Ofi GST P2P

Oracle Financials for India (OFI)
Goods and Services Tax (GST)

Procure to Pay Functional
Author: Vaishali and Somdeep (P2P)

Somdeep (Reverse Charge and ERS Invoice)
Subbu Nemani (Revision of GST P2P )
Laxminarayana (Revision of Inventory Costing)
Ritesh and Vishwajit (Revision of RCM and client
extension package)
Creation Date: 21-Mar-2016

Last Updated: 26-OCT-2021
Document Ref:
Version: 7.0
Organization: Oracle India Private Limited.
OFI-GST Procure to Pay Flow 1

Document Control
Change Record
Date Author Vers Change Reference

ion
21-Mar-16 Vaishali and 1A Initial document

Somdeep
30-Sep-16 Vaishali and 1.0 Phase-I frozen document
Somdeep
30-Dec-16 Vaishali and 1.1 Modified the ERS invoice flow chart to
Somdeep include running ADS (Pay On Receipt
AutoInvoice)’ Program separately
02-Mar-17 Somdeep 2.0 Reverse Charge Process and ERS
Invoice
31-Apr-2017 Somdeep 3.0 Reverse Charge in standard Invoice
20-Nov-2017 Somdeep 4.0 Reverse Charge Changes post RUP10
Adapting to changes as per latest

features/forms/functionality as per
RUP 11 Sep consolidation patch.
Modification of Tools India tax details
form, changes in Process Claim form
11-Jan-2019 Subbu Nemani 5.0 are shown.
Laxminarayana Included the Inventory Costing

22-Feb-2019 Ryakala 6.0 Transactions.
Ritesh/Vishwajit Included RCM Setup incase of

26-Oct-2021 7.0 recoverable Tax.
Introduction of profile option
for change in client extension
package
Reviewers
Name Position
Rajnish Kumar Director, Tax Development
V S Baburaj Director, Product Strategy
Audience

Name Position
12.1 & 12.2 Implementation team
12.1 & 12.2 Customers

Table of Contents
Document Control ............................................................................................................................... 2
Phase1 .................................................................................................................................................... 6
1 – Introduction....................................................................................................................................... 6
2 – Scope ................................................................................................................................................. 6
3 – Prerequisite Setups ............................................................................................................................ 6
4 – Functional Flow ................................................................................................................................. 7
5 – Requisition to Purchase Order (Pre-PO- PO Documents)..................................................................... 8
5.1 Flow Diagram................................................................................................................................. 8
5.2 Create Requisition ......................................................................................................................... 9
5.3 India tax details form ................................................................................................................... 12
5.4. Create RFQ (Request for Quotation) ............................................................................................ 13
5.5 Creating Quotation ...................................................................................................................... 16
5.6 Create Purchase Order from the approved Requisition ................................................................ 18
6 – Tax recalculation logic ...................................................................................................................... 22
7 – Tax on receipts................................................................................................................................. 22
7.1 Flow Diagram............................................................................................................................... 22
7.2 Receipt Creation .......................................................................................................................... 23
8 – Tax Accounting on Receipts.............................................................................................................. 28
8.1 Accounting for Receipt Routing - Direct Delivery and Standard Routing ...................................... 29
8.1.1 Flow Diagram ........................................................................................................................ 29
8.1.2 Direct Delivery – Recoverable Tax ......................................................................................... 31
8.1.3 Direct Delivery – Non-Recoverable Tax .................................................................................. 31
8.1.4 Standard Routing - Recoverable Tax ...................................................................................... 31

8.1.5 Standard Routing - Non-Recoverable Tax............................................................................... 31
9 – PO/Receipt Matched AP invoice ....................................................................................................... 32
9.1 Flow Diagram............................................................................................................................... 32
9.2 Process and Accounting ............................................................................................................... 33
10 – Standalone AP Invoice ................................................................................................................... 38
10.1 Flow Diagram ............................................................................................................................. 38
10.2 Process and Accounting ............................................................................................................. 38
11 –Tax Recovery Accounting (Interim).................................................................................................. 41
11.1 Flow Diagram ............................................................................................................................. 41
Process Claim Functionality ................................................................................................................... 43
12 – Third Party Invoices........................................................................................................................ 46
12.1 Flow Diagram ............................................................................................................................. 47
13 – Inventory Costing ........................................................................................................................... 52
13.1. Introduction to Inventory Costing.............................................................................................. 52
13.2 Scope ......................................................................................................................................... 52
13.3. Setup for GST Inventory Costing ................................................................................................ 53
13. 4. Inventory Costing Transactions ................................................................................................. 55
Costing Effect – Accounting Entries .................................................................................................... 59
13.5. Average Costing ........................................................................................................................ 59
13.2 Standard Costing ........................................................................................................................ 60
14 – Reverse Charge .............................................................................................................................. 62
14.1 Law ................................................................................................................................................ 62
14.2 GST Functionality of Reverse Charge .............................................................................................. 63

14.3 Flow Diagram................................................................................................................................. 63
14.4 Configuration................................................................................................................................. 64
14.5 HSN/SAC Code ............................................................................................................................... 68
14.6 Linking of Reporting Code value to 3rd party Registration .............................................................. 69
14.7 Prepayment: .................................................................................................................................. 69
4.8 Standard Invoice .............................................................................................................................. 71
14.9 Period Ending Process .................................................................................................................... 73
14.10 Accounting................................................................................................................................... 76
14.11. Reverse Charge on Standalone standard invoice ......................................................................... 76
14.12 Reverse Charge Self Invoice Number generation ..................................................................... 79
14.12.1 Setup for RC Self Invoice .................................................................................................... 79
14.12.2. Process Flow – RC on Prepayment .................................................................................... 80
14.12.3. Process Flow – RC on Invoice ............................................................................................ 83
15 – ERS Invoice .................................................................................................................................... 85
16 – Introduction of profile option for change in client extension package ........................................... 89
17 – Summary ....................................................................................................................................... 91

Phase1
1 – Introduction
The Procure to Pay cycle (P2P) is vital to an organization as in this process the organization buys and
receives goods or services from its vendors and makes necessary payments. This business process
covers the process of requesting, purchasing, receiving, paying for and accounting for goods and
services.
2 – Scope
This document provides the details of Functional flow for ‘Oracle Financials for India’ (OFI) Procure to
Pay cycle from GST point of view along with accounting entries.
Note: This document provides the details of Functional flow for ‘Oracle Financials for India’ (OFI)
Procure To Pay cycle from GST point of view along with accounting entries. Note: The current
content has been compiled in reference to the frozen scope of the Phase-I deliverables (Ref: GST
Phase -1 Deliverables.docx)
3 – Prerequisite Setups
For the P2P cycle to work in the new GST architecture, the below setup needs to be defined
 Regime
 Tax types
 Tax rates
 Tax Categories
 Tax Rules
 Tax Defaulting basis
 Item Classification
 Claim term
 Common Configuration
 First and Third party Registration

Flow Diagram
To start with, this document facilitates with a flowchart which will allow the users to get an outline of the
setup flow for Procure to Pay Cycle. Some of the steps outlined in this flowchart are required and some
are Optional. Required step with Defaults means that the setup functionality comes with pre–seeded,
default values in the application. However, to ensure a successful setup, you need to review those
defaults and decide whether to change them to suit your business needs. If you need to change the
default values, you should perform the corresponding setup step. You need to perform Optional steps
only if you plan to use the related feature.
Regime Registration Tax types (R) Tax rates (R)

