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How-To Guide

SAP Business One 9.2 Patch Level 8 and Higher

Document Version: 2.0 – 2017-06-05

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How to Work with GST in the India Localization of SAP Business One

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© 2017 SAP SE or an SAP affiliate company. All rights reserved.


Typographic Conventions

Typographic Conventions

Type Style Description

Example Words or characters quoted from the screen. These include field names, screen titles,

pushbuttons labels, menu names, menu paths, and menu options.

Textual cross-references to other documents.

Example Emphasized words or expressions.

EXAMPLE Technical names of system objects. These include report names, program names,

transaction codes, table names, and key concepts of a programming language when they

are surrounded by body text, for example, SELECT and INCLUDE.

Example Output on the screen. This includes file and directory names and their paths, messages,

names of variables and parameters, source text, and names of installation, upgrade and

database tools.

Example Exact user entry. These are words or characters that you enter in the system exactly as

they appear in the documentation.

<Example> Variable user entry. Angle brackets indicate that you replace these words and characters

with appropriate entries to make entries in the system.

EXAMPLE Keys on the keyboard, for example, F2 or ENTER .


Document History

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© 2017 SAP SE or an SAP affiliate company. All rights reserved. 3

Document History

Version Date Change

1.0 2017-03-11 Document Created for SAP Business One v9.2 PL07

2.0 2017-06-05 Document Updated for SAP Business One v9.2 PL08

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Contents

Contents

1 Introduction ................................................................................................................................... 6

2 GST Changes Schedule ................................................................................................................ 7

3 Settings .......................................................................................................................................... 8 3.1 States ............................................................................................................................................... 8 3.2 Locations ......................................................................................................................................... 9 3.3 Business Partner Master Data ...................................................................................................... 10 3.4 Item Master Data ............................................................................................................................12 3.5 Freight ............................................................................................................................................ 13 3.6 Warehouses ................................................................................................................................... 14 3.7 Tax Types........................................................................................................................................15 3.8 Tax Formula ................................................................................................................................... 16 3.9 Tax Code Determination ................................................................................................................17 3.10 Withholding Tax (GST TDS) ...........................................................................................................17 3.11 Document Numbering ....................................................................................................................21

4 Marketing Documents for A/R .................................................................................................. 23 4.1 A/R Invoices – Sales ..................................................................................................................... 23 4.2 A/R Invoices, Attributes and Scenarios: .................................................................................... 25 4.3 A/R Credit Memos......................................................................................................................... 27 4.4 A/R Down Payment Requests ....................................................................................................... 28 4.5 Inventory Transfers ....................................................................................................................... 29

5 GST Scenarios for A/R .............................................................................................................. 30 5.1 Sales Scenario for Goods or Services – Nil Rated & Regular ................................................... 30 5.2 Sales Scenario for Goods or Services – Composition Levy, Exempt or Non-GST .................. 30 5.3 Sales Scenario for Goods or Services – Exports ....................................................................... 31 5.4 Sales Scenario for Goods or Services – Advance Payments.................................................... 31 5.5 Sales Scenario for Goods or Services – Reverse Charges ....................................................... 33 5.6 Sales Scenario for Debit Memos ................................................................................................. 34 5.7 Sales Scenario for Credit Memo and Sales Return ................................................................... 35 5.8 Sales Scenario for Revising Invoices .......................................................................................... 36 5.9 Inventory Scenario for Self-Supplies (Incl. Consignment) ....................................................... 37 5.10 Inventory Scenario for Job Work ................................................................................................ 40

6 Marketing Documents for A/P .................................................................................................. 41 6.1 A/P Invoice – Purchases ............................................................................................................. 41 6.2 A/P Invoices, Attributes and Scenarios: .................................................................................... 43 6.3 A/P Credit Memos ....................................................................................................................... 44

7 GST Scenarios for A/P .............................................................................................................. 46 7.1 Purchasing Scenario for Goods or Services – Invoice First (Regular Tax) ............................. 46 7.2 Purchasing Scenario for Goods or Services – Outgoing Payment First (Regular GST Tax).. 47


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7.3 Purchasing Scenario for Goods – Invoice First (Reverse Charge) ........................................... 48 7.4 Purchasing Scenario for Service – Invoice First (Reverse Charge) ......................................... 49 7.5 Purchasing Scenario for Goods or Services – Outgoing Payment First (Reverse Charge) ... 49 7.6 Purchasing Scenario for Goods or Services (Credit Note) and Return ...................................50 7.7 Purchasing Scenario for Goods or Services (Debit Note) and Supplementary Invoices ....... 51 7.8 Purchasing Scenario for Goods or Services (Revised Invoice, DR and CR Memo) ................. 52 7.9 Purchasing Scenario for the Import of Goods ........................................................................... 53 7.10 Purchasing Scenario for the Import of Services........................................................................ 53 7.11 Purchasing Scenario for Withholding Tax (WHT) for TDS GST (A/P Invoice and A/P DPM)54

8 Reporting....................................................................................................................................... 55 8.1 Reporting Summary: .................................................................................................................... 55 8.2 Reporting in SAP Business One:.................................................................................................... 56

9 Migration ....................................................................................................................................... 57 9.1 States ............................................................................................................................................ 57 9.2 Location......................................................................................................................................... 58 9.3 Business Partner Master Data .................................................................................................... 59 9.4 Item Master Data ......................................................................................................................... 60 9.5 Warehouses .................................................................................................................................. 61 9.6 Tax Codes - Setup ........................................................................................................................ 62 9.7 Tax Code Determination .............................................................................................................. 62 9.8 Withholding Tax (GST TDS) ........................................................................................................ 63 9.9 Numbering .................................................................................................................................... 64 9.10 G/L Accounts................................................................................................................................ 64 9.11 Migration cases - Open documents ............................................................................................ 65

10 Sections and updates coming soon… ........................................................................................ 68

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Introduction

1 Introduction

This how-to guide will help you to work with Goods and Service Tax (GST) in the India localization of SAP Business

One.

GST is a new way of handling indirect taxation in India. GST replaces some existing tax regimes providing benefits

such as:

Reduced tax complexity

A simplified taxation system with fewer variables

Greater tax transparency

A reduced administrative burden

Unified taxation for the country and individual states

Economic and employment benefits

GST will lead to changes in existing functionality that affects SAP Business One Customers in India. SAP Business

One provides solutions to customers through patch deployment to meet the requirements of GST, the relevant

versions and or patches will be needed to take advantage of GST functionality. The GST solutions provided in SAP

Business One are described and explained in this guide.


GST Changes Schedule

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2 GST Changes Schedule

The changes being made in SAP Business One for GST are being released in different patches.

The following changes will apply in SAP Business One version 9.2 Patch Level 07:

Master data information will be expanded to include information about GST in the following areas:

o States

o Locations

o Business Partner Master Data

o Item Master Data

o Warehouses

o Tax Code Determination

o GST TDS Setup (Withholding Tax)

o Document Numbering

The following procedures will change in SAP Business One version 9.2 Patch Level 08 to allow for and include

information about GST:

o Reverse charges

o Down Payment (DPM) scenarios for Advance Payments

o GST TDS and GST TCS (Withholding Tax Setup, Outgoing Payment/Deposit handling)

o Freight

o Union territories and CESS

o Tax Types update (removal of SINCess and addion of UTGST and CESS)

o Tax codes setup (for removal)

o Marketing document handling (Reverse Charge, A/R and A/P specific uses cases)

o Migration process description

o Reporting

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Settings

3 Settings

Settings in SAP Business One allow GST functionality to operate and conform to the legal and reporting

requirements of the tax authorities in India.

3.1 States

As GST requirements are different depending on which states of India are involved, the states need to be clearly

defined in SAP Business One. The state codes are specifically required for the reporting of Place of Supply in

various GST reports.

You must ensure that the required GST State Codes are entered into SAP Business One for GST, and related

reporting, to function properly. GST State Codes are represented by two-digit numeric values.

The States - Setup screen can be accessed by following the path Main Menu → Modules tab → Administration →

Setup → General → States in SAP Business One.

The field Union Territory (UT) is used to identify if the location in States - Setup is relevant for UTGST. Currently,

UTGST is applied to the following union territories of India: Andaman and Nicobar Islands, Chandigarh, Daman

and Diu, Dadra and Nagar Haveli and Lakshadweep.

Note

The GST State Codes used for states are different to the eCodes used for states in the eTDS process.


