GST Implementation

GST is an Indirect Tax which has replaced many Indirect Taxes in India. The Goods and
Service Tax Act was passed in the Parliament on 29th March 2017. The Act came into effect
on 1st July 2017; Goods & Services Tax Law in India is a comprehensive, multi-stage,
destination-based tax that is levied on every value addition.

In simple words, Goods and Service Tax (GST) is an indirect tax levied on the supply of
goods and services. This law has replaced many indirect tax laws that previously existed in
India.

GST is one indirect tax for the entire country.

So, before Goods and Service Tax, the pattern of tax levy was as follows:

Under the GST regime, the tax will be levied at every point of sale. In case of intra-state
sales, Central GST and State GST will be charged. Inter-state sales will be chargeable to
Integrated GST.

Components of GST

CGST: Collected by the Central Government on an intra-state sale (E.g.: transaction

happening within Maharashtra) Central GST

SGST: Collected by the State Government on an intra-state sale (E.g.: transaction happening
within Maharashtra) State GST

IGST: Collected by the Central Government for inter-state sale (E.g.: Maharashtra to Tamil
Nadu) Integrated GST

UTGST: Collected by the Union Territory Government on an intra-state sale (E.g.

Chandigarh to Chandigarh) Union Territory GST (applicable only to 5 UTs).
 SAP SD Changes in GST Regime

Below are highlights of changes done in SAP post GST and those are done as per
interpretation of law

1. In VAT regime or pre-GST regime Ship to Party was consider for determination of
taxes like Var was determined on basis of Region of Ship to Party and tax
classification of Ship to party. Post GST Bill to party replaces Ship to party, so
Region and Tax classification of Bill to party is considered for GST rate
determination.
2. In pre-GST regime has Tax Category (Mapped in material master and customer
master) UTXJ taking place at the time of taxes determination. In GST regime JOIG
was new tax category SAP introduced so tax class assigned against same will be key
to determine rates.
3. SAP has not provided any solution to handle export cases which individually has to
take care of, so we have our own solution.
4. HSN Code (Harmonized System of Nomenclature Code for Goods) and SAC Code
(Service Accounting Code for Services) were given to determine various applicable
GST rates. This is existing field (MARC-STEUC) know as Control code which was
earlier used incase of Excise sales and was known by “Tariff code” or “Chapter ID”.
5. CIN configurations are not required at all so for India CIN module is not required
except for few goods which are not part of GST like Petroleum products and Alcohol.
6. GSTIN number is new concept came in GST which is mapped in Business Place
which is assigned to all plants in a state, so all plants will have one GSTIN and SAP
provided “Tax Number 3” field in Customer and Vendor to map their respective
GSTIN numbers. This is required for printing and reporting as well.
7. All sale and service transactions are of below nature where GST is applicable
A. Sale and services within state CGST+SGST
B. Sales and services outside state IGST
C. Sale and services within Union Territory CGST+UTGST
D. Export sale and services there are GST exempted except ones which are
applicable for rebate where companies must pay IGST and can get it refunded
once customs approved the amount.
E. Stock Transfers GST law says if transaction is within company, but plants are
in 2 different states then IGST is applicable as the transaction is between 2
different GSTIN numbers. No GST applicable if transaction is within state.
8. STO process needed to be configured for creation of inter and intrastate billing which
was not required earlier as VAT was not applicable. Initially it was required for
Interstate transactions but from 1st April 2018 when E-way bill was passed since then
STO within state is also required as per law.
9. Subcontracting is the additional process which was introduced in SD side for
reconciliation and GST rate purposed where 2 types of transaction are taking place.
A. Subcontracting Challan Here proforma is created without accounting
B. Subcontracting Invoice Here tax invoice is created with accounting entries.
 Workbench and Configuration changes in SAP