(R
Tax Defaulting Document sequence

basis (R) Tax Categories (R)
(O)
Define Item Define Claim Terms

Tax Rules (R)
Classification (R) (R)
Third Party First Party Common Configuration

(R) (R)
(R)
Note: - In The above flow diagram R standard for ‘Required’ and O stands for ‘Optional’
4 – Functional Flow
The P2P cycle comprises of the following steps,
Create Requisition Create RFQ Create Quotation

(Localization taxes – (Localization taxes – (Localization taxes –
applied) Applied) Not Applied)
Receipt creation (Localization taxes Create Purchase

–Applied) Taxes are freezed Once Order (Localization
receiving is done taxes – Applied)
Create Payable Invoice-

Localization taxes from receipts Invoice Payment
are copied to Invoice
OFI-GST Procure to Pay Flo w 7
5 – Requisition to Purchase Order (Pre-PO- PO Documents)
Every organization that operates a business has to purchase material such as raw materials services etc.
The procurement process of any organization consists of many steps like material requirement planning,
creation of purchase requisition, receiving quotations from various suppliers etc. Please refer to the
following section for details
5.1 Flow Diagram
Create Requisition Enter

Header/Line Info
Navigate to Tools India Tax Details. Tax category is

defaulted based on defaulting mechanism defined
Create RFQ  Tax category is defaulted from requisition
Create Purchase Order

and Approve

defaulted from requisition to Purchase order

5.2 Create Requisition
A purchase requisition is an internal request to purchase a material / service which will have details of
certain quantity of material or service on a certain date which is required by the organization. To create
requisition navigate to
Responsibility  Oracle Purchasing Requisitions  Requisitions
Enter Requisition Header:
The header holds the general information about the requisition that is related to all the lines. Choose the
requisition type (here it is purchase requisition). Preparer is the default person who is creating the
requisition and cannot be changed. You can give the description in the description field.
Enter Requisition Line:
In the requisition line, select the item that you wanted to purchase and enter the quantity and need by
date. In the Source details tab, you can input detailed information. You can give a specific note to the
buyer which might give particular information related to this purchase. RFQ required check box denotes
that the purchase of the item requires a request for quote.
Requisitions can be added in any currency set up in EBS by identifying the currency code and exchange
rate type on currency tab

Click on distribution button and enter the charge account
Close the form and save your work. Click the ‘Approve’ button to submit this requisition for approval.
Now navigate to Tools  India tax details form. The India tax details form will show the tax category
Defaulted.
For more information on the tax defaultation logic refer the ‘OFI-GST- Tax Defaultation flow’
document.

Tax
Category is
defaulted
Latest Changes on RUP 11
Form: Tools – India Tax Details has undergone a change when compared with that of during RUP7,8 & 9.
Below is the latest form.
Henceforth, any reference to tools- India tax details form will be referred to the above form.

Notes:-
 Unlike earlier we will no longer have Localized forms in the new GST solution and to view the tax
details the navigation is Tools India tax details
 Tax category defaulted based on tax defaulting logic can be manually overridden at each document
level until the document is approved.
5.3 India tax details form
SL No Field Functional Description Query/Enabled
1 Organization Inventory Organization name No
2 Location Inventory Organization Location No
3 Document Number PO number No
4 Revision / release Number No
5 Currency PO currency No
6 Amount PO line amount No
7 Tax amount Total tax amount No
8 Total Amount Total PO amount No
9 Line Number Po Line number No
10 Item Item Code No
11 Item Description Descript of the item attached to PO No
12 Tax category Tax category Defaulted based on Yes

defaulting Mechanism
13 Tax rate name Tax type attached to the tax No

category
14 Tax type Tax type attached to tax category No
15 Tax point basis Determines the point in which tax No

accounting is done. Gets defaulted
from Tax type setup

16 Precedence Gets defaulted from tax category No
setup
17 Tax conversion date Date on which tax is calculated No
18 Tax rate Tax rate defined at tax rate setup No
19 Tax amount Amount calculated for each tax type No
20 Recoverable amount Tax amount which can be No

recovered. Get populated only if the
tax type is a recoverable
21 Recoverable Get populated only if the tax type is No

a recoverable
22 Inclusive Get populated only if the tax type is No

a inclusive
23 Self Assessed / reverse charge Gets defaulted from tax type No
24 Party name and Party type Gets defaulted from PO Yes
5.4. Create RFQ (Request for Quotation)

A Request for Quotation (RFQ) is a formal request sent to the suppliers to find the pricing and other
information for an item or items. Based on the information supplied, the supplier quotes a quotation
against the RFQ form.
In Oracle EBS, RFQ’s can be auto created from an existing Purchase Requisition or can be a fresh RFQ.
Navigation to Auto create the RFQ is
Responsibility  Oracle Purchasing (USA) Auto Create and then query the Requisition number
Your Requisition summary is shown in the next screen. Check box your Requisition line and in
the Document Type, select RFQ and click Automatic button to Auto Create RFQ.
It will navigate to a new window. Here the RFQ Type is Standard RFQ and click create button

Select the line
against which RFQ
needs to be Select
In the next window, RFQ is auto created from an existing Purchase requisition.
Click Suppliers button and enter the details of the Suppliers to whom you want to send this RFQ.

Click on Terms button and add payment terms and freight terms. Click Price Breaks button for entering
pricing information for the RFQ.
Now from the Tools India tax details form, we can see that tax category is defaulted
Tax category is
defaulted
Save the transaction.

Tools- India Tax details form on latest patches when compared with that of RUP 7,8 & 9 has undergone a
change. Below is the form that will be appearing over the latest patches.
5.5 Creating Quotation

A quotation is a supplier’s response to RFQ. Now we will create quotations based on the response from
the suppliers with relevant to RFQ which we have created in step 5.4.
To create a quotation from the RFQ, first query the RFQ. The below picture shows the completed RFQ.
Tools
Copy
Document

In the next screen, enter the details of quotation sent by the supplier. Click OK button.
Repeat the same steps if you want to create multiple quotation for multiple suppliers.
Once the quotation is created, system will show the below message
Change the status of the quotation to Active and approve the quotation.

Change
status to
active
5.6 Create Purchase Order from the approved Requisition

Purchase Order (PO) is the formal request to a vendor to supply certain materials or services. A PO can
be created with reference to a requisition or RFQ or another PO.
Responsibility  Oracle Purchasing Auto Create and then query the Requisition number
Select Document
type as ‘Standard
PO’

Your Requisition summary is shown in the next screen. Check box your Requisition line and in
the Document Type, select standard PO and click Automatic button to Auto Create PO. By clicking
Automatic button, a standard PO is created based on the details provided in the Purchasing requisition.
You can select Supplier either in the New Document form or in the Purchase Order form
Click on ‘Create’
Button to confirm
the PO creation
After clicking on the Create button in the above screen a Standard PO is created as follows

In the shipment form, Shipment number, Org, Ship-to, UOM, Quantity and Need-by-date are shown by
default. These fields can be edited as needed.
Even in the more tab and distribution details tab, the default values will be populated from requisition.
Now, Navigate to Tools  India tax details.
The default tax category is automatically defaulted here
Tax category is
defaulted from
requisition level
Now approve the PO. No accounting entry happens when a PO is created.
Note:
Unlike earlier we will no longer have Localized forms in the new GST solution and to view the tax details
the navigation is Tools  India tax details
On the latest patches, tools- India tax details form has undergone a change wherein below is the latest
form.

