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In India, under the Goods and Services Tax (GST) regime, you need to create a self-invoice for all the goods and services procured from an unregistered vendor. In India, under the Goods and Services Tax (GST) regime, you need to create a self-invoice for all the goods and services procured from an unregistered vendor.

This is handled through the Evaluated Receipt Settlements (ERS) invoice. You create an ERS invoice with relevant Reverse Charge Mechanism (RCM) tax codes. For these documents, an Official Document Number (ODN) is generated, based on the GST registration number and the annual year.

Note: Before creating the document numbering rules for self-invoices, all existing ERS invoices should be posted. This will avoid mismatch in the document numbering format.

Prerequisites: The below Prerequisites have to be maintained in your system to determine the right document numbering format.

A. Define Tax Registration Number under Tax Management work center. 

Go to Tax Management work center.

Go to Tax Authorities view

Go to Company Tax Arrangements

You have maintained the GST Identification Number of the company.

 

B. Define Document numbering format for supplier invoice

Go to Business Configuration work center

Go to Fine Tuning activity

Select the Activity – Document Numbering Formats for Supplier Invoicing

Select Indian Company code & assign a unique Prefix value against the Tax Registration Number.

Note: The below screen shots are taken from the Internal system for the reference.

C. Configure Supplier Master Data 

Go to Supplier Base work center

Go to Suppliers view

Make sure business partner is Unregistered Vendor while creating supplier invoices meaning, supplier master tax data should not contain the GST number.

D. Configure Deferred Taxes in Business Configuration work center. 

Go to Business Configuration work center

Go to Implementation Projects view

Go to Fine Tune tab

Select the activity Charts of Accounts, Financial Reporting Structures, Account Determination

Select Account Determination and Tax

Find Charts of accounts for India

Select Input Tax tab

Select Country India

Define Tax Type with Deferred Input Tax.

Self-Invoice creation procedure:  

Go to Supplier Invoicing work center.

Common Tasks.

Create New Manual ERS Invoice for Indian Company and Unregistered Vendor.

Select the Product details and make sure that, Tax Code selected is associated with the GST RCM tax codes.

86 Import of Service (Reverse Charge – IGST)

89 Domestic Purchase Interstate (IGST) – Reverse Charge

Domestic Purchase Interstate (CGST & SGST) Reverse Charge

Domestic Purchase UT (CGST & UTGST) – Reverse Charge

As you see below, system has selected the Check Box for – Tax Payment Deferred.

Check the consistency of ERS Invoice

Go to Actions

Simulate Journal Entry

Now system hits the ERS Invoice to deferred GL account as below.

(70004043 – State GST Deferred + 70004041 – Central GST Deferred)

Save and Post the ERS invoice.

System creates the self-invoice and generates an ODN that adheres to the rules maintained in the business configuration.

Note: When you copy a self-invoice, the document numbering rules will not be applicable, as this invoice is treated as a supplier invoice.

End of the documentation.

 

Best Regards,

Arun ML

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