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How-To Guide
SAP Business One 9.2 Patch Level 8 and Higher
Document Version: 2.0 – 2017-06-05
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How to Work with GST in the India Localization of SAP Business One
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How to Work with GST in the India Localization of SAP Business One
Typographic Conventions
Typographic Conventions
Type Style Description
Example Words or characters quoted from the screen. These include field names, screen titles,
pushbuttons labels, menu names, menu paths, and menu options.
Textual cross-references to other documents.
Example Emphasized words or expressions.
EXAMPLE Technical names of system objects. These include report names, program names,
transaction codes, table names, and key concepts of a programming language when they
are surrounded by body text, for example, SELECT and INCLUDE.
Example Output on the screen. This includes file and directory names and their paths, messages,
names of variables and parameters, source text, and names of installation, upgrade and
database tools.
Example Exact user entry. These are words or characters that you enter in the system exactly as
they appear in the documentation.
<Example> Variable user entry. Angle brackets indicate that you replace these words and characters
with appropriate entries to make entries in the system.
EXAMPLE Keys on the keyboard, for example, F2 or ENTER .
How to Work with GST in the India Localization of SAP Business One
Document History
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Document History
Version Date Change
1.0 2017-03-11 Document Created for SAP Business One v9.2 PL07
2.0 2017-06-05 Document Updated for SAP Business One v9.2 PL08
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How to Work with GST in the India Localization of SAP Business One
Contents
Contents
1 Introduction ................................................................................................................................... 6
2 GST Changes Schedule ................................................................................................................ 7
3 Settings .......................................................................................................................................... 8 3.1 States ............................................................................................................................................... 8 3.2 Locations ......................................................................................................................................... 9 3.3 Business Partner Master Data ...................................................................................................... 10 3.4 Item Master Data ............................................................................................................................12 3.5 Freight ............................................................................................................................................ 13 3.6 Warehouses ................................................................................................................................... 14 3.7 Tax Types........................................................................................................................................15 3.8 Tax Formula ................................................................................................................................... 16 3.9 Tax Code Determination ................................................................................................................17 3.10 Withholding Tax (GST TDS) ...........................................................................................................17 3.11 Document Numbering ....................................................................................................................21
4 Marketing Documents for A/R .................................................................................................. 23 4.1 A/R Invoices – Sales ..................................................................................................................... 23 4.2 A/R Invoices, Attributes and Scenarios: .................................................................................... 25 4.3 A/R Credit Memos......................................................................................................................... 27 4.4 A/R Down Payment Requests ....................................................................................................... 28 4.5 Inventory Transfers ....................................................................................................................... 29
5 GST Scenarios for A/R .............................................................................................................. 30 5.1 Sales Scenario for Goods or Services – Nil Rated & Regular ................................................... 30 5.2 Sales Scenario for Goods or Services – Composition Levy, Exempt or Non-GST .................. 30 5.3 Sales Scenario for Goods or Services – Exports ....................................................................... 31 5.4 Sales Scenario for Goods or Services – Advance Payments.................................................... 31 5.5 Sales Scenario for Goods or Services – Reverse Charges ....................................................... 33 5.6 Sales Scenario for Debit Memos ................................................................................................. 34 5.7 Sales Scenario for Credit Memo and Sales Return ................................................................... 35 5.8 Sales Scenario for Revising Invoices .......................................................................................... 36 5.9 Inventory Scenario for Self-Supplies (Incl. Consignment) ....................................................... 37 5.10 Inventory Scenario for Job Work ................................................................................................ 40
6 Marketing Documents for A/P .................................................................................................. 41 6.1 A/P Invoice – Purchases ............................................................................................................. 41 6.2 A/P Invoices, Attributes and Scenarios: .................................................................................... 43 6.3 A/P Credit Memos ....................................................................................................................... 44
7 GST Scenarios for A/P .............................................................................................................. 46 7.1 Purchasing Scenario for Goods or Services – Invoice First (Regular Tax) ............................. 46 7.2 Purchasing Scenario for Goods or Services – Outgoing Payment First (Regular GST Tax).. 47
How to Work with GST in the India Localization of SAP Business One
Contents
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7.3 Purchasing Scenario for Goods – Invoice First (Reverse Charge) ........................................... 48 7.4 Purchasing Scenario for Service – Invoice First (Reverse Charge) ......................................... 49 7.5 Purchasing Scenario for Goods or Services – Outgoing Payment First (Reverse Charge) ... 49 7.6 Purchasing Scenario for Goods or Services (Credit Note) and Return ...................................50 7.7 Purchasing Scenario for Goods or Services (Debit Note) and Supplementary Invoices ....... 51 7.8 Purchasing Scenario for Goods or Services (Revised Invoice, DR and CR Memo) ................. 52 7.9 Purchasing Scenario for the Import of Goods ........................................................................... 53 7.10 Purchasing Scenario for the Import of Services........................................................................ 53 7.11 Purchasing Scenario for Withholding Tax (WHT) for TDS GST (A/P Invoice and A/P DPM)54
8 Reporting....................................................................................................................................... 55 8.1 Reporting Summary: .................................................................................................................... 55 8.2 Reporting in SAP Business One:.................................................................................................... 56
9 Migration ....................................................................................................................................... 57 9.1 States ............................................................................................................................................ 57 9.2 Location......................................................................................................................................... 58 9.3 Business Partner Master Data .................................................................................................... 59 9.4 Item Master Data ......................................................................................................................... 60 9.5 Warehouses .................................................................................................................................. 61 9.6 Tax Codes - Setup ........................................................................................................................ 62 9.7 Tax Code Determination .............................................................................................................. 62 9.8 Withholding Tax (GST TDS) ........................................................................................................ 63 9.9 Numbering .................................................................................................................................... 64 9.10 G/L Accounts................................................................................................................................ 64 9.11 Migration cases - Open documents ............................................................................................ 65
10 Sections and updates coming soon… ........................................................................................ 68
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How to Work with GST in the India Localization of SAP Business One
Introduction
1 Introduction
This how-to guide will help you to work with Goods and Service Tax (GST) in the India localization of SAP Business
One.
GST is a new way of handling indirect taxation in India. GST replaces some existing tax regimes providing benefits
such as:
Reduced tax complexity
A simplified taxation system with fewer variables
Greater tax transparency
A reduced administrative burden
Unified taxation for the country and individual states
Economic and employment benefits
GST will lead to changes in existing functionality that affects SAP Business One Customers in India. SAP Business
One provides solutions to customers through patch deployment to meet the requirements of GST, the relevant
versions and or patches will be needed to take advantage of GST functionality. The GST solutions provided in SAP
Business One are described and explained in this guide.
How to Work with GST in the India Localization of SAP Business One
GST Changes Schedule
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2 GST Changes Schedule
The changes being made in SAP Business One for GST are being released in different patches.
The following changes will apply in SAP Business One version 9.2 Patch Level 07:
Master data information will be expanded to include information about GST in the following areas:
o States
o Locations
o Business Partner Master Data
o Item Master Data
o Warehouses
o Tax Code Determination
o GST TDS Setup (Withholding Tax)
o Document Numbering
The following procedures will change in SAP Business One version 9.2 Patch Level 08 to allow for and include
information about GST:
o Reverse charges
o Down Payment (DPM) scenarios for Advance Payments
o GST TDS and GST TCS (Withholding Tax Setup, Outgoing Payment/Deposit handling)
o Freight
o Union territories and CESS
o Tax Types update (removal of SINCess and addion of UTGST and CESS)
o Tax codes setup (for removal)
o Marketing document handling (Reverse Charge, A/R and A/P specific uses cases)
o Migration process description
o Reporting
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How to Work with GST in the India Localization of SAP Business One
Settings
3 Settings
Settings in SAP Business One allow GST functionality to operate and conform to the legal and reporting
requirements of the tax authorities in India.
3.1 States
As GST requirements are different depending on which states of India are involved, the states need to be clearly
defined in SAP Business One. The state codes are specifically required for the reporting of Place of Supply in
various GST reports.
You must ensure that the required GST State Codes are entered into SAP Business One for GST, and related
reporting, to function properly. GST State Codes are represented by two-digit numeric values.
The States - Setup screen can be accessed by following the path Main Menu → Modules tab → Administration →
Setup → General → States in SAP Business One.
The field Union Territory (UT) is used to identify if the location in States - Setup is relevant for UTGST. Currently,
UTGST is applied to the following union territories of India: Andaman and Nicobar Islands, Chandigarh, Daman
and Diu, Dadra and Nagar Haveli and Lakshadweep.
Note
The GST State Codes used for states are different to the eCodes used for states in the eTDS process.