6 – Tax recalculation logic
As per the current architecture, the tax defaulting engine should recalculate the taxes at every document
level. However if the tax is already defaulted / manually overridden at parent document level, then the
same tax category gets defaulted for further documents until unless there is some change. If the Primary
document does not have the tax category attached, then based on the tax defaulting logic the tax
category will get defaulted at each document level.
7 – Tax on receipts
Once the PO is sent to the supplier, the supplier sends the goods to the organization. The goods now
have to be received in Oracle.
7.1 Flow Diagram
Select the PO lineEnter

Inventory details

defaulted from PO level
Check on ‘Confirm taxes’ Check box to freeze the tax

category and it is mandatory to check
Navigate to Receipt form

and Save the receipt
‘Receiving Transaction processor’ program will be fired and

it will process Base / Localization tax details

7.2 Receipt Creation
Navigation for creating a receipt is
Responsibility  Oracle Purchasing  Receiving  Receipts
Enter the PO number and click Find button
Select the line

against which
receipt needs to Shows the PO
be created details against
which receipt is
created
Check the Lines you want to receive and enter the sub inventory details
In the lower part of the screen, Purchasing displays the following detail information for the current
shipment line: Order Type, Order Number, Source, Due Date, Item Description, Hazard, Destination, UN
Number, Receiver Note, and Routing.
Now if we navigate to Tools  India tax details, we can see that tax category is defaulted here also.

Tax category
defaulted
Now we have to click on ‘confirm taxes’ check box to freeze the tax category. Once this check box is
checked, overriding the tax category is not possible.
Latest changes on RUP 11
From the above screen shot, only change as per the latest RUP patches is as below:
Where, there is a provision to capture Supplier invoice number, Supplier invoice date for the respective
transaction. Rest every other process and functionality is similar which was mentioned previously.

Note:
 If a receipt is saved without checking the ‘Confirm Taxes’ check box, the Receiving Transaction
Processor program will end in error and no receipts will be created.
 In GST solution ‘India Receiving Transaction’ Processor program will not be triggered and has no
relevance.
 Unlike earlier we will no longer have Localized forms in the new GST solution and to view the tax
details the navigation is Tools India tax details
Once the check box is checked, below message will appear
‘Confirm Taxes’
check box
needs to be
checked to
freeze the taxes
before receipt
creation
Confirmation
message once
the taxes are
freezed

Latest tools – India Tax details form looks like below .
Click on Header and save the receipt to get the receipt number
Once the receipt is saved, system automatically triggers the “Receiving Transaction Processor” (RTP)
concurrent. Unlike earlier, now “India Receiving Transaction Processor program” will not be fired. The
base Receiving Transaction Processor concurrent itself will process the India localization tax details.

Receiving transaction
processor program is fired
after receipt creation and it
will create / process both
base receipt detail as well
as Localization tax details
Once the RTP concurrent is completed, in the Receiving transaction Window we can see that receipt
processing has already happened

8 – Tax Accounting on Receipts
Based on the tax point basis, tax types like recoverable / non-recoverable, different routing method
adopted, different accounting entries will get generated at different stages.
The accounting entry generated after the receipt creation and this is the core accounting
Event Account Debit Credit
Receiving Inventory Line Amount

Receipt
Inventory AP Accrual Line Amount
For the India tax details, the below lines are inserted in GL_INTERFACE table after the Receiving
transaction processor program is completed.
The below script can be used extract data from GL_INTERFACE
Select gcc.segment1,
gcc.segment2,gcc.segment3,gcc.segment4,gcc.segment5,gi.code_
combination_id,gi.entered_dr,gi.entered_cr,gi.user_je_category_na
me,gi.reference10
from gl_code_combinations gcc, gl_interface gi
where gi.date_created like sysdate and gi.code_Combination_id =
gcc.code_Combination_id and reference10
OFI-GST Procure like '%Receipt
to Pay Flow 28
number%';
Below accounting entry is generated for each tax type
Receiving Inventory Tax Amount

Receipt
Inventory AP Accrual Tax Amount
8.1 Accounting for Receipt Routing - Direct Delivery and Standard Routing
8.1.1 Flow Diagram
Create PO Receipt Routing set to
Direct Delivery Standard Routing
Navigate to Tools India Tax Details. Navigate to Tools India Tax Details.
Attach Category recoverable or Non- Attach Category recoverable or Non-
recoverable recoverable
Navigate to Receipt form and select Navigate to Receipt form and select
the PO line for receipt creation the PO line for receipt creation
Navigate to Tools India Tax Details. Navigate to Tools India Tax Details.
Check ‘Confirm taxes’ check box. Check ‘Confirm taxes’ check box.
‘Receiving Transaction processor’ program ‘Receiving Transaction processor’ program

will be fired and it will process Base / will be fired and it will process Base /
Localization tax details. Both Receiving and Localization tax details. Only Receiving
Delivery transaction will be created. transaction will be created.
Lines are inserted in GL_INTERFACE table Lines are inserted in GL_INTERFACE table
for tax accounting (refer query mentioned in for tax accounting (refer query mentioned in
Chapter 8 to extract the data) Chapter 8 to extract the data)
Perform the Receiving transaction by navigating to

Purchasing Receiving  Receiving transactions
When a recoverable tax category is attached, in India tax details form (both at PO and receipt level) the
Recoverable check box will be checked and recoverable amount will be populated.
If Recoverable check box is appearing as not checked at Receipt level, though the taxes applied are
recoverable and the same taxes “Recoverable” being checked at Purchase Order level, it means that the
necessary setups to ensure that the taxes flow are recoverable are not performed.
Setups for Taxes to flow are Recoverable

 For a tax type to be recoverable, the below setup has to be in place
- Recoverable check box needs to be checked at Tax type Setup
- Recoverable option needs to be set to ‘Yes’ in item classification setup
- Claim term has to be defined for the Tax type.
If any of the above setup is missing, then the tax type will be treated as a non-recoverable tax.
When a non-recoverable tax category is attached, in India tax details form (both at PO and receipt level)
the Recoverable check box will be unchecked and recoverable amount will not be populated.
Recoverable check box is

unchecked and
Recoverable amount is not
calculated.
8.1.2 Direct Delivery – Recoverable Tax
The accounting entry generated in GL_INTERFACE is
Tax Interim Recovery Tax Amount

Receipt
Inventory AP Accrual A/c Tax Amount
8.1.3 Direct Delivery – Non-Recoverable Tax

