Former Member

June 8, 2017 4 minute read

A solution
for Indian
GST

implementation for simple procurement

scenario using TAXINN
FollowRSS feed
9 Likes 19,282 Views 8 Comments

This is an attempt to incorporate the tax reformation in India- GST via a simple SAP solution using
the existing provisions in ECC 6.0 EHP 6.
Brief Requirement:
Goods and Services Tax (GST) is an indirect tax throughout India to replace existing multiple taxes
levied by the central and state governments.
Applicable GST rates are determined by the combination Nature of Purchase and Harmonized
System of Nomenclature (HSN) code assigned to material.
CGST Central Goods and Service Tax

SGST State Goods and Service Tax

IGST Integrated Goods and Service Tax

Nature of Purchase Before GST After GST

Goods Purchase within State Excise + VAT CGST + SGST

Goods Purchase inter State Excise + CST IGST

Import Purchase BCD, CVD, AED, CESS, ECESS IGST

Inward branch transfer Excise/ No Excise No Tax

(Intra State)

Inward branch transfer Excise/ No Excise IGST

(Inter State)

Job work expense No tax, only VAT in case CGST + SGST

of Painting contract

Service expense Service Tax CSGT + SGST/ IGST

GST CGST SGST IGST UGST

RATE %
BANDS* 2.5 2.5 5 *

6 6 12 *

9 9 18 *

14 14 28 *

*Mapped to Material HSN

(Harmonized System Nomenclature)

Single registration per PAN and state of business for CGST, SGST and IGST

The scenario considered is a simple Procure to Pay cycle where Quotations received from the
Vendor determine the Taxes applicable.
For complex Supply Chain scenarios where multiple goods movements, subcontracting,
consignment, etc. are involved, this might not be an efficient solution for GST implementation. SAP
recommended Notes and Patches should be followed in this case.
Configuration Steps:
Steps t-code

Assign Tax Procedure to Country OBBG

Define Tax Access Sequence OBQ2/OBYZ

Define Condition Types(Tax) OBQ1/OBYZ

Create account keys OBCN

Define Tax procedure OBQ3/OBYZ

Assign GL to account keys & GL OB40

Create Tax code in Country FTXP

Maintain Tax Codes for Excise Duties Using Condition Technique SM30 –
J_1ICONDTAX

Maintain Tax Condition Records FV11

1. Assign Tax Procedure to Country

T-code: OBBG

1. Define Tax Access Sequence

T-code: OBQ2
Copy Access sequence JTAX and create new sequence ZGST.
Include table 03 for condition value determination based on Country and Tax code.
Non-deductible tax percentages will be determined based the last table in access.

1. Define Condition Types(Tax)

T-code: OBQ1 or OBYZ

Based on the available information the below listed GST related condition types are created:
Tax type Condition Type Description

CGST JICG IN: Central GST

SGST JISG IN: State GST

IGST JIIG IN: Integrated GST

UGST JIUG IN: UnionTer. GST

CGST JICN IN: Central GST – ND

SGST JISN IN: State GST – ND

IGST JIIN IN: Integrated GST – ND

UGST JIUN IN: UnionTer. GST – ND

CGST JICR IN: CGST Rev. Charge

SGST JISR IN: SGST Rev. Charge

IGST JIIR IN: IGST Rev. Charge

IGST JIMD IN: Import GST deduct

IGST JIMN IN: Import GST – ND

ND- non-deductible
 1. Create Account Keys

T-code: OBCN
Create new Account keys for all conditions who need to be assigned individual GLs

Non-deductible conditions can be assigned to standard key NVV

 1. Define Tax procedure

T-code: OBQ3
Append your GST condition types to TAXINN tax procedure as shown below;
 1. Assign GL to account keys & GL

T-code: OB40
Assign GLs to transaction key at chart accounts level. Separate GLs can be assigned for each Tax
code.

1. Create Tax Codes in Country IN

T-code: FTXP
Create tax codes in Country India
Tax codes are required to be captured in a TR separately;
FTXP-Tax Code-Transport-Export and save in TR

1. Maintain Tax Codes for Excise Duties Using Condition Technique

T-code: SM30
table: J_1ICONDTAX
This is an important step as we are using TAXINN tax procedure. If this is not maintained tax code
does not work in PO.

1. Maintain Tax Condition Records

T-code: FV11
Complete this master data activity and maintain the required tax percentages according to you
access sequence/key combination for them to be determined in PO.