How to Work with GST in the India Localization of SAP Business One
Settings
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3.2 Locations
Locations contain key information related to GST which needs to be defined in SAP Business One. Without the
correct location information, GST functionality will not work properly. Locations can be applied, for example, to
Warehouses. The required fields on the Locations - Setup screen GST tab are as follows:
o GSTIN – a unique GST identification number applicable to a Location and provided by the GST Authorities
for a company during the registration process. Consists of 15 characters.
o GST Type – a GST categorization as specified by the GST authorities. There are 6 defined GST Types:
1. Casual Taxable Person
2. Composition Levy
3. Government Department or PSU
4. Non-Resident Taxable Person
5. Regular/TDS/ISD
6. UN Agency or Embassy
o GSTIN TDS – a unique GST identification number applicable to a Location when an entity or company is
registered for TDS (Tax Deducted at Source).
o GSTIN ISD – a unique GST identification number applicable to a Location when an entity or company is
registered for ISD (Internal Supply Distribution).
o Default Vendor – a "related/dummy vendor" required for 'Self-Supply' scenarios where an Inventory
Transfer document can be copied into an A/R Tax Invoice or an A/P Tax Invoice (tax only).
o Default Customer – a "related/dummy customer" required for 'Self-Supply' scenarios where an Inventory
Transfer document can be copied into an A/R Tax Invoice or an A/P Tax Invoice (tax only).
o Drop Ship WH – required for 'Self-Supply' scenarios, a drop-ship warehouse must be defined for each
location to fulfill job-work scenarios.
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How to Work with GST in the India Localization of SAP Business One
Settings
Note
From a GST perspective, job-work scenarios are treated as supply scenarios. Special provision exists
under GST law where a registered person may send inputs and/or capital goods, without payment of tax,
to a job worker for job work and from there subsequently to another job worker. Job-workers and
principals can be located in the same state or in the same union territory, or in different states and union
territories.
You must manually enter the required, correct Location GST information into SAP Business One for GST to
function properly.
The Locations - Setup screen can be accessed by following the path Main Menu → Modules tab → Administration
→ Setup → Inventory → Locations → Accounting Data tab → GST tab in SAP Business One.
The field Capital Goods on Hold Account appears on the General subtab of General tab on the Locations - Setup
screen. The field is used for defining both capital goods on hold accounts for excise, and GST related Item MD
where the material type is defined as capital goods.
3.3 Business Partner Master Data
Different Business Partners (BPs) are dealt with differently under GST depending on their GST settings. A BP may
have several ship to addresses that each need different GST information. A BP may not have any GST information
at all, depending on their classification.
3.3.1 Business Partner Master Data - Addresses
The following fields on the Addresses tab of the Business Partner Master Data screen are important when GST is
being considered:
How to Work with GST in the India Localization of SAP Business One
Settings
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o State – as GST is based on a destination principle (the state location), this is key to determining the
correct GST treatment.
o GSTIN – a unique GST identification number applicable to a Ship to Address and provided by the GST
authorities. Consists of 15 characters.
o GST Type – a GST categorization as specified by the GST authorities.
o E-Commerce Merchant ID – to generate a BP identifier for e-commerce selling purposes.
You must manually enter the required GST information into SAP Business One for GST and related reporting to
function properly.
In SAP Business One, the Business Partner Master Data screen can be accessed by following the path Main Menu
→ Modules tab → Business Partners → Business Partner Master Data. Both the Addresses tab and Accounting tab
→ Tax tab are found on the Business Partner Master Data screen.
3.3.2 Business Partner Master Data - Accounting
The Subject to GST Withholding Tax checkbox on the Accounting tab → Tax tab of the Business Partner Master
Data screen must be selected when GST and withholding tax are being considered for a BP.
o Subject to GST Withholding Tax – checkbox
o Define which withholding tax codes, including GST TDS (GST Withholding tax), apply on the WTax Codes
Allowed screen
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How to Work with GST in the India Localization of SAP Business One
Settings
3.4 Item Master Data
Different Items are dealt with differently under GST depending on their GST settings. An item must be marked as
GST relevant to consider it for GST treatment. An item can be classified differently under Material Type and Tax
Category leading to different GST treatment. The following fields on the Item Master Data screen, General tab are
important when GST is being considered:
o GST – checkbox to consider the item for GST.
o Material Type – options are Raw Material, Capital Goods or Finished Goods.
o HSN – "Harmonized System of Nomenclature", a unique product coding system defined by the
authorities. Very similar in nature to Chapter ID that is used for excise tax.
o Tax Category – options are Regular, Nil Rated or Exempt depending on how the tax authorities regard the
item, this selection drives GST treatment logic.
o Capital Goods on Hold Percentage.
o Capital Goods on Hold Amount Limit.
o Assessable Value.
o SAC – "Service Accounting Code" only applicable to Service type items. A default list of SAC Codes is
available.
You must manually enter the required GST information into SAP Business One for GST and related reporting to
function properly.
In SAP Business One, the Item Master Data screen can be accessed by following the path Main Menu → Modules
tab → Inventory → Item Master Data.
How to Work with GST in the India Localization of SAP Business One
Settings
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3.5 Freight
For GST, Freight - Setup and related areas are configured as follows:
o The field SAC is available on the Freight - Setup screen. SAC information is mandatory for GSTR
reporting and therefore an SAC is mandatory information for freight on a document. Freight and
additional expenses, for which GST is applicable, will be shown as a separate line items on documents
for reporting purposes.
o At the document level, GST relevant tax codes are enabled for direct selection on the document, both in
the line and header sections.
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How to Work with GST in the India Localization of SAP Business One
Settings
3.6 Warehouses
If a Warehouse is set up as external, then it can be used in subcontracting (job-work) scenarios. The following field
on the Warehouses - Setup screen, General tab is important when GST is being considered:
o External – checkbox
The Warehouses - Setup screen can be accessed by following the path Main Menu → Modules tab →
Administration → Setup → Inventory → Warehouses → General tab in SAP Business One.
How to Work with GST in the India Localization of SAP Business One
Settings
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3.7 Tax Types
Specific Tax Types are available to handle GST as defined by the authorities. The following tax types on the Tax
Types - Setup screen specifically relate to GST:
o SYS_CGST – central goods and services tax.
o SYS_IGST – integrated goods and services tax.
o SYS_SGST – state goods and services tax.
o SYS_CessGST – an additional goods and services tax.
o SYS_UTGST (Union Territory) – union territory goods and services tax.
Default tax type name is changed IN PL08 in order to avoid upgrade conflicts with user defined types.
By selecting the Attribute Values option for a Tax Type, you can enter a value into the Reverse Charge % field to
determine how reverse charging is handled, especially in relation to A/P marketing document journal entries.
In SAP Business One, the Tax Types - Setup screen can be accessed by following the path Main Menu → Modules
tab → Administration → Setup → Financials → Tax → Tax Types.
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How to Work with GST in the India Localization of SAP Business One
Settings
Note
The background formulas for calculating the different tax types can be setup through the Tax Formula -
Setup screen. No default values are to be delivered as part of 9.2 PL08 due to a lack of clarity on tax rates
from the GST Committee. It is recommended to setup tax codes according to your business needs
related to intrastate and interstate transactions.
3.8 Tax Formula
To access the Tax Formula - Setup screen follow the path Main Menu → Modules tab → Administration → Setup →
Financials → Tax → Tax Engine Configuration → Tax Formula). An example setup for CGST's tax formula follows:
How to Work with GST in the India Localization of SAP Business One
Settings
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3.9 Tax Code Determination
To manage GST, four Key Fields are available in the Tax Code Determination - Setup screen.
Additional GST related Key Field options are available for selection:
o UDF – User Defined Field
o State From
o State To
o BP Country
o Item Tax Category
o GST Type
The Tax Code Determination - Setup screen can be accessed by following the path Main Menu → Modules tab →
Administration → Setup → Financials → Tax → Tax Code Determination.
3.10 Withholding Tax (GST TDS)
For GST TDS (Tax Deducted at Source) and GST TCS (Tax Collected at Source) to function properly settings need
to be made in multiple areas of SAP Business One.
The section below describes changes you need to make for TDS and TCS. Following areas are enhanced:
1. Withholding Tax - Setup
2. Business Partner Master data
3. GST TDS and GST TCS Deposit (Outgoing Payment)
4. G/L Account Determination
5. Generic behavior
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How to Work with GST in the India Localization of SAP Business One
Settings
3.10.1 Withholding Tax - Setup
o The field TDS Type defines if the withholding tax is relevant for the legacy eTDS regime, GST TDS regime,
or GST TCS regime. The default values for TDS Type are:
o eTDS (current tax regime)
o GST TDS
o GST TCS
o For GST TDS and GST TCS a new account setup must be defined:
o A/P IGST account
o A/P SGST account
o A/P CGST account
o A/P UTGST account
o A/P CESS account
o A/R IGST account
o A/R SGST account
o A/R CGST account
o A/R UTGST account
o A/R CESS account
How to Work with GST in the India Localization of SAP Business One
Settings
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o The definition of multiple tax rates is possible; options are available via Form settings functionality.
o All other accounts relevant for eTDS only are disabled in case you choose the GST TDS or GST TCS
option.