Receiving Inventory Tax amount

Receipt
Inventory AP Accrual Tax amount
8.1.4 Standard Routing - Recoverable Tax


Receipt
8.1.5 Standard Routing - Non-Recoverable Tax


Receipt

Note:
 The non–recoverable tax amounts need to be added to item cost. So after delivery transaction, lines
are inserted in MTL_MATERIAL_TRANSACTIONS (MMT) and MTL_TRANSACTION_ACCOUNTS (MTA).
For more information on queries that can be used to find out the details of the lines inserted in the
MMT and MTA tables, refer document 1065343.1.
 Period End Accrual functionality which is not supported in current architecture will not be supported
even in GST solution.
9 – PO/Receipt Matched AP invoice

In oracle payables an invoice can be created by using the purchase order / receipt information from
purchasing system to enable online matching with invoices. Invoiced or billed items are matched to the
original purchase orders / receipt created to ensure that invoice is created only for goods or services you
ordered and/or received.
9.1 Flow Diagram
Create Invoice  Match

Action ‘Receipt’
Click on Match option Select receipt  Click on Match

button
Line / distribution details are defaulted from

Receipt level to Invoice
Navigate to Tools India Tax Details. The tax

category is defaulted from Receipt to invoice
Since Tax point basis was Delivery, the taxes are freezed in
India Tax Details form
Validate and Run Create accounting

9.2 Process and Accounting
Create Payables invoice
Responsibility: Payables responsibility to create an AP invoice
Navigation: Invoice Entry Invoices
Create an Invoice for supplier against whom PO /receipt is created.
Invoice Header
In invoice header level, select the operating Unit, invoice type and enter the PO number i.e. 65 in our
example. Once you select the PO number, supplier name and Site automatically gets defaulted from the
PO.
Matching Receipt to the invoice
To create a receipt matched invoice, the match type in Invoice header should be “Receipt”.

Match Action
is set to
‘Receipt’
We shall not enter the invoice line / distribution details as this will come automatically from matching the
invoice with Receipt.
The next step would be to Click on Match button in Invoice work bench and query for the Receipt which
we are intending to match to the invoice and click on find.
Query the
Receipt
Select the line which needs to be matched to the invoice and click on Match button

Click on ‘Match’ button to
default distribution details
from receipt to Invoice
Now we can see that the line details and Distribution details at invoice level is automatically populated
from PO / receipt.
Tax Defaultation
Now if we navigate to Tools  India tax details, we can see that Taxes which are defaulted at receipt are
defaulted at invoice level as well

Tax category
from Receipt
got defaulted to
Invoice
Tax Point basis is set

as ‘Delivery’
Latest changes on RUP 11
Below is the latest form for tools- India tax details.
There is an option to enter the relevant ‘Supplier Tax invoice number’ & ‘Supplier Tax invoice date’
shared by the supplier.

Whereas in case of RTV Debit memo, we shall enter the Supplier invoice number details of the original
transaction in ‘Original Tax invoice number’ and supplier invoice date at ‘original tax invoice date’.
Now validate the invoice and run Create accounting. Accounting entry generated
The accounting class for the tax type

is set as ‘Miscellaneous’

10 – Standalone AP Invoice
Standalone AP Invoices will be raised for non-item based expense or service activities and they will not
have any reference to any purchasing documents like PO, receipt etc. These invoices are directly created
in invoice work bench by manually entering the supplier details and distribution details.
As Item information is not available for such invoices, Item-based taxes will not be applicable for
standalone invoice.
10.1 Flow Diagram
Enter the Header details like invoice

type, Supplier Name, site etc
Click on Line Items and fill the line

level and distribution details
Navigate back to Header. Tools -

India Tax details
Pick the Organization and location.

The same is required for adding
taxes/tax defaultation if any
Lines are inserted in

GL_INTERFACE table for tax
Validate and Account the invoice
accounting (refer query
mentioned in Chapter 8 to extract
the data)
Tax details can be viewed in India Tax
Details form / View accounting
(Accounting class ‘Miscellaneous
Expense’

Responsibility: Payables responsibility to create an AP invoice Navigation:

Invoice  Entry  Invoices
In invoice header level, select the operating Unit, invoice type, Supplier name and site details etc.
Now navigate to Line level details and enter the Line and distribution Details
Now navigate to Tools  India tax details
Enter the Organization

and Location details
Tax category
defaulted
The tax point basis is

‘Invoice’

Every other logic in the above example is valid. Whereas on RUP 11, the tools- India tax details form has
changed over.
Below is the latest form.

Considering the previous example shared with older version ,based on the tax default rule we have setup,
the ‘P2P testing 2’ tax category is defaulted automatically. Below we can also see the Taxes attached to
the ‘P2P testing 2’ category.
Once the Organization and location details are entered, save the transaction and navigate back to invoice
work bench and validate and Account the invoice. The accounting entry generated at this stage is
Tax lines are generated

with accounting class as
‘Miscellaneous Expense’

11 –Tax Recovery Accounting (Interim)
Users have the flexibility of selecting the Tax Point Basis (TPB) while defining the Tax Types
based on which the accounting will happen at differently. In the same way the recovery process
can also be done at different stages based on the Tax Point Basis. They are
11.1 Flow Diagram
Create PO Enter header /

line details
Navigate to Tools India Tax Details. Attach tax category

with Recoverable tax type and TPB as Delivery
Navigate to Receipt form and select the PO

line for receipt creation
Navigate to Tools India Tax Details. Check

‘Confirm taxes’ check box.

‘Receiving Transaction processor’ program will be fired and
it will process Base / Localization tax details
the data)
Navigate to Tools India Tax Details. From Menu

select Tools Process Claims. Claim details form will
open
Enter the claim details and click on  populate

values

Select the lines which needs to be processed 
Enter claim term details click on Process option
the data)
The processed line status is changed from

‘Pending Recovery’ to ‘Recovered’

Once the receipt accounting is done, for a receipt with recoverable taxes,
The accounting entry is generated in GL_INTERFACE is

Receipt
Once the receipt accounting is done, to process recovery amount, navigate to

Process Claim Functionality
1. (N) to Oracle Financials for India – Recovery Management – Process Recovery
2. Enter Tax Regime Code, GST Registration number, Document Type ( pick a value from the given
list , here it is Receipt) and its relevant document number ( receipt number ) , date. On clicking
Find, see below
3. From the above screen, there is an option to enter “Tax Invoice number” and “Tax Invoice date”
provided if they were NOT entered at the transaction level.
4. Query to find the relevant credit / debit entry :

Accounting entry from jai_tax_journal_entries.

Select TAX_DET_FACTOR_ID,
code_combination_id,entered_cr,
entered_dr,accounted_cr,accounted_dr,
transaction_date
From jai_tax_journal_entries
Where tax_det_Factor_id in (select det_Factor_id
from jai_Tax_det_factors
where trx_number=':Receipt_number'
and org_id=:Org_id
and user_je_category_name='Delivery');
5. Accounting Entry generated for Process Claim entry is
Process Claim Tax Credit Debit

Accounting
Interim Recovery Account --
-- Recovery Account
Ineligible for Process Claim flow
As per Section 17(5) of the Central Goods and Services Act, 2017 provides that input tax credit in respect
of the few goods and services shall not be available. In those cases, if recoverable tax already attached,
then those transactions can be made ineligible for process claim by using this functionality.
As per the requirement , we shall illustrate a case where taxes though applied as “Recoverable” ( citing
above rule ) these are NOT entitled for taking a claim.
1. PO is created with GST recoverable taxes.

