GST Prerequsites

Implimentation Road MAP

The high level things you would probably need to do for a customer:

1. Ensure a condition based tax procedure is used. SAP's proposed roadmap

is for TAXINN

2. The Govt has said that the Outgoing invoice will be validated by GST
Network, so the same would probably be an interface to GST Network,
something like a Golden tax in China

3. The GST in india will be a dual structure tax regime, so you will need to
set up the requisite condition types in your tax procedure and in your sales
schema

4. If you are not on TAXINN, you will need to migrate to TAXINN given as per
roadmap by SAP

5. Every GST No will be at state level, so configuration change will be

required for the same to be set up as Business Place in SAP

6. You will have to be on the required SP Level as per the details which will
be provided by SAP.

7. There will be some amount of overlap for VAT and GST Regime expected,
so you would need to plan for a transition time for the tax applicability and
how to migrate the open documents from VAT to GST. Of course, this will
also depend on legal guidance on GST from the Govt and it is still under
works.

Importnat notes to consider

you can follow the below steps for GST India Implementations.

1. OSS Note : 1175384 Minimum Support Pack to obtain Support for legal
Change in india Logistics and indirect Tax (CIN)

2. OSS Note : 2167294 : DDIC Change

3. OSS Note : 2153807 Improvement in Tax Code Update Program for PO/
SLA and Contracts
4. OSS Note : 2161911 : Purchase Order / Invoice Display or Cancel Issue

5. OSS Note : 2014164 : TAXINJ to TAXINN Migration.

6. OSS Note : 2252781 : FAQ on Tax Procedure Migration for TAXINJ to

TAXINN.

A Brief explanation about CGST

CGST is a part of Goods and Service Tax (GST).

CGST means Central Goods and Service Tax, one of the three categories
under Goods and Service Tax (CGST, IGST and SGST) with a concept of one
tax one nation. CGST falls under Central Goods and Service Tax Act 2016.

For easy understanding, when CGST is being introduced, the present

central taxes of Central Excise Duty, Central Sales Tax CST, Service Tax,
Additional excise duties, excise duty levied under the medical and toiletries
preparation Act, CVD (Additional Customs duty Countervailing Duty), SAD
(Special Additional Duty of customs) surcharges and cesses are subsumed.

CGST is charged on the movement of goods and services of standard

commodities and services which can be amended time to time by a
separate body. The revenue collected under CGST is for Centre. However,
input tax credit on CGST is given to states and such input tax could be
utilized only against the payment of Central GST.

The above information is a brief idea about CGST in simple and easy to
understand.
A Brief simple explanation about SGST

SGST is a part of Goods and Service Tax (GST).

SGST means State Goods and Service Tax, one of the three categories
under Goods and Service Tax (CGST, IGST and SGST) with a concept of one
tax one nation. SGST falls under State Goods and Service Tax Act 2016.

For easy understanding, when SGST is being introduced, the present state
taxes of State Sales Tax, VAT, Luxury Tax, Entertainment tax (unless it is
levied by the local bodies), Taxes on lottery, betting and gambling, Entry
tax not in lieu of Octroi, State Cesses and Surcharges in so far as they
relate to supply of goods and services etc. are subsumed.

The revenue collected under SGST is for State Government.

The above information is a brief idea about SGST in simple and easy to
understand.

CGST & SGST are part of GST, Goods and Service Tax.

CGST expands as Central Goods and Service Tax and SGST is the short form
of State Goods and Service Tax.
Different indirect taxes of Central Excise Duty, Central Sales Tax CST,
Service Tax, Additional excise duties, excise duty levied under the medical
and toiletries preparation Act, CVD (Additional Customs duty
Countervailing Duty), SAD (Special Additional Duty of customs) surcharges
and cesses are merged with CGST. Under SGST, the taxes like State Sales
Tax, VAT, Luxury Tax, Entertainment tax (unless it is levied by the local
bodies), Taxes on lottery, betting and gambling, Entry tax not in lieu of
Octroi, State Cesses and Surcharges in so far as they relate to supply of
goods and services etc. are subsumed.

The major share of tax revenue under CGST is meant for central
government where as SGST tax revenue is for state government.

More details about CGST and SGST are described below

IGST is a part of Goods and Service Tax (GST).

IGST means Integrated Goods and Service Tax, one of the three categories
under Goods and Service Tax (CGST, IGST and SGST) with a concept of one
tax one nation. IGST falls under Integrated Goods and Service Tax Act 2016.