3.10.2 Withholding Tax - Business Partner MD
o Both GST TDS and GST TCS tax codes must be enabled per WTax Codes Allowed under Accounting - Tax
tab of Business Partner MD
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Settings
3.10.3 GST TDS/ GST TCS Outgoing payment (Deposit)
o The field Location is available to determine the location for which a deposit payment will be made
o Both TDS and TCS are enabled as per new TDS Type field
3.10.4 TDS/TCS under G/L Account Determination
New G/L accounts defined for TDS/TCS under G/L Account Determination
o GST TDS/TCS Interest
o GST TDS/TCS Other Charges
o GST TDS/TCS Fee
TDS Interest, TDS Other Charges and TDS Fee (Late Filing) fields have the same behavior as currently for eTDS
functionality, however they have a new definition under G/L Account Determination - General tab
How to Work with GST in the India Localization of SAP Business One
Settings
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3.10.5 General behavior:
o Mixed usage of invoice and payment category withholding tax is supported in document
o Both categories WTax in AP/AR invoice, and AP/AR down payment invoice are supported
o GST TDS/TCS - payment category is supported in AP Invoice and AP DPM Invoice
o eTDS - invoice category and GST TDS/TCS - invoice category is supported in AP Invoice
o eTDS - invoice category and GST TDS/TCS - payment category is supported in AP Invoice
o Per current behavior, it is not allowed to not allow mix usage of different category in one document. One
invoice must have the same, either invoice or payment category
o Behavior of TDS Interest, TDS Other Charges and TDS Fee (late Filling) fields remains the same as per
logic, however new G/L accounts are created for this purpose in G/L account determination, General tab
o The behavior for the new GST TDS and GST TCS from a document perspective remains the same as for
current eTDS regime
o IGST, SGST, CGST, UTGST and Cess
o All tax type combinations are supported within enhanced GST TGS and GST TCS setup
o Calculation base of UTGST and Cess is the same as IGST, SGST and CGST
3.11 Document Numbering
For the purposes of GST, new subdocument types have been introduced for invoices and credit memos to fulfill
requirement of consecutive serial number for each document from GST law perspective.
For these new subdocument types, there is a different numbering series. The Document Numbering - Setup
screen can be used to view and amend these settings.
Note
The document type Bill of Supply is unaffected by GST changes and remains in place for invoicing under
the previous tax regimes and for Excise purposes.
The Document Numbering - Setup screen can be accessed by following the path Main Menu → Modules
tab → Administration → System Initialization → Document Numbering
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Settings
Sequence also reflects GST Subdocument type. The Sequence - Setup screen can be accessed by following the
path Main Menu → Modules tab → Administration → Setup → Financials → Tax → Sequence.
How to Work with GST in the India Localization of SAP Business One
Marketing Documents for A/R
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4 Marketing Documents for A/R
To handle GST, there are options available in the marketing documents available in SAP Business One. These
options have been introduced as enhancements to comply with the requirements of GST.
4.1 A/R Invoices – Sales
A/R Invoices (follow path Main Menu → Modules tab → Sales - A/R → A/R Invoice) have various fields and options
to help specify the correct details for GST.
The field Transaction Type in the header section of an A/R Invoice has three different options to determine how
the A/R Invoice you are creating relates to GST:
o Bill of Supply – A Bill of Supply is for use with the pre-GST tax regime. There are specific cases when a Bill
of supply can be used with GST tax as well:
o in case of Item is GST Item, type Exempt; and
o if Location is Composition Levy type
o GST Tax Invoice – for invoices that are affected by GST
o GST Debit Memo – for adjusting GST Tax Invoices already created
The field Place of Supply in the header section of an A/R Invoice has the states of India as options. Place of Supply
determines which state the A/R Invoice contents are being shipped to and therefore how GST will be dealt with.
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How to Work with GST in the India Localization of SAP Business One
Marketing Documents for A/R
The Tax tab of an A/R Invoice has several options to determine how the A/R Invoice you are creating relates to
GST:
o E-Commerce Operator – to choose a Business Partner when selling through an E-Commerce Portal.
o E-Commerce GSTN – to choose a GSTIN associated with an E-Commerce Operator.
o Revision – checkbox option stating that the A/R Invoice is a revision, reveals the following:
o Original Ref. No. – reference number of the document that is being revised.
o Original Doc. Date – the date of the document that is being revised.
o Export – checkbox option determining that the A/R Invoice is for exports outside India or for specific case
related to Union Territory transactions within India.
o Port Code
o Bill of Export No. – provided by the authorities as an official document with standalone
numbering/identification.
o Bill of Export Date. – date of document provided.
If a Transaction Type of GST Debit Memo is chosen for the A/R Invoice, then an additional two fields will become
available when the Revision checkbox is selected:
o Original Debit No. – to enable the reporting of reference numbers of credited documents
o Original Debit Date
How to Work with GST in the India Localization of SAP Business One
Marketing Documents for A/R
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The Contents tab of an A/R Invoice has a SAC field option for GST when the Item/Service Type is selected as
Service for a GST Tax Invoice. The SAC field value must be manually entered as unlike in Service Type Documents
the SAC information is not determined by Master Data.
4.2 A/R Invoices, Attributes and Scenarios:
# GST Reg.
Type Loc.
Ship to
Country
Ship
From
Ship
To
Item
Type
Document
Type
Tax Code Notes
1 Regular Foreign NA NA Nil
Rated
Tax
Invoice
IGST_Zero
Rated
Without
Payment of
duty
Existing
CENVAT
posting
behavior 2 Regular Foreign NA NA Regular Tax
Invoice
IGST_Zero
Rated
Without
Payment of
duty
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How to Work with GST in the India Localization of SAP Business One
Marketing Documents for A/R
# GST Reg.
Type Loc.
Ship to
Country
Ship
From
Ship
To
Item
Type
Document
Type
Tax Code Notes
3 Regular Foreign NA NA Exempt Bill of
Supply
Exempt Tax
Code (0%)
Without
Payment of
duty
4 Regular Foreign NA NA Nil
Rated
Tax
Invoice
IGST_Nil Rated With
Payment of
duty
5 Regular Foreign NA NA Regular Tax
Invoice
IGST_ (Rate for
that Item)
With
Payment of
duty
6 Regular Foreign NA NA Exempt Bill of
Supply
Exempt Tax
Code (0%)
With
Payment of
duty
7 Composition
Levy
Foreign NA NA Nil
Rated
Bill of
Supply
Exempt Tax
Code (0%)
Without
Payment of
duty
8 Composition
Levy
Foreign NA NA Regular Bill of
Supply
Exempt Tax
Code (0%)
Without
Payment of
duty
9 Composition
Levy
Foreign NA NA Exempt Bill of
Supply
Exempt Tax
Code (0%)
Without
Payment of
duty
10 Composition
Levy
Foreign NA NA Nil
Rated
Bill of
Supply
Exempt Tax
Code (0%)
With
Payment of
duty
11 Composition
Levy
Foreign NA NA Regular Bill of
Supply
Exempt Tax
Code (0%)
With
Payment of
duty
12 Composition
Levy
Foreign NA NA Exempt Bill of
Supply
Exempt Tax
Code (0%)
With
Payment of
duty
13 Regular India Intrastate Nil
Rated
Tax
Invoice
CGST+SGST_Nil
Rated
14 Regular India Intrastate Regular Tax
Invoice
CGST+SGST_
(Rate for that
Item)
15 Regular India Intrastate Exempt Bill of
Supply
Exempt Tax
Code (0%)
16 Regular India Interstate Nil
Rated
Tax
Invoice
IGST_Nil Rated
How to Work with GST in the India Localization of SAP Business One
Marketing Documents for A/R
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# GST Reg.
Type Loc.
Ship to
Country
Ship
From
Ship
To
Item
Type
Document
Type
Tax Code Notes
17 Regular India Interstate Regular Tax
Invoice
IGST_(Rate for
that Item)
18 Regular India Interstate Exempt Bill of
Supply
Exempt Tax
Code (0%)
19 Composition
Levy
India Interstate &
Intrastate
Nil
Rated
Bill of
Supply
Exempt Tax
Code (0%)
20 Composition
Levy
India Interstate &
Intrastate
Regular Bill of
Supply
Exempt Tax
Code (0%)
21 Composition
Levy
India Interstate &
Intrastate
Exempt Bill of
Supply
Exempt Tax
Code (0%)
4.3 A/R Credit Memos
A/R Credit Memos (follow path Main Menu → Modules tab → Sales - A/R → A/R Credit Memos) have fields and
options to help specify the correct details for GST, much like in A/R Invoices, but with important differences.
When selected, the checkbox Revision on the Tax tab of an A/R Credit Memo reveals four fields:
o Original Ref. No. – reference number of the original invoice being credited.
o Original Doc. Date – reference date of the original invoice being credited.
o Original Credit No. – reference to Credit Memo used for crediting invoice, in case this is a second Credit
Memo.
o Original Credit Date – date reference to Credit Memo used for crediting invoice, in case this is a second
Credit Memo.
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Marketing Documents for A/R
4.4 A/R Down Payment Requests
A/R Down Payment Requests (follow path Main Menu → Modules tab → Sales - A/R → A/R Down Payment
Requests) have the field Transaction ID on the Tax tab to specify the correct details for GST.
