Oracle Financials of India Configuration

Submitted By: KESAVAN.B

FocusR Consultancy and Technologies Private Limited
Harakara Tower, III Floor, Subramania Nagar 1st Gate, Junction Main
road, Salem, 636005,
Phone: +91 6379503621
Web site: www.focusrtech.com
Table of Contents
1. Goods and Service Tax...................................................................................3
2. Oracle Financials for India Setup...................................................................5
I. Supplier creation -Tax Authority and GST Calendar..................................6
II. Reporting Type............................................................................................7
III. Tax Regime...............................................................................................8
IV. Tax Type....................................................................................................8
V. Tax Rate.....................................................................................................11
VI. Tax Category...........................................................................................12
VII. Common Configuration..........................................................................13
VIII. First Party Registration........................................................................13
IX. Third-Party Registration.........................................................................14
X. Item Classification.....................................................................................15
XI. Report Type-HSN Inclusion...................................................................15
XII. Item Classification -HSN Association....................................................16
XIII. Item categories-Tax category...............................................................17
XIV. Item category -Third Party Registration..............................................17
3. Purchase Order with Default Taxation.........................................................18
 1.Goods and Service Tax

GST is a type of tax included in the goods or services provided for customers and
included in the invoice. The Tax amount will be paid to the Country's Tax
Authority by the seller. GST is the most common tax used all over the world
where taxation per cent and norms can be different according to the country's
regulation.
In India, there are three types of GST they are

GST

Intra State Inter State

Sale within the state Sale between State

SGST CGST IGST

SGST- State Goods and Services Tax

CGST- Central Goods and Services Tax
IGST- Integrated Goods and Services Tax
UTGST-Union Territory Goods and Services Tax
SNo Transaction Tax applicable Example
Type
1 Intra State SGST/UTGST +CGST A supplier in Delhi ships the
(within the item to customers in also
state) Delhi. Here GST rate will be
SGST 2.5% and CGST 2.5%
Rate per cent is based on the
HSN code,
2 Inter-State IGST A supplier in Delhi ships the
(Between the item to customers in Chennai.
state) Here GST rate will be IGST
5% Rate per cent is based on
the HSN code,

There are different types of GST rate percent as per Classification based on the
HSN and SAC code
HSN Code
HSN stand for Harmonised System of Nomenclature is a 6-digit unique code for
the classification of goods all over the world. This system mainly introduced for
the determination of the rate per cent based on this HSN code.
SAC Code
Service Accounting Code A classification system developed and issued by the
(CBIC) Service Tax Department of India to classify various services is known as
SAC or Services Accounting Code. These codes are used to classify services for
better measurement, taxation, and recognition of services.
GST Rates
In India GST rate for various goods and services is divided into four slabs: they
are GST 5% GST, 12% GST, 18% GST, & 28% GST. The GST rates for
various products have been revised several times by the GST Council
 2.Oracle Financials for India Setup

Item Category
Responsibility
HSN inclusion
creation

Item
Supplier Classification
creation HSN

Reporting
GST calendar Types HSN
inclusion

Reporting
Item
Type
Classification

Tax Regime Third Party

Registration
Tax Type

First party
Tax Rate registration

Tax Categories Common

Configuration
 I. Supplier creation -Tax Authority and GST Calendar
Organisation who eligible for Paying tax are liable to the government for tax
payment. So we are creating Tax India Authority as a supplier for tax payment
and registered him as First Party.
We want to add our operating unit for the address site

GST calendar
Every country revises the Taxation every year So in that case our India revises
every year April month so we are defining GST calendar for month of APR 23 to
Mar 24 for a one year.

II. Reporting Type

Oracle Financials India->Reporting->Define Reporting Types
Reporting type we assigning for the purpose of tax determination for the item
code as a Reporting code. Entity should be a first party
III. Tax Regime
Tax Configuration->Define Regime
Tax Regime is the rules and regulations defined for Taxation by the Government
Here we entering the India Tax authority supplier and GST Calendar.
Transaction Tax – Tax included when there is business transaction
Withholding Tax- Tax paid by the employer by deduction from the employee and
paid to the government

Rounding for the tax amount and taxable amount are defined for the easy
determination of tax and payment.

IV. Tax Type

In India there are two type of tax system
For Intrastate transaction there are type of tax they are SGST, CGST
For Interstate transaction IGST only tax but tax percent is combination of SGST
and CGST
Here we are defining Tax types and their accounting information for tax types.
Ensure all profile values are set to the oracle financials responsibility.
CGST
We set tax types and attaching the defined tax regime, ledger,operating unit and
organisation and location Enter the Account codes as given below

By the same procedure of CGST replicate the procedure for SGST and IGST
SGST

IGST
V. Tax Rate
Tax rate is the rate percent defining for the tax type created.
Here we want to define the tax rate for all the taxes we created at tax type,
SGST
CGST
 IGST

VI.

Tax Category
 A group of different tax codes having applicable tax rates belonging to
different regime codes are defined in Tax Categories.
 This is a mandatory setup to enable Tax defaulting and automatic
calculation at the transaction line level.
 Tax Categories are based on the taxes that will be applicable to the
transaction and the Tax Base Amount calculation are determined.
For Intra start Tax code we defined as sum of SGST tax and CGST tax

VII.

Common Configuration
Common configuration determines the tax defaulting and determination basis by
operating unit. You can modify the same at any point of time based on the date
attributes.
 Here we define whether the tax determination based on tax rule or item category
basis for any transaction tax and withholding tax

VIII.

First Party Registration

First party Registration is defining our Tax regime with the Primary registration
number for registering the taxation and here we also assign our reporting code
and type we created for First Party.
Here we can also select the PAN number instead of GSTIN number for
registration.
we can also assign organisation type as inventory organisation

IX. Third-Party Registration

In this step we registering the supplier with the Registration number and
Reporting type and code.
X. Item Classification
In Item Classification we define the item classification for tax regime and item
attributes for recoverability of tax and we want to include the reporting type for
the HSN code for an item

XI. Report Type-HSN Inclusion

Here we creating one more reporting type as entity of item and we create the
reporting type for HSN for our items to include the tax rates.
XII. Item Classification -HSN Association
For Item classification defined for the item, we want to include the HSN
Reporting type for defautation tax of the Purchase order
XIII. Item categories-Tax category
Defining item category is for assigning the tax for item
Item classification and Item category is the important step for tax
defaultation

XIV.

Item category -Third Party Registration

In this step we attaching the defined item categories for the third-party
registration for whom we register supplier.
The registered supplier shoud be the vendor of the item which we include in item
categories.

3.Purchase Order with Default Taxation

Let create an purchase order and check the defaultation of tax as shown as below
Tools->India Tax Details

When the purchase order is created and saved, we can view the taxation of item
as we defined.
purchase Order Notification
Receipt[Standard Delivery]

while taking receipt go to india tax details enable the confirm taxes
otherwise receiving transaction concurrent program will get error as given below.

As above highlighted wait till program run successfully

Receiving transaction summary
Item received from supplier as per receipt and deliver directly to the inventory
as it is direct delivery
Accounting entries
while receiving Receiving account got debited and Ap accrual account got
credited

while
delivery Inventory material value account got debited and receiving inventory
account got credited