IGST is charged when movement of goods and services from one state to
another. For example, if goods are moved from Tamil Nadu to Kerala, IGST
is levied on such goods. The revenue out of IGST is shared by state
government and central government as per the rates fixed by the
authorities.

As per GST Law:

Under the GST regime, an Integrated GST (IGST) would be levied and
collected by the Centre on inter-State supply of goods and services. Under
Article 269A of the Constitution, the GST on supplies in the course of
interState trade or commerce shall be levied and collected by the
Government of India and such tax shall be apportioned between the Union
and the States in the manner as may be provided by Parliament by law on
the recommendations of the Goods and Services Tax Council.
IGST mechanism step by step:-

Dealer of the selling state will collect IGST from the purchaser on I
nterstate Transaction and the rate of IGST will be the combined rate
of SGST and CGST, Say if the rate of SGST is 12% and CGST is 14%
then the rate of IGST will be 26%.

While depositing the IGST the seller will take credit of SGST and CGST
paid by him on purchase of such Goods or services within the state.

The selling state will transfer the amount of input credit of SGST
taken by the selling dealer against the IGST to the centre. This will
ensure that selling state will not get any revenue out of this
transaction.

The interstate buyer shall take credit of IGST against his liability of
SGST / CGST or IGST. For this purpose the total amount of IGST will be
bifurcated in two parts SGST and CGST.

Now come to the mechanism of transferring the SGST to the

consumer state in which the central agency will transfer the amount
of input credit of IGST used by selling dealer of consumer state while
paying his liability of SGST. This will be clear from the example given
below - See more at:

GST Registration Process in India.

Liability For GST Registration in India.

GST Registration Process.

GST registration process will be online through a portal maintained by

Central Government of India. Govt. will also appoint GSPs (GST Suvidha
Providers) to help businesses with the registration.

process.

Based on the information provided by GSTn, registration process looks like

this:

1. The applicant, will need to submit his PAN, mobile number and email
address in Part A of Form GST REG01 on the GSTN portal or through
Facilitation center (notified by board or commissioner).

2. The PAN is verified on the GST Portal. Mobile number and Email address
are verified with a onetime password (OTP). Once the verification is
complete, applicant will receive an application reference number on the
registered mobile number and via Email. An acknowledgement should be
issued to the applicant in FORM GST REG02 electronically.

3. Applicant needs to fill PartB of Form GST REG01 and specify the
application reference number. Then the form can be submitted after
attaching required documents.
 4. If additional information is required, Form GST REG03 will be issued.
Applicant needs to respond in Form GST REG04 with required information
within 7 working days from the date of receipt of Form GST REG03.

5. If you have provided all required information via Form GST REG01 or
Form GST REG04, the registration certificate in Form GST REG 06 for the
principal place of business as well as for every additional place of business
will be issued to the applicant. If the person has multiple business
verticals within a state he can file a separate application for the
registration in Form GST REG01 for each business verticals.If the details
submitted are not satisfactory, the registration application is rejected
using Form GST REG05. The applicant who is required to deduct TDS or
collect TCS shall submit an application in Form GST REG 07 for
registration. If he is no longer liable to deduct or collect tax at source then
the officer may cancel and communicate the cancel of registration

Documents required for GST registration:

PAN card of the Company

Proof of constitution like partnership deed, Memorandum of
Association (MOA) /Articles of Association (AOA), certificate of
incorporation.
Details and proof of place of business like rent agreement or
electricity bill
Cancelled cheque of your bank account showing name of account
holder, MICR code, IFSC code and bank branch details
Authorized signatory like List of partners with their identity and
address proof in case of partnership firm or List of directors with
their identity and address proof in case of company

For Person operating in different states, with the same PAN

number.

Every person who is liable to take a Registration will have to get registered
separately for each of the States where he has a business operation and is
liable to pay GST in terms of Subsection (1) of Section 19 of Model GST Law.

For a person having multiple business verticals in a state.

In terms of SubSection (2) of Section 19, a person having multiple business

verticals in a State may obtain a separate registration for each business
vertical, subject to such conditions as may be prescribed.
Scenarios- Explained

X company in Mumbai sold 10 lakh worth goods to Y company in Mumbai.

And Y company of mumbai sold same goods to Z company of Rajasthan at
1.50 Lakhs. At the second stage Z of rajasthan sold the same goods to a
consumer in rajasthan at 11.00 Lakhs. Suppose the rate of SGST is 12%,
CGST is 14 % and IGST is 26% .

