2013 Copyright Genpact. All Rights Reserved. Presentation Title Goes Here Date: 8th Nov 13 Location: Hyderabad Speakers- Vivek Bhatia and Venkat Kompella *(Genpact)
India Localization Demystified 3 2013 Copyright Genpact. All Rights Reserved. Table of Contents About the speaker(s) Project Based tax transactions (O2C and P2P) Project Da Vinci Infrastructure Industry( Key Challenges) Questions Genpact Overview About the speaker(s) 5 2013 Copyright Genpact. All Rights Reserved. About the Speakers Vivek Bhatia Overall IT experience 12 Oracle Experience 13 Years Skill Set Oracle Apps Financials and Projects Oracle Corp Experience 3 years Qualifications Bachelor Of Engineering Masters if Business Administration ( Finance Full Time) Masters In Economics and Masters in Finance and Control Venkat Kompella* Overall IT experience 15 Years Oracle Experience 12 Years Skill Set Oracle Apps Financials and Projects Oracle Corp Experience 3 years Qualifications Bachelor Of Technology Masters in Business Administration ( Finance) Project Management Professional (PMP) from PMI, USA 6 2013 Copyright Genpact. All Rights Reserved. I have been impressed with the urgency of doing. Knowing is not enough; we must apply.
- Leonardo da Vinci India Localization in Oracle R12 8 2013 Copyright Genpact. All Rights Reserved. India Localization in Oracle R12 Tax Requirement
Direct Taxes
Indirect Taxes
Income tax
Tax Deducted at Source
Depreciation as per Income Tax Act
Tax Collected at Source
Service Tax
Customs
VAT & Sales Tax
Excise
Input Tax Recovery (VAT) Input Tax Recovery
Allocation with Excise Duty
CVD recovery and CENVAT
CENVAT
9 2013 Copyright Genpact. All Rights Reserved. R12 : A BIGTHANK YOU ORACLE : No Additional Patch No additional Localization Flex Fields Service Tax on Unmatched invoices : Reducing Redundancy and Non Value Added Jobs
WHAT MORE CAN BE ENHANCED: Transfer of Balances across Inventory Organizations automatically Pass Localization entries through SLA for all Sub Ledgers Considerations for Localization Configuration 10 2013 Copyright Genpact. All Rights Reserved. Considerations for Localization Configuration Inventory Organization Setup India Localization configuration is at inventory organization level. Tax regimes, Input credits, liability etc., are defined at the organization level Accounting, P&L and Balance sheet at inventory org level? Use Localization for Gross Reporting TDS liability to be consolidated centrally or maintained as per balancing segment This decides if we need inventory organization as part of our CoA and define TDS accounts as centralized or at balancing segment level 11 2013 Copyright Genpact. All Rights Reserved. Gross Reporting: Use a Combination of SLA and India Localization Business Requirement to have multiple receivables accounts along with gross up of Tax to revenue and expense Dr Receivables 1 Dr Receivables 2 Dr Receivables 3 Dr Expense (Tax) Cr Revenue Cr Revenue (Tax) Service tax 13 2013 Copyright Genpact. All Rights Reserved. Major features of Service tax functionality provided in the Oracle Financials for India are mentioned below: Defining Service tax regime and the registration details of the Organization. Definition of Service tax type codes, as applicable. Definition of rules for accounting for Service tax. Provision to default the Service type applicable for Suppliers/Customers. Provision to distribute the service tax credit available across inventory organizations. Facilitating the settlement of Service tax liability. Provision to maintain and view the Service tax repository. Reporting requirements with respect to Service tax. Service Tax 14 2013 Copyright Genpact. All Rights Reserved. 14 Assign Tax Type and Account Service Tax Registration 15 2013 Copyright Genpact. All Rights Reserved. Assigning Organizations
Regime has to be assigned to all organizations to which it is applicable. Taxes defined under this regime would default only for these organizations.
16 2013 Copyright Genpact. All Rights Reserved. Under the Organization details, User will be able to assign the Inventory Organizations to which the service tax regime is applicable. Also if an inventory organization is having multiple locations, all those locations have to be assigned under this regime. Otherwise processing of Service taxes will happen only for the assigned locations. Title 17 2013 Copyright Genpact. All Rights Reserved. To be able to make transactions in Order to Cash cycle, Customer additional information setup need to be completed for those Customers from whom service tax amount will be recovered. In this form, Service tax registration number and the Service tax type applicable for that particular Customer needs to provided. If Service type is defined here, then it will be defaulted in the transactions. Otherwise Users need to manually update the service type in the transactions.
