GST Implementation ECC 6.0

Overview and Approach

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Agenda

About Goods & Services Tax

Impact of GST on SAP system

SAP System configuration & Master Data Preperation

Simple Sales and Purchase Scenario with GST

Preparatory Work

Goods and Services Tax

Goods and Services Tax (GST)

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GST?

How is GST different for Local and Export

Sales?

Am I liable for GST?

Which supply is liable for GST?

Which business processes are

impacted by GST?Is service Import liable

for GST?

What is GST?

How to handle GST in System?

What about reporting?

5What is GST Goods and Services Tax (GST) is a multi-stage tax on domestic consumption charged on all taxable supplies of goods and services in Malaysia except those specifically exempted also charged on importation of goods and services into Malaysia

Registered Person: A person is required to be registered for GST if he makes taxable supplies where the annual taxable turnover exceeds RM500,000.

Taxable Turnover : Taxable turnover means the total value of taxable supplies excluding the amount of GST.

Exporters and GST: To make the export sector in Malaysia more competitive, all exports are zero-rated, meaning exporters do not collect output tax on their supplies

GST Timeline in Malaysia

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Registration Threshold: RM500,000 turnover per annum of taxable supplies

Timeline:17 months for preparation

GST registration opens 6 months before

GST implementation date

1st April 2015

Announcement of GST

implementation in 2014 Budget

12 months

17 months for preparation

25th October 2013 1st October 2014

Deadline for GST registration

1st January 2015

Impact of GST on SAP System

GST Impact on SAP

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FRICE Forms: Tax Invoice, Debit Note, Credit Note ,

Sales Invoice, Sales Debit/Credit Note

Interface: Sales or Purchase process Interface needs to be updated to capture GST value

Reports: GST tax return report.

Master Data Update Vendor Master & Info record

Customer Master : Update Tax relevant or not

Update Material Master

Maintain Tax percentage master data

Transactions Purchase Cycle: Purchase Order, Vendor

Invoice , Direct AP Invoice

Sales Cycle: Sales Order, Customer Billing , Direct AR Invoice

Configuration Tax Procedure

Tax Codes

Pricing Procedure

Master Data

SAP System Configuration & Master Data preperation

Accounting for GST

Business Process Activity in SAP FI Entry Remarks

Procurement to Pay Create Purchase order Not Applicable While purchase holds the tax code no FI