GOODS & SERVICE TAX

The New Tax Regime

TOPICS
What is GST
System of Administration
Benefits
GST Structure
Sample Calculation
Impact
Solution Approach & System Changes(SAP)
Challenges
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.
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
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
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 State Cesses & Surcharges
Customs
Surcharges & Cesses Octroi & Entry Tax

IGST=CGST + SGST on all inter-state transactions of supply of taxable

goods & services
CALCULATION EXAMPLE
CALCULATION EXAMPLE WITHIN THE SATE
CALCULATION EXAMPLE :INTERSTATE
IMPACT
Existing Registrations
Vendors (Vendors vendors)
Customers (Customers Customer)
Logistic Network
Purchase Scenarios
Sales Scenarios
Utilization
Inter-Company Transfers
Various Reporting Requirements
Infrastructure change in order to connect with GSTN Portal
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.
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
SYSTEM CHANGES
Master Data Changes Material Master
Vendors Purchasing View Tax Indicator to classify the
materials
GSTN numbers to be captured (15 CHARS)-This
will be done under CIN tab ,in a new field GSTN Control Code To map the HSN numbers.
Number". Incase of multiple registrations , the
partner function Goods Supplier (GS) can be Sales View- Tax Classification to be used to classify
used. the materials.
Vendor Classification- A new field under CIN tab
to classify vendors Service Master
Customers Tax Tariff Code Will be used to map the SAC codes.

GSTN Numbers- A new field ,same as Vendor Tax Indicator Classification of Services
Master

Customer Classification Will be done under tax

Classification

A new partner function called GST Partner to

map multiple locations for customers (Ship to)
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.
SYSTEM CHANGES
Processes Tobacco,Alocohol,Petroleum
excluded
Local Purchase - GST needs to be
captured during goods receipts Zero Rating for Exports
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
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
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
SAPS 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
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