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4.5 Inventory Transfers
Inventory Transfers (follow path Main Menu → Modules tab → Inventory → Inventory Transactions → Inventory
Transfer) have the option Copy To for copying details to an A/R Tax Invoice.
This Inventory Transfer functionality enables the specific scenario of Self-Supplies including Consignment
Scenarios. See more details in further section for the scenarios.
After copying an Inventory Transfer into an A/R Tax Invoice and A/P Tax Invoice, only the following fields are
editable:
o Tax Code
o Assessable values
o Unit Price
o Discount
Through Inventory Transfers you can perform the following processes:
o Intrastate inventory transfers
o Interstate inventory transfers.
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GST Scenarios for A/R
5 GST Scenarios for A/R
The introduction of GST will affect common, everyday business processes. Most of the process for raising
marketing documents or performing business transactions will remain the same but there will be important
changes resulting from GST. The different processes and marketing documents that are impacted by GST are
described by the scenarios in this section.
5.1 Sales Scenario for Goods or Services – Nil Rated & Regular
The standard sales process involving Sales Quotation, Sales Order and Delivery remains the same as it was before
the introduction of GST. However, after the introduction of GST, there are important new mandatory steps at the
A/R Invoice stage of the sales process.
To generate an A/R Invoice (follow path Main Menu → Modules tab → Sales - A/R → A/R Invoice) for Nil Rated and
Regular items the standard operating procedure as before applies, but with some important differences, following
the introduction of GST:
In the Transaction Type field of the A/R Invoice header you must choose GST Tax Invoice.
In the Item No. or Item Description field you must choose a GST relevant item.
In the Tax Code field, you must choose a GST relevant Tax Code, this makes sure the correct GST account is
credited.
5.2 Sales Scenario for Goods or Services – Composition Levy, Exempt or Non-GST
In order to generate an A/R Invoice (follow path Main Menu → Modules tab → Sales - A/R → A/R Invoice) for
Comp. Levy, Exempt or Non-GST items, the standard operating procedure as before applies, but with some
important differences:
In the Transaction Type field of the A/R Invoice header you must choose Bill of Supply.
In the Item No. or Item Description field you can choose non-GST relevant items or GST exempt items.
You cannot combine GST relevant items with GST Exempt or non-GST relevant items.
In the Tax Code field, you must choose Non-GST tax code.
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5.3 Sales Scenario for Goods or Services – Exports
To generate an A/R Invoice (follow path Main Menu → Modules tab → Sales - A/R → A/R Invoice) for items for
export, the standard operating procedure as before applies, but with some important differences:
In the Transaction Type field of the A/R Invoice header, you must choose GST Tax Invoice.
If a Ship-to address with a foreign country is chosen, then the Export checkbox will be selected automatically
on the Tax tab.
In the Item No. or Item Description field, you must choose a GST relevant item.
In the Tax Code field, you must choose a GST relevant code, so indicating a GST account.
There are two different options, choose which applies in the Duty Status field on the Tax tab:
o With Payment of Duty – GST will be posted
o Without Payment of Duty – GST will not be posted
You must populate the Bill of Export No. and Bill of Export Date fields
5.4 Sales Scenario for Goods or Services – Advance Payments
Advance Payment processing with GST is supported through A/R Down Payment Requests (A/R DPM Requests)
in SAP Business One. The standard process consists of an A/R Down Payment Request, an Incoming Payment,
and an A/R Invoice amongst other steps.
In order to generate an A/R Down Payment Request (follow path Main Menu → Modules tab → Sales - A/R → A/R
Down Payment Request), the standard operating procedure as before GST applies, but with some important
differences:
Where relevant, GST will be applied to the document produced first in the process, either the A/R Down
Payment or the A/R Invoice.
Once determined, define the Duty Status in the field on the Tax tab of the A/R Down Payment Request. The
options are either With Payment of Duty or Without Payment of Duty.
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GST Scenarios for A/R
Step by Step Procedure with Example:
1. Create an A/R Down Payment Request (DPM) for an item or service with a GST tax code. In our example,
there is a 5% GST tax code rate and a base value of INR 100 for the down payment.
2. Create an Incoming Payment for the received payment relating to the A/R Down Payment Request from step
1. In our example the following postings would be made to the relevant accounts:
Account Debit Credit
Bank account 105
BP Receivable account 105
Down Payment Interim account 105
GST Payable account 5
DPM Clearing account 100
3. Create an A/R Invoice linked by reference to the A/R Down Payment Request created in step 1, Duty Status is
'With Payment'. In our example the following postings would be made to the relevant accounts:
Account Debit Credit
BP Receivable account 105
DPM Interim account 105
DPM Clearing account 100
GST Payable account 5
GST Payable account -5
Revenue account 100
Raw Material account X
Finished Goods /COGS X
4. Complete the process with a GST tax payment to the GST authorities.
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GST Scenarios for A/R
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5.5 Sales Scenario for Goods or Services – Reverse Charges
Reverse charge sales scenarios for goods or services are handled by A/R Invoices in SAP Business One. Under
GST, a reverse charge is when the recipient of the goods is liable to pay GST rather than the supplier. The GST
process is supported in SAP Business One by Tax codes defined as being for reverse charges.
In order to generate an A/R Invoice (follow path Main Menu → Modules tab → Sales - A/R → A/R Invoice) for a
reverse charge, the standard operating procedure applies, but with the following conditions:
The A/R Invoice needs to be raised as a GST Tax Invoice.
A reverse charge relevant tax code with the appropriate percentage must be selected.
The amount of GST payable is based on the reverse charge percentage. If the percentage is 100%, then no
GST is payable.
A single document may hold regular and reverse charge items or services.
Reverse charge related transactions are reported in GSTR1.
Examples of Account Postings:
o An A/R Invoice is raised with a tax code of rate of 5% and the base value is INR 100:
Account Debit Credit
BP Receivable account 105
GST Payable account 5
Revenue account 100
o An A/R Invoice is raised with tax code reverse charge of 100% and the base value is INR 100:
Account Debit Credit
BP Receivable account 100
GST Payable account 0
Revenue account 100
Remark:
The GST Payable is calculated based on reverse charge %
Reverse charge related transactions are reported in GSTR1
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GST Scenarios for A/R
5.6 Sales Scenario for Debit Memos
To create a debit memo, generate an A/R Invoice (follow path Main Menu → Modules tab → Sales - A/R → A/R
Invoice). Debit memos correct a previously created A/R Invoice, normally charging making additional charges.
The following rules apply to the creation of debit memos under GST:
In the Transaction Type field of the A/R Invoice header GST Debit Memo must be chosen.
Debit memos are to be used to adjust GST Tax Invoices only.
A/R Invoices for GST Debit Memos can be created for three scenarios:
o Tax only – the Tax Only checkbox on the Tax tab must be selected.
o Quantity, value and tax.
o Without Quantity – dropship warehouse must be used.
A/R Invoices for GST Debit Memos are not possible without a stated quantity unless a Dropship Warehouse is
used
You must enter the original GST Tax Invoice reference number and date on the A/R Invoice you are creating
as the debit memo.
Example Account Postings:
o An A/R Invoice is raised for a tax-only debit memo with a value of INR 10. 'Tax Only' GST Debit Memo is
managed via 'Tax Only' checkbox available on A/R Invoice. Example below shows posting of 10 Rupees
posted as tax only:
Account Debit Credit
BP Receivable account 10
GST Payable account 10
o An A/R Invoice is raised for a debit memo for quantity, value and tax. The total value is INR 200 of which
INR 180 is the base value and GST is INR 20. Adjustment of Quantity, Value or Tax can be adjusted on
GST Debit Memo as standard functionality:
Account Debit Credit
BP Receivable account 200
GST Payable account 20
Revenue account 180
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GST Scenarios for A/R
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Account Debit Credit
Raw Material account X
Finished Goods /COGS X
o An A/R Invoice is raised for a debit memo for adjustment of value and tax, but not quantity. The total
value is INR 200 of which INR 180 is the base value and GST is INR 20. The scenario must be managed by
selecting items linked to a dropship warehouse:
Account Debit Credit
BP Receivable account 200
GST Payable account 20
Revenue account 180
5.7 Sales Scenario for Credit Memo and Sales Return
To create a credit memo and sales return, generate an A/R Credit Memo (follow path Main Menu → Modules tab
→ Sales - A/R → A/R Credit Memo). Credit memos can correct a previously created A/R Invoice with a
transaction type of GST Tax Invoice. The following conditions apply:
You must enter the original A/R Invoice reference number and date details.
A Bill of Supply transaction type is to be used for all A/R Credit Memos that are not GST related.
An A/R Credit Memo can be revised as long as the original document is referenced.
An A/R Credit Memo can be created for three scenarios:
o Tax only – you must select the Tax Only checkbox and Without Quantity checkbox
o Quantity, value and tax
o Without quantity – you must select the Without Quantity checkbox.
The sales return is handled by the A/R Credit Memo.
