Individual registration to be obtained in each state of business establishment
PAN Based registrations number – Up to 15 character in length

 GST Registration should be at Business place level (i.e. state level).

 GST Tax procedure need to validate wether it is TAXINN or TAXINJ.

 Document Number Range at business Place level.
 Business Process change in O2C as well as P2P.

 Utilization Process Changes in GST

 Data Migration
 Road Block for GST India

Solution Approach for India GST

 While driving the solution approach 1 st we need to take care of the pre-requisite from
SAP for GST india in form of SAP Application requirement to apply OSS Note which
provide by SAP for GST india solution

Author : Milind Joshi

Page 6 of 30
  GST Registration should be in place of Business place level i.e. state level

 Need to validate the System have the TAXINJ or TAXINN Procedure to design or work on solution
Approach for Tax Activity.
1. If Business have the TAXINN Procedure the follow below process;

Author : Milind Joshi

Page 7 of 30
 TAXINN Procedure – New Condition Types

SD Pricing Procedure – NewCondition Types

SD Access Sequence

Author : Milind Joshi

Page 8 of 30
 MM Access Sequence

Business Place Based G/L Account Determination – Both for MM and SD

Author : Milind Joshi

Page 9 of 30
 Create Required Tax Code

Condition based Tax are need to Assignment with the desired (%) percentage.

2. If business have the TAXINJ then follow the below OSS Note and document for Migration to
TAXINJ to TAXINN.

2252781.pdf 11. Migration from

TAXINJ to TAXINNA pre-requisite for GSTby Thejes A G and Shankar Prabhu.pdf

 Unique Sequencial numbering for Outgoing GST invoice

Maintain Document Class

Author : Milind Joshi

Page 10 of 30
 Assign Document class to Document Types

Assign Number Range to Business Place

Author : Milind Joshi

Page 11 of 30
  Sales Processes

Sales Order

Billing Document (A/R)

Author : Milind Joshi

Page 12 of 30
  Procurement Processes

Purchase Order

Vendor Invoice (A/P)

Author : Milind Joshi

Page 13 of 30
  Stock Transfers
Purchase Order Components

Replenishment Delivery from sending plant

Author : Milind Joshi

Page 14 of 30
 Good Receipt at receiving plant

Author : Milind Joshi

Page 15 of 30
Author : Milind Joshi

Page 16 of 30
  Subcontracting

Purchase Order

Subcontracting Purchase order – Component

Author : Milind Joshi

Page 17 of 30
 Subcontracting Purchase Order – Taxes

Trasnfer Posting

Author : Milind Joshi

Page 18 of 30
 Subcontracting – Outgoing GST Invoice

Goods Receipt

Author : Milind Joshi

Page 19 of 30
 Subcontracting Invoice GST Invoice

Author : Milind Joshi

Page 20 of 30
  GST Tax Postings from Receivable and Payable Accounts

Billing A/R Accounting Document

Vendor Invoice A/P Accounting Document

Author : Milind Joshi

Page 21 of 30
Data Migration for India GST

 Data Migration for Customer Master

GST Reg. no. to be capture for Registered Customer

 Data Migration for Sales and Distributions (Order to Cash)

o Sales Orders, Invoicing
o Distribution Channels & Sales areas
o Pricing (Types of Conditions)
o Billing Schedules, Delivery
o Debit / Credit Notes

Author : Milind Joshi

Page 22 of 30
  Data Migration for Vendor Master
GST Reg. no. to be capture for Registered Vendor

 Data Migration from Material Management (Procure to Pay)

o Material / Service Master
o Purchase Order, Invoices
o Subsequent Credit/ Debit, Debit or Credit Notes
o Purchase Infor Records

 Data Migration SAP Forms and Master Data

o SAP FI, SD, MM, G/L Reports
o Other Statutory Reporting
o Vendor and Customer
o G/L Account Reporting
Author : Milind Joshi

Page 23 of 30
  Data Migration from Financial Accounting
o Accounts Payable and Account Receivables
o Invoicing (Non - PO)
o Management of Master Records
o Billing (Non - SO)
o Petty Cash
o Invoicing and Credit Notes
o General Voucher
o G/L Account

 Data Migration from Human Capital Management

o Employee Benefits
o Travel & Expenditures

Author : Milind Joshi

Page 24 of 30
Utilization

 Inforamtion and Understanding

1. Input CGST to be utilized against output CGST and IGST
2. Input SGST to be utilized against output SGST and IGST
3. Input IGST to be utilized against Output IGST, CGST and SGST in the order of IGST, CGST and SGST.