2. Equally at Receipt, the same taxes have flow into.
i.e taxes have flown as Recoverable.
3. Now, citing above rule / requirement, ITC cannot be availed.
4. In such case we shall navigate to Process Claim form, query the record and select it as
“Ineligible”.

5. From the above screen, it is observed that Recoverable Amount is 2160 whereas “Recovered
Amount” is 0. And “Ineligible” “Checkbox is selected.
6. Query to identify the generated accounting entries post this
Select * from jai_tax_journal_entries
where det_Factor_id in (select det_Factor_id from jai_tax_Det_Factors
where trx_number = :’receipt_number’
and user_je_Category_name=’Delivery’);
7. Relevant Accounting entry generated
Process Claim InEligible Credit Debit

Tax Accounting
Interim Recovery Account --
-- Tax Type Expense Account

12 – Third Party Invoices
Third party invoice functionality provides provision to pay to the Vendor other than the PO Vendor. This
will be required for paying the services offered by other Vendors related to that PO. An approved Invoice
for the Non-PO Vendor will be created automatically when the invoice is created via payable open
interface.
For using the third party invoice functionality, the tax type attached to the PO should have the
‘Update vendor on
transaction’ check box
should be checked at
tax type definition.

12.1 Flow Diagram
Create PO  Enter header
and line information
Navigate to Tools India Tax Details. Attach tax category

with ‘Update vendor on transaction’ check box checked
Navigate to Receipt form and select the PO line for receipt

creation
Navigate to Tools India Tax Details. Change the

party Name and party site at tax type level  Click
apply. Click on ‘Confirm taxes’ Check box
Four concurrent requests are triggered Lines are inserted in

Receiving Transaction Processor accounting (refer query mentioned
ADS (Pay On Receipt AutoInvoice) in Chapter 8 to extract the data)
Third party Payables Open Interface Import
Payables Open Interface Import
Payables Open Interface Import – Imports Invoice for

Item line for PO vendor and
Third party Payables Open Interface Import - Imports

Invoice for tax line for Non PO vendor
Validate and Account both Standard

Invoice and Third party Invoice

Create a purchase order with tax type which has ‘Update vendor on transaction’ check box checked at tax
type setup.
In Receipt form, before saving the receipt navigate to Tools  India tax details. Change the ‘Party Name’
and ‘Party site’ to a new vendor and click apply button to save the changes
Change the Party

Name and Party Site
to a Non PO vendor
Click Apply to
save the changes
Note:
The third party vendor details can also be updated at PO level and if it is updated at PO level, the same
gets defaulted to receipt level as well.
Now click on confirm taxes check box to freeze the tax details

Now once the receipt is saved, system automatically fired the below concurrent
Below concurrent
are fired
In the above request set, the program ‘Third party Invoices - Payables open interface Import (Payables
Open Interface Import)’ creates the Third party invoice against the Non –PO vendor and ‘Payables Open
Interface Import’ program creates the invoice against the vendor in the PO. The output of the ‘Third party
Invoices - Payables open interface Import’ shows invoice for tax amount has been created against the
third party vendor.

Invoice created
against Third party
vendor
The output of ‘Payables Open Interface Import’ program shows the invoice details created against the PO
vendor.
Invoice created
against PO vendor
Now in invoice work bench, when queried, the invoice created against PO vendor will show the Item + tax
amount in India tax details form even though invoice line level only item line amount is reflected.

Below accounting is created for the third party invoice

13 – Inventory Costing
13.1. Introduction to Inventory Costing

Oracle Cost Management is a full absorption, perpetual cost system for purchasing, inventory, work in
process, and order entry transactions. Cost Management supports multiple cost elements, costed
transactions, activity-based costing, comprehensive valuation and variance reporting, and thorough
integration with Oracle Financials.
Cost Management automatically costs and values all inventory, work in process, and purchasing
transactions. This means that inventory and work in process costs are up-to-date and inventory value
matches the cumulative total of accounting transactions. Cost Management supports both standard and
average costing.
 Standard Costing : Under standard costing, predetermined costs are used for valuing inventory
and for charging material, resource, overhead, period close, and job close and schedule complete
transactions. Differences between standard costs and actual costs are recorded as variances.
 Average Costing : Under average cost systems, the unit cost of an item is the average value of all
receipts of that item to inventory, on a per unit basis. Each receipt of material to inventory
updates the unit cost of the item received. Issues from inventory use the current average cost as
the unit cost.
Base processes/concurrent programs used by Projects to update commitments and interface costs would
automatically bring in localization taxes into Projects.
13.2 Scope
The main objective of this section of the document is to provide the overview of Discrete/OPM Standard
and Average Costing. The document also describes the Oracle Financials for India (OFI) integration with
Inventory Costing. Any GST Tax could either be Recoverable or Non Recoverable in Nature. The Non-
recoverable taxes will be adding to the Inventory Cost at the time of Receipt Delivery.
The tax types should be Non Recoverable only then it will be eligible to add in the Item Cost. This section
of document deals with different types of scenario’s in the OFI Inventory Costing.

13.3. Setup for GST Inventory Costing
Defining the Non-Recoverable Tax Category and Inventory Organizations are two major setup for GST
Inventory Costing:
A. Tax Type:
Navigation: Oracle Financials for India  Tax Configuration  Define Tax Type
CGST Tax Type:
For a tax type to be Non recoverable, the below setup has to be in place:
- Recoverable check box should not be checked.

B. Define Inventory Organization Setups:
(N)Navigation  India Local Inventory  Setup  Organizations  Organizations  Define

Inventory Organization.
For Standard Cost (Discrete): The Inventory Organization should be defined with Costing Method
as Standard and Uncheck the Process Manufacturing checkbox.
Average Cost (Discrete): The Inventory Organization should be defined with Costing Method as
Average and Uncheck the Process Manufacturing checkbox.
Average Cost (OPM): The Inventory Organization should be defined with Costing Method as Average
and select the Process Manufacturing checkbox.
For Instance consider the Standard Cost Discrete:

13. 4. Inventory Costing Transactions
The sample transactions are provided as below:
A. Standard Cost (Discrete):

Navigation: Oracle Purchasing  Receiving  Receipts  Select the Inventory Organization.
Select the Inventory Organization: IL Trading with Standard cost:

Note: In the Standard Costing The Receiving and Delivery Accounting will be handled by the GST Code.
The Accounting Entries will be directly posted in to GL Interface Table.
B. Average Cost (Discrete):
Select the Inventory Organization: IL Trading with Average cost:

Note: 1) Deliver the material to sub-inventory, India Receiving Transaction Processor fires to populate
non recoverable tax amount into base inventory tables MTL_TRANSACTIONS_INTERFACE (MTI) and
MTL_TXN_COST_DET_INTERFACE (MTCDI).
2) Scope of India localization is to populate non recoverable tax amount to interface tables.
3) Inventory Transaction worker will fire to process these records from MTI ,MTCDI and populate
MTL_MATERIAL_TRANSACTIONS(MMT) and MTL_TRANSACTION_ACCOUNTS(MTA). Records from
MTI and MTCDI are deleted.
4) Average Cost Update concurrent will fire to process the cost entries.
5) View the item cost using Item Cost History screen.
Following is the formula used for calculation:-
{[(prior cost * prior costed quantity) + (transaction cost * transaction quantity)] +taxes } / [prior costed
quantity + transaction qty]

C. Average Cost (OPM):
Inventory Org Name: IL OPM with Average Cost:
Select the Inventory Organization: IL OPM with Standard cost:
Note: Most of the India customers are not using the OPM with Standard costing, hence not included the
scenario.
1) Run the INDIA PROGRAM TO UPDATE OPM COST as part of Month End process.
2) The program will populate the Non recoverable cost under PO_UNIT_PRICE table under
RCV_TRANSACTIONS for Delivery events.