Example Account Postings:
o An A/R Credit Memo is raised for tax only and the value is INR 10. The Tax Only and Without Quantity
checkboxes must be selected:
Account Debit Credit
BP Receivable account 10
GST Payable account 10
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GST Scenarios for A/R
o An A/R Credit Memo is raised for adjustment of quantity, value and tax. The total value is INR 50, of which
the base value is INR 45 and GST is INR 5:
Account Debit Credit
BP Receivable account 50
GST Payable account 5
Revenue account 45
Inventory account 30
Cost of Goods sold 30
o An A/R Credit Memo is raised for adjustment of value and tax, but not quantity. The total value is INR 50,
of which the base value is INR 45 and GST is INR 5. The Without Quantity checkbox is selected:
Account Debit Credit
BP Receivable account 50
GST Payable account 5
Revenue account 45
5.8 Sales Scenario for Revising Invoices
First, cancel the original A/R Invoice (follow path Main Menu → Modules tab → Sales - A/R → A/R Invoice) that
was created with a transaction type of GST Tax Invoice. Then create a new A/R Invoice with the correct revised
attributes and reference the original invoice:
Select the Revision checkbox to flag the new A/R Invoice as a revision.
Enter the original GST Tax Invoice reference number and date of the invoice being revised.
This process should only be used when the A/R Invoice being corrected belongs to a previous period, and has
been reported. In the same period, it is possible to cancel the A/R Invoice and create a new one without the
additional revision steps.
Example Account Postings:
1. An initial A/R Invoice is raised for a sale. The total value is INR 30 of which the base value is INR 25 and
GST is INR 5:
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Account Debit Credit
BP Receivable account 30
GST Payable account 5
Revenue account 25
2. The initial A/R Invoice created in step 1 is cancelled:
Account Debit Credit
BP Receivable account 30
GST Payable account 5
Revenue account 25
3. A revised A/R Invoice is raised for the sale. The A/R Invoice is flagged as a revision and references the
original invoice number and date. The total value is INR 60 of which INR 50 is the base amount and GST is
INR 10:
Account Debit Credit
BP Receivable account 60
GST Payable account 10
Revenue account 50
5.9 Inventory Scenario for Self-Supplies (Incl. Consignment)
For inventory transfers made within the same state (intrastate) there is no GST impact so no change to the
existing process.
If GSTIN of From location and To location is different, then GST tax is also applicable for intra state.
For inventory transfers made between two different states (interstate) an Inventory Transfer is needed first
(follow path Main Menu → Modules tab → Inventory → Inventory Transactions → Inventory Transfer) followed by
an A/R Invoice where the warehouse is the issuing party. The A/R Invoice can be created by selecting Copy To on
the relevant Inventory Transfer. Where the warehouse is the receiving party, an A/P Invoice can be created by
selecting Copy To on the relevant Inventory Transfer.
Once the A/R Invoice has been copied to, ensure the transaction type is GST Tax Invoice.
A business partner for each interstate warehouse is needed.
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Example Scenario and Account Postings:
Interstate transactions involve two sides of a transaction, there is a process for both the issuing and the receiving
warehouses.
Prerequisites:
Master data has been defined for the Default vendor.
Master data has been defined for the Default customer.
Dropship Warehouse has been defined in Location on the GST tab, for both target and source location.
The default master data or "dummy business partner" information is used in self-supply scenarios.
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5.9.1 Issuing warehouse scenario:
1. Create an Inventory Transfer.
2. Copy the Inventory Transfer from step 1 into an A/R Invoice with a dropship warehouse defined and Tax
Only selected on the Tax tab. The total value is INR; the account postings represent the issuing
warehouse perspective:
Account Debit Credit
BP Receivable account ** 100
GST Payable account 100
** The business partner is the Default Customer as defined on the GST tab of Locations.
5.9.2 Receiving warehouse scenario:
Copy the Inventory Transfer created in step 1 of the Issuing Warehouse Scenario into an A/P Invoice. Define
the dropship warehouse and select Tax Only for the A/P Invoice.
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Account Debit Credit
BP Receivable account ** 100
GST Input account 100
** The business partner is the Default Vendor as defined on the GST tab of Locations.
Scenario details for interstate self-supply:
An A/R Invoice, GST Tax Invoice is required.
The business partner is defined on the Inventory Transfer document, the business partner will be then copied
to the A/R Invoice, GST Tax Invoice created by copy functionality.
The copying of an Inventory Transfer to an A/R Invoice, GST Tax Invoice is allowed for both interstate and
interstate inventory transfers.
The originating "from state" is the state of the originating warehouse as defined in Location. The place of
supply (POS) state is the related business partner's state as defined in its Ship to address.
Customer details for A/R Invoices are copied from the Inventory Transfer default customer target locations.
The drop ship warehouse of the source location from the Inventory Transfer is used as the warehouse on A/R
Invoice
This kind of self-supply scenario is treated as a sales transaction from the source location to the target
location, from an issuing location perspective.
From a target location perspective, the scenario is treated as a purchase transaction from the source location
to the target location.
The default vendor of the source location from the Inventory Transfer will be used as the vendor for A/P
invoices.
The dropship warehouse of the target location from the inventory transfer will be used as the warehouse of
A/P Invoice.
The dropship warehouse must belong to the same location as the "From Warehouse" location.
5.10 Inventory Scenario for Job Work
More details on Job-Work scenario will be coming soon.
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Marketing Documents for A/P
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6 Marketing Documents for A/P
6.1 A/P Invoice – Purchases
The standard purchasing process involving Purchase Request, Purchase Order, Goods Receipt, Purchase Order
and Outgoing Payment remains the same as it was before the introduction of GST. However, after the introduction
of GST, there are important new mandatory steps at the A/P Invoice stage of the purchasing process.
A/P Invoices (follow path Main Menu → Modules tab → Purchase - A/P → A/P Invoice) have various fields and
options to help specify the correct details for GST.
The field Transaction Type in the header section of an A/P Invoice has three different options to determine how
the A/P Invoice you are creating relates to GST:
o Bill of Supply – for invoices that are not affected by GST.
o GST Tax Invoice – for invoices affected by GST.
o GST Debit Memo – for adjusting GST Tax Invoices already created.
The field Ship From in the header section of an A/P Invoice has the states of India as options. Ship From
determines which state the A/P Invoice contents are being shipped from and therefore how GST will be dealt with.
The Tax tab of an A/P Invoice has several options to determine how the A/P Invoice you are creating relates to
GST:
o Reference Number
o Ref. date
o Revision – checkbox option stating that the A/P Invoice is a revision, reveals the following:
o Original Ref. No. – reference number of the document that is being revised.
o Original Doc. Date – the date of the document that is being revised.
o Import – checkbox option determining that the A/P Invoice is for import to India.
o Port Code
o Bill of Import No. – provided by the authorities as an official document with standalone
numbering/identification.
o Bill of Import Date. – date of document provided.
To generate an A/P Invoice for invoice first, standard tax scenarios, the standard operating procedure as before
applies, but with some important differences following the introduction of GST:
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Marketing Documents for A/P
In the Transaction Type field of the A/P Invoice header you must choose GST Tax Invoice (highlighted in the
screenshot below).
In the Item No. or Item Description field you must choose a GST relevant item.
In the Tax Code field, you must choose a GST relevant Tax Code, this makes sure the correct GST account is
credited.
When creating an invoice revision, select the Revision checkbox on the Tax tab of the A/P Invoice, you must
enter the Original Ref No. and Original Ref Date from the document being revised.
Tax code determination is based on the Ship from address for the vendor and the location of recipient
warehouse.
For the import of goods, Bill of entry no. and Bill of entry date are mandatory reporting elements of GSTR-2, new
fields are available to enter this information on A/P Invoices. As there is separate reporting for Import of Goods
and Import of services, these fields are mandatory only when the document is for material category items. If the
A/P Invoice is for service items or the document is of a service type, then Bill of entry no. and Bill of entry date are
not mandatory.