Settings

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3.2 Locations

Locations contain key information related to GST which needs to be defined in SAP Business One. Without the

correct location information, GST functionality will not work properly. Locations can be applied, for example, to

Warehouses. The required fields on the Locations - Setup screen GST tab are as follows:

o GSTIN – a unique GST identification number applicable to a Location and provided by the GST Authorities

for a company during the registration process. Consists of 15 characters.

o GST Type – a GST categorization as specified by the GST authorities. There are 6 defined GST Types:

1. Casual Taxable Person

2. Composition Levy

3. Government Department or PSU

4. Non-Resident Taxable Person

5. Regular/TDS/ISD

6. UN Agency or Embassy

o GSTIN TDS – a unique GST identification number applicable to a Location when an entity or company is

registered for TDS (Tax Deducted at Source).

o GSTIN ISD – a unique GST identification number applicable to a Location when an entity or company is

registered for ISD (Internal Supply Distribution).

o Default Vendor – a "related/dummy vendor" required for 'Self-Supply' scenarios where an Inventory

Transfer document can be copied into an A/R Tax Invoice or an A/P Tax Invoice (tax only).

o Default Customer – a "related/dummy customer" required for 'Self-Supply' scenarios where an Inventory

Transfer document can be copied into an A/R Tax Invoice or an A/P Tax Invoice (tax only).

o Drop Ship WH – required for 'Self-Supply' scenarios, a drop-ship warehouse must be defined for each

location to fulfill job-work scenarios.

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Settings

Note

From a GST perspective, job-work scenarios are treated as supply scenarios. Special provision exists

under GST law where a registered person may send inputs and/or capital goods, without payment of tax,

to a job worker for job work and from there subsequently to another job worker. Job-workers and

principals can be located in the same state or in the same union territory, or in different states and union

territories.

You must manually enter the required, correct Location GST information into SAP Business One for GST to

function properly.

The Locations - Setup screen can be accessed by following the path Main Menu → Modules tab → Administration

→ Setup → Inventory → Locations → Accounting Data tab → GST tab in SAP Business One.

The field Capital Goods on Hold Account appears on the General subtab of General tab on the Locations - Setup

screen. The field is used for defining both capital goods on hold accounts for excise, and GST related Item MD

where the material type is defined as capital goods.

3.3 Business Partner Master Data

Different Business Partners (BPs) are dealt with differently under GST depending on their GST settings. A BP may

have several ship to addresses that each need different GST information. A BP may not have any GST information

at all, depending on their classification.

3.3.1 Business Partner Master Data - Addresses

The following fields on the Addresses tab of the Business Partner Master Data screen are important when GST is

being considered:


Settings

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o State – as GST is based on a destination principle (the state location), this is key to determining the

correct GST treatment.

o GSTIN – a unique GST identification number applicable to a Ship to Address and provided by the GST

authorities. Consists of 15 characters.

o GST Type – a GST categorization as specified by the GST authorities.

o E-Commerce Merchant ID – to generate a BP identifier for e-commerce selling purposes.

You must manually enter the required GST information into SAP Business One for GST and related reporting to

function properly.

In SAP Business One, the Business Partner Master Data screen can be accessed by following the path Main Menu

→ Modules tab → Business Partners → Business Partner Master Data. Both the Addresses tab and Accounting tab

→ Tax tab are found on the Business Partner Master Data screen.

3.3.2 Business Partner Master Data - Accounting

The Subject to GST Withholding Tax checkbox on the Accounting tab → Tax tab of the Business Partner Master

Data screen must be selected when GST and withholding tax are being considered for a BP.

o Subject to GST Withholding Tax – checkbox

o Define which withholding tax codes, including GST TDS (GST Withholding tax), apply on the WTax Codes

Allowed screen

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Settings

3.4 Item Master Data

Different Items are dealt with differently under GST depending on their GST settings. An item must be marked as

GST relevant to consider it for GST treatment. An item can be classified differently under Material Type and Tax

Category leading to different GST treatment. The following fields on the Item Master Data screen, General tab are

important when GST is being considered:

o GST – checkbox to consider the item for GST.

o Material Type – options are Raw Material, Capital Goods or Finished Goods.

o HSN – "Harmonized System of Nomenclature", a unique product coding system defined by the

authorities. Very similar in nature to Chapter ID that is used for excise tax.

o Tax Category – options are Regular, Nil Rated or Exempt depending on how the tax authorities regard the

item, this selection drives GST treatment logic.

o Capital Goods on Hold Percentage.

o Capital Goods on Hold Amount Limit.

o Assessable Value.

o SAC – "Service Accounting Code" only applicable to Service type items. A default list of SAC Codes is

available.

You must manually enter the required GST information into SAP Business One for GST and related reporting to

function properly.

In SAP Business One, the Item Master Data screen can be accessed by following the path Main Menu → Modules

tab → Inventory → Item Master Data.


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3.5 Freight

For GST, Freight - Setup and related areas are configured as follows:

o The field SAC is available on the Freight - Setup screen. SAC information is mandatory for GSTR

reporting and therefore an SAC is mandatory information for freight on a document. Freight and

additional expenses, for which GST is applicable, will be shown as a separate line items on documents

for reporting purposes.

o At the document level, GST relevant tax codes are enabled for direct selection on the document, both in

the line and header sections.

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Settings

3.6 Warehouses

If a Warehouse is set up as external, then it can be used in subcontracting (job-work) scenarios. The following field

on the Warehouses - Setup screen, General tab is important when GST is being considered:

o External – checkbox

The Warehouses - Setup screen can be accessed by following the path Main Menu → Modules tab →

Administration → Setup → Inventory → Warehouses → General tab in SAP Business One.


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3.7 Tax Types

Specific Tax Types are available to handle GST as defined by the authorities. The following tax types on the Tax

Types - Setup screen specifically relate to GST:

o SYS_CGST – central goods and services tax.

o SYS_IGST – integrated goods and services tax.

o SYS_SGST – state goods and services tax.

o SYS_CessGST – an additional goods and services tax.

o SYS_UTGST (Union Territory) – union territory goods and services tax.

Default tax type name is changed IN PL08 in order to avoid upgrade conflicts with user defined types.

By selecting the Attribute Values option for a Tax Type, you can enter a value into the Reverse Charge % field to

determine how reverse charging is handled, especially in relation to A/P marketing document journal entries.

In SAP Business One, the Tax Types - Setup screen can be accessed by following the path Main Menu → Modules

tab → Administration → Setup → Financials → Tax → Tax Types.

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Settings

Note

The background formulas for calculating the different tax types can be setup through the Tax Formula -

Setup screen. No default values are to be delivered as part of 9.2 PL08 due to a lack of clarity on tax rates

from the GST Committee. It is recommended to setup tax codes according to your business needs

related to intrastate and interstate transactions.

3.8 Tax Formula

To access the Tax Formula - Setup screen follow the path Main Menu → Modules tab → Administration → Setup →

Financials → Tax → Tax Engine Configuration → Tax Formula). An example setup for CGST's tax formula follows:


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3.9 Tax Code Determination

To manage GST, four Key Fields are available in the Tax Code Determination - Setup screen.

Additional GST related Key Field options are available for selection:

o UDF – User Defined Field

o State From

o State To

o BP Country

o Item Tax Category

o GST Type

The Tax Code Determination - Setup screen can be accessed by following the path Main Menu → Modules tab →

Administration → Setup → Financials → Tax → Tax Code Determination.

3.10 Withholding Tax (GST TDS)

For GST TDS (Tax Deducted at Source) and GST TCS (Tax Collected at Source) to function properly settings need

to be made in multiple areas of SAP Business One.

The section below describes changes you need to make for TDS and TCS. Following areas are enhanced:

1. Withholding Tax - Setup

2. Business Partner Master data

3. GST TDS and GST TCS Deposit (Outgoing Payment)

4. G/L Account Determination

5. Generic behavior

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Settings

3.10.1 Withholding Tax - Setup

o The field TDS Type defines if the withholding tax is relevant for the legacy eTDS regime, GST TDS regime,

or GST TCS regime. The default values for TDS Type are:

o eTDS (current tax regime)

o GST TDS

o GST TCS

o For GST TDS and GST TCS a new account setup must be defined:

o A/P IGST account

o A/P SGST account

o A/P CGST account

o A/P UTGST account

o A/P CESS account

o A/R IGST account

o A/R SGST account

o A/R CGST account

o A/R UTGST account

o A/R CESS account


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o The definition of multiple tax rates is possible; options are available via Form settings functionality.

o All other accounts relevant for eTDS only are disabled in case you choose the GST TDS or GST TCS

option.