Costing Effect – Accounting Entries
13.5. Average Costing

In a average costing organization, the below accounting is generated for
A. Recoverable Taxes
After receipt Accounting
Interim recovery A/c Tax Amount

Receipt Inventory AP Accrual Tax Amount
A/c
After Recovery
Tax Recovery Tax Amount

Receipt
In case of recoverable taxes, the MTL tables will not be impacted / hit with the tax amount.
B. Non Recoverable Taxes
After receipt Accounting

Receipt
Once the delivery transaction is done, Average Cost update transaction is interfaced in
MTL_TRANSACTIONS_INTERFACE table with non-recoverable tax amount and the same gets added
to item cost once Material transaction worker imports the transaction. Further Cost manager creates
material account distributions against Average Cost update transaction for Deliver accounting and then
running Create accounting via Cost management will create the Sub-ledger accounting for same.
Accounting entry at that stage will be
Material Tax Amount

Receipt
Receiving inventory Tax Amount

13.2 Standard Costing
In a standard costing organization, the below accounting lines are inserted in GL_INTERFACE table once
the Receiving transaction is completed
A. Non-Recoverable taxes
Accounting entry for PO receiving

Receipt
Accounting entry for Delivery transaction is
Purchase Price Tax Amount

Variance
Receipt
Note:
In case of standard costing Organization, the MTL tables will not be impacted / hit with the tax amount.
B. Recoverable taxes
After receipt accounting, the accounting entry generated in GL_INTERFACE is
Interim Recovery Tax Amount

Receipt
Once the recovery is done, the accounting entry generated in GL_INTERFACE is

Recovery Tax Amount
Receipt
Interim Recovery Tax Amount
Note:
 There is no relevance of PO destination in GST architecture. Whether the destination is ‘Expense’

or ‘Inventory’ the accounting treatment will be same.
 The accounting impacting on costing and OPM remains same as it is in current architecture.

14 – Reverse Charge
14.1 Law
“Reverse charge’’ means the liability to pay tax by the recipient of supply of goods or
services instead of the supplier of such goods or services in respect of such categories of supplies as
notified under sub-section (3) of Section 8. The concept of Reverse Charge existed earlier under the
Service Tax provisions for services like Works Contract, Manpower, Goods transport Agencies, Legal
services etc., However, under the GST, Reverse charge mechanism has been introduced both for
Goods and Services. Accordingly, all other provisions of this Act and CGST Act, as applicable, will apply
to the recipient of such goods and / or services, as if the recipient is the supplier of such goods and / or
services i.e. for the limited purpose of such transactions, the recipient would be deemed to be the
‘supplier’
Section 12(3) talks about Time of supply of Goods, wherein for Reverse Charge cases, the time of
supply would be the earliest of the following dates:
(a) The date of the receipt of goods, or
(b) The date on which the payment is made, or
(c) The date immediately following thirty days from the date of issue of invoice by the supplier:
While the above said concept is already prevalent under the Service Tax regulations, the concept is
altogether new under the Excise and especially VAT, where predominantly the point of determinants were
removal from factory and sale.
Section 13 (3) talks about Time of Supply of Services, wherein for Reverse Charge cases, the time of
supply would be the earliest of the following dates
(a) The date on which the payment is made, or
(b) The date immediately following sixty days from the date of issue of invoice by the supplier
In case, it is not possible to determine the time of supply of services under the above said options,
the time of supply shall be the date of entry in the books of account of the recipient of supply.
Example to understand reverse charge

Let us assume that supply of cement will attract Reverse Charge. Now a supplier dispatched the goods
on 1st August, received by the buyer on August 5, payment was made on 25th July (Advance Payment)
and invoice raised by supplier on 1st August.
Time of Supply under reverse charge would be 25th July and must be included in the return for July
period though the goods are received in August.

14.2 GST Functionality of Reverse Charge
Reverse Charge on application of Prepayment to Standard invoice:
As per the Model law requirement, we need to capture the Reverse Charge on Prepayment. Below are
the salient features of the Reverse Charge functionality on Prepayment:
 We need to calculate the tax as ‘Self Assessed’ on Prepayment.

 There is the requirement to capture the HSN (Goods) or SAC (Services) codes in Prepayment.
 Also, we need to account the liability of Reverse Charge on Prepayment. GST laws specify that it
should be Reversal entry instead of Net Off entry on Prepayment application to standard
invoice with Reverse charge taxes.
 Need to have the Repository update on the Reverse Charge taxes of Prepayment as well as the
accounting.
 The Accounting of Reverse Charge taxes to the Period End Processing Concurrent which
has been introduced as a part of Model law feature. This will avoid multiple accounting
adjustments happening in the invoice life cycle and will consider the net consolidated value in the
period end process.
 There is no need for the HSN/SAC codes to match between Prepayment and standard Invoice for
getting the offset entries to get created
14.3 Flow Diagram
Configure HSN/SAC Code in the

seeded Reporting Type
Create a Prepayment Invoice having Reverse Charge

Taxes attached to it
Validate and Pay the Prepayment Invoice

Run the India Period end Process
Create a Standard Invoice having Reverse Charge Taxes attached to it
Validate the Standard Invoice Run the India Period end Process

Run the Period End Process in ‘Save’ and then in
liability accounting
‘Final’ modes
Repository will get updated
14.4 Configuration:
Tax Type:
Ensure that “ Self Assessed/Reverse Charge: 'Y'
Also ensure, if Tax is recoverable in nature, then set Tax point basis as INVOICE

Tax Rate:

Third party Registration:
As these are “Reverse Charge Taxes” which means they are applicable for “Un-Registered
Vendors”, THIRD PARTY Registration for the combination of Operating Unit, Vendor and Vendor Site
shouldn’t be define in the system. This is in accordance with the definition of “Un-Registered Vendors”.
Over the below test case, these reverse charge taxes are applied for Vendor:” GSTR Unregistered” and
its site “DONT REGISTER M” for “Vision India Mumbai OU” (Operating Unit ).
As explained, this vendor and its site under the Operating Unit are NOT registered in the system. Hence,
Reverse charge taxes are applicable.

Claim Term:
(N): Oracle Financials for India – Recovery Management – Define Claim Terms
Below is the setup specific to the reverse charge tax type defined.
Under Assignments for the specific Tax type.
As observed, claim terms setup is defined for the combination of Organization type, Organization,
Location, Item Classification and Intended Use.
Certain caution needs to be exercised when setting up claim terms and equally these same
values are expected at the transaction. Failing which (even if a field is not matching with setup)
system wouldn’t consider the claim terms as it checks for the aforementioned combination.