GST calculation at each stage

1. X company in Mumbai sold 10 lakh wort goods to Y company in

Mumbai.

SGST=12% of 10 Lakh, Ie: 1.20 Lakh

CGST=14% of 10 Lakh, Ie: 1:40 Lakh

Hence input credit of Y- Company is CGST+SGST= 260000 Paid to X-

Company

2. And Y company of mumbai sold same goods to Z company of

Rajasthan at 10.50 Lakhs.
IGST= 26% of 10.50 Lakh Ie: 273000

Y-company need to deposit 13000 INR after claiming input credit of SGST
and CGST of 2.60 lakh

IGST- (CGST+SGST) paid= 13000 INR

3. Z of rajasthan sold the same goods to a consumer in rajasthan

at 11.00 Lakhs

SGST= 12 % of 11 Lakh, Ie: 1.32 lakh

CGST=14 % of 11 Lakh. Ie: 1.54 lakh

Input credit of Z-Comany is- 273000

Input credit claim

IGST-(SGST+CGST)= 13000 INR

Z-Company need to deposit INR 13000

Configuration

1. Master data

1.1. 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

Business place

Multiple business places must be created per the region of operation. The
relevant plants must be assigned to their corresponding business places
i.e. region wise association. A new field will be provided to store the GSTIN
of the business.
Data dictionary changes-

Refer note 2405502 Changes to Master data- DDIC

Activities- pre requsites for note 2385575

2385575 - GST India - Changes to Master data

1.2 Customer Master.

GSTIN - The registration number to be saved in the Tax number 3(KNA1-
STCD3) field of customer master. This field will be enabled for one time
customers as well.

Tax classification for customers

Type of customers (Non-registered Govt entities, Compounding etc. The

standard tax classification field will be used for categorizing the
customers.
1.3 Vendor Master

Data relevant for GST to be captured at vendor master are mentioned

below.

GSTIN

The GST registration number to be saved in the Tax number 3(LFA1-

STCD3) field of vendor master. This field will be enabled for one time
vendors as well.
 Types of Vendors (Compounding, Non-registered, etc.)

A new field/table will be provided under CIN details Tab (Vendor master
data) for identification

DDIC changes

Refer note 2405502-GST india Changes to master data DDIC activities

Refer Note 2385575-Gst India Changes to master data- pre req note
2405502
1.4. Material Master

Classification of materials

The fields Tax indicator for material and/or material group under
Purchasing tab may be used.

Capital/Raw classification

A new indicator may be introduced based on further clarity by

Govt.

HSN/SAC code
 For Goods the HSN code will be stored in Control code field of
foreign data Tab.

For Services, the SAC code will be stored in Tax tariff code of Service
master.

Classification of Services:

The fields Tax indicator for services and/or services group under Basic
Data tab may be used.
1.5 Tax account

Business Place based G/L account determination: For Input and output,
condition type wise transaction key to be created and business place wise
G/L to be created and assigned.
Expected transaction key and description

Transaction Key Description

JIC Input CGST
JII Input IGST
JIS Input SGST
JIR Input GST Reverse charge
JOC Output CGST
JOI Output IGST
JOS Output SGST

2- tax categorisation and computation

Condition types required

Intra state Transactions (With in state)- CGST and SGST

Interstate or Import Transactions- IGST

Deductible and Non Deductible

Reverse Charge Conditions

Export Transactions

Zero rated (Expected)

 Region level rate variations may exist

New condition types/access sequences for pricing and account

determination planned detailed below.

2.1 Tax Procedure

Pricing Procedure
3 DOCUMENT NUMBERING

Unique sequential numbering may be required for outgoing GST

invoices

Criteria for legal numbering may be specified by Govt.

It could be for example

Registration level

Plant level

Document type (Invoice / Credit Memo)

A combination of above

Any other criteria

This can be achieved by using the existing ODN (Official document
Numbering) functionality.

Assign Document class to Document Types

Assign Number Range to Business Place

Consider following notes to implement Master data changes

2405502 - GST India - Changes to Master data- DDIC activities

2385575 - GST India - Changes to Master data
 2417506 - GST India Utilities
2407980 - GST India - Changes to tax procedure and pricing
Procedure.
2415115 - GST India - Changes to Transaction data- DDIC
Activities.