 Utilization Process
New Utilization Program to handle GST Credit Utiltization

Cross Utilization as per GST rules

Author : Milind Joshi

Page 25 of 30
Reporting for India GST

 Inforamtion and Understanding

Tax Registers are as bellows;
1. CGST – Central Goods and Services Tax
2. SGST – State Goods and Services Tax
3. IGST – Import Goods and Services Tax

 Reporting
Tax Register

Author : Milind Joshi

Page 26 of 30
GSTN Portal

 GSTN Portal
 The GSTN Portal are distributed in two
1. Supplier will upload there Sales Data

2. Manufacturer / consumer will download data from the GSTN portal

Author : Milind Joshi

Page 27 of 30
 3. Assumptions
 GSTN Autorities will provided for upload download of data, between ERP
& GSTN Portal
 System will be capable to manage the humongous volumns
 Compute power of Hana will ease transactions at both ends

GST Implementation Roadblocks

 Enactment Timelines
The Constitution (One Hundred and Twenty Second Amendment) Bill, 2014, or the Goods and Service Tax
(GST) bill in India has been passed by the lower and upper house of the Parliament on August 03, 2016.
The expected GST implementation is 1st April, 2017.
At present,
1. More than 50% of the states have ratified the bill
2. The President has provided his assent to the bill
3. GST council is formed
4. Enactment of GST Laws yet to form if this is in place before Dec 2016 then we are in good phase to
continues the Implementation and further actions for GST India.

 GSTN Processes
 SAP Still working on the solution Appoach for GSTN Process.
 GSTR Report
 SAP Still working on the solution Appoach for GSTR Process.
 Rate Debate
 GST Rates are yet to confirm from Finance Minister.
 No Update on Current State / Central Incentive Schemes.
Author : Milind Joshi

Page 28 of 30
  Place of Supply Rules and Credit
 Distribution of accumulated credit at Corporate Office
 Credit utilization dependent in seller declaration
 Credit on businesses indirect spends by employees

 Transition Provision
 Dual Assessment of Taxpayer
 Treatement of Existing area based exemptions / benefits unter state
industrial policy.

 Treatement of way-bills / C form / Checkposts

 Defer capital expenditure / Purchases
 Refund, not claimed – Accumulated credit at the cut off date can not be
carried forwards
- Input and input services – CENVAT
- Capital Goods – CENVAT and VAT
- VAT Credit

Author : Milind Joshi

Page 29 of 30
Reference document for GST

Registration Process. : http://www.cbec.gov.in/resources//htdocs-cbec/gst/ppt-regn-29102015.pdf

Payment Process : http://www.cbec.gov.in/resources//htdocs-cbec/gst/ppt-paymnts-26102015.pdf

Refund Process : http://www.cbec.gov.in/resources//htdocs-cbec/gst/ppt-gst-refund-26102015.pdf

Return Process : http://www.cbec.gov.in/resources//htdocs-cbec/gst/ppt-returns-30102015.pdf

Invoice Format : http://www.cbec.gov.in/resources//htdocs-cbec/gst/draft-formats-under-invoice-rules.pdf

GST Return format : http://www.cbec.gov.in/resources//htdocs-cbec/gst/draft-return-formats-26092016.pdf

GST Refund Format : http://www.cbec.gov.in/resources//htdocs-cbec/gst/draft-refund-formats-26092016.pdf

GST Payment format : http://www.cbec.gov.in/resources//htdocs-cbec/gst/draft-formats-under-payment-

rules.pdf

GST Return 9B GST ITC Mismatch Report

gstr_9b-26092016.xl itc-mismatch-report
sx -26092016.xlsx

Author : Milind Joshi

Page 30 of 30