3.10.2 Withholding Tax - Business Partner MD

o Both GST TDS and GST TCS tax codes must be enabled per WTax Codes Allowed under Accounting - Tax

tab of Business Partner MD

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Settings

3.10.3 GST TDS/ GST TCS Outgoing payment (Deposit)

o The field Location is available to determine the location for which a deposit payment will be made

o Both TDS and TCS are enabled as per new TDS Type field

3.10.4 TDS/TCS under G/L Account Determination

New G/L accounts defined for TDS/TCS under G/L Account Determination

o GST TDS/TCS Interest

o GST TDS/TCS Other Charges

o GST TDS/TCS Fee

TDS Interest, TDS Other Charges and TDS Fee (Late Filing) fields have the same behavior as currently for eTDS

functionality, however they have a new definition under G/L Account Determination - General tab


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3.10.5 General behavior:

o Mixed usage of invoice and payment category withholding tax is supported in document

o Both categories WTax in AP/AR invoice, and AP/AR down payment invoice are supported

o GST TDS/TCS - payment category is supported in AP Invoice and AP DPM Invoice

o eTDS - invoice category and GST TDS/TCS - invoice category is supported in AP Invoice

o eTDS - invoice category and GST TDS/TCS - payment category is supported in AP Invoice

o Per current behavior, it is not allowed to not allow mix usage of different category in one document. One

invoice must have the same, either invoice or payment category

o Behavior of TDS Interest, TDS Other Charges and TDS Fee (late Filling) fields remains the same as per

logic, however new G/L accounts are created for this purpose in G/L account determination, General tab

o The behavior for the new GST TDS and GST TCS from a document perspective remains the same as for

current eTDS regime

o IGST, SGST, CGST, UTGST and Cess

o All tax type combinations are supported within enhanced GST TGS and GST TCS setup

o Calculation base of UTGST and Cess is the same as IGST, SGST and CGST

3.11 Document Numbering

For the purposes of GST, new subdocument types have been introduced for invoices and credit memos to fulfill

requirement of consecutive serial number for each document from GST law perspective.

For these new subdocument types, there is a different numbering series. The Document Numbering - Setup

screen can be used to view and amend these settings.

Note

The document type Bill of Supply is unaffected by GST changes and remains in place for invoicing under

the previous tax regimes and for Excise purposes.

The Document Numbering - Setup screen can be accessed by following the path Main Menu → Modules

tab → Administration → System Initialization → Document Numbering

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Settings

Sequence also reflects GST Subdocument type. The Sequence - Setup screen can be accessed by following the

path Main Menu → Modules tab → Administration → Setup → Financials → Tax → Sequence.


Marketing Documents for A/R

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4 Marketing Documents for A/R

To handle GST, there are options available in the marketing documents available in SAP Business One. These

options have been introduced as enhancements to comply with the requirements of GST.

4.1 A/R Invoices – Sales

A/R Invoices (follow path Main Menu → Modules tab → Sales - A/R → A/R Invoice) have various fields and options

to help specify the correct details for GST.

The field Transaction Type in the header section of an A/R Invoice has three different options to determine how

the A/R Invoice you are creating relates to GST:

o Bill of Supply – A Bill of Supply is for use with the pre-GST tax regime. There are specific cases when a Bill

of supply can be used with GST tax as well:

o in case of Item is GST Item, type Exempt; and

o if Location is Composition Levy type

o GST Tax Invoice – for invoices that are affected by GST

o GST Debit Memo – for adjusting GST Tax Invoices already created

The field Place of Supply in the header section of an A/R Invoice has the states of India as options. Place of Supply

determines which state the A/R Invoice contents are being shipped to and therefore how GST will be dealt with.

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The Tax tab of an A/R Invoice has several options to determine how the A/R Invoice you are creating relates to

GST:

o E-Commerce Operator – to choose a Business Partner when selling through an E-Commerce Portal.

o E-Commerce GSTN – to choose a GSTIN associated with an E-Commerce Operator.

o Revision – checkbox option stating that the A/R Invoice is a revision, reveals the following:

o Original Ref. No. – reference number of the document that is being revised.

o Original Doc. Date – the date of the document that is being revised.

o Export – checkbox option determining that the A/R Invoice is for exports outside India or for specific case

related to Union Territory transactions within India.

o Port Code

o Bill of Export No. – provided by the authorities as an official document with standalone

numbering/identification.

o Bill of Export Date. – date of document provided.

If a Transaction Type of GST Debit Memo is chosen for the A/R Invoice, then an additional two fields will become

available when the Revision checkbox is selected:

o Original Debit No. – to enable the reporting of reference numbers of credited documents

o Original Debit Date



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The Contents tab of an A/R Invoice has a SAC field option for GST when the Item/Service Type is selected as

Service for a GST Tax Invoice. The SAC field value must be manually entered as unlike in Service Type Documents

the SAC information is not determined by Master Data.

4.2 A/R Invoices, Attributes and Scenarios:

# GST Reg.

Type Loc.

Ship to

Country

Ship

From

Ship

To

Item

Type

Document

Type

Tax Code Notes

1 Regular Foreign NA NA Nil

Rated

Tax

Invoice

IGST_Zero

Rated

Without

Payment of

duty

Existing

CENVAT

posting

behavior 2 Regular Foreign NA NA Regular Tax

Invoice

IGST_Zero

Rated

Without

Payment of

duty

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# GST Reg.

Type Loc.

Ship to

Country

Ship

From

Ship

To

Item

Type

Document

Type

Tax Code Notes

3 Regular Foreign NA NA Exempt Bill of

Supply

Exempt Tax

Code (0%)

Without

Payment of

duty

4 Regular Foreign NA NA Nil

Rated

Tax

Invoice

IGST_Nil Rated With

Payment of

duty

5 Regular Foreign NA NA Regular Tax

Invoice

IGST_ (Rate for

that Item)

With

Payment of

duty

6 Regular Foreign NA NA Exempt Bill of

Supply

Exempt Tax

Code (0%)

With

Payment of

duty

7 Composition

Levy

Foreign NA NA Nil

Rated

Bill of

Supply

Exempt Tax

Code (0%)

Without

Payment of

duty

8 Composition

Levy

Foreign NA NA Regular Bill of

Supply

Exempt Tax

Code (0%)

Without

Payment of

duty

9 Composition

Levy

Foreign NA NA Exempt Bill of

Supply

Exempt Tax

Code (0%)

Without

Payment of

duty

10 Composition

Levy

Foreign NA NA Nil

Rated

Bill of

Supply

Exempt Tax

Code (0%)

With

Payment of

duty

11 Composition

Levy

Foreign NA NA Regular Bill of

Supply

Exempt Tax

Code (0%)

With

Payment of

duty

12 Composition

Levy

Foreign NA NA Exempt Bill of

Supply

Exempt Tax

Code (0%)

With

Payment of

duty

13 Regular India Intrastate Nil

Rated

Tax

Invoice

CGST+SGST_Nil

Rated

14 Regular India Intrastate Regular Tax

Invoice

CGST+SGST_

(Rate for that

Item)

15 Regular India Intrastate Exempt Bill of

Supply

Exempt Tax

Code (0%)

16 Regular India Interstate Nil

Rated

Tax

Invoice

IGST_Nil Rated



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# GST Reg.

Type Loc.

Ship to

Country

Ship

From

Ship

To

Item

Type

Document

Type

Tax Code Notes

17 Regular India Interstate Regular Tax

Invoice

IGST_(Rate for

that Item)

18 Regular India Interstate Exempt Bill of

Supply

Exempt Tax

Code (0%)

19 Composition

Levy

India Interstate &

Intrastate

Nil

Rated

Bill of

Supply

Exempt Tax

Code (0%)

20 Composition

Levy

India Interstate &

Intrastate

Regular Bill of

Supply

Exempt Tax

Code (0%)

21 Composition

Levy

India Interstate &

Intrastate

Exempt Bill of

Supply

Exempt Tax

Code (0%)

4.3 A/R Credit Memos

A/R Credit Memos (follow path Main Menu → Modules tab → Sales - A/R → A/R Credit Memos) have fields and

options to help specify the correct details for GST, much like in A/R Invoices, but with important differences.

When selected, the checkbox Revision on the Tax tab of an A/R Credit Memo reveals four fields:

o Original Ref. No. – reference number of the original invoice being credited.

o Original Doc. Date – reference date of the original invoice being credited.

o Original Credit No. – reference to Credit Memo used for crediting invoice, in case this is a second Credit

Memo.

o Original Credit Date – date reference to Credit Memo used for crediting invoice, in case this is a second

Credit Memo.