14.5 HSN/SAC Code:
1. HSN Code is meant for Goods. For inventory item(reporting code only for item)
2. SAC Code is meant for Services. For non inventory item(reporting code for both 3rd party and
item)
3. New seeded Reporting Types are introduced to capture the details. These Reporting Types are
User configurable.
4. At transaction level we have the flexibility to modify the HSN/SAC code defaulted from 3rd Party
Registration or Item Classification
Seeded Reporting Types for HSN and SAC codes.

Entity is 3rd party which means we will
1. SAC Code for Non Inventory Item: GST_SAC_CODE_ITEM have to attach the Reporting Code
2. SAC Code for 3rd Party: GST_SAC_CODE_TP value to the 3rd party Registration.
3. HSN Code for Item: GST_HSN_CODE Likewise, if Entity is Item then the
Reporting Code value to be attached to
Item Classification.

Attached the Reporting
Code value to the Third
14.6 Linking of Reporting Code value to 3rd party Registration: party Registrations
14.7 Prepayment:
In prepayment we have the provision to attach the Reverse Charge taxes unlike the current architecture.
1. Prepayment invoice.

2. Provision to apply GST Taxes via tools- India Tax details form.
Need to tag the relevant Inventory organization and location fields.

Equally have a provision to enter the received Supplier Tax invoice number and Tax invoice date.
3. Screen shot which ascertains that the applied tax is “Reverse Charge applicable”.
4. Now validate, pay the prepayment invoice.
5. Run the India- Period End Process concurrent for the combination of Regime, GST Registration
number and Period. This is supposed to be run in “Final Mode”.

6. On successful completion, the relevant accounting entries gets generated.
7. And in addition, repository / jai_rgm_recovery_lines table gets updated with status field as
“CONFIRMED”.
4.8 Standard Invoice

Mandatory
Note:
 When you are going to create a Reverse Charge for a Prepayment you are accounting the tax
liability. Again when you create the AP invoice for which the TPB is set, you are going to
calculate for the full value and when the Prepayment is applied, the system will check if the
SAC/HSN codes are same in both documents and if those are same then it will allow you to
trigger an offset entry for the Reverse Charge which is calculated on PP.
 If SAC code is entered, HSN code will be disabled. So both SAC and HSN codes are mutually
exclusive.
 Prepayment PAYMENT, Standard Invoice VALIDATE and Prepayment APPLICATION does not
create any accounting. Only period Ending process will create accounting and update the
repository.

14.9 Prepayment Application
14.9 Period Ending Process:

 Data should get populated into the Repository(table jai_rgm_recovery_lines) once the
prepayment is applied to the Standard invoice
 Based on the data populated, the Period Ending Process shall create the accounting
in GL
 For Standard invoice there will be a record inserted into the repository table with
liability account and for Prepayment also there will be a liability account. Once the
Prepayment is applied to Standard Invoice, there will be a negative Reversal entry
against liability to adjust the prepayment application.

A new concurrent program: India - Period Ending Process is introduced for the period ending
process. There are 2 valid modes of running the period end process
a. Save - In this mode, the invoices will be prepared for GSTN and the user can view those
details and they can upload the information to the GSTR
b. Final - In this mode all the records will be locked and the accounting will get created in GL
Running the program in Save mode:
The status of the Repository against the transaction can be found out by the column:
REPORTING_STATUS_FLAG which will be marked as ‘S’ when the program is run in Save mode

Running the program in Final mode:
The status of the Repository against the transaction can be found out by the column:
REPORTING_STATUS_FLAG which will be marked as ‘RF’ (Ready to File) when the program is run in
Final mode. Once it’s filed, the system will not allow any adjustment to the invoice. So the user can
go and take the data and file it to GSTN
At this point of time the LIABILITY Accounting will get generated. So with the Period end Process
in Final mode the system will generate Liability accounting and Adjustment accounting in GL

14.10 Accounting
Period End Tax Type Suspense Tax Amount

Process
(Prepayment) Tax Type Liability Tax Amount
Period End Tax Type expense Tax Amount

Process
(Standard Invoice) Tax Liability Tax Amount
Prepayment Tax Liability Tax Amount

Application
Tax Type Suspense Tax Amount
14.11. Reverse Charge on Standalone standard invoice

Reverse charge means the liability to pay tax is by the recipient of goods/services instead of the supplier.
Reverse charge may be applicable for both services as well as goods.
Situations where reverse charge will apply
Unregistered dealer selling to a registered dealer
In such a case, the registered dealer has to pay GST on the supply.
Services through an e-commerce operator
If an e-commerce operator supplies services then reverse charge will apply on the e-commerce operator. He will
be liable to pay GST.
Import of Services
Model GST law accord liability of payment of tax on the service receiver, if such services are provided by a person
residing outside India. This is similar to the current provision of reverse charge, wherein service receiver is required
to pay tax and file return.
As per the Model law requirement, we need to capture the Reverse Charge on Standard Invoice. Below are the
salient features of the Reverse Charge functionality on Prepayment:
We need to calculate the tax as ‘Self Assessed’ on Standard Invoice.
There is the requirement to capture the HSN (Goods) or SAC (Services) codes in SI.
Also, we need to account the liability of Reverse Charge on Std Invoice.

Need to have the Repository update on the Reverse Charge taxes of SI as well as the accounting.
The Accounting of Reverse Charge taxes to the Period End Processing Concurrent which has been introduced as a
part of Model law feature. This will avoid multiple accounting adjustments happening in the invoice life cycle and
will consider the net consolidated value in the period end process.
Standard Invoice:
India Tax Details: Reverse charge taxes are applied

Validate the Invoice:
Run the India – Period Ending Process for ‘Final Mode’
Repository Updates:
Accounting
Once Period End Process Program is completed

Interim Recovery / Tax Tax Amount

Type Expense
Period End Process
Liability Tax Amount
14.12 Reverse Charge Self Invoice Number generation:

Clause f of sub-section 3 of Section 31 of CGST Act prescribes a registered person to issue a self-
generated invoice and the provision is reproduced for ready reference:-
(f) a registered person who is liable to pay tax under sub-section (3) or sub-section (4) of section 9 shall
issue an invoice in respect of goods or services or both received by him from the supplier who is not
registered on the date of receipt of goods or services or both
14.12.1 Setup for RC Self Invoice:

Document Sequencing:
(N) Oracle Financials for India  Tax Configuration  Define Document Sequencing

14.12.2. Process Flow – RC on Prepayment
Capture AP Prepayment
(N) India Local Payables Oracle Payables  Invoices  Entry  Invoices
Capture India Tax Details
(N) India Local Payables Oracle Payables  Invoices  Entry  Invoices  Tools India Tax details

Pay the Invoice
India Period End Concurrent

Tax Repository Review - Prepayment
Self Invoice RC Prepayment

14.12.3. Process Flow – RC on Invoice
Reverse Charge on Invoice
(N) India Local Payables Oracle Payables  Invoices  Entry  Invoices
Capture India tax details
(N) India Local Payables Oracle Payables  Invoices  Entry  Invoices  Tools India
Tax details

Validate the Invoice and Run “India Period End Concurrent”
Tax Invoice Number - RC Invoice

15– ERS Invoice
Payment on Receipt enables the user to automatically create standard, unapproved invoices for payment
of goods based on receipt transactions. Invoices are created using a combination of receipt and purchase
order information that eliminates duplicate manual data entry. It automatically creates invoices with
multiple items and distribution lines, and includes tax. Payment on Receipt is also known as Evaluated
Receipt Settlement (ERS).