There are various steps involved in implementation of GST like below

1. Implementation of All notes given by SAP in Mater Note 2421394 - GST India: SAP
ERP Solution Notes.

2421394_GST India
SAP ERP Solution Notes.pdf

2. Configurations done as suggested in some of the notes. Below are the configurations
A. Created new condition tables for GST
a. 760 (Country/Matl grp 4) This is created to handle exceptional cases like
export with rebate
b. 870 (Country/Country/Matl grp 4/Ctrl code) This is created to handle GST:
SIROT/Defective Retur (IGST) where ship to party and bill to party are
foreign customers but customer is liable to pay GST as per agreement.
c. 777 (Country/Matl grp 4/Ctrl code) This condition table is created to handle
GST: SIROT/Defective Retur (CGST & SGST) when ship to party and bill to
party are foreign customers but customer is liable to pay GST as per
agreement
d. 815 (Country/Country) This is created to handle export cases where first
one is source country and second is destination country and taxes are
exempted.
e. 820 (Bill. Type/Ctrl code) This access is created to handle STO GST rates
where billing type is ZIGT (Interstate STO billing) and ZIG3 (Intrastate STO
billing).
f. 865 (Country/Matl grp 4/PlntRegion/ship to re/TaxCl2Cust/TaxCl.2M)
Siemens has Indivisible business scenario where they take projects of building
plants which are immovable where, as per IDT the taxes should be calculated
based on Ship to party region instead of bill to party region.
g. 860 (Country/Matl grp 4/PlntRegion/Region/TaxCl2Cust/TaxCl.2Mat/C)
This access is created to handle concessional GST rate. When some machine
or motor is used in projects like renewable energy generation then government
gives concession in GST. So, if standard GST rate is 18%, here customer can
pay with 5%.
h. 880 (Country/PlntRegion/Region/TaxCl2Cust/TaxCl.2Mat/Material/Ctr)
This access was created specifically to handle GST at material code level if
applicable, though it has never been used.
i. 840 (Country/PlntRegion/Region/TaxCl2Cust/TaxCl.2Mat/Ctrl code) This
is SAP suggested access and widely used. Here standard GST rate will be
maintained which is determined in transactions.
j. 850 (Country/PlntRegion/Region/TaxCl2Cust/TaxCl.2Mat) This is just
created for to handle generic records so will never be used in actual.
 k. 775 (PlntRegion/Region/TaxCl2Cust/Material) SAP suggested condition
table. Not used anywhere and should not be used.
l. 750 (PlntRegion/Region/TaxCl2Cust/Activity) SAP suggested to use this
access to handle service billing cases by creating Activities which was later
cancelled by SAP itself and suggested to go with SAC code which is
technically same as that of HSN code (both are saved in same field MARC-
STEUC).
m. 003 (Tax Classification) SAP suggested and not of any use in Siemens.

B. Create Access Sequence:

New access sequence JGSO (IN: GST For Output Tax) was created which had
above all condition tables

C. Create Condition Types for GST

Basically, JOIG is arithmetic addition of JOCG and JOSG or JOCG and JOUG.
a. JOCG (IN: Central GST) Central GST applicable when transaction is within
state or Union territory.
b. JOSG (IN: State GST) State GST is applicable if transaction is within State
(except Union Territories). This will exist with JOCG.
c. JOUG (IN: Union Ter GST) Union Territory GST is applicable if
transaction is within UTs (except Delhi and Puducherry). This will exist with
JOCG.
d. JOIG (IN: Integrated GST) Integrated GST is applicable if transaction is
between two different states.
e. ZEXR (GST IN: Export Rbat) This is for setting off Integrated GST along
with JOIG condition based on Material Group 4 indicators provided with
applicable GST rates.
D. Changes in Pricing Procedures
Various pricing procedures were changed to have GST rates. Those are listed
below with one example.
a. YC0001 Rental Contract India
b. ZACMIN ACM Pricing India
c. ZDCMIN Debit/Credit Memo-IN
d. ZINSUB IN: GST Subcontracting Pricing
e. ZMNTIN MNT contract -India
f. ZPSSIN Pricing India
g. ZREPIN Repairs-IN
h. ZSRVIN SRV RRB Pricing-IN
i. ZINSTO IN: GST STO Pricing

E. Create new Accounting Keys

a. JOC IN: Central GST GL applicable 47250901
b. JOI IN: Integrated GST GL applicable 47250903
c. JOS IN: State GST GL applicable 47250902
d. JOU IN: Union GST GL applicable 47250904
e. ZXR IN: Export Rebate GST GL applicable 48320011