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Marketing Documents for A/P
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6.2 A/P Invoices, Attributes and Scenarios:
# GST BP Type Receiving
Location
Type
Ship
from
Count
ry
Ship
Fro
m
Shi
p
To
Item
Type
Doc Type Tax Code Notes
1 Not in India
(unregistered)
Regular Foreig
n
NA NA Nil
Rated
AP
Invoic
e
IGST_Nil Rated Import
Scenario
(GST
posting
handled
with
import of
goods
scenario)
2 Not in India
(unregistered)
Regular Foreig
n
NA NA Regul
ar
AP
Invoic
e
IGST_(Rate for
that Item)
3 Not in India
(unregistered)
Regular Foreig
n
NA NA Exem
pt
AP
Invoic
e
Exempt Tax
Code (0%)
4 Regular Regular India Intrastate Nil
Rated
AP
Invoic
e
CGST+SGST_Nil
Rated
Posting to
GST Input
5 Regular Regular India Regul
ar
AP
Invoic
e
CGST+SGST_(R
ate for that
Item)
6 Regular Regular India Exem
pt
AP
Invoic
e
Exempt Tax
Code (0%)
7 Regular Regular India Interstate Nil
Rated
AP
Invoic
e
IGST_Nil Rated Posting to
GST Input
8 Regular Regular India Regul
ar
AP
Invoic
e
IGST_(Rate for
that Item)
9 Regular Regular India Exem
pt
AP
Invoic
e
Exempt Tax
Code (0%)
1
0
Regular Compositi
on Levy
India Intrastate Nil
Rated
AP
Invoic
e
CGST+SGST_Nil
Rated_Non-
Deductible
Not
posted to
GST Input
but the
Non-
Deductible
Acct
11 Regular Compositi
on Levy
India Regul
ar
AP
Invoic
e
CGST+SGST_(R
ate for that
Item)_Non
Deductible
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Marketing Documents for A/P
# GST BP Type Receiving
Location
Type
Ship
from
Count
ry
Ship
Fro
m
Shi
p
To
Item
Type
Doc Type Tax Code Notes
12 Regular Compositi
on Levy
India Exem
pt
AP
Invoic
e
Exempt Tax
Code (0%)_Non
Deductible
13 Regular Compositi
on Levy
India Interstate Nil
Rated
AP
Invoic
e
IGST_Nil
Rated_Non
Deductible
Non-
Deductible
14 Regular Compositi
on Levy
India Regul
ar
AP
Invoic
e
IGST_(Rate for
that Item)_Non-
Deductible
15 Regular Compositi
on Levy
India Exem
pt
AP
Invoic
e
Exempt Tax
Code
(0%)_Non-
Deductible
16 Unregistered/Co
mp Levy
Regular India Intrastate
/
Interstate
Nil
Rated
AP
Invoic
e
Exempt Tax
Code (0%)
Unregister
ed vendor
cannot
charge
GST 17 Unregistered /
Comp Levy
Regular India Regul
ar
AP
Invoic
e
Exempt Tax
Code (0%)
18 Unregistered /
Comp Levy
Regular India Exem
pt
AP
Invoic
e
Exempt Tax
Code (0%)
19 Unregistered /
Comp Levy
Compositi
on Levy
India Intrastate
/
Interstate
Nil
Rated
AP
Invoic
e
Exempt Tax
Code (0%)
Unregister
ed vendor
cannot
charge
GST 2
0
Unregistered /
Comp Levy
Compositi
on Levy
India Regul
ar
AP
Invoic
e
Exempt Tax
Code (0%)
21 Unregistered /
Comp Levy
Compositi
on Levy
India Exem
pt
AP
Invoic
e
Exempt Tax
Code (0%)
6.3 A/P Credit Memos
A/P Credit Memos (follow path Main Menu → Modules tab → Purchase - A/P → A/P Credit Memo) have various
fields and options to help specify the correct details for GST.
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The field Transaction Type in the header section of an A/P Credit Memo has two different options to determine
how the A/P Credit memo you are creating relates to GST:
o Bill of Supply – for credit memos that are not affected by GST.
o GST Tax Invoice – for invoices affected by GST.
The Tax tab of an A/P Credit Memo has several options to determine how the A/P Credit Memo you are creating
relates to GST:
o Revision – checkbox option stating that the A/P Credit Memo is a revision, reveals the following:
o Original Ref. No. – reference number of the document that is being revised.
o Original Doc. Date – the date of the document that is being revised.
o Original Credit No. – reference number of the credit memo document that is being revised.
o Original Credit Date – the date of the credit memo document that is being revised.
o The revision of an A/P Credit Memo – GST Tax Invoice is allowed in system, however, it needs to be
used only if the A/P Credit Memo reported in a previous tax period is being revised.
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GST Scenarios for A/P
7 GST Scenarios for A/P
7.1 Purchasing Scenario for Goods or Services – Invoice First (Regular Tax)
The standard purchasing process involving Purchase Request, Purchase Order, Goods Receipt, Purchase Order
and Outgoing Payment remains the same as it was before the introduction of GST. However, after the introduction
of GST, there are important new mandatory steps at the A/P Invoice stage of the purchasing process.
A/P Invoices (follow path Main Menu → Modules tab → Purchase - A/P → A/P Invoice) have various fields and
options to help specify the correct details for GST.
The field Transaction Type in the header section of an A/P Invoice has three different options to determine how
the A/P Invoice you are creating relates to GST:
o Bill of Supply – for invoices that are not affected by GST.
o GST Tax Invoice – for invoices affected by GST.
o GST Debit Memo – for adjusting GST Tax Invoices already created.
Example Account Postings:
o In a standard purchasing scenario, an A/P Invoice is raised for a base transaction value of INR 100 where
GST is INR 10:
Account Debit Credit
BP account 110
GST Input** account 10
Expense account 100
Note
**For Capital Goods that are on hold, set up is required in the fields Capital Goods on Hold Percentage and
Capital Goods on Hold Amount Limit on the General tab of Item Master Data. If on hold functionality is
used, then separate postings for "GST Input" and "GST Input on hold" will be made.
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GST Scenarios for A/P
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7.2 Purchasing Scenario for Goods or Services – Outgoing Payment First (Regular GST Tax)
A/P Invoices are needed for purchasing scenarios of goods and services where there is an outgoing payment first,
under regular GST tax.
When an A/P Down Payment has already been issued as part of a scenario, input tax credit cannot be
accepted until the related goods or services are received as well as the counter-party tax invoice.
An A/P Down Payment can be used for making advance payments to customers (for goods and services),
however GST input is not posted, and instead of it DPM Interim account will be posted on the A/P Down
Payment Invoice or outgoing payment
Example Account Postings:
1. An outgoing payment is made for INR 110:
Account Debit Credit
BP account 110
Bank account 110
2. An A/P Invoice is then raised, as part of a manual reconciliation process, where the base value of the
transaction is INR 100 and GST is INR 10.
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Account Debit Credit
BP account 110
GST Input account 10
Material / Expense account 100
7.3 Purchasing Scenario for Goods – Invoice First (Reverse Charge)
In a purchasing scenario for goods where there is an invoice first followed by a reverse charge, the reverse charge
can be for all or part of the original A/P Invoice.
Reverse charge means the liability to pay tax is on the recipient of goods or services; instead of liability being on
the supplier side. Reverse charge is applicable for both services as well as goods.
There are 2 main business cases for reverse charge scenario:
o Unregistered person selling to a registered person the (GST registered person pays GST).
o E-commerce related services (E-commerce operator supplying services is liable to pay GST).
Reverse Charge must be stated in the tax code of the A/P Invoice
Time of supply is the earlier of payment, or 30 days from the issue of the A/P Invoice
Example Account Postings:
1. A/P Invoice (tax code is reverse charge)
Account Debit Credit
BP account 100
GST Input account 10
GST Payable account 10
Expense account 100
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7.4 Purchasing Scenario for Service – Invoice First (Reverse Charge)
In a purchasing scenario where there is an invoice for services first followed by a reverse charge, there will first be
an A/P Invoice with an exempt tax code. If an outgoing payment is not completed within 60 days, then there will
be an A/P Invoice for tax only - reverse charge, followed by an Outgoing Payment.
Tax liability is at the time of payment or 60 days from the issue of A/P Invoice.
The same behavior is applied as for goods in section 6.3.
7.5 Purchasing Scenario for Goods or Services – Outgoing Payment First (Reverse Charge)
In a purchasing scenario where there is an A/P Down Payment request followed by an A/P Invoice, a reverse
charge can be for all or part of the original amount.
Step by step scenario
1. A/P Down Payment request is raised
2. Outgoing Payment is made
3. A/P Invoice
Example Account Postings:
1. A/P Down Payment request (for which there is no postings)
2. Outgoing Payment (100% reverse charge)
Account Debit Credit
Bank account 100
BP account 100
DPM Interim account 100
GST Payable account 10
GST Input Interim account 10
DPM Clearing account 100
3. A/P Invoice with fully linked DPM Request (100% reverse charge)
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Account Debit Credit
BP account 100
DPM Interim account 100
DPM Clearing account 100
GST Input account 10
GST Input Interim account -10
GST Payable account 10
GST Payable account 10
Raw Material account 100
7.6 Purchasing Scenario for Goods or Services (Credit Note) and Return
There are two possible options for a purchasing scenario where there is a credit note and return:
o When the Tax Code selected in the A/P Credit Memo is a Normal Tax Code
o When the Tax Code selected in the A/P Credit Memo is a Reverse Charge, the GST will be determined
based on the percentage of the reverse charge
Example Account Postings
o A/P Credit Memo, with regular tax code:
Account Debit Credit
BP account 110
GST Input account 10
Expense account 100
o A/P Credit Memo, with reverse charge 100%:
Account Debit Credit
BP account 100
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Account Debit Credit
GST Input account 10
GST Payable account 10
Raw Material account X*
Material - Purchase Price Account Y*
Remark:
* sum of X+Y is equal to 100 in above case
o A/P Credit Memo, with reverse charge 50% (supplier pays 50%, recipient pays 50%), tax rate is 8%:
Account Debit Credit
BP account 104
GST Input account 8
GST Payable account 4
Raw Material account X**
Material - Purchase Price Account Y**
Remark:
** sum of X+Y is equal to 100 in above case
7.7 Purchasing Scenario for Goods or Services (Debit Note) and Supplementary Invoices
In a purchasing scenario where there is a debit note for goods or services and a supplementary invoice, an A/P
Invoice will be required with the relevant GST amount.
