Pre-Release Document

Oracle Financials for India (OFI)

GST- Regime to Rate flow

Author: Ashish Gupta

Creation Date: 30-Sep-2016
Last Updated: 23-Oct-2016
Document Ref:
Version: 1A

Organization: Oracle India Private Limited.

Ashish Gupta OFI-GST Regime to Rate Flow 1

Document Control

Change Record
3
7

Date Author Versi Change Reference

on
23-Oct-16 Ashish Gupta 1A Initial document

Reviewers

Name Position
Rajnish Kumar Director Tax Development
V S Baburaj Director, Product Strategy

Audience

Name Position
12.2.X Implementation team
12.2.X Customers

Ashish Gupta OFI-GST Regime to Rate Flow 2

Table of Contents

Document Control .................................................................................................................................. 2

1 Introduction ........................................................................................................................................... 4

2 Scope .................................................................................................................................................... 4

3 - Define the term Regime to Rate Flow: .............................................................................................. 5

4 - Relationship between the various entities in Regime to Rate flow ............................................... 5

5 - Define Regime ...................................................................................................................................... 7

6 - Define Tax: ............................................................................................................................................ 9

7 - Define Tax Status ............................................................................................................................... 12

8 - Define Tax Rate: ................................................................................................................................. 18

9 - P2P cycle using Tax Code Lower: Tax Type (SGST) ................................................................ 21

10 - Call to action ..................................................................................................................................... 37

Ashish Gupta OFI-GST Regime to Rate Flow 3

1 Introduction

The Regime to Rate flow is a mandatory setup and a concept to understand for Implementing GST in
Oracle Application.

2 Scope
The Scope of this document is to explain the concept and the Regime to Rate flow setups.

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3 - Define the term Regime to Rate Flow:

Regime to Rate flow is the term used to do a Setup procedure as part of tax Configuration where we
define Regime and various other entities till the Tax Rate.
You define Regime and Taxes within the Regime, Tax Statuses for each of the Tax and Tax Rates for each
of the Tax status.

4 - Relationship between the various entities in Regime to Rate flow:

2 3 4

Tax Tax Statuses Tax rates

O 1

Tax Authority Tax Regime

Diagram to show the relationship in Regime to Rate flow

One to Many relationship between Tax Regime and Tax:

Within one Tax regime there could be more than one tax.

One to Many relationship between Tax and Tax Status:

Each tax can have one or more statuses for example if there are no Exemptions then there will be only
one status which would be standard, everybody would be paying 18% GST or 22% GST for example, but
if there are exemptions then there would be other statuses Lower,Standard,Reduced etc.

Which Status will be applied will be governed by the context of the Transaction.

We have to create at least one status.

Ashish Gupta OFI-GST Regime to Rate Flow 5

 One to Many relationship between Tax Status and Tax Rate:

Each Tax Status can have different tax rates specific to different period of time for example Standard rate
is 18% in 2016 and 22% in 2017.

There will be start date and end date for each rate.

The numbers 1, 2, 3 and 4 indicates in above diagram that in Regime to Rate flow this is the main setup
you perform however optionally you can link the tax Authority, it is not a Mandatory Setup, and your Tax
setup will still work fine.

Note: One Tax can only be governed by one Tax Authority, however one Tax Authority can govern one or
more Taxes.

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5 - Define Regime

What is a Tax Regime?

The set of tax rules that determines treatment of one or more taxes administer by Tax Authority.

(N)->Oracle Financials for India->Tax Configuration->Regime

Define Tax Regime:

The first step to set up India Tax is

building your Tax Regime base of
your organization requirement.

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 Define Tax Authority:

Government Entity that regulates tax

laws administers and audit taxes.
It will be used for settlement
process.

Tax Regime Registration form

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6 - Define Tax:
What is a Tax?

Tax is a classification of charge imposed by government through Tax Authority.

(N)->Oracle Financials for India->Tax Configuration->Define Tax Type

Define Tax Type:

Create a Tax under tax Regime.

Ashish Gupta OFI-GST Regime to Rate Flow 9

 Defined the CGST Tax under GST Regime

Defined the SGST Tax under GST Regime

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 Defined the IGST Tax under GST Regime

As you can see in above screenshots that we can define multiple Taxes under one Tax Regime.

Tax Regime (GST)

Tax (CGST) Tax (SGST) Tax (IGST)

The above diagram shows the relationship between Tax Regime and Taxes.

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7 - Define Tax Status:
The taxable nature of the product or service in the context of the transaction.

Example: Certain groups of people are Tax Exempt, so lets say if they buy a Laptop no tax would be
charged so the status would be exempt, if the same laptop is purchased by some other group of people
then the status could be standard that means regular rate would be applied. There are various statuses
for the tax.

