Topic: Vendor Credit Reconciliation
The business need and the solution proposal
Richard de Souza
Vice President & Head Business
Solutions Corporate IT - Mahindra & Mahindra
Ltd.
S. M. Kulkarni
Vice President - Corporate Sales Tax
Mahindra & Mahindra Limited
Automotive
Corporate Center
Farm Equipment
Information Technology
Financial Services Sector
Systech
Partners Division
Real Estate
After Market
Hospitality
Two Wheeler
Defense
11 Business Sectors, 18 Industries
US $16.5 billion - 140 companies - 190k Employees
Topic: Vendor Credit Reconciliation
The business need and the solution proposal
Richard de Souza
Vice President & Head Business
Solutions Corporate IT - Mahindra & Mahindra
Ltd.
S. M. Kulkarni
Vice President - Corporate Sales Tax
Mahindra & Mahindra Limited
• Dual GST Levy :
• Integrated GST ( I-GST) on Imports & Interstate Supply of Goods & Services :
• To be levied by the Central Govt. .
• IGST = C GST + S GST
• Paid in the state of Origin and passed on to Destination State
through Clearing House Mechanism .
• 1% Non Creditable Additional
Tax would be levied on
Interstate Supply of Goods only
• Levied, collected & Retained by the Origin State , for first two
years only .
Adverse Impact on Purchase Costs & Selling Prices for
first two years .
• Within the state Supply of Goods & Services : GST = CGST + S GST
Structure of GST
V Foreign
V1
Imports
Custom Duty +
CVD+ SAD
M&M
State
“A”
MFR
(Goods )
Taxation
Export
0% ED/CST
Foreign
Customer
CST
V VAT Outside
V2
Inter-state
Sales
(ED + 2% CST
(Tax on Tax)
Transfer
ED+0% CST
Depot
“B”
Local
Sales
VAT
Customer
“B”
Interstate
Sales
2% CST –
“C” Form V CST
Local
V3
Dealer
“B”
Local
Sales
VAT
Customer
“B”
Local Sales
ED + VAT
(Tax on Tax) Local Sale
VAT
Dealer
“A”
Local
Sales
VAT
Customer
“A” V VAT
M&M – Present Indirect Tax (Excise/VAT) System in India
V Outside
India V1
Imports
Custom Duty +
( I GST)
M&M
State
“A”
MFR.
On
Supply
of
Goods &
Services
Export
0% GST
Foreign
Customer
I GST Inter-state
Supply of
goods
IGST V GST
Outside
V2 Inter-state Supply
IGST (C+S-GST)
Depot
“B”
Local
Supply
CGST +
SGST
Customer
“B”
Interstate
supply
IGST
(CST+SGST
)
V I GST
Local
V3
Dealer
“B”
Local
Supply
CGST +
IGST
Customer
“B”
Local Supply
(CGST + SGST)
Local
Supply
CGST +
SGST V
C&S
GST
Dealer
“A”
Local
Supply
CGST +
SGST
Customer
“A”
Non Creditable 1% Additional Tax on interstate Supplies
M&M – Proposed Indirect Tax (GST) System in India (C-GST & S-GST)
State A
Vendor ( IGST)
State
B
MFR - 1
( IGST)
State
“C”
MFR - 2
( I GST)
Dealer
State “D”
(GST)
Customer
State
“D”
Consuming
State
1OO + 20 IGST
150 + 30 IGST
200 + 40 I GST
220 + 44 GST
220 + 44
• 20% GST = 10% C GST + 10% S GST ( Within the state Supply ) , 20% I GST = 10% CGST + 10% S GST (Interstate Supply + Imports )
• Finally , the State D gets the S GST Revenue
• Transfers of Credits to receiving states by Clearing House • 1% Non creditable Additional Tax on Interstate Supply of Goods
1% Add Tax
1% Addl. Tax
1% Addl Tax
GST – Seamless Flow of Credits in a Supply Chain
Vendor 1 Imports ( I GST)
Exporter
Foreign
Customer
Outside
India
Vendor 2 Interstate Supply (I GST) Exports
0% GST
Vendor 3 Local Supply (GST)
Grant of Cash Refund to such Exporter.
Cash flow , Blockage of Funds issues.
GST & Exports
GST Tax Invoice Invoice No. (Serially Numbered)
Date 01 – 04 – 2016
Name (Local Buyer) : Mahindra & Mahindra Ltd.
Address : Kandivli (East), Mumbai
GST TIN (Tax Payer Identification Number of both – Seller & Buyer)
Sale of Goods ( Auto Parts ) Rs.
Net Supply Price……………………………………………………….……………………… 100.00
Freight ………………………………………….……………………… 05.00
20% GST Net Taxable T.O. ….. 105.00
…………………………… 10% C GST ……………………………………………………
--------------------------------- 10% S GST ---------------------------------
10.50
10.50
Total -------------
126.00
Specific Requirements as per the State C – S GST Acts.
Like Certificate, Time of sale, Name & Address of Printer etc.
Authorized Signatory
GSTN system auto drafts purchase statement for tax payer based on sales invoice details uploaded by the seller Tax payer accepts/reject/modifies auto drafted purchase invoice details Adds valid purchase invoice details not reported by sellers
Business Needs
Suppliers will upload their Sales Data • Mico • Lucas TVs • MRF Tyres
Manufacturers/ Consumers will download data from the GSTN Portal. • Mahindra’s • Tata Motors • Ashok Leyland
Suppliers will upload their Sales Data Manufacturers/ Consumers will download data from the
GSTN Portal
Suppliers will upload their Sales Data which will contain the following
information
Sellers GSTIN - Buyers GSTIN
Sellers Invoice No: Invoice Date: Business Place: Product Category: HSN/SAC Code Gross Value : GST Value:
Suppliers will upload their Sales Data Manufacturers/ Consumers will download data from the
GSTN Portal
Buyers will download the data from the GSTN Portal
• Match the same with the receipt data in their systems.
• Identify exceptions – Invoice in GSTN not in ERP
• Goods in Transit • Value Mismatch • Material not Received
• Identify exceptions – Invoice in ERP not in
GSTN. • Material received not uploaded by
supplier. • Upload the exceptions on to the GSTN
Portal. (Unregistered Suppliers)
Suppliers will upload their Sales Data Manufacturers/ Consumers will download data from the
PSTN Portal
Features by SAP
• Discrepant Invoices – Value Mismatch
• Missing in GSTN
• Missing in ERP
• Facility to trigger an Email to the supplier
Suppliers will upload their Sales Data Manufacturers/ Consumers will download data from the
GSTN Portal
Assumptions
GSTN Authorities will provide
• Standard API will be provided for
upload download of data, between
ERP & GSTN Portal
• System will be capable to manage the
humongous volumes
• Compute power of Hana will ease
transactions at both ends.
Top Related