Customer Additional Information 18 2013 Copyright Genpact. All Rights Reserved. To be able to make transactions in Procure to pay cycle, Supplier additional information setup need to be completed for those suppliers to whom service tax amount will be paid. In this form, Service tax registration number and the Service tax type applicable for that particular supplier needs to provided. If Service type is defined here, then it will be defaulted in the transactions. Otherwise Users need to manually update the service type in the transactions.
Supplier Additional Information 19 2013 Copyright Genpact. All Rights Reserved. In Tax code definition form, Service tax type codes can be defined and the same can be used in the transactions. It has to be noted that Service tax codes have to be defined as recoverable taxes by specifying the credit percentage as 100. Otherwise the accounting will not happen as mentioned in this document and those taxes will be considered for costing in Procure to pay cycle.
Tax code definition 20 2013 Copyright Genpact. All Rights Reserved. Currently the following tax types are applicable for Service tax and the same have been provided as seeded values in the tax type field: Service tax Education cess on Service tax Secondary Higher education cess on Service tax. Title 21 2013 Copyright Genpact. All Rights Reserved. It may be noted that the user in the application can manually add service types. The need for addition of service types arises whenever Government of India added more services vide inclusion in Finance Act. The same can be done using the below steps: Navigate to Oracle Purchasing > Setup > Purchasing > Lookup Codes Query with Type as JAI_SERVICE_TYPE Click on New and specify the code, Meaning, description and effective from date. By doing this, User will be able to select the new service types as well in the transactions. Service type mentioned in the Supplier additional information and Customer additional information would be used to default automatically in transactions like Purchase Order and Receivables transaction and Sales Order respectively. This defaulted value can be changed in those transaction forms. If this setup is not carried out and service type is not mentioned even in the transaction forms also, then Users will not be able to perform settlement. In Purchase Order localized form, as shown above, Service type got defaulted from the Supplier additional information setup. Also the User can change this value. Similarly in Sales Order localized form and Receivables transaction localized form also, User can change the defaulted service type values. However service type cannot be changed when a RMA is created with reference to Order or Invoice. In this case, Service type of the original order will get copied to the RMA order and is shown in view mode only. Inclusion of Service Types 22 2013 Copyright Genpact. All Rights Reserved. VAT and Service Tax on Work Orders Is it a Tradeoff? Complex PO (self service POs) are not supported by India Localization Complex POs provide the features of advance recoupment, retention and retention releases This is a trade off between using the Complex PO and India Localization Is there any workaround to this?
23 2013 Copyright Genpact. All Rights Reserved. VAT and Service Tax on Work Orders When we create complex PO there is no provision to include the India localization taxes When work confirmation done this is also in the self service pages with no provision for local taxes The work confirmation creates a receipt in the form Query for the receipt from the localization form and attach the required localization taxes. Now when the invoice is created by matching to the receipt the local taxes are included in the invoice
24 2013 Copyright Genpact. All Rights Reserved. Excise and Customs 25 2013 Copyright Genpact. All Rights Reserved. 25 Excise Duty Excise Duty Excise Duty is a federal tax on manufacture of goods Oracle Finance India localization provides solutions to meet the complex requirements 26 2013 Copyright Genpact. All Rights Reserved. Excise Define Excise Invoice Generation This feature can be used to automate the Excise Invoice document sequence generation - You can setup a document sequence for the combination of Transaction Type, Order/Invoice Type and Register Type. You can define an alpha/numeric value which would be prefixed to the number series generated for each excise invoice.
Pre Requisites: Setups needs to be done in define Bond register where the user needs to associate an Order type for all transactions Order Management module and Transaction source for all transactions from Accounts Receivable module. The Order type and transaction source will be associated with different type of excise removals (like domestic with excise, Bond, Export with excise etc.). 27 2013 Copyright Genpact. All Rights Reserved. Excise Invoice Generation contd. 28 2013 Copyright Genpact. All Rights Reserved. As a part of Localization , the sub-inventories have to be associated to a combination of Organization/Location. Excise related transactions and records would be updated only for those sub inventories that are identified as bonded for manufacturing organizations and as traded for trading organizations.
NAV: GEIN MMF Local Inventory > India Localization > Setup > Sub Inventory Locations
Define Sub-Inventory Locations 29 2013 Copyright Genpact. All Rights Reserved. The recording, recoverability and reporting of localization taxes would depend on the India Localization related information setup for the item The updation of the Dispatch transaction into the Excise / CENVAT credit would be considered only when the Excise /Modvat is set to YES. Accounting from Organization Additional Information The option chosen in the Item Class attribute would be the basis on which, the type of excise credit register that has to be considered. The Trading item is transacted in a trading item. Here initially you can define Attribute Template and then assign item with that template. NAV: GEIN MMF Local Inventory > India Localization > Setup > Item Setup > VAT/Excise Item Classification Define Item Localization Information 30 2013 Copyright Genpact. All Rights Reserved. Define Tax Code and Categories Tips: If you can identify your purchase and sales transactions into clear categories, for which a similar set of taxes with similar precedence and calculation are applicable, then you can group such taxes into a Tax Category.
