Paradigm of Business-Government-Business (B2G2B)

Communication
November 23, 2016

Local Solutions. Global Success.

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Impact On Master Data & Processes

Impact on Processes Development Wave 1 Development Wave 2

• Master Data Changes

• Master Data • External Service Procurement
• Material Procurement
• Tax Procedure • Special Goods Movements
• Codified Service Procurement
• Procure to Pay • Imports
• Sell from Stock
• Order to Cash • FI Postings
• Service Sale
• Other Movements
• A/P & A/R Invoices

Delivery Plan [Subject to availability of Legal Change Notification by November 30th 2016]
November 2016 December 2016 December 2016 February 2017 February 2017 February 2017
30th 9th 16th 3rd 10th 17th
Wave 1: Wave 1: Wave 1 : Wave 2 : Wave 2 : Wave 2 :
Development Customer Release to Development Customer Release to
Testing Customer Testing Customer

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The New Paradigm:
GST System - the Single Source of Truth for Indirect Tax
GST Compliance Processes Impacted
• Outward Supplies • TDS Return • Input Tax Credit availment
• Inward Supplies • Annual Return • Tax Payable amount determination
• Monthly Return • Reconciliation
• Return for Input Service Statement
Distributor

New Processing Needs

• Consolidation across multiple landscapes &
systems for reporting at GSTIN level
• Input Tax Credit Reconciliation between
Inward Supplies and Data in ERP System
• Input Tax Credit utilization against Tax
Payable based on GST System reporting

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GSTN Proposed Data Communication Model

Taxpayers ASPs GSPs

(>80lakhs) (in Hundreds) (<20)

GSTN will allow API based

consumption for data transmission
and communication via GST Suvidha
Providers (GSPs)

ASP/GSP GST
System
Application Service Providers (ASPs)
shall offer related value added
services
ASP/GSP

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 Based on Draft Rules

Impact on GST Data Communication & Reporting

Represents
Represents Tax Payer’s
Vendor Sales Outward
Inward
Supplies
Supplies Invoice System Invoice

Inward Validated Submitted by the

Supplies Inward Tax Payer as
through Supplies GSTR1 at a
Submitted by GSTIN +
Modified GSTR2A through
the Vendor as HSN/SAC + line
Outward GSTR2
GSTR1 at a item level
GSTIN + HSN/ Supplies
SAC+ line item GSTR1A
level
GST System

Reference:
http://www.gstn.org/ecosystem/index.php
http://www.gstn.org/ecosystem/pdf/GSP_Implementation_Framework.pdf
http://www.cbec.gov.in/htdocs-cbec/gst/draft-rules-format

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Details of Outward Supplies By 10th of the succeeding month

At a GSTIN + Tax Period Level

To be submitted by the Tax Payer

Covers both Inter & Intra state Outward Supplies

Information to be provided at Invoice + HSN/SAC Item Level

Includes:
• Taxable Outward Supplies to a Registered Person
• Taxable Outward Supplies to a Consumer
• Debit / Credit Note transactions
• Nil Rated, Exempted and Non GST outward supplies
• Supplies Exported (including deemed exports)
• Tax already paid
• Invoices issued , including Reverse Charge cases
• Amendments from previous tax periods for the above

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Details of Outward Supplies By 10th of the succeeding month

Demo

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Details of Inward Supplies By 15th of the succeeding month

At a GSTIN + Tax Period Level

Provides Available Input Tax Credits

Auto-Populated from Outward Supplies, Return of ISD

Includes:
• Supplies received, including Reverse Charge cases
• Import of Goods and Services
• Debit / Credit Note transactions
• Nil Rated, Exempted and Non GST outward supplies
• ISD Credit , TDS Credit and TCS Credit
• Tax paid under Reverse charges
• Amendments from previous tax periods for the above

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Monthly Return By 20th of the succeeding month

At a GSTIN + Tax Period Level

Auto-Populated from Outward Supplies, Inward Supplies, electronic

credit ledger, electronic cash ledger and electronic tax liability register

Discharging of the liability towards tax, interest, penalty etc

Provides for Refund Claim application

Includes:
• Turnover Details
• Summary of Outward Supplies – Inter and Intra State,
Exports
• Summary of Inward Supplies - Inter and Intra State,
Imports
• TDS Credit, ITC Received and TCS Credit
• Tax Payment , Interest, Late Fee and Penalty
• Amendments from previous tax periods for the above

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Vendor Credit Reconciliation

• Claim of Input Tax Credit on Invoices & Debit Notes

Matching Parameters
considered matched if the amount is equal to or less
than the output tax paid by the corresponding supplier
• GSTIN of Supplier;
• GSTIN of Recipient;
• 15 to 20% mismatch of invoice estimated; Root Cause
• Invoice/Debit Note Date
Analysis support required on mismatch
• Invoice Debit Note Number
• Taxable Value
• E.g. HSN/SAC code can be 4, 6, 8 for the same item
• Tax Amount
across entities
• Impacts Root Cause detection
• Recommend 8 digit code across your
ecosystem

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 Tax Payable Determination [Utilization]

• Output tax liability determination based on

tax liability on outward supplies reduced by: Input Credit
IGST CGST SGST
• Credit note issuance as accepted by the Tax Payable
recipient in his inward supplies details
• Input Tax Credit as per principles of
Utilization IGST Y Y Y

• Dependence on GST System information CGST Y Y

on Outward Supplies of Tax payer, Inward
Supplies of their supplier and acceptance SGST Y Y
by respective parties

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Technology Considerations

Scalability Transaction Volume

 Disparate Systems: Consolidation
Capabilities
 Evolving Regime: Need for a Framework
driven approach for reporting
 Possibility of direct interface to GST
System
 Monthly Inward Supply alone estimated to
range from 45Klines to 600k
 Average Inward Invoices to reconcile
close to 15 to 20%
 Peak Load Management at specific times

Security Data Volume

 Data Authentication  ~20kb for Invoice with 10 line items
 Data Protection & Privacy  Duplication of Vendor & Sales Invoice in
 Archiving and Retrieval the system
 Audit Features  Min of 2X increase of data storage &
management from current set-up.

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SAP as an GST Application Service Provider (ASP)

GST
System

SAP Digital Compliance Service

 Details of Outward Supplies

 Details of Inward Supplies
Platform for Delivery : S/4 HANA
 Monthly Return
 ISD Returns
 TDS Returns
 S/4 HANA Customers
 Annual Return
 Reconciliation Statement
 Final Return
 Vendor Credit Reconciliation App
 Utilization Dashboard App
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 SAP as an GST Application Service Provider (ASP)

GST
System

SAP Digital Compliance Service

Platform for Delivery : HANA Cloud Platform  Details of Outward Supplies

 Details of Inward Supplies
 Monthly Return
ERP Agnostic
 SAP ByD  ISD Returns
 SAP ECC
 3 Party Applications etc  TDS Returns
 SAP Industry Solutions
 Annual Return
 Reconciliation Statement
 Final Return
 Vendor Credit Reconciliation App
 Utilization Dashboard App
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 Local Solutions. Global Success.

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 Contact information:

Thank you Manjusha Nair

Prateek Tripathi

Ajay Uniyal

Local Solutions. Global Success.