The below message may appear while maintaining Condition Record;

Tax ID G2 cannot be checked (there are several/no tax records)
Message no. VK242
This is because we did not maintain any Tax Percent. Rate in FTXP. This will not affect tax
determination in PO.
rmer Member
June 8, 2017 4 minute read

A solution for Indian GST implementation for

simple procurement scenario using TAXINN
FollowRSS feed
9 Likes 19,282 Views 8 Comments

This is an attempt to incorporate the tax reformation in India- GST via a simple SAP solution using
the existing provisions in ECC 6.0 EHP 6.
Brief Requirement:
Goods and Services Tax (GST) is an indirect tax throughout India to replace existing multiple taxes
levied by the central and state governments.
Applicable GST rates are determined by the combination Nature of Purchase and Harmonized
System of Nomenclature (HSN) code assigned to material.
CGST Central Goods and Service Tax

SGST State Goods and Service Tax

IGST Integrated Goods and Service Tax

Nature of Purchase Before GST After GST

Goods Purchase within State Excise + VAT CGST + SGST

Goods Purchase inter State Excise + CST IGST

Import Purchase BCD, CVD, AED, CESS, ECESS IGST

Inward branch transfer Excise/ No Excise No Tax

(Intra State)

Inward branch transfer Excise/ No Excise IGST

(Inter State)

Job work expense No tax, only VAT in case CGST + SGST

of Painting contract

Service expense Service Tax CSGT + SGST/ IGST

GST CGST SGST IGST UGST

RATE %
BANDS* 2.5 2.5 5 *

6 6 12 *

9 9 18 *

14 14 28 *

*Mapped to Material HSN

(Harmonized System Nomenclature)

Single registration per PAN and state of business for CGST, SGST and IGST

The scenario considered is a simple Procure to Pay cycle where Quotations received from the
Vendor determine the Taxes applicable.
For complex Supply Chain scenarios where multiple goods movements, subcontracting,
consignment, etc. are involved, this might not be an efficient solution for GST implementation. SAP
recommended Notes and Patches should be followed in this case.
Configuration Steps:
Steps t-code

Assign Tax Procedure to Country OBBG

Define Tax Access Sequence OBQ2/OBYZ

Define Condition Types(Tax) OBQ1/OBYZ

Create account keys OBCN

Define Tax procedure OBQ3/OBYZ

Assign GL to account keys & GL OB40

Create Tax code in Country FTXP

Maintain Tax Codes for Excise Duties Using Condition Technique SM30 –
J_1ICONDTAX

Maintain Tax Condition Records FV11

1. Assign Tax Procedure to Country

T-code: OBBG

1. Define Tax Access Sequence

T-code: OBQ2
Copy Access sequence JTAX and create new sequence ZGST.
Include table 03 for condition value determination based on Country and Tax code.
Non-deductible tax percentages will be determined based the last table in access.
 1. Define Condition Types(Tax)

T-code: OBQ1 or OBYZ

Based on the available information the below listed GST related condition types are created:
Tax type Condition Type Description

CGST JICG IN: Central GST

SGST JISG IN: State GST

IGST JIIG IN: Integrated GST

UGST JIUG IN: UnionTer. GST

CGST JICN IN: Central GST – ND

SGST JISN IN: State GST – ND

IGST JIIN IN: Integrated GST – ND

UGST JIUN IN: UnionTer. GST – ND

CGST JICR IN: CGST Rev. Charge

SGST JISR IN: SGST Rev. Charge

IGST JIIR IN: IGST Rev. Charge

IGST JIMD IN: Import GST deduct

IGST JIMN IN: Import GST – ND

ND- non-deductible
 1. Create Account Keys

T-code: OBCN
Create new Account keys for all conditions who need to be assigned individual GLs

Non-deductible conditions can be assigned to standard key NVV

 1. Define Tax procedure

T-code: OBQ3
Append your GST condition types to TAXINN tax procedure as shown below;

1. Assign GL to account keys & GL

T-code: OB40
Assign GLs to transaction key at chart accounts level. Separate GLs can be assigned for each Tax
code.

1. Create Tax Codes in Country IN

T-code: FTXP
Create tax codes in Country India
Tax codes are required to be captured in a TR separately;
FTXP-Tax Code-Transport-Export and save in TR

1. Maintain Tax Codes for Excise Duties Using Condition Technique

T-code: SM30
table: J_1ICONDTAX
This is an important step as we are using TAXINN tax procedure. If this is not maintained tax code
does not work in PO.

1. Maintain Tax Condition Records

T-code: FV11
Complete this master data activity and maintain the required tax percentages according to you
access sequence/key combination for them to be determined in PO.

The below message may appear while maintaining Condition Record;

Tax ID G2 cannot be checked (there are several/no tax records)
Message no. VK242
This is because we did not maintain any Tax Percent. Rate in FTXP. This will not affect tax
determination in PO.
https://www.youtube.com/watch?v=n2TjPNetT4M