GST and SAP Overview
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GST – IndiaRajesh Sharma8th. December, 2016
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Contents
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GST – Overview - history
In the year 2000 Vijpayee Government started discussion, for introduction of GST, Committee set up under Asim Dasgupta (Finance Minter of West Bengal), role of committee was design GST model as well as check IT preparation for same.
In his in budget speech of 2004-05, the then finance minister P .Chidambaram says: “In the medium-to-long term, it is my goal that the entire production-distribution chain should be covered by a national VAT (value added tax), or even better, a goods and services tax, encompassing both the centre and the states.”
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GST – Overview - History
2010 – Government launches mission mode for computerisation of Taxes, this is foundation stone for GST.
2011 – Congress introduces Constitution Amendment bill in Loksabha, main opposition parties oppose (BJP & Left) – bill sent to standing committee, , finally bill lapses in year 2014.
2012 – P. Chidambaram, has meeting with all state Finance Ministers to discuss GST.
2013 – Standing committee provides suggestion on Tax reforms and changes.
2015 Feb – Jaitley announces implementation of GST, in year 2016,
2016 May- Government passes Constitutional Amendment bill.
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GST – Area of impact
Tax Registration Define GST Registration Level
Master Data Maintenance Business Partner Tax Data, GST Accounts
Tax Configuration & Computation Configure Tax and Pricing procedures ; Tax computation
Document Numbering Outgoing Invoice Numbering
Business Process Localization Extend to currently localized Business Processes
GST Tax Postings GST Input and Output Tax postings
Utilization Input tax credit utilization against payable for GST Taxes
Reporting Tax Register
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GST – Present Status
Digital Platform
Customers
State - GSTCentre GST
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GST – Unique Number
15 digit number
2 - Digit represents State
Next 10 - Digit represents PAN
Number
13th. digit number Consist of registration number of assesse,
14th digit is Z, for all number
15th. digit number is correction number
GSTIN-GST Identification numberSingle registration for CGST, SGST and IGSTIndividual registration to be obtained in each state of business establishmentPAN based registration number – Up to 15 characters in length
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GST – Registration
1.All the taxpayers with PAN validated from CBDT’s database are not required to apply for fresh
registration under GST. They can get provisional GSTIN from GST portal with a validity of 6
months so that they can provide relevant data as per GST registration form.
2.GST – Registration has started in most of states.
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GST – Concept
1. Consumption state to earn tax.
2. Manufacturing state will loose tax earnings.
3. States to be compensated for 5 years.
4. Avoids Cascading effect of tax.
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GST – Rates
The four GST slabs have been set at 5%, 12%, 18% and 28% for different items or services.
To keep inflation in check, essential items including food, which at present constitute roughly half of the consumer inflation basket, will be taxed at a zero rate. The lowest rate of 5 per cent would apply to common use items.
The peak rate of 28% will apply to luxury goods. Luxury cars, tobacco products and aerated drinks will attract an additional cess on top of the highest tax rate.
The additional cess and a clean energy cess will create a revenue pool which will be used to compensate states for any loss of revenue during the first five years of the implementation of GST, Mr Jaitley said.
Service Tax will go up from 15% to 18 %, said Revenue Secretary Hasmukh Adhia.
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Master Data Maintenance
Business Partner Tax Data • GST reg. no. to be captured for each Registered Customer and Vendor
GST Tax Accounts • Separate tax A/P and A/R accumulation might be required at GST registration level • To be defined for CGST, SGST and IGST separately
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Vendor GST Registration
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Customer GST Registration
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Tax Account
• Business Place based G/L account determination – Both for MM and SD
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GST - Tax Configuration and Computation
Intra-state transactions
CGST and SGST applicable
Inter-state/Import transactions
– IGST applicable
Export Transactions
– Zero rated
Region level rate variations may exist
New condition types/access sequences and account determination
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Tax Configuration and Computation- Proposed Solution
Tax Procedure – New Condition Types
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Tax Configuration and Computation- Proposed Solution
SD Pricing Procedure – New Condition Types
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Tax Configuration and Computation- Proposed Solution
SD Pricing Procedure – Access Sequence
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Tax Configuration and Computation- Proposed Solution
MM– Access Sequence
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Document Numbering
Unique sequential numbering for outgoing GST invoices• Criteria for legal numbering may be specified by govt. • It could be for example:
Registration level
Document type (Invoice / Credit Memo)
A combination of above
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Document Numbering-Proposed Solution
Maintain Document Class
Assign Document class to Document Types
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Document Numbering-Proposed Solution
Assign Number Range to Business Place
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Business Process Localization
• Sales Processes • Procurement Processes • Stock Transfers • Subcontracting • Others
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Sales - Proposed Solution
Sales Order
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Sales - Proposed Solution
Sales Order
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Sales - Proposed Solution
Billing Document (A/R)
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Sales - Proposed Solution
Billing Document (A/R)
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Sales - Proposed Solution
Billing Document (A/R)
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GST – Credits
1. Liberal Credits
2. Credits on all bills
3. Uploads Necessary to claim credits
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GST – Coverage - Subsumed
Subsumed:
Excise Duty
CVD, SAD
Service Tax
VAT
CST
Entry Tax
Octroi
LBT
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GST – Coverage - Excluded
Exculded:
Basic Customs Duty
Entertainment Tax
Taxes at Municipal Level
Electricity Duty
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GST – Issues
Old Wine in New Bottle
GST Staff
State and Central sharing.29 states and the two Union Territories with legislatures. Given the sharp
differences in the structure of the economy and sales tax revenue (as a ratio
of gross state domestic product, or GSDP) across states, the interests of the
states do not always coincide and considerable effort is needed to persuade
them to adopt a uniform or even a broadly harmonised structure and
administrative system for the tax.
Transitional period, accounting/ inventory/ set-off
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GST
Thank You
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GST – Issues
Old Wine in New Bottle
GST Staff
State and Central sharing.29 states and the two Union Territories with legislatures. Given the sharp
differences in the structure of the economy and sales tax revenue (as a ratio
of gross state domestic product, or GSDP) across states, the interests of the
states do not always coincide and considerable effort is needed to persuade
them to adopt a uniform or even a broadly harmonised structure and
administrative system for the tax.
Transitional period, accounting/ inventory/ set-off