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4.4 A/R Down Payment Requests

A/R Down Payment Requests (follow path Main Menu → Modules tab → Sales - A/R → A/R Down Payment

Requests) have the field Transaction ID on the Tax tab to specify the correct details for GST.


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4.5 Inventory Transfers

Inventory Transfers (follow path Main Menu → Modules tab → Inventory → Inventory Transactions → Inventory

Transfer) have the option Copy To for copying details to an A/R Tax Invoice.

This Inventory Transfer functionality enables the specific scenario of Self-Supplies including Consignment

Scenarios. See more details in further section for the scenarios.

After copying an Inventory Transfer into an A/R Tax Invoice and A/P Tax Invoice, only the following fields are

editable:

o Tax Code

o Assessable values

o Unit Price

o Discount

Through Inventory Transfers you can perform the following processes:

o Intrastate inventory transfers

o Interstate inventory transfers.

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GST Scenarios for A/R

5 GST Scenarios for A/R

The introduction of GST will affect common, everyday business processes. Most of the process for raising

marketing documents or performing business transactions will remain the same but there will be important

changes resulting from GST. The different processes and marketing documents that are impacted by GST are

described by the scenarios in this section.

5.1 Sales Scenario for Goods or Services – Nil Rated & Regular

The standard sales process involving Sales Quotation, Sales Order and Delivery remains the same as it was before

the introduction of GST. However, after the introduction of GST, there are important new mandatory steps at the

A/R Invoice stage of the sales process.

To generate an A/R Invoice (follow path Main Menu → Modules tab → Sales - A/R → A/R Invoice) for Nil Rated and

Regular items the standard operating procedure as before applies, but with some important differences, following

the introduction of GST:

In the Transaction Type field of the A/R Invoice header you must choose GST Tax Invoice.

In the Item No. or Item Description field you must choose a GST relevant item.

In the Tax Code field, you must choose a GST relevant Tax Code, this makes sure the correct GST account is

credited.

5.2 Sales Scenario for Goods or Services – Composition Levy, Exempt or Non-GST

In order to generate an A/R Invoice (follow path Main Menu → Modules tab → Sales - A/R → A/R Invoice) for

Comp. Levy, Exempt or Non-GST items, the standard operating procedure as before applies, but with some

important differences:

In the Transaction Type field of the A/R Invoice header you must choose Bill of Supply.

In the Item No. or Item Description field you can choose non-GST relevant items or GST exempt items.

You cannot combine GST relevant items with GST Exempt or non-GST relevant items.

In the Tax Code field, you must choose Non-GST tax code.



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5.3 Sales Scenario for Goods or Services – Exports

To generate an A/R Invoice (follow path Main Menu → Modules tab → Sales - A/R → A/R Invoice) for items for

export, the standard operating procedure as before applies, but with some important differences:

In the Transaction Type field of the A/R Invoice header, you must choose GST Tax Invoice.

If a Ship-to address with a foreign country is chosen, then the Export checkbox will be selected automatically

on the Tax tab.

In the Item No. or Item Description field, you must choose a GST relevant item.

In the Tax Code field, you must choose a GST relevant code, so indicating a GST account.

There are two different options, choose which applies in the Duty Status field on the Tax tab:

o With Payment of Duty – GST will be posted

o Without Payment of Duty – GST will not be posted

You must populate the Bill of Export No. and Bill of Export Date fields

5.4 Sales Scenario for Goods or Services – Advance Payments

Advance Payment processing with GST is supported through A/R Down Payment Requests (A/R DPM Requests)

in SAP Business One. The standard process consists of an A/R Down Payment Request, an Incoming Payment,

and an A/R Invoice amongst other steps.

In order to generate an A/R Down Payment Request (follow path Main Menu → Modules tab → Sales - A/R → A/R

Down Payment Request), the standard operating procedure as before GST applies, but with some important

differences:

Where relevant, GST will be applied to the document produced first in the process, either the A/R Down

Payment or the A/R Invoice.

Once determined, define the Duty Status in the field on the Tax tab of the A/R Down Payment Request. The

options are either With Payment of Duty or Without Payment of Duty.

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Step by Step Procedure with Example:

1. Create an A/R Down Payment Request (DPM) for an item or service with a GST tax code. In our example,

there is a 5% GST tax code rate and a base value of INR 100 for the down payment.

2. Create an Incoming Payment for the received payment relating to the A/R Down Payment Request from step

1. In our example the following postings would be made to the relevant accounts:

Account Debit Credit

Bank account 105

BP Receivable account 105

Down Payment Interim account 105

GST Payable account 5

DPM Clearing account 100

3. Create an A/R Invoice linked by reference to the A/R Down Payment Request created in step 1, Duty Status is

'With Payment'. In our example the following postings would be made to the relevant accounts:



DPM Interim account 105



GST Payable account -5

Revenue account 100

Raw Material account X

Finished Goods /COGS X

4. Complete the process with a GST tax payment to the GST authorities.



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5.5 Sales Scenario for Goods or Services – Reverse Charges

Reverse charge sales scenarios for goods or services are handled by A/R Invoices in SAP Business One. Under

GST, a reverse charge is when the recipient of the goods is liable to pay GST rather than the supplier. The GST

process is supported in SAP Business One by Tax codes defined as being for reverse charges.

In order to generate an A/R Invoice (follow path Main Menu → Modules tab → Sales - A/R → A/R Invoice) for a

reverse charge, the standard operating procedure applies, but with the following conditions:

The A/R Invoice needs to be raised as a GST Tax Invoice.

A reverse charge relevant tax code with the appropriate percentage must be selected.

The amount of GST payable is based on the reverse charge percentage. If the percentage is 100%, then no

GST is payable.

A single document may hold regular and reverse charge items or services.

Reverse charge related transactions are reported in GSTR1.

Examples of Account Postings:

o An A/R Invoice is raised with a tax code of rate of 5% and the base value is INR 100:




Revenue account 100

o An A/R Invoice is raised with tax code reverse charge of 100% and the base value is INR 100:




Revenue account 100

Remark:

The GST Payable is calculated based on reverse charge %

Reverse charge related transactions are reported in GSTR1

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5.6 Sales Scenario for Debit Memos

To create a debit memo, generate an A/R Invoice (follow path Main Menu → Modules tab → Sales - A/R → A/R

Invoice). Debit memos correct a previously created A/R Invoice, normally charging making additional charges.

The following rules apply to the creation of debit memos under GST:

In the Transaction Type field of the A/R Invoice header GST Debit Memo must be chosen.

Debit memos are to be used to adjust GST Tax Invoices only.

A/R Invoices for GST Debit Memos can be created for three scenarios:

o Tax only – the Tax Only checkbox on the Tax tab must be selected.

o Quantity, value and tax.

o Without Quantity – dropship warehouse must be used.

A/R Invoices for GST Debit Memos are not possible without a stated quantity unless a Dropship Warehouse is

used

You must enter the original GST Tax Invoice reference number and date on the A/R Invoice you are creating

as the debit memo.

Example Account Postings:

o An A/R Invoice is raised for a tax-only debit memo with a value of INR 10. 'Tax Only' GST Debit Memo is

managed via 'Tax Only' checkbox available on A/R Invoice. Example below shows posting of 10 Rupees

posted as tax only:




o An A/R Invoice is raised for a debit memo for quantity, value and tax. The total value is INR 200 of which

INR 180 is the base value and GST is INR 20. Adjustment of Quantity, Value or Tax can be adjusted on

GST Debit Memo as standard functionality:




Revenue account 180



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Raw Material account X

Finished Goods /COGS X

o An A/R Invoice is raised for a debit memo for adjustment of value and tax, but not quantity. The total

value is INR 200 of which INR 180 is the base value and GST is INR 20. The scenario must be managed by

selecting items linked to a dropship warehouse:




Revenue account 180

5.7 Sales Scenario for Credit Memo and Sales Return

To create a credit memo and sales return, generate an A/R Credit Memo (follow path Main Menu → Modules tab

→ Sales - A/R → A/R Credit Memo). Credit memos can correct a previously created A/R Invoice with a

transaction type of GST Tax Invoice. The following conditions apply:

You must enter the original A/R Invoice reference number and date details.

A Bill of Supply transaction type is to be used for all A/R Credit Memos that are not GST related.

An A/R Credit Memo can be revised as long as the original document is referenced.

An A/R Credit Memo can be created for three scenarios:

o Tax only – you must select the Tax Only checkbox and Without Quantity checkbox

o Quantity, value and tax

o Without quantity – you must select the Without Quantity checkbox.