F. Create new customer tax classes for GST under Tax Category JOIG
a. 0 Taxable under GST
b. 1 GST – Exempted
c. 2 Non-Taxable GST
d. 3 Excisable with GST
e. 4 GST SEZ Customer
f. 5 GST Merchant Export
g. 6 HC-ICB Credit Note
h. 8 Intra-Company Bus.0%
G. Create new Material Tax classes under Tax Category JOIG
a. 0 Taxable under GST
b. 1 GST – Exempted
c. 2 Non-Taxable GST
d. 3 Excisable with GST

H. Create Material Group 4 Indicators with their significances

Material Group Ind 4 Description Significance

E04 GST: HSS Inter State (IGST=0%) Interstate High Sea Sale
E05 GST: HSS Intra State (CGST=0%, SGST=0%) Intra State High Sea Sale
E06 GST: Export Sale Rebate - 5% Export with rebate where IGST will be 5%
E07 GST: Export Sale Rebate - 12% Export with rebate where IGST will be 12%
E08 GST: Tax On Comission - 18% Export invoice for commission business where IGST is applicable at 18%
E09 GST: Export Sale Rebate - 18% Export with rebate where IGST will be 18%
E10 GST: Export Sale Rebate - 28% Export with rebate where IGST will be 28%
Indivisible contract and Unregistered Customer where ship to party region to
E11 GST: Indivisible Contract-SH Region
be considered instead of bill to party for GST determination
E12 GST: Concessional GST Rate 5% Concessional GST at 5%
E13 GST: Concessional GST Rate 12% Concessional GST at 12%
E14 GST: Concessional GST Rate 18% Concessional GST at 18%
E15 GST: Concessional GST Rate 28% Concessional GST at 28%
E16 GST: FoC- Customer Payable FoC where customer is liable to pay GST
E17 GST: FoC- Siemens Payable FoC where Siemens is liable to pay GST
E18 GST: SIROT/Defective Retur (IGST) Defective Part returns/SIROT IGST is applicable
E19 GST: SIROT/Defective Retur (CGST & SGST) Defective Part returns/SIROT CGST and SGST is applicable
E20 GST: Export Sale (IGST=0%) Export without payment of any taxes (For Reporting Only)
E21 GST: Deemed Exports AA/EPCG/EOU 5% Sale to the Deemed Export Customer at 5% GST
E22 GST: Deemed Exports AA/EPCG/EOU 12% Sale to the Deemed Export Customer at 12% GST
E23 GST: Deemed Exports AA/EPCG/EOU 18% Sale to the Deemed Export Customer at 18% GST
E24 GST: Deemed Exports AA/EPCG/EOU 28% Sale to the Deemed Export Customer at 28% GST
E25 GST: FoC- No Tax (Reporting) FoC without payment of any GST (For Reporting only)
E26 GST: Third Country Shipment This is for reporting of third country shipment, no impact on taxes
E27 GST: SEZ Supply (Inter/Intra State) This is for reporting of SEZ transactions, no impact on taxes
E28 GST: Supply from FTWZ - Intrastate This is for reporting of Supply from FTWZ - Intrastate, no impact on taxes
E29 GST: Supply from FTWZ - Interstate This is for reporting of Supply from FTWZ - Interstate, no impact on taxes
E30 GST: DMR Billing Documents This is created to handle DMR cases

Path to configure: Logistics – General Material Master Settings for Key

Fields Data Relevant to Sales and Distribution Define Material Groups

I. Outputs configured during GST as per business scenarios.

a. ZOI3 Sales order confirmation output in GST (Copy of ZOI1)
b. ZL03 Delivery Note printing in GST
c. ZGS1 Tax Invoice
d. ZGS2 Tax Invoice
e. ZGS3 STO Invoice (both inter and intrastate)
f. ZGS4 FoC output type
g. ZGS5 Single line cumulation amount output type
h. ZGS6 Export sales tax invoice
i. ZGS7 Subcontracting Challan and Invoice.
j. ZSUB Subcontracting challan on pre-printed stationary.
k. ZIIG Specifically for company 461S (Copy of ZIIE)
Various Customised Changes Done During GST as per customer requirement listed below

1. HSN_SAC in Sales Order and Billing Siemens had Generic materials which were
used for multiple scenarios. Basically, one material code used to suffice multiple
purposes which was not feasible in GST regime as multiple purpose can have multiple
HSN/SAC code and only one HSN/SAC can be mapped in material master so we
have given facility to enter material code in sales order at line item in Additional Tab
B, where user can change HSN and re-determine prices and GST will be determined
as per HSN code over there. Same will be printed on all forms (order, delivery billing)

