Indian GST implementation for simple procurement using TAXINN

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

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.

Configuration Steps:

Steps	T-Code
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

1. Assign Tax Procedure to Country

2. Define Tax Access Sequence

T-code: OBQ2

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.

3. 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	IGST	IN: IGST Rev. Charge
IGST	JIMD	IN: Import GST deduct
IGST	JIMN	IN: Import GST – ND

ND- non-deductible

4. Create Account Keys

T-code: OBCN

Create new Account keys for all conditions who need to be assigned individual GLs

Non-deductible conditions can be assigned to standard key NVV

5. Define Tax procedure

T-code: OBQ3

Append your GST condition types to TAXINN tax procedure as shown below:

6. Assign GL to account keys & GL

T-code: OB40

Assign GLs to transaction key at chart accounts level. Separate GLs can be assigned for each Tax code.

7. Create Tax Codes in Country IN 

T-code: FTXP

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

8. Maintain Tax Codes for Excise Duties Using Condition Technique

T-code: SM30

table: J_1ICONDTAX

This is an important step as we are using TAXINN tax procedure. If this is not maintained tax code does not work in PO.

9. Maintain Tax Condition Records

T-code: FV11

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.