The sales return is handled by the A/R Credit Memo.


o An A/R Credit Memo is raised for tax only and the value is INR 10. The Tax Only and Without Quantity

checkboxes must be selected:




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o An A/R Credit Memo is raised for adjustment of quantity, value and tax. The total value is INR 50, of which

the base value is INR 45 and GST is INR 5:




Revenue account 45

Inventory account 30

Cost of Goods sold 30

o An A/R Credit Memo is raised for adjustment of value and tax, but not quantity. The total value is INR 50,

of which the base value is INR 45 and GST is INR 5. The Without Quantity checkbox is selected:




Revenue account 45

5.8 Sales Scenario for Revising Invoices

First, cancel the original A/R Invoice (follow path Main Menu → Modules tab → Sales - A/R → A/R Invoice) that

was created with a transaction type of GST Tax Invoice. Then create a new A/R Invoice with the correct revised

attributes and reference the original invoice:

Select the Revision checkbox to flag the new A/R Invoice as a revision.

Enter the original GST Tax Invoice reference number and date of the invoice being revised.

This process should only be used when the A/R Invoice being corrected belongs to a previous period, and has

been reported. In the same period, it is possible to cancel the A/R Invoice and create a new one without the

additional revision steps.


1. An initial A/R Invoice is raised for a sale. The total value is INR 30 of which the base value is INR 25 and

GST is INR 5:



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Revenue account 25

2. The initial A/R Invoice created in step 1 is cancelled:




Revenue account 25

3. A revised A/R Invoice is raised for the sale. The A/R Invoice is flagged as a revision and references the

original invoice number and date. The total value is INR 60 of which INR 50 is the base amount and GST is

INR 10:




Revenue account 50

5.9 Inventory Scenario for Self-Supplies (Incl. Consignment)

For inventory transfers made within the same state (intrastate) there is no GST impact so no change to the

existing process.

If GSTIN of From location and To location is different, then GST tax is also applicable for intra state.

For inventory transfers made between two different states (interstate) an Inventory Transfer is needed first

(follow path Main Menu → Modules tab → Inventory → Inventory Transactions → Inventory Transfer) followed by

an A/R Invoice where the warehouse is the issuing party. The A/R Invoice can be created by selecting Copy To on

the relevant Inventory Transfer. Where the warehouse is the receiving party, an A/P Invoice can be created by

selecting Copy To on the relevant Inventory Transfer.

Once the A/R Invoice has been copied to, ensure the transaction type is GST Tax Invoice.

A business partner for each interstate warehouse is needed.

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Example Scenario and Account Postings:

Interstate transactions involve two sides of a transaction, there is a process for both the issuing and the receiving

warehouses.

Prerequisites:

Master data has been defined for the Default vendor.

Master data has been defined for the Default customer.

Dropship Warehouse has been defined in Location on the GST tab, for both target and source location.

The default master data or "dummy business partner" information is used in self-supply scenarios.



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5.9.1 Issuing warehouse scenario:

1. Create an Inventory Transfer.

2. Copy the Inventory Transfer from step 1 into an A/R Invoice with a dropship warehouse defined and Tax

Only selected on the Tax tab. The total value is INR; the account postings represent the issuing

warehouse perspective:


BP Receivable account ** 100


** The business partner is the Default Customer as defined on the GST tab of Locations.

5.9.2 Receiving warehouse scenario:

Copy the Inventory Transfer created in step 1 of the Issuing Warehouse Scenario into an A/P Invoice. Define

the dropship warehouse and select Tax Only for the A/P Invoice.

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BP Receivable account ** 100

GST Input account 100

** The business partner is the Default Vendor as defined on the GST tab of Locations.

Scenario details for interstate self-supply:

An A/R Invoice, GST Tax Invoice is required.

The business partner is defined on the Inventory Transfer document, the business partner will be then copied

to the A/R Invoice, GST Tax Invoice created by copy functionality.

The copying of an Inventory Transfer to an A/R Invoice, GST Tax Invoice is allowed for both interstate and

interstate inventory transfers.

The originating "from state" is the state of the originating warehouse as defined in Location. The place of

supply (POS) state is the related business partner's state as defined in its Ship to address.

Customer details for A/R Invoices are copied from the Inventory Transfer default customer target locations.

The drop ship warehouse of the source location from the Inventory Transfer is used as the warehouse on A/R

Invoice

This kind of self-supply scenario is treated as a sales transaction from the source location to the target

location, from an issuing location perspective.

From a target location perspective, the scenario is treated as a purchase transaction from the source location

to the target location.

The default vendor of the source location from the Inventory Transfer will be used as the vendor for A/P

invoices.

The dropship warehouse of the target location from the inventory transfer will be used as the warehouse of

A/P Invoice.

The dropship warehouse must belong to the same location as the "From Warehouse" location.

5.10 Inventory Scenario for Job Work

More details on Job-Work scenario will be coming soon.


Marketing Documents for A/P

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6 Marketing Documents for A/P

6.1 A/P Invoice – Purchases

The standard purchasing process involving Purchase Request, Purchase Order, Goods Receipt, Purchase Order

and Outgoing Payment remains the same as it was before the introduction of GST. However, after the introduction

of GST, there are important new mandatory steps at the A/P Invoice stage of the purchasing process.

A/P Invoices (follow path Main Menu → Modules tab → Purchase - A/P → A/P Invoice) have various fields and

options to help specify the correct details for GST.

The field Transaction Type in the header section of an A/P Invoice has three different options to determine how

the A/P Invoice you are creating relates to GST:

o Bill of Supply – for invoices that are not affected by GST.

o GST Tax Invoice – for invoices affected by GST.

o GST Debit Memo – for adjusting GST Tax Invoices already created.

The field Ship From in the header section of an A/P Invoice has the states of India as options. Ship From

determines which state the A/P Invoice contents are being shipped from and therefore how GST will be dealt with.

The Tax tab of an A/P Invoice has several options to determine how the A/P Invoice you are creating relates to

GST:

o Reference Number

o Ref. date

o Revision – checkbox option stating that the A/P Invoice is a revision, reveals the following:



o Import – checkbox option determining that the A/P Invoice is for import to India.

o Port Code

o Bill of Import No. – provided by the authorities as an official document with standalone

numbering/identification.

o Bill of Import Date. – date of document provided.

To generate an A/P Invoice for invoice first, standard tax scenarios, the standard operating procedure as before

applies, but with some important differences following the introduction of GST:

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In the Transaction Type field of the A/P Invoice header you must choose GST Tax Invoice (highlighted in the

screenshot below).

In the Item No. or Item Description field you must choose a GST relevant item.

In the Tax Code field, you must choose a GST relevant Tax Code, this makes sure the correct GST account is

credited.

When creating an invoice revision, select the Revision checkbox on the Tax tab of the A/P Invoice, you must

enter the Original Ref No. and Original Ref Date from the document being revised.

Tax code determination is based on the Ship from address for the vendor and the location of recipient

warehouse.

For the import of goods, Bill of entry no. and Bill of entry date are mandatory reporting elements of GSTR-2, new

fields are available to enter this information on A/P Invoices. As there is separate reporting for Import of Goods

and Import of services, these fields are mandatory only when the document is for material category items. If the

A/P Invoice is for service items or the document is of a service type, then Bill of entry no. and Bill of entry date are

not mandatory.



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6.2 A/P Invoices, Attributes and Scenarios:

# GST BP Type Receiving

Location

Type

Ship

from

Count

ry

Ship

Fro

m

Shi

p

To

Item

Type

Doc Type Tax Code Notes

1 Not in India

(unregistered)

Regular Foreig

n

NA NA Nil

Rated

AP

Invoic

e

IGST_Nil Rated Import

Scenario

(GST

posting

handled

with

import of

goods

scenario)

2 Not in India

(unregistered)

Regular Foreig

n

NA NA Regul

ar

AP

Invoic

e

IGST_(Rate for

that Item)

3 Not in India

(unregistered)

Regular Foreig

n

NA NA Exem

pt

AP

Invoic

e

Exempt Tax

Code (0%)

4 Regular Regular India Intrastate Nil

Rated

AP

Invoic

e

CGST+SGST_Nil

Rated

Posting to

GST Input

5 Regular Regular India Regul

ar

AP

Invoic

e

CGST+SGST_(R

ate for that

Item)

6 Regular Regular India Exem

pt

AP

Invoic

e

Exempt Tax

Code (0%)

7 Regular Regular India Interstate Nil

Rated

AP

Invoic

e

IGST_Nil Rated Posting to

GST Input

8 Regular Regular India Regul

ar

AP

Invoic

e

IGST_(Rate for

that Item)