In the A/P Invoice marketing document, Transaction Type debit memo type must be used.
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7.8 Purchasing Scenario for Goods or Services (Revised Invoice, DR and CR Memo)
In a purchasing scenario where there is a canceled A/P Invoice or A/P Credit Memo, the revised A/P Invoice or
revised A/P Credit Memo must have the Revised field selected and the original document reference number and
date provided.
This scenario is only to be used when canceling a document for a period that was already reported.
For a revision in the same reporting period, a simple cancellation and new invoice should be processed.
Canceled invoices within the same period are not reported.
Step by step scenario:
1. A/P Invoice #1 is created
2. A/P Invoice #1 is canceled
3. A/P Invoice #2 is created. The revision checkbox needs to be checked, the original invoice number #1 and
date must be referenced.
The same scenario as mentioned above is used for canceling credit memos (revision of credit memo).
Example Account Postings
o A/P Invoice #1 is created
Account Debit Credit
BP account 110
GST Input account 10
Expense account 100
o A/P Invoice #1 is canceled
Account Debit Credit
BP account 110
GST Input account 10
Expense account 100
o A/P Invoice #2 is created (revision)
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Account Debit Credit
BP account 110
GST Input account 10
Expense account 100
7.9 Purchasing Scenario for the Import of Goods
In purchasing scenarios, the import of goods is supported through several A/P Invoices with tax only or reverse
charges. A collecting and forwarding agent is required to act as an intermediary in import scenarios.
A/P Invoices require a business partner that is set up as a tax-exempt Goods Vendor.
An A/P Invoice is required for the collecting and forwarding agent, with only Basic Customs Duty (BCD) and a
service fee. The agent is then required to pay the relevant BCD and GST.
An A/P Invoice is required for just the tax of the relevant item with an IGST tax code. The import checkbox on
the A/P Invoice should only be selected for the GST input credit posting.
Step by step scenario:
Four steps need to be made for the scenario:
o An A/P Invoice (Bill of Supply) with the amount payable to the foreign vendor, no tax applicable.
o Landed cost is needed to post BCD to BCD clearing and to add inventory cost.
o An A/P Invoice for tax only (Bill of Entry) with IGST tax code and Supplier details for the foreign
vendor. This invoice is reported separately in GSTR-2 and must have reference to the Bill of Entry.
o An A/P invoice for BCD and services paid to the Clearing & Forwarding agency.
Further information regarding the scenario is available on the SAP Jam for GST, GST Solution Approach, slide 94.
Remark:
Import scenario may vary depending on your business processes. It is recommended to discuss the best fitting
scenario of import with your Partner/Consultant.
7.10 Purchasing Scenario for the Import of Services
In purchasing scenarios, the import of services is supported through A/P Invoices as a tax only, reverse charge.
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Further information regarding the scenario is available on the SAP Jam for GST, GST Solution Approach, slide
94.
7.11 Purchasing Scenario for Withholding Tax (WHT) for TDS GST (A/P Invoice and A/P DPM)
A GST Withholding Tax (GST TDS) scenario is a specific scenario where a government department or "Notified
Company" makes a payment to a supplier, or an e-commerce company makes a payment to a supplier.
TDS is to be deducted at a rate of 1% of payments made to the supplier of taxable goods and/or services, where
the total value of such supply, under an individual contract, exceeds INR 250,000.
As per GST law, the following people or entities need to deduct TDS:
A department or establishment of central or a state government.
A local authority.
A governmental agency.
Persons or category of persons, as may be notified by the central or a state Government on the
recommendations of the GST Council.
TDS must be paid within 10 days of the end of the month in which tax was deducted. The payment shall be made
to the appropriate government, meaning:
Central government in case of the IGST and CGST.
A state government in case of the SGST.
In purchasing scenarios, both direct and indirect Withholding Tax is supported on A/P Invoices and A/P Down
Payment Invoices.
For A/P Invoices, TDS / TCS GST will only be applicable when a government department or a notified
company is making a payment more than INR 100,000, or an e-commerce operator is making a payment to a
supplier.
A purchase order will be mandatory for the TDS GST number.
Further information regarding the scenario is available on the SAP Jam for GST, GST Solution Approach,
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8 Reporting
As part of GST, all supplier taxpayers are required to file GSTR (GST Reports). GST laws allow for reporting
through the GST web portal, the utility provided specially for returns, or a GST Suvidha Provider (GSP).
For example, supplier taxpayers need to report invoice level information on a HSN/SAC basis in the report GSTR-
1. GSTR-1 needs to be filed even if there is no business activity (a nil return) for the tax period.
For more information regarding reporting scope and details of GST reports see the GSTN portal.
Reporting in SAP Business One is supported via GEP files based on EFM (Electronic File Manager). The GEP
files will be soon delivered via SAP Note no. 2194689.
8.1 Reporting Summary:
o Registered taxable persons must submit, by the 10th day of the subsequent month, outward supply
details for the month in GSTR-1 to comply with GST laws.
o On the 11th day of a respective month, inward supply details are available to the recipient in the auto-
populated GSTR-2.
o The period between the 11th and 15th days of a month is dedicated to any required corrections (additions,
modifications or removals) which are made in the form GSTR-2A and submitted in GSTR-2 by 15th day of
the month.
o Corrections made by the company or recipient in GSTR-2 are available to suppliers in GSTR-1A.
o Suppliers are obliged to either accept or reject the changes or adjustments provided by the recipient.
GSTR-1 is then amended according to the corrections made by the supplier.
o On the 20th day of the month, the auto-populated return GSTR-3 is available for submission along with
payment. Following the due date of filing the GSTR-3 monthly return, inward supplies are reconciled with
outward supplies provided by suppliers.
o The final approval of ITC (input tax credit) is available in GST ITC 1.
o The following details are considered the matching principles of invoices:
o GSTIN of the supplier
o GSTIN of the recipient
o Invoice or debit note number
o Invoice or debit note date
o Taxable value
o Tax amount
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8.2 Reporting in SAP Business One:
The first reporting method available for GST is through generic data outputs that are accepted by GSPs:
o Generic data outputs are provided through standard EFM functionality by GEP files.
o GEP files will be delivered for PL08 in SAP Note 2194689.
o With GEP files you are able to generate standard CSV files through Excel export functionality.
o CSV output files contain all the necessary data to fulfill reporting requirements of individual reports such
as GSTR-1 and GSTR-2.
o CSV output files can be used by any registered third party service company licensed as a GSP
o GSPs enable taxpayers to comply with the requirements of GST laws through its web platform
o A large number of companies have been provided with GSP licenses. A complete list of GSPs is available
on the GSTN portal
The second reporting method available for GST is through the embedded reporting of required reports (planned
for PL09).
o Direct embedded reporting is planned for following patch cycles, details to follow.
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9 Migration
This section will help you update your databases after upgrading your SAP Business One to 9.2 PL08 or higher to
meet the requirements of the Good and Service Tax (GST) in India. The GST functionality was introduced in India
localization of SAP Business One to allow customers to conform to the legal and reporting requirements of the tax
authorities in India.
Following steps are describing details of step by step process you may need to perform to migrate your existing
data to be GST compliant. Please notice step are individual and depends on your current database and company
setup.
To migrate your newly upgraded SAP Business One databases into the GST regime in India, perform the following
steps:
1. Adjust States setup
2. Adjust Location setup
3. Adjust Business Partner Master Data
4. Adjust Item Master data
5. Adjust Warehouses
6. Adjust Tax Setup
7. Define Tax Code Determination
8. Define GST Withholding Tax (GST TDS and GST TCS)
9. Adjust Numbering Series and Sequences
10. Define G/L Accounts
11. Close your open documents created in previous tax regime
Note
For more details about the GST functionality, see How to Work with GST in the India Localization of SAP
Business One available as an attachment in SAP Note 2194689.
Details for individual migration steps below:
9.1 States
A new GST tax type Union Territory GST (UTGST) was introduced to distinguish the six union territories in India
(Chandigarh, Lakshadweep, Daman and Diu, Dadra and Nagar Haveli, Andaman and Nicobar Islands). As SAP
Business One 9.2 PL08 does not provide default values for the union territories, if this is relevant to your business,
in the States - Setup window (Main Menu → Administration → Setup → General → States), select the Is Union
Territory checkbox and define the union territories manually.
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Note
The e-Code and GST State Code values for the union territories are not yet available from the authorities.
9.2 Location
If you have previously defined locations (in the Locations - Setup window, on the GST tab), perform one of the
following depending on what type of business you will conduct:
9.2.1 100% GST (all your items, warehouses, and transactions will be GST relevant)
In the SAP Business One Main Menu, choose Administration → Setup → Inventory → Locations →
Accounting Data tab → GST tab and perform the following:
o Enter the GSTIN value.
o From the dropdown list, choose a value in the GST Type field related to your registration.
o If applicable, enter values in the GSTIN TDS and GSTIN ISD fields.
o In the Inventory Transfer Setting section, define settings for the job work process as follows:
In the Drop-Ship WH field, define the drop-ship warehouse for the same job work purpose.
