A solution for Indian GST implementation for simple procurement scenario using TAXINN
This is an attempt to incorporate the tax reformation in India- GST via a simple SAP solution using the existing provisions in ECC 6.0 EHP 6.
Applicable GST rates are determined by the combination Nature of Purchase and Harmonized System of Nomenclature (HSN) code assigned to material.
|CGST||Central Goods and Service Tax|
|SGST||State Goods and Service Tax|
|IGST||Integrated Goods and Service Tax|
|Nature of Purchase||Before GST||After GST|
|Goods Purchase within State||Excise + VAT||CGST + SGST|
|Goods Purchase inter State||Excise + CST||IGST|
|Import Purchase||BCD, CVD, AED, CESS, ECESS||IGST|
|Inward branch transfer
|Excise/ No Excise||No Tax|
|Inward branch transfer
|Excise/ No Excise||IGST|
|Job work expense||No tax, only VAT in case
of Painting contract
|CGST + SGST|
|Service expense||Service Tax||CSGT + SGST/ IGST|
|*Mapped to Material HSN
(Harmonized System Nomenclature)
|Single registration per PAN and state of business for CGST, SGST and IGST|
The scenario considered is a simple Procure to Pay cycle where Quotations received from the Vendor determine the Taxes applicable.
For complex Supply Chain scenarios where multiple goods movements, subcontracting, consignment, etc. are involved, this might not be an efficient solution for GST implementation. SAP recommended Notes and Patches should be followed in this case.
|Assign Tax Procedure to Country||OBBG|
|Define Tax Access Sequence||OBQ2/OBYZ|
|Define Condition Types(Tax)||OBQ1/OBYZ|
|Create account keys||OBCN|
|Define Tax procedure||OBQ3/OBYZ|
|Assign GL to account keys & GL||OB40|
|Create Tax code in Country||FTXP|
|Maintain Tax Codes for Excise Duties Using Condition Technique||SM30 – J_1ICONDTAX|
|Maintain Tax Condition Records||FV11|
- Assign Tax Procedure to Country
- Define Tax Access Sequence
Copy Access sequence JTAX and create new sequence ZGST.
Include table 03 for condition value determination based on Country and Tax code.
Non-deductible tax percentages will be determined based the last table in access.
- Define Condition Types(Tax)
T-code: OBQ1 or OBYZ
Based on the available information the below listed GST related condition types are created:
|Tax type||Condition Type||Description|
|CGST||JICG||IN: Central GST|
|SGST||JISG||IN: State GST|
|IGST||JIIG||IN: Integrated GST|
|UGST||JIUG||IN: UnionTer. GST|
|CGST||JICN||IN: Central GST – ND|
|SGST||JISN||IN: State GST – ND|
|IGST||JIIN||IN: Integrated GST – ND|
|UGST||JIUN||IN: UnionTer. GST – ND|
|CGST||JICR||IN: CGST Rev. Charge|
|SGST||JISR||IN: SGST Rev. Charge|
|IGST||JIIR||IN: IGST Rev. Charge|
|IGST||JIMD||IN: Import GST deduct|
|IGST||JIMN||IN: Import GST – ND|
- Create Account Keys
Create new Account keys for all conditions who need to be assigned individual GLs
Non-deductible conditions can be assigned to standard key NVV
- Define Tax procedure
Append your GST condition types to TAXINN tax procedure as shown below;
- Assign GL to account keys & GL
Assign GLs to transaction key at chart accounts level. Separate GLs can be assigned for each Tax code.
- Create Tax Codes in Country IN
Create tax codes in Country India
Tax codes are required to be captured in a TR separately;
FTXP-Tax Code-Transport-Export and save in TR
- Maintain Tax Codes for Excise Duties Using Condition Technique
This is an important step as we are using TAXINN tax procedure. If this is not maintained tax code does not work in PO.
- Maintain Tax Condition Records
Complete this master data activity and maintain the required tax percentages according to you access sequence/key combination for them to be determined in PO.
The below message may appear while maintaining Condition Record;
Tax ID G2 cannot be checked (there are several/no tax records)
Message no. VK242
This is because we did not maintain any Tax Percent. Rate in FTXP. This will not affect tax determination in PO.