9 Regular Regular India Exem

pt

AP

Invoic

e

Exempt Tax

Code (0%)

1

0

Regular Compositi

on Levy

India Intrastate Nil

Rated

AP

Invoic

e

CGST+SGST_Nil

Rated_Non-

Deductible

Not

posted to

GST Input

but the

Non-

Deductible

Acct

11 Regular Compositi

on Levy

India Regul

ar

AP

Invoic

e

CGST+SGST_(R

ate for that

Item)_Non

Deductible

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# GST BP Type Receiving

Location

Type

Ship

from

Count

ry

Ship

Fro

m

Shi

p

To

Item

Type

Doc Type Tax Code Notes


on Levy

India Exem

pt

AP

Invoic

e

Exempt Tax

Code (0%)_Non

Deductible


on Levy

India Interstate Nil

Rated

AP

Invoic

e

IGST_Nil

Rated_Non

Deductible

Non-

Deductible


on Levy

India Regul

ar

AP

Invoic

e

IGST_(Rate for

that Item)_Non-

Deductible


on Levy

India Exem

pt

AP

Invoic

e

Exempt Tax

Code

(0%)_Non-

Deductible

16 Unregistered/Co

mp Levy

Regular India Intrastate

/

Interstate

Nil

Rated

AP

Invoic

e

Exempt Tax

Code (0%)

Unregister

ed vendor

cannot

charge

GST 17 Unregistered /

Comp Levy

Regular India Regul

ar

AP

Invoic

e

Exempt Tax

Code (0%)

18 Unregistered /

Comp Levy

Regular India Exem

pt

AP

Invoic

e

Exempt Tax

Code (0%)

19 Unregistered /

Comp Levy

Compositi

on Levy

India Intrastate

/

Interstate

Nil

Rated

AP

Invoic

e

Exempt Tax

Code (0%)

Unregister

ed vendor

cannot

charge

GST 2

0

Unregistered /

Comp Levy

Compositi

on Levy

India Regul

ar

AP

Invoic

e

Exempt Tax

Code (0%)

21 Unregistered /

Comp Levy

Compositi

on Levy

India Exem

pt

AP

Invoic

e

Exempt Tax

Code (0%)

6.3 A/P Credit Memos

A/P Credit Memos (follow path Main Menu → Modules tab → Purchase - A/P → A/P Credit Memo) have various

fields and options to help specify the correct details for GST.



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The field Transaction Type in the header section of an A/P Credit Memo has two different options to determine

how the A/P Credit memo you are creating relates to GST:

o Bill of Supply – for credit memos that are not affected by GST.


The Tax tab of an A/P Credit Memo has several options to determine how the A/P Credit Memo you are creating

relates to GST:

o Revision – checkbox option stating that the A/P Credit Memo is a revision, reveals the following:



o Original Credit No. – reference number of the credit memo document that is being revised.

o Original Credit Date – the date of the credit memo document that is being revised.

o The revision of an A/P Credit Memo – GST Tax Invoice is allowed in system, however, it needs to be

used only if the A/P Credit Memo reported in a previous tax period is being revised.

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GST Scenarios for A/P

7 GST Scenarios for A/P

7.1 Purchasing Scenario for Goods or Services – Invoice First (Regular Tax)

The standard purchasing process involving Purchase Request, Purchase Order, Goods Receipt, Purchase Order

and Outgoing Payment remains the same as it was before the introduction of GST. However, after the introduction

of GST, there are important new mandatory steps at the A/P Invoice stage of the purchasing process.

A/P Invoices (follow path Main Menu → Modules tab → Purchase - A/P → A/P Invoice) have various fields and

options to help specify the correct details for GST.

The field Transaction Type in the header section of an A/P Invoice has three different options to determine how

the A/P Invoice you are creating relates to GST:

o Bill of Supply – for invoices that are not affected by GST.


o GST Debit Memo – for adjusting GST Tax Invoices already created.


o In a standard purchasing scenario, an A/P Invoice is raised for a base transaction value of INR 100 where

GST is INR 10:


BP account 110

GST Input** account 10

Expense account 100

Note

**For Capital Goods that are on hold, set up is required in the fields Capital Goods on Hold Percentage and

Capital Goods on Hold Amount Limit on the General tab of Item Master Data. If on hold functionality is

used, then separate postings for "GST Input" and "GST Input on hold" will be made.



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7.2 Purchasing Scenario for Goods or Services – Outgoing Payment First (Regular GST Tax)

A/P Invoices are needed for purchasing scenarios of goods and services where there is an outgoing payment first,

under regular GST tax.

When an A/P Down Payment has already been issued as part of a scenario, input tax credit cannot be

accepted until the related goods or services are received as well as the counter-party tax invoice.

An A/P Down Payment can be used for making advance payments to customers (for goods and services),

however GST input is not posted, and instead of it DPM Interim account will be posted on the A/P Down

Payment Invoice or outgoing payment


1. An outgoing payment is made for INR 110:


BP account 110

Bank account 110

2. An A/P Invoice is then raised, as part of a manual reconciliation process, where the base value of the

transaction is INR 100 and GST is INR 10.

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BP account 110


Material / Expense account 100

7.3 Purchasing Scenario for Goods – Invoice First (Reverse Charge)

In a purchasing scenario for goods where there is an invoice first followed by a reverse charge, the reverse charge

can be for all or part of the original A/P Invoice.

Reverse charge means the liability to pay tax is on the recipient of goods or services; instead of liability being on

the supplier side. Reverse charge is applicable for both services as well as goods.

There are 2 main business cases for reverse charge scenario:

o Unregistered person selling to a registered person the (GST registered person pays GST).

o E-commerce related services (E-commerce operator supplying services is liable to pay GST).

Reverse Charge must be stated in the tax code of the A/P Invoice

Time of supply is the earlier of payment, or 30 days from the issue of the A/P Invoice


1. A/P Invoice (tax code is reverse charge)


BP account 100



Expense account 100



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7.4 Purchasing Scenario for Service – Invoice First (Reverse Charge)

In a purchasing scenario where there is an invoice for services first followed by a reverse charge, there will first be

an A/P Invoice with an exempt tax code. If an outgoing payment is not completed within 60 days, then there will

be an A/P Invoice for tax only - reverse charge, followed by an Outgoing Payment.

Tax liability is at the time of payment or 60 days from the issue of A/P Invoice.

The same behavior is applied as for goods in section 6.3.

7.5 Purchasing Scenario for Goods or Services – Outgoing Payment First (Reverse Charge)

In a purchasing scenario where there is an A/P Down Payment request followed by an A/P Invoice, a reverse

charge can be for all or part of the original amount.

Step by step scenario

1. A/P Down Payment request is raised

2. Outgoing Payment is made

3. A/P Invoice


1. A/P Down Payment request (for which there is no postings)

2. Outgoing Payment (100% reverse charge)


Bank account 100

BP account 100



GST Input Interim account 10


3. A/P Invoice with fully linked DPM Request (100% reverse charge)

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BP account 100




GST Input Interim account -10



Raw Material account 100

7.6 Purchasing Scenario for Goods or Services (Credit Note) and Return

There are two possible options for a purchasing scenario where there is a credit note and return:

o When the Tax Code selected in the A/P Credit Memo is a Normal Tax Code

o When the Tax Code selected in the A/P Credit Memo is a Reverse Charge, the GST will be determined

based on the percentage of the reverse charge

Example Account Postings

o A/P Credit Memo, with regular tax code:


BP account 110


Expense account 100

o A/P Credit Memo, with reverse charge 100%:


BP account 100



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Raw Material account X*

Material - Purchase Price Account Y*

Remark:

* sum of X+Y is equal to 100 in above case

o A/P Credit Memo, with reverse charge 50% (supplier pays 50%, recipient pays 50%), tax rate is 8%:


BP account 104

GST Input account 8


Raw Material account X**

Material - Purchase Price Account Y**

Remark:

** sum of X+Y is equal to 100 in above case

7.7 Purchasing Scenario for Goods or Services (Debit Note) and Supplementary Invoices

In a purchasing scenario where there is a debit note for goods or services and a supplementary invoice, an A/P

Invoice will be required with the relevant GST amount.

In the A/P Invoice marketing document, Transaction Type debit memo type must be used.

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7.8 Purchasing Scenario for Goods or Services (Revised Invoice, DR and CR Memo)

In a purchasing scenario where there is a canceled A/P Invoice or A/P Credit Memo, the revised A/P Invoice or

revised A/P Credit Memo must have the Revised field selected and the original document reference number and

date provided.

This scenario is only to be used when canceling a document for a period that was already reported.