Note
The Default Vendor and Default Customer fields are default business partners used for generating
GST tax invoice from inventory transfer documents (see details in section Job-Work).
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9.2.2 Partial GST Shift (you will be GST registered but your current excise tax regime will still be applicable)
o Create a new warehouse (Administration → Setup → Inventory → Warehouses → General) for your
GST related items.
o You can create a new location or maintain GST relevant information in already existing Location
(Administration → Setup → Inventory → Locations) for your GST related items.
o In the Locations - Setup window, on the Accounting Data tab → GST subtab, enter values in the GSTIN
and GST Type fields.
o Create an inventory transfer (Inventory → Transfer) for all items to be moved from excise warehouses
into GST warehouses.
Note
Ensure that each new warehouse is linked to its respective location.
9.3 Business Partner Master Data
For existing business partners that are registered for GST, perform the following:
1. In the Business Partner Master Data window, on the Addresses tab, in the Ship To section, define the
following information mandatory for reporting and correct document handling:
o GSTIN
o GST Type
2. If your business partner is an E-commerce seller, you can define the Merchant ID field.
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Migration Options:
To migrate item master data, choose one of the following options:
1. As all new fields are exposed through the DI API and Data Transfer Workbench (DTW), you can migrate
the data one batch run.
2. You can manually update the business partner master data using the UI API.
9.4 Item Master Data
You must update the item master data based on the existing GST classification. Approximately 90% of items
should be relevant for GST; the exact information should be specified online by the authority.
If you change an item from the excise regime to the GST regime, in the Item Master Data window (Inventory →
Item Master Data), on the General tab, perform the following:
1. Deselect the Excisable checkbox.
2. Select the GST checkbox and define the following fields:
o Material Type: select the material type depending on the type of GST item.
o HSN: specify the harmonized nomenclature number (you can use the Chapter ID value that exists for
the excisable item).
o Tax Category: select the tax category relevant to the item as defined by the tax authorities.
o Assessable Value: if relevant for the item, define the assessable value. Note that the calculation of the
assessable value remains the same as for the excisable item.
Migration Options:
To migrate item master data, choose one of the following options:
1. As all new fields are exposed, use the DTW to update the information in one batch.
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2. You can manually migrate the item master data using the UI API.
9.5 Warehouses
Depending on your preferences and business scenarios, you can either use existing warehouses or create new
ones.
If you have an inventory scenario for Job-work process, perform the following:
1. In the Warehouses - Setup window (Administration → Setup → Inventory → Warehouses), on the General
tab, perform the following:
o Select the External checkbox.
o Ensure that you have defined the State field.
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Note
You can find more details about job work in the Inventory Scenario for Job Work section of the how-to
guide.
9.6 Tax Codes - Setup
As new tax code rates are not available yet from the tax authority, default values will only be available for tax
types. You may enter tax codes manually depending on your business scenario.
Note
Please contact your local Partner to provide default values for tax setup and tax calculation.
Recommendation
Ensure you do not have tax types for GST with the same name created manually; if do you, please rename
them before the upgrade.
9.7 Tax Code Determination
While setting up the tax code determination is not mandatory for migrating to the GST regime, defining an
appropriate tax code determination rule can make documents handling and determining correct tax code easier
to manage.
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In the Tax Code Determination - Setup window, new key field options related to GST are available that allow you to
more precisely define tax code determination rules relevant to GST.
Note
You can find more details in the Tax Code Determination section of the How to guide
9.8 Withholding Tax (GST TDS)
This section describes withholding tax changes relevant for GST TDS (Tax Deducted at Source).
Note that there are currently no default values for withholding tax. If you need to define GST TDS tax codes for
your business scenario, perform it as you do for your current eTDS regime.
Perform the following:
o In the Withholding Tax window (Administration → Setup → Financials → Tax → Withholding Tax), a new
field TDS Type allows you to indicate whether the defined tax is relevant to the new or old tax regime.
From the dropdown list in the TDS Type field, select either the eTDS or GST TDS option.
o In the G/L Account Determination window (Administration → Setup → Financials → G/L Account
Determination), define the following three new accounts relevant for GST TDS deposit:
1. GST TDS Interest Acct
2. GST TDS Other Charges Acct
3. GST TDS Fee Acct
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Note
The calculation and document handling of withholding tax is very similar as that currently performed in
the application for eTDS. For more details, see the GST TDS section in How to guide
9.9 Numbering
With the introduction of GST, new subdocument types have been introduced for invoices and credit/debit
memos. The subdocument types are as follows:
o Bill of Supply (for invoicing under the previous tax regimes and for excise purposes)
o GST Tax Invoice (tax invoice created for GST related transactions)
o GST Debit Memo
o GST Credit Memo
Note
Existing documents from the previous tax regime will be upgraded as a bill of supply document.
The subdocument types require different numbering series for each document type.
In the Document Numbering - Setup window (Administration → System Initialization → Document Numbering), set
up a separate numbering series for each location and assign a default for each user.
9.10 G/L Accounts
The payment in advance process in SAP Business One is relevant to the A/P down payment request scenario.
You need to define the following accounts:
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1. Input interim account (Administration → Setup → Financials → G/L Account Determination → G/L
Account Determination → Purchasing tab: Tax subtab) to be used for goods under the reverse charge
regime. The account uses a deferred principle for outgoing payments. The posting mechanisms functions
as follows:
1. The GST payable is posted.
2. The GST input is added to the interim account.
3. When the GST tax invoice is created, the accounts are cleared accordingly.
2. Capital goods on hold account (Administration → Setup → Inventory Locations → Accounting Data tab:
General subtab) if you are using capital goods in your company.
9.11 Migration cases - Open documents
Note
Ensure you close all open transactions existing in your system.
The following table provides a summary of possible combinations of relevant properties in the current setup and
corresponding migration solutions:
No. Current Setup: Migration Solution:
Field: Item Type Warehouse Location Tax Code Item Warehouse Location
1
Non-
excisable
Non-
excisable
Non-GST VAT Keep as
non-
excisable
Keep as Non-
excisable
Change to
GST
Current
Transaction
Remark:
No action to be taken; behavior is the same as before.
New
Transaction
Remark:
No action to be taken; behavior is same as before.
Field: Item Type Warehouse Location Tax Code Item Warehouse Location
2
Non-
excisable
Non-
excisable
Non-GST VAT Change to
GST
Keep as non-
excisable
Change to
GST
Current
Transaction
Remark:
We recommend that you close all open sales orders and create new ones for GST tax. If you
want to apply a new GST tax code, you need to remove the item from the sales order and
add it again. If you want to copy a sales order to an upper document, you can change the tax
code in the target document to GST and proceed with GST process. If you already copied
several lines to an upper document, it is not possible to remove lines from the sales order. In
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this case, you can only change the tax code in the target document.
For returns or credit memos, we recommend that you create a standalone return or credit
memo to handle them according to GST tax.
New
Transaction
Remark:
You can use the items for new transaction using the GST tax code. No action necessary.
Field: Item Type Warehouse Location Tax Code Item Warehouse Location
3
Excisable Non-
excisable
Non-GST VAT Keep as
Excisable
Keep as non-
excisable
Change to
GST
Current
Transaction
Remark:
As described in Case 1.
New
Transaction
Remark:
As described in Case 1.
Field: Item Type Warehouse Location Tax Code Item Warehouse Location
4
Excisable Non-
excisable
Non-GST VAT Change to
GST
Keep as non-
excisable
Change to
GST
Current
Transaction
Remark:
Same as described in Case 2.
New
Transaction
Remark:
Same as described in Case 2.
Field: Item Type Warehouse Location Tax Code Item Warehouse Location
5
Excisable Excisable Non-GST CENVAT Perform the following:
1. Create a new excisable
warehouse and link it to an
existing location.
2. Transfer the excisable item
to a new warehouse.
3. Change the old warehouse
to a non-excisable
warehouse.
Change to
GST
Current
Transaction
Remark:
Since all inventory is moved to a new warehouse, we recommend to close all open
transactions before this migration.
New
Transaction
Remark:
All new transaction should be performed within the new warehouse following the old
behavior (non-excisable items cannot be stored in an excisable warehouse).
Field: Item Type Warehouse Location Tax Code Item Warehouse Location
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6
Excisable Excisable Non-GST CENVAT Change to
GST
Change to
non-excisable
warehouse
Change to
GST
Current
Transaction
Remark:
Same as described in Case 2.
New
Transaction
Remark:
All new transaction should be performed within the old warehouse following the new GST
behavior.
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Sections and updates coming soon…
10 Sections and updates coming soon…
o ISD - relevant for PL08 HotFix
o Reporting - relevant for PL08 HotFix (delivered as a GEP files via SAP Note)
o Job-Work scenario
www.sap.com/contactsap
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