15.1 Flow Diagram
Create PO for Supplier / Supplier site which has

ERS Invoice setup
Navigate to Terms  Set ‘Pay on’ option to

‘Receipt

defaulted based on defaulting mechanism defined
Create a receipt Check the ‘Confirm taxes’

check box

Receiving Transaction Processor program GL_INTERFACE table for tax
will be triggered accounting (refer query
the data)
Run the ‘ADS (Pay On Receipt

AutoInvoice)’ Program
ERS invoice is imported to Payables
Validate the ERS invoice and run create

accounting

Create a purchase with Pay on option set to ‘Receipt’. Once the PO is approved, create a receipt. Once
the receipt is saved, ‘Receiving Transaction Processor’ program will be triggered automatically. After
successful completion of ‘Receiving Transaction Processor’ program, run the ‘ADS (Pay On Receipt
Autoinvoice) program:-
 Receiving Transaction Processor

 ADS (Pay On Receipt
AutoInvoice)
 Payables Open Interface Import
Once receiving transaction processor program is completed

Receipt
The output of payable Open interface program, the ERS invoice number which got created will be
displayed

ERS invoice number
which got imported
to payables
When we query the invoice number in invoice work bench and navigate to Tools  India tax details form,
the tax category has defaulted from receipt level.
Tax category is defaulted from

Receipt. Since confirm taxes
check box is checked at receipt
level, the fields are freezed at
invoice level

Once the invoice is validated and Accounted, the below accounting entry is generated by navigating to
Tools View accounting
Notes:
15.2.1 For both Recoverable and Non recoverable taxes, the tax lines will hit the AP
Accrual ExpenseAccount
15.2.2 For ERS invoices, the TPB should always be set at ‘DELIVERY’
16 – Introduction of profile option for change in client

extension package
The profile option is used to change the reference of GET_TAX_CONFIRMED_FLAG from
JAI_CMN_UTILS_PKG TO JAI_CLIENT_EXTN_PKG.
NOTE: It will be only used for interface receipt and when the value is set as Y, it is going
to bypass Tax confirm flag validation

Navigation: Application Developer > Profile
Create Profile Option having below information:
 Name: JAI_TAX_CONFIRMED_FLAG
 Application: Asia/Pacific Localizations
 User Profile Name: JAI: Get Tax Confirmed Flag Reference
 Description: The value of the tax confirmed flag
 Hierarchy Type: Security
 Active Date: SYSDATE
 Hierarchy Access Level: Site (checked for Visible and Updatable) only
 SQL:
SQL="SELECT MEANING \"Run in Debug Mode\", LOOKUP_CODE

into :visible_option_value,
:profile_option_value
from fnd_lookups
where lookup_type = 'YES_NO'"
COLUMN="\"Run in Debug Mode\"(10)"
Setup:

Profile Option Value:
Navigation: System Administrator > Profile > System
Search for JAI: Get Tax Confirmed Flag Reference
Select the value that should be returned:
17 – Summary
The above document will provide the below benefits:
 Transaction flow in different stages of P2P in Oracle GST solution.

 Summary accounting entries generated at each stage
 Major difference between the current India Localization structure and the GST solution.
 This document will help you understand the different scenarios / transaction flows in P2P cycle
 Reverse Charge Process
 Claim functionality
 ERS Invoice
 Introduction of profile option JAI: Get Tax Confirmed Flag Reference

Ofi GST P2P

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Oracle Financials for India (OFI)

Goods and Services Tax (GST)

Author: Vaishali and Somdeep (P2P)

Creation Date: 21-Mar-2016

Organization: Oracle India Private Limited.

OFI-GST Procure to Pay Flow 1

Date Author Vers Change Reference

21-Mar-16 Vaishali and 1A Initial document

Adapting to changes as per latest

Laxminarayana Included the Inventory Costing

Ritesh/Vishwajit Included RCM Setup incase of

OFI-GST Procure to Pay Flow 2

OFI-GST Procure to Pay Flow 3

Document Control ............................................................................................................................... 2

3 – Prerequisite Setups ............................................................................................................................ 6

4 – Functional Flow ................................................................................................................................. 7

5 – Requisition to Purchase Order (Pre-PO- PO Documents)..................................................................... 8

5.1 Flow Diagram................................................................................................................................. 8

5.2 Create Requisition ......................................................................................................................... 9

5.3 India tax details form ................................................................................................................... 12

5.4. Create RFQ (Request for Quotation) ............................................................................................ 13

5.5 Creating Quotation ...................................................................................................................... 16

5.6 Create Purchase Order from the approved Requisition ................................................................ 18

6 – Tax recalculation logic ...................................................................................................................... 22

7.1 Flow Diagram............................................................................................................................... 22

7.2 Receipt Creation .......................................................................................................................... 23

8 – Tax Accounting on Receipts.............................................................................................................. 28

8.1.1 Flow Diagram ........................................................................................................................ 29

8.1.2 Direct Delivery – Recoverable Tax ......................................................................................... 31

8.1.3 Direct Delivery – Non-Recoverable Tax .................................................................................. 31

8.1.4 Standard Routing - Recoverable Tax ...................................................................................... 31

OFI-GST Procure to Pay Flow 4

9 – PO/Receipt Matched AP invoice ....................................................................................................... 32

9.1 Flow Diagram............................................................................................................................... 32

9.2 Process and Accounting ............................................................................................................... 33

10 – Standalone AP Invoice ................................................................................................................... 38

10.1 Flow Diagram ............................................................................................................................. 38

10.2 Process and Accounting ............................................................................................................. 38

11 –Tax Recovery Accounting (Interim).................................................................................................. 41

11.1 Flow Diagram ............................................................................................................................. 41

11.2 Process and Accounting ............................................................................................................. 42

Process Claim Functionality ................................................................................................................... 43

12 – Third Party Invoices........................................................................................................................ 46

12.1 Flow Diagram ............................................................................................................................. 47

12.2 Process and Accounting ............................................................................................................. 48

13 – Inventory Costing ........................................................................................................................... 52

13.1. Introduction to Inventory Costing.............................................................................................. 52

13.2 Scope ......................................................................................................................................... 52

13.3. Setup for GST Inventory Costing ................................................................................................ 53

13. 4. Inventory Costing Transactions ................................................................................................. 55

Costing Effect – Accounting Entries .................................................................................................... 59

13.5. Average Costing ........................................................................................................................ 59

13.2 Standard Costing ........................................................................................................................ 60

14 – Reverse Charge .............................................................................................................................. 62

14.1 Law ................................................................................................................................................ 62

14.2 GST Functionality of Reverse Charge .............................................................................................. 63

OFI-GST Procure to Pay Flow 5

14.5 HSN/SAC Code ............................................................................................................................... 68

14.6 Linking of Reporting Code value to 3rd party Registration .............................................................. 69

14.7 Prepayment: .................................................................................................................................. 69

4.8 Standard Invoice .............................................................................................................................. 71

14.9 Period Ending Process .................................................................................................................... 73