For a revision in the same reporting period, a simple cancellation and new invoice should be processed.

Canceled invoices within the same period are not reported.

Step by step scenario:

1. A/P Invoice #1 is created

2. A/P Invoice #1 is canceled

3. A/P Invoice #2 is created. The revision checkbox needs to be checked, the original invoice number #1 and

date must be referenced.

The same scenario as mentioned above is used for canceling credit memos (revision of credit memo).

Example Account Postings

o A/P Invoice #1 is created


BP account 110


Expense account 100

o A/P Invoice #1 is canceled


BP account 110


Expense account 100

o A/P Invoice #2 is created (revision)



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BP account 110


Expense account 100

7.9 Purchasing Scenario for the Import of Goods

In purchasing scenarios, the import of goods is supported through several A/P Invoices with tax only or reverse

charges. A collecting and forwarding agent is required to act as an intermediary in import scenarios.

A/P Invoices require a business partner that is set up as a tax-exempt Goods Vendor.

An A/P Invoice is required for the collecting and forwarding agent, with only Basic Customs Duty (BCD) and a

service fee. The agent is then required to pay the relevant BCD and GST.

An A/P Invoice is required for just the tax of the relevant item with an IGST tax code. The import checkbox on

the A/P Invoice should only be selected for the GST input credit posting.

Step by step scenario:

Four steps need to be made for the scenario:

o An A/P Invoice (Bill of Supply) with the amount payable to the foreign vendor, no tax applicable.

o Landed cost is needed to post BCD to BCD clearing and to add inventory cost.

o An A/P Invoice for tax only (Bill of Entry) with IGST tax code and Supplier details for the foreign

vendor. This invoice is reported separately in GSTR-2 and must have reference to the Bill of Entry.

o An A/P invoice for BCD and services paid to the Clearing & Forwarding agency.

Further information regarding the scenario is available on the SAP Jam for GST, GST Solution Approach, slide 94.

Remark:

Import scenario may vary depending on your business processes. It is recommended to discuss the best fitting

scenario of import with your Partner/Consultant.

7.10 Purchasing Scenario for the Import of Services

In purchasing scenarios, the import of services is supported through A/P Invoices as a tax only, reverse charge.

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Further information regarding the scenario is available on the SAP Jam for GST, GST Solution Approach, slide

94.

7.11 Purchasing Scenario for Withholding Tax (WHT) for TDS GST (A/P Invoice and A/P DPM)

A GST Withholding Tax (GST TDS) scenario is a specific scenario where a government department or "Notified

Company" makes a payment to a supplier, or an e-commerce company makes a payment to a supplier.

TDS is to be deducted at a rate of 1% of payments made to the supplier of taxable goods and/or services, where

the total value of such supply, under an individual contract, exceeds INR 250,000.

As per GST law, the following people or entities need to deduct TDS:

A department or establishment of central or a state government.

A local authority.

A governmental agency.

Persons or category of persons, as may be notified by the central or a state Government on the

recommendations of the GST Council.

TDS must be paid within 10 days of the end of the month in which tax was deducted. The payment shall be made

to the appropriate government, meaning:

Central government in case of the IGST and CGST.

A state government in case of the SGST.

In purchasing scenarios, both direct and indirect Withholding Tax is supported on A/P Invoices and A/P Down

Payment Invoices.

For A/P Invoices, TDS / TCS GST will only be applicable when a government department or a notified

company is making a payment more than INR 100,000, or an e-commerce operator is making a payment to a

supplier.

A purchase order will be mandatory for the TDS GST number.

Further information regarding the scenario is available on the SAP Jam for GST, GST Solution Approach,


Reporting

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8 Reporting

As part of GST, all supplier taxpayers are required to file GSTR (GST Reports). GST laws allow for reporting

through the GST web portal, the utility provided specially for returns, or a GST Suvidha Provider (GSP).

For example, supplier taxpayers need to report invoice level information on a HSN/SAC basis in the report GSTR-

1. GSTR-1 needs to be filed even if there is no business activity (a nil return) for the tax period.

For more information regarding reporting scope and details of GST reports see the GSTN portal.

Reporting in SAP Business One is supported via GEP files based on EFM (Electronic File Manager). The GEP

files will be soon delivered via SAP Note no. 2194689.

8.1 Reporting Summary:

o Registered taxable persons must submit, by the 10th day of the subsequent month, outward supply

details for the month in GSTR-1 to comply with GST laws.

o On the 11th day of a respective month, inward supply details are available to the recipient in the auto-

populated GSTR-2.

o The period between the 11th and 15th days of a month is dedicated to any required corrections (additions,

modifications or removals) which are made in the form GSTR-2A and submitted in GSTR-2 by 15th day of

the month.

o Corrections made by the company or recipient in GSTR-2 are available to suppliers in GSTR-1A.

o Suppliers are obliged to either accept or reject the changes or adjustments provided by the recipient.

GSTR-1 is then amended according to the corrections made by the supplier.

o On the 20th day of the month, the auto-populated return GSTR-3 is available for submission along with

payment. Following the due date of filing the GSTR-3 monthly return, inward supplies are reconciled with

outward supplies provided by suppliers.

o The final approval of ITC (input tax credit) is available in GST ITC 1.

o The following details are considered the matching principles of invoices:

o GSTIN of the supplier

o GSTIN of the recipient

o Invoice or debit note number

o Invoice or debit note date

o Taxable value

o Tax amount

http://www.gstn.org/gst-law-forms/

https://launchpad.support.sap.com/#/notes/2194689/E

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8.2 Reporting in SAP Business One:

The first reporting method available for GST is through generic data outputs that are accepted by GSPs:

o Generic data outputs are provided through standard EFM functionality by GEP files.

o GEP files will be delivered for PL08 in SAP Note 2194689.

o With GEP files you are able to generate standard CSV files through Excel export functionality.

o CSV output files contain all the necessary data to fulfill reporting requirements of individual reports such

as GSTR-1 and GSTR-2.

o CSV output files can be used by any registered third party service company licensed as a GSP

o GSPs enable taxpayers to comply with the requirements of GST laws through its web platform

o A large number of companies have been provided with GSP licenses. A complete list of GSPs is available

on the GSTN portal

The second reporting method available for GST is through the embedded reporting of required reports (planned

for PL09).

o Direct embedded reporting is planned for following patch cycles, details to follow.

https://launchpad.support.sap.com/#/notes/2194689/E

http://www.gstn.org/


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9 Migration

This section will help you update your databases after upgrading your SAP Business One to 9.2 PL08 or higher to

meet the requirements of the Good and Service Tax (GST) in India. The GST functionality was introduced in India

localization of SAP Business One to allow customers to conform to the legal and reporting requirements of the tax

authorities in India.

Following steps are describing details of step by step process you may need to perform to migrate your existing

data to be GST compliant. Please notice step are individual and depends on your current database and company

setup.

To migrate your newly upgraded SAP Business One databases into the GST regime in India, perform the following

steps:

1. Adjust States setup

2. Adjust Location setup

3. Adjust Business Partner Master Data

4. Adjust Item Master data

5. Adjust Warehouses

6. Adjust Tax Setup

7. Define Tax Code Determination

8. Define GST Withholding Tax (GST TDS and GST TCS)

9. Adjust Numbering Series and Sequences

10. Define G/L Accounts

11. Close your open documents created in previous tax regime

Note

For more details about the GST functionality, see How to Work with GST in the India Localization of SAP

Business One available as an attachment in SAP Note 2194689.

Details for individual migration steps below:

9.1 States

A new GST tax type Union Territory GST (UTGST) was introduced to distinguish the six union territories in India

(Chandigarh, Lakshadweep, Daman and Diu, Dadra and Nagar Haveli, Andaman and Nicobar Islands). As SAP

Business One 9.2 PL08 does not provide default values for the union territories, if this is relevant to your business,

in the States - Setup window (Main Menu → Administration → Setup → General → States), select the Is Union

Territory checkbox and define the union territories manually.

https://launchpad.support.sap.com/#/notes/2194689

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Note

The e-Code and GST State Code values for the union territories are not yet available from the authorities.

9.2 Location

If you have previously defined locations (in the Locations - Setup window, on the GST tab), perform one of the

following depending on what type of business you will conduct:

9.2.1 100% GST (all your items, warehouses, and transactions will be GST relevant)

In the SAP Business One Main Menu, choose Administration → Setup → Inventory → Locations →

Accounting Data tab → GST tab and perform the following:

o Enter the GSTIN value.

o From the dropdown list, choose a value in the GST Type field related to your registration.

o If applicable, enter values in the GSTIN TDS and GSTIN ISD fields.

o In the Inventory Transfer Setting section, define settings for the job work process as follows:

In the Drop-Ship WH field, define the drop-ship warehouse for the same job work purpose.