2. Instax Key Mandatory Removal In pre-GST regime taxes were determined using
Instax Key at sales order line Item and that was mandatory which we have removed.
So, Instax key will be there, but it will not be mandatory in sales order

3. Commercial Rounding Routine for GST Amount As per initial customer

requirement GST amount should be rounded up or down for which we have written
pricing routine 961 and assigned in pricing procedure. Then there was change and it
will round for INR only. Which in later phase changed not to do commercial rounding
so completely removed the code written and 961 (RV64A961) is used to handle
Indivisible contract cases where if E11 indicator is used in sales order it will de-
activate JOIG.
4. Routine to Get TAXM2 value As per SAP UTXJ was asked to remove and
replace it with JOIG but for Siemens we were not going to migrate transactional data
so we have saved Material tax class in TAXM2 (Tax classification 2) of material
which was not getting determined in sales order and billing so we have written pricing
routine 952 (RV61A952) and assigned to condition tables in access sequence JGSO.

5. Ship to Party Region for GST incase of Indivisible Contracts As explained

earlier Siemens has Indivisible or Immovable business where per IDT requirement
taxes should be calculated based on Ship to party region instead of Bill to party taxes.
For this we have done below changes. Pre-condition for this to happen was plant
should be selected from state where project is being executed (ship to party region) so
that only JOCG and JOSG is applicable.
a. Created new field /SIE/ASP_GST_REG in pricing catalogue to capture ship to
party region
b. This field is captured in condition table 865 and IDT will uplaod condition records
for same.
c. Material group 4 indicator E11 was given for this specific requirement.
d. Pricing routine 961 was written to de-activate JOIG as it used to get determined
for next accesses based on bill to party region.

6. Billing Number Range Logic in GST Billing number ranges in pre-SGT were
determined based on Instax Key and Assessment Location to plant in table
/SIE/ASP_SD_INAL which we have changed to determine from new table
/SIE/ASP_SD_GSTI. New logic in GST is based on Company code and business
place. Number ranges are maintained using transaction SNRO against Number range
object RV_BELEG on 31st March night every year post closure of business hours.

7. FoC Sale in GST Handling FoC was one of the crucial factor which had to be
dealt. There are three business scenarios in FoC listed below
a. FoC with no taxes Here no need of taxes so it was plain, and customer has to
update material group 4 indicator E25 at line item level in sales order. This was
purely from reporting point of view which is used further in ODN.
b. FoC with Customer Payable taxes Here customer must pay taxes for which we
have created material group 4 indicator E16. Once user chooses this and update
pricing conditions relevant will get activated and taxes will be determined which
are payable by customer.
c. FoC with Siemens Payable Taxes Here Siemens used to pay taxes and handled
using material group 4 indicator E17. This will also lead to activation of some
conditions.
8. GST Subcontracting Solution Under this standard subcontracting solution was
provided as SAP suggested in its respective SAP notes. This needed below
configurations.
a. Create new billing types 2 new billing types ZIG1 (Subcontracting Invoice) and
ZIG2 (Subcontracting Challan) were created along with their respective
cancellation billing types.
b. Created new order type ZGOR which is dummy
c. Maintain customising view J_1IG_V_SUBINV using transaction code SM30
d. Created new pricing procedure ZINSUB where prices will be determined mainly
on VPRS and customer has flexibility to maintain it by VK11 in PR00
e. Maintained copying control from ZGOR to ZIG1 and ZIG2.

SAP gave new transaction J1IGSUBCON to create subcontracting challan and

subcontracting invoice with reference to 541 movement material documents.

There are pre-requisites to be followed before executing that transaction, listed below

1. Customer is assigned in vendor.

2. Customer is extended to company and Sales area (Sales Org, distribution channel
and division) to which plant is extended.
3. Material is extended to Sales org and distribution channel of plant.
4. Item category group in material must be NORM.
5. HSN/SAC code is mapped in material
6. GST rate is maintained for HSN/SAC.
7. MAP/Cost (Condition type VPRS) will be considered as base value for calculation
of GST.