GST Implementation approach in SAP

ARAY CONSULTING LLP

C-1101, Titanium City Center, Anandnagar Road, Ahmedabad 380015, Ph:079-40082634, M:+91-

Aray Consulting LLP

Agenda

What is GST?
Difference between current and GST tax structure
Impact of GST on Existing SAP System
GST Implementation Pre-requisites
GST Project Roadmap, Phases & Considerations
GST Implementation Project Timeline

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What is GST?
GST - Goods and Service Tax

oods and Services Tax (GST) is an indirect tax reform by government of

hich aims to remove tax barriers between states and create a single ma
ST in all probability will be implemented from 1st July 2017.

CGST Central Goods & Service Tax (By Central Govt)

SGST State Goods & Service Tax ( By State Govt)

GST Integrated Goods & Service Tax (Shared by Central & State Govt)

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Changes in Tax Structure

Excise Duty
Service tax
Central Sales Tax
State VAT

Central GST (CGST)

Entry Tax

Integrated GST
(IGST)

Luxury Tax
Entertainment Tax

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State GST (SGST)

Number of taxes out of scope of GST:

Basic Customs duty

Export Duty
Road/Passenger Tax
Toll charges
Property Tax
Electricity Duty
Stamp duty
Certain cases entertainment tax levied by
local authorities

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Existing Tax Structure

Present Tax
Structure
[4 Important
Constituents]

Excise
Duty

Service
Tax

Entry No. 84,

List I, Schedule
VII

Residuary Entry
No. 97, List I,
Schedule VII

Taxable Event is
Manufacture

Taxable Event is
Provision of
Service

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Sales Tax /
VAT/ CST

Customs
Duty

Entry Tax/
Entertain
ment Tax

Entry No. 54 of
List II (VAT) and
92A of List I
(CST)

Entry No. 83,

List I, Schedule
VII

Entry No. 52
&62 List II,
Schedule VII

Taxable Event is
Sale

Taxable Event is
Import & Export

Taxable Event is
Entertainment
& Entry of
Goods

Proposed Structure Under GST

Excise and
Service Tax
will
be known as
CGST
CST
will be
known as
Integrated
GST
(IGST)
Custom Duty

Local VAT &

Other taxes will
be known as
SGST
Rate is ~ Sum
Total of CGST
and SGST

In Place of CVD
and SAD, IGST
will be charged

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Impact of GST on Existing SAP

System
Tax Registration

Define GST Registration levels (Only in case of multiple plants)

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 Support 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, Sales Register, Purchase Register

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SAP Roadmap towards

GST
Customer Preparation

Go through the supportability matrix.

Install the requisite EHP or Service Pack.

Install the patches for TAX procedure migration.

(From TAXINJ to TAXINN)

Once the SAP note is released install requisite

notes.

Follow the manual correction parts.

Customize according to your business process.

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Tax Registration

GSTIN GST Identification number

Single registration for CGST, SGST and
IGST
Individual registration to be obtained in each
state of business establishment
PAN based registration number Up to 15
characters in length

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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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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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Business Process Localization

Sales
Processes
Procurement
Processes
Stock
Transfers

Subcontracting

Others

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GST Tax Postings

Separate accumulation of credit and payables for
CGST
SGST
IGST
Separate accumulation at Registration level
Automatic Tax posting to respective accounts
from
business processes

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Utilization
Utilization of Input tax credit would be as under
Input CGST to be utilized against output CGST
and IGST
Input SGST to be utilized against output SGST
and IGST
Input IGST to be utilized against output IGST,
CGST and SGST in the order of IGST, CGST
and
SGST

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Input

Output

Reporting
Tax register
CGST
SGST
IGST
Registration level segregation
Purchase & Sales Register

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GST Impact in SAP System- Summary

SAP Materials Management (Procure to Pay)
Material/Service Master
Purchase orders
Purchase Info Records
Debit/Credit Notes
SAP Sales & Distribution (Order to Cash)
Sales Orders
Distribution Channel
Sales Area
Billing Schedule
Invoicing
Delivery
SAP Financial Accounting
Accounts Payable and Receivables
Management of Master Records
Invoices and Credit Notes
SAP Forms & Master Data
SAP FI, SD, MM, G/L Reports
Vendor, Customer

SAP Human Capital Management

Employee Benefits
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Subsequent Credit /Debit

Invoices

Pricing (Types of Conditions)

Debit/Credit Notes

Invoicing (Non-PO)
Billing (Non-SO)
General Voucher

Other Statutory Reporting

G/L Account Reporting

Travel & Expenses

Petty Cash
G/L
Account

Pre-requisites
Tax Procedure
TAXINN
Minimum Support Pack level SAP Note no 1175384

SAP_APPL Release

Support Pack

SAP ERP 6.0 (600)

EHP2 FOR SAP ERP 6.0 (602)
EHP3 FOR SAP ERP 6.0 (603)
EHP4 FOR SAP ERP 6.0 (604)
EHP5 FOR SAP ERP 6.0 (605)
EHP6 FOR SAP ERP 6.0 (606)
EHP6 FOR SAP ERP 6.0 for
EHP7 FOR HANA (616- SAP
EHP8 FOR HANA)
SAP S/4HANA
SAPON-PREMISE
ERP 6.0(617)1511
SAP ERP 6.0(618)

SP 26
SP 16
SP 15
SP 16
SP 13
SP 14
SP 08
SP 07
SP 02
02
SP

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Project Roadmap

Upgrade
methodology
Upgrade Impact

System
Checks

Upgrade
Execution
Inclusion of GST
patches
SPAU SPDD

SAP Releases
GST Notes
Implement note
(Automated
corrections and
Manual
Corrections)

GST Release

SAP Safeguarding services forGST Preparedness

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GST
Implementation
Business &
customer specific
activities
Implement changes
to system

Major Milestones & Methodology

Task #

Task item

Technical Upgrade , TAXINN tax procedure ( Prerequisite)

Sandbox creation

Impact Analysis

Business Blueprint (IA document sign off )

Configuration in Sandbox

Process Integration Testing ( 2 rounds)

Users/key-users Training

Deployment in global environment ( if global env. Exists)

Master Data Setup in Production

10

Go-live

11

Post go-live Support

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Project Time Line

3.5 Months onsite
2 weeks of post Go-Live support ( onsite)

* Assumption : Prerequisites are already met.

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THANK YOU

ARAY CONSULTING LLP

C-1101, Titanium City Center, Anandnagar Road, Ahmedabad 380015, Ph:079-40082634, M:+91-

Aray Consulting LLP