Note

The Default Vendor and Default Customer fields are default business partners used for generating

GST tax invoice from inventory transfer documents (see details in section Job-Work).


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9.2.2 Partial GST Shift (you will be GST registered but your current excise tax regime will still be applicable)

o Create a new warehouse (Administration → Setup → Inventory → Warehouses → General) for your

GST related items.

o You can create a new location or maintain GST relevant information in already existing Location

(Administration → Setup → Inventory → Locations) for your GST related items.

o In the Locations - Setup window, on the Accounting Data tab → GST subtab, enter values in the GSTIN

and GST Type fields.

o Create an inventory transfer (Inventory → Transfer) for all items to be moved from excise warehouses

into GST warehouses.

Note

Ensure that each new warehouse is linked to its respective location.

9.3 Business Partner Master Data

For existing business partners that are registered for GST, perform the following:

1. In the Business Partner Master Data window, on the Addresses tab, in the Ship To section, define the

following information mandatory for reporting and correct document handling:

o GSTIN

o GST Type

2. If your business partner is an E-commerce seller, you can define the Merchant ID field.

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Migration Options:

To migrate item master data, choose one of the following options:

1. As all new fields are exposed through the DI API and Data Transfer Workbench (DTW), you can migrate

the data one batch run.

2. You can manually update the business partner master data using the UI API.

9.4 Item Master Data

You must update the item master data based on the existing GST classification. Approximately 90% of items

should be relevant for GST; the exact information should be specified online by the authority.

If you change an item from the excise regime to the GST regime, in the Item Master Data window (Inventory →

Item Master Data), on the General tab, perform the following:

1. Deselect the Excisable checkbox.

2. Select the GST checkbox and define the following fields:

o Material Type: select the material type depending on the type of GST item.

o HSN: specify the harmonized nomenclature number (you can use the Chapter ID value that exists for

the excisable item).

o Tax Category: select the tax category relevant to the item as defined by the tax authorities.

o Assessable Value: if relevant for the item, define the assessable value. Note that the calculation of the

assessable value remains the same as for the excisable item.

Migration Options:

To migrate item master data, choose one of the following options:

1. As all new fields are exposed, use the DTW to update the information in one batch.


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2. You can manually migrate the item master data using the UI API.

9.5 Warehouses

Depending on your preferences and business scenarios, you can either use existing warehouses or create new

ones.

If you have an inventory scenario for Job-work process, perform the following:

1. In the Warehouses - Setup window (Administration → Setup → Inventory → Warehouses), on the General

tab, perform the following:

o Select the External checkbox.

o Ensure that you have defined the State field.

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Note

You can find more details about job work in the Inventory Scenario for Job Work section of the how-to

guide.

9.6 Tax Codes - Setup

As new tax code rates are not available yet from the tax authority, default values will only be available for tax

types. You may enter tax codes manually depending on your business scenario.

Note

Please contact your local Partner to provide default values for tax setup and tax calculation.

Recommendation

Ensure you do not have tax types for GST with the same name created manually; if do you, please rename

them before the upgrade.

9.7 Tax Code Determination

While setting up the tax code determination is not mandatory for migrating to the GST regime, defining an

appropriate tax code determination rule can make documents handling and determining correct tax code easier

to manage.


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In the Tax Code Determination - Setup window, new key field options related to GST are available that allow you to

more precisely define tax code determination rules relevant to GST.

Note

You can find more details in the Tax Code Determination section of the How to guide

9.8 Withholding Tax (GST TDS)

This section describes withholding tax changes relevant for GST TDS (Tax Deducted at Source).

Note that there are currently no default values for withholding tax. If you need to define GST TDS tax codes for

your business scenario, perform it as you do for your current eTDS regime.

Perform the following:

o In the Withholding Tax window (Administration → Setup → Financials → Tax → Withholding Tax), a new

field TDS Type allows you to indicate whether the defined tax is relevant to the new or old tax regime.

From the dropdown list in the TDS Type field, select either the eTDS or GST TDS option.

o In the G/L Account Determination window (Administration → Setup → Financials → G/L Account

Determination), define the following three new accounts relevant for GST TDS deposit:

1. GST TDS Interest Acct

2. GST TDS Other Charges Acct

3. GST TDS Fee Acct

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Note

The calculation and document handling of withholding tax is very similar as that currently performed in

the application for eTDS. For more details, see the GST TDS section in How to guide

9.9 Numbering

With the introduction of GST, new subdocument types have been introduced for invoices and credit/debit

memos. The subdocument types are as follows:

o Bill of Supply (for invoicing under the previous tax regimes and for excise purposes)

o GST Tax Invoice (tax invoice created for GST related transactions)

o GST Debit Memo

o GST Credit Memo

Note

Existing documents from the previous tax regime will be upgraded as a bill of supply document.

The subdocument types require different numbering series for each document type.

In the Document Numbering - Setup window (Administration → System Initialization → Document Numbering), set

up a separate numbering series for each location and assign a default for each user.

9.10 G/L Accounts

The payment in advance process in SAP Business One is relevant to the A/P down payment request scenario.

You need to define the following accounts:


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1. Input interim account (Administration → Setup → Financials → G/L Account Determination → G/L

Account Determination → Purchasing tab: Tax subtab) to be used for goods under the reverse charge

regime. The account uses a deferred principle for outgoing payments. The posting mechanisms functions

as follows:

1. The GST payable is posted.

2. The GST input is added to the interim account.

3. When the GST tax invoice is created, the accounts are cleared accordingly.

2. Capital goods on hold account (Administration → Setup → Inventory Locations → Accounting Data tab:

General subtab) if you are using capital goods in your company.

9.11 Migration cases - Open documents

Note

Ensure you close all open transactions existing in your system.

The following table provides a summary of possible combinations of relevant properties in the current setup and

corresponding migration solutions:

No. Current Setup: Migration Solution:

Field: Item Type Warehouse Location Tax Code Item Warehouse Location

1

Non-

excisable

Non-

excisable

Non-GST VAT Keep as

non-

excisable

Keep as Non-

excisable

Change to

GST

Current

Transaction

Remark:

No action to be taken; behavior is the same as before.

New

Transaction

Remark:

No action to be taken; behavior is same as before.


2

Non-

excisable

Non-

excisable

Non-GST VAT Change to

GST

Keep as non-

excisable

Change to

GST

Current

Transaction

Remark:

We recommend that you close all open sales orders and create new ones for GST tax. If you

want to apply a new GST tax code, you need to remove the item from the sales order and

add it again. If you want to copy a sales order to an upper document, you can change the tax

code in the target document to GST and proceed with GST process. If you already copied

several lines to an upper document, it is not possible to remove lines from the sales order. In

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this case, you can only change the tax code in the target document.

For returns or credit memos, we recommend that you create a standalone return or credit

memo to handle them according to GST tax.

New

Transaction

Remark:

You can use the items for new transaction using the GST tax code. No action necessary.


3

Excisable Non-

excisable

Non-GST VAT Keep as

Excisable

Keep as non-

excisable

Change to

GST

Current

Transaction

Remark:

As described in Case 1.

New

Transaction

Remark:

As described in Case 1.


4

Excisable Non-

excisable

Non-GST VAT Change to

GST

Keep as non-

excisable

Change to

GST

Current

Transaction

Remark:

Same as described in Case 2.

New

Transaction

Remark:



5

Excisable Excisable Non-GST CENVAT Perform the following:

1. Create a new excisable

warehouse and link it to an

existing location.

2. Transfer the excisable item

to a new warehouse.

3. Change the old warehouse

to a non-excisable

warehouse.

Change to

GST

Current

Transaction

Remark:

Since all inventory is moved to a new warehouse, we recommend to close all open

transactions before this migration.

New

Transaction

Remark:

All new transaction should be performed within the new warehouse following the old

behavior (non-excisable items cannot be stored in an excisable warehouse).



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6

Excisable Excisable Non-GST CENVAT Change to

GST

Change to

non-excisable

warehouse

Change to

GST

Current

Transaction

Remark:


New

Transaction

Remark:

All new transaction should be performed within the old warehouse following the new GST

behavior.

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Sections and updates coming soon…

10 Sections and updates coming soon…

o ISD - relevant for PL08 HotFix

o Reporting - relevant for PL08 HotFix (delivered as a GEP files via SAP Note)

o Job-Work scenario

www.sap.com/contactsap


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