India Localization Services
SAP Technology Support
e-Invoicing
SAP S/4HANA AND ECC
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TAX COLLECTION AT SOURCE
SAP S/4HANA AND ECC
Digital Transformation of Tax
TCS Applicability
Steps to Comply with Tax laws
FAQ
GOODS AND SERVICE TAX
SAP S/4HANA AND ECC
An indirect tax charged on the supply of goods and services, right from the manufacturer or service
provider to the consumer
In accordance with the indirect tax reforms introduced by the Government of India, all business
operating in the country will adhere to the Goods and Services Tax (GST) act of 2016, effective from
July 01, 2017.
Goods and Services Tax (GST) is an indirect tax charged on the supply of goods and services, right from
the manufacturer or service provider to the consumer. Credits of input taxes paid at each stage is
available in the subsequent stage of value addition. Thus, the final consumer will only bear the tax
charged by the last dealer in the supply chain, with set-off benefits at all previous stages.
Goods and Services Tax (GST) is an indirect tax throughout India to replace existing multiple taxes levied by the central and state governments.
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 (Intra State) | Excise/ No Excise | No Tax |
| Inward branch transfer (Inter State) | 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 |
GST
RATE %
BANDS*
RATE %
BANDS*
| CGST | SGST | IGST | UGST |
|---|---|---|---|
| 2.5 | 6 | 9 | 14 |
| 2.5 | 6 | 9 | 14 |
| 5 | 12 | 18 | 28 |
| * | * | * | * |
*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.
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.
- Steps
- Assign Tax Procedure to Country
- Define Tax Access Sequence
- Define Condition Types(Tax)
- Create account keys
- Define Tax procedure
- Assign GL to account keys & GL
- Create Tax code in Country
- Maintain Tax Codes for Excise Duties Using Condition Technique
- Maintain Tax Condition Records