The Tax Statuses defined in the current architecture are below:

EXEMPTED HIGHER

LOWER REDUCED

STANDARD ZERO

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 (N)->Oracle Financials for India->Tax Configuration->Define Tax Rate

The above form shows the Navigation to define Tax Status and Tax Rate

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 The above form shows the different types of tax Statuses

The above form shows that we defined the Standard Tax Status i.e. No Exemption

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 The above form shows that we defined the Exempted Tax Status under CGST Tax

The above form shows that we defined the ZERO Tax Status under CGST Tax

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 The above form shows that we defined the Higher Tax Status under SGST Tax

The above form shows that we defined the Lower Tax Status under SGST Tax

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 Tax Regime (GST)

Tax (CGST) Tax (SGST) Tax (IGST)

Tax Rate Code Tax Rate Code Tax Rate Code

Tax Rate Code

Tax Code Tax Code Tax Code

Tax Code
Zero (Tax Status) Higher (Tax Status) Lower (Tax Status)
Exempted (Tax Status)

The above diagram shows the relationship of Tax Regime, Tax and Tax Statuses

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8 - Define Tax Rate:
Each Tax Status can have different tax rates specific to different period of time for example Standard rate
is 18% in 2016 and 22% in 2017.

There will be start date and end date for each rate.

(N)->Oracle Financials for India->Tax Configuration->Define Tax Rate

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 Above form shows that 2 Tax Rates defined for different periods under SGST Tax and Higher Tax Status

Above form shows that 2 Tax Rates defined for different periods under SGST Tax and Lower Tax Status

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 Tax Regime (GST)

Tax (CGST) Tax (SGST) Tax (IGST)

Tax Rate Code Tax Rate Code Tax Rate Code Tax Rate Code
Tax Rate Code

Tax Code Tax Code Tax Code CVD_CODE (Tax

Tax Code
Zero (Tax Status) Higher (Tax Status) Lower (Tax Status) Status)
Exempted (Tax Status)

Tax Rate Tax Rate Tax Rate Tax Rate Tax Rate
Tax Rate Tax Rate

22% 24% 12% 10% 10%

0% 0%

Start Date: Start Date: Start Date: Start Date: Start Date:
Start Date: Start Date:
01-Oct-2016 01-Nov-2016 01-Oct-2016 01-Nov-2016 16-Sep-2015
01-Oct-2016 01-Oct-2016

End Date: End Date: End Date: End Date: End Date:
End Date: End Date:
31-Oct-2016 NULL 31-Oct-2016 NULL NULL
NULL NULL

The above diagram shows the relationship between Regime, Tax, Tax Status and Tax Rate

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9 - P2P cycle using Tax Code Lower: Tax Type (SGST)

Create a Purchase Order

(N)->Oracle Purchasing->Purchase Orders->Purchase Orders

You can assign the Tax Manually or Tax can be defaulted based on Tax Rules

Assign Tax Manually:

Ashish Gupta OFI-GST Regime to Rate Flow 21

Go to Tools -> India Tax Details

These are tax

statuses created
in the above
Setup.

Tax Regime (GST)

Tax (SGST)

Tax Rate Code

Tax Code
Lower (Tax Status)

Tax Rate Tax Rate

Ashish Gupta OFI-GST Regime

12%
to Rate Flow
10%
22

Start Date: Start Date:

12% Rate has been defaulted
01-Oct-2016 01-Nov-2016
on the Purchase Order as it is
valid till 31-Oct-2016. End Date: End Date:
31-Oct-2016 NULL
Select the Tax Rate Name : Tax Code Lower

12% Rate has been defaulted on the Purchase Order as it is valid till 31-Oct-2016

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Tax defaulted from the Tax Rules:

Setups to default Tax Rate to a Purchase order:

Create tax Category:

Define Item Classification:

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Define Tax Rules:

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Create a Purchase Order

Check the India Tax Details:

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Approve the Purchase Order

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Status of the Purchase Order is Approved

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Search for Purchase Order created to create a Receipt against that Purchase Order

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Receipt Created

Ashish Gupta OFI-GST Regime to Rate Flow 30

Ashish Gupta OFI-GST Regime to Rate Flow 31
The Tax Code Lower Tax name defaulted in the Receipt.

Clicked on Confirm Taxes checkbox and saved the Receipt, which triggered the below programs:

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Output file of program: Payables Open Interface Import

Query the ERS Invoice created

(N)->Oracle Payables->Invoices->Inquiry->Invoices

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Taxes from Receipt have been defaulted to this Invoice:

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Validate the Invoice:

Ashish Gupta OFI-GST Regime to Rate Flow 35

Run Create Accounting

Ashish Gupta OFI-GST Regime to Rate Flow 36

10 - Call to action
This is not the final document and further changes shall be incorporated as and when there are any
further updates from Product Management / Development teams in regards to the changed
features/functionality or pending product clarifications, if any.

For further reference, you can also refer the below Pre-Release documents released as a part of the EBS
GST Infrastructure Scope:

OFI-GST-Functional Tax Computation for O2C Phase1

OFI-GST-Functional Setups Phase1
OFI-GST- Tax Defaultation flow Phase1
OFI-GST-Functional O2C flow Phase1
OFI-GST-Functional Tax Computation for P2P Phase1

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