All of us are aware that effective 1st April 2017, Goods and Services Tax (GST) will be applicable in India. Tax payers need to be GST compliant to be able to test IT system changes on time. SAP India is ready with GST related changes in the software. However there are certain prerequisites to meet before GST changes can be done in SAP system. In order to prepare for the implementation of GST, several companies are moving forward to understand GST policy and its implications on the business processes.
The GST has been categorized into State GST(SGST), Central GST (CGST) and Integrated GST (IGST). It is proposed that GST will be levied concurrently by the Centre (CGST) and the states (SGST). Both CGST and SGST would be levied on the basis of the destination principle. Inter-state Goods and Supplies within India would attract an Integrated GST (aggregate of CGST and the SGST of the destination State). Although under due deliberation, it has been proposed to levy an additional tax of up to 1% by the Centre, the revenue of which will be assigned to origin states.
India’s current tax scenario is riddled with various indirect taxes which the GST aims to subsume with a single pan India comprehensive tax, by bringing all such taxes under a single umbrella. GST thus reduces the cascading effect of tax in different stages of production and consumption. The Government will introduce eight forms namely GSTR-1 to GSTR-8 that will be required to file the GST Tax returns in India. After excluding exception GST returns like GSTR-5 (Return file by the Non Resident Indian) and GSTR-6 (Return for Input Service Distributor) which are specific in nature and to be filed as applicable, there will be approximately 61 returns per year with a minimum of 5 GST returns per month.
Our Indirect Taxation team has got expertise in GST and can provide consultancy in Business as well as Legal areas. They have come out with a phased wise approach namely :
- Review of Operations (‘AS IS’ Analysis)
- Mapping of Model GST Laws
- Detailed Analysis of finalized GST Laws
- Implementation of GST (including SAP System and Training)
- Advisory and Compliance Support
This will be achieved by active stakeholder involvement and total commitment by all contributing parties to meet the deadlines set by the Government of India.
GST related changes done by SAP are based on TAXINN concept of tax determination. If TAXINJ concept of tax determination is still being used, it is time now to migrate the SAP system from TAXINJ to TAXINN. Apart from this, it also includes activities namely :
- Impact Analysis and preparation on affected scenarios mostly around Sales and Purchase and its appropriate linkages with Finance
- System configuration of the impacted SAP modules
- Preparation of use cases and test scenarios
- Master data changes, correction in existing ABAP objects and conversion of open transactions to new concept.
The configuration steps for implementation and activation will be provided by SAP and we need to abide by them.
We are keeping abreast with the GST updates in various media and are constantly upgrading ourselves for providing robust yet flexible consultancy to address the needs of our customers.
For any queries related to GST, kindly email us at firstname.lastname@example.org. We would consider it as a privilege to respond to your queries.
Vishal is lead Technology Consultant and founder member of Ranadive Consultancy Services Pvt. Ltd. He is carrying Engineering degree in Electronics & Telecommunication Engineering from University of Pune. He is a multifaceted professional with core competencies in Computational techniques, ERP & Business Consultancy. With more than 14 years of experience in his field