In a Tax Category you can choose the Taxes, along with the precedence order and calculation basis. You can however, manually add new tax lines and can change, delete, change precedence for the defaulted lines. Basic, CST etc , VAT, Custom Duty 31 2013 Copyright Genpact. All Rights Reserved. Associate Tax Categories to Item Categories Tips Item Category allows you to assign Tax Categories to an inventory items in an Organization. You can attach an item category to the Additional customer/supplier information. The Taxes defaulted for a transaction line would be based on the Item Category attached to the Supplier/customer and the Tax Category assigned to the Item in this category. 32 2013 Copyright Genpact. All Rights Reserved. Tips Before you start using the Supplier/ supplier site for a localization transaction, it would be a necessary for you to define India Localization related information for the Supplier/ Supplier Site. The supplier registration information, with various tax authorities, Assessable Price List that would be the base for the calculation of the Excise Base Amount and default Item Category can be defined here. The definition would be the Supplier NULL Site and for Supplier Site. The primarily Tax defaulting would be from the Supplier Site. In absence of any Tax Category at this level, the system would pickup the value from the NULL Site. You will also have to enter the Income Tax and TDS related details applicable for the Supplier Site. Supplier Additional Information 33 2013 Copyright Genpact. All Rights Reserved. Tips The calculation of excise duty and updating of excise registers are based on the setup made in the define bond register. Before making this set up the user need to define the Order types and transaction sources. Excise transactions are classified as: Domestic with Excise Domestic without Excise Export with Excise Bond Register (Export under Bond) Excise transactions need to be identified based on the Organization/Location combination and against each excise transaction multiple Order types and Transaction sources can be assigned. Order type need to be assigned to excise related transactions from Order Management Module and Transaction source need to be assigned for all excise related transactions through the Receivable module. NAV: GEIN MMF India Local Order Management > India Localization > Registers > Define Bond Registers Bond Registers Export of Excisable product. SEZ sales> Amount to Govt , Govt provides Bond e.g 1 lakh.. Shipping sales order. Tax amt is 1000 34 2013 Copyright Genpact. All Rights Reserved. Additional Price List Tips: If the Taxable basis for the calculation of the excise duty is different from the Price at which the item is sold, the, you will have to create additional Price lists with the Item Excise Assessable Price. This price list has to be attached to the Customer/Customer Site and Supplier/Supplier Site. The assessable price would be considered only for the calculation of the excise duty. 35 2013 Copyright Genpact. All Rights Reserved. Tips Claim Cenvat on Receipt NAV: GEIN MMF Local Purchasing > India Localization > Receipts > Claim Modvat on Receipts To claim the Cenvat against receipt put the Organization name, Location, and Receipt Number. Then click on Find Button.
Put the Excise Invoice Number and Date check Claim CENVAT flag and finally click on Claim button .
Claim Cenvat on Receipt 36 2013 Copyright Genpact. All Rights Reserved. Transaction Type Impact on Excise Registers for Item Types RMIN FGIN CGIN Miscellaneous Receipt RG Update RG 23A Part 1 RG 1 RG 23C Part 1 Miscellaneous Issue RG Update RG 23A Part 1 RG 1 RG 23C Part 1 Cycle Count Adjustment RG 23A Part 1 RG 1 NA Physical Inventory Adjustment. RG 23A Part 1 RG 1 RG 23C Part 1 Move Order Issue RG 23A Part 1 RG 1 NA WIP Component Return RG 23A Part 1 RG 1 NA WIP Assembly Completion RG 23A Part 1 RG 1 NA WIP Assembly Return. RG 23A Part 1 RG 1 NA WIP Negative Component Issue RG 23A Part 1 RG 1 NA WIP Negative Component Return RG 23A Part 1 RG 1 NA WIP Scrap Transaction RG 23A Part 1 RG 1 NA Staging transfer of a sales order RG 23A Part 1 RG 1 NA Transactions Overview & Register Update
37 2013 Copyright Genpact. All Rights Reserved. Title 38 2013 Copyright Genpact. All Rights Reserved. Title 39 2013 Copyright Genpact. All Rights Reserved. Title 40 2013 Copyright Genpact. All Rights Reserved. Title 41 2013 Copyright Genpact. All Rights Reserved. The Duty advance paid to the Customs Authority has to be booked against a Customs Authority, through a Bill of Entry. Before you create a Bill of Entry India Localization Transaction, you should have defined a Customs Authority. You would create a Supplier and Site for this Authority. Additionally, in the Type field on the Classification tab, choose Custom Authorities-IND. On doing this, when defining a Bill of Entry transaction, the Supplier name would be listed in the Customs Authority field LOV on the Bill of Entry India Localization screen. 1.Custom Rate will be 10 %, 7.5% , 5% 2. CVD (Purchase Price +Custom Duty) 3. Cess 2% on Custom 4. SH 1 %(Custom and CVD). 5. SAD ( Applicable on all)
Define BOE Agent It would be a pre-requisite to define a BOE Agent before you do a BOE Transaction. Navigate to the Payables Setup and define the Clearing & agent information. The agent codes would appear in the LOV of Agent Code field of the Bill of Entry screen.
NAV: GEIN MMF India Local Payables > India Localization > Setup > Others > BOE Agent Define Customs Authority Tips on TDS 43 2013 Copyright Genpact. All Rights Reserved. TDS Considerations TDS liability to be consolidated centrally or maintained as per the inventory organization / balancing segment
If it needs to be consolidated then defining one tax code is sufficient
If it needs to be accounted for each balancing segment :
Define different tax codes for each balancing segment and assign these tax codes to the respective suppliers so that the tax liability hits the respective balancing segments
OR
Update the company segment for the supplier credit memo and IT invoices using SLA to ensure 44 2013 Copyright Genpact. All Rights Reserved. TDS on Prepayments When prepayments are applied to an invoice the TDS deductions are reversed and creates RTN TDS invoices Ensure that the invoices are validated after the application of prepayment invoice to have the TDS invoices in sync. When the prepayment application is unapplied it created CAN RTN TDS invoices. Application and application creates multiple RTN invoices and can lead to reconciliation issues. TDS Invoice DFF will carry Invoice ID against which TDS invoice is corresponding to If the same supplier is a vendor and sub-contractor requiring TDS on subcontractor invoices and no TDS on vendor invoices (e.g. Oracle Implementation and License Sale by Partner) Create two different sites for the supplier for vendor and subcontractor Update the TDS information for the subcontractor and leave the information for vendor blank Invoices will be created based on the site information it will follow the TDS applicability Appendix 46 2013 Copyright Genpact. All Rights Reserved. Depreciation Defining Block of Assets under different categories based on applicable rate of depreciation
Defining Depreciation calculation criteria based on the acquisition date of interest. 100% Depreciation on assets acquired in first six months and 50% on assets acquired in second half of financial year Questions ?? 48 2013 Copyright Genpact. All Rights Reserved. Oracle ERP Suite | Oracle Database | Siebel | Hyperion + OBIEE ERP STRATEGY Implementation/ Rollouts Upgrades Support Manufacturing Discrete Process
BFS& I Banking & FinSvcs Insurance
Business Services Telecom, Media Hospitality Oracle EAS Practice An Overview SIZE Over 3,000 Oracle professionals Over 3.1 million days of Oracle experience
EXPERIENCE 160+ go-lives in 40+ countries Implemented and Supported Oracle for aggregate revenue of 250 Billion USD Support more than 175 Oracle ERP Instances 60% resources > 6 years of industry experience > 80% resources trained in Lean, Six Sigma, CMMi
EXPERTISE / SKILLS Centers of Excellence (CoE) dedicated for Industry Vertical Solutions Oracle Gold Partner 24x7 maintenance & enhancement capabilities Strong DNA of managing Program Management Offices (PMO) 49 2013 Copyright Genpact. All Rights Reserved. $14B Consumer & Industrial Manufacturer $8B ETO Turbine Manufacturer $2B ETO Gas Engine Manufacturer $1.5B Sub-Sea Drilling Manufacturer $2B Avionics & Display Manufacturer $250M Furniture Manufacturer $12.7B Automotive Manufacturer $3.6B Hospitality Loding $16B Cable & Telecom $12B Media Company $2.1B Telecom Services $5B Nulear Energy Construction $6.4B Software and Technology $1.2B Staffing Temp Services $15B Consumer Finance Company $23B Commercial Finance Company $500M Project Manufacturer $1.3B Trading Company $1.8B Information Services $2B Commercial Lending $200M Telecom Equip Manufacturer $13B Healthcare Equipment Manufacturer $8B Plastics Molding Manufacture $15B A&D Manufacturer $3B Renewable Energy Manufacturer $3B ETO Electronics Manufacturer $6B ETO Engine Manufacturer $52B Life Sciences Sample ERP Client Profiles Thank You 2013 Copyright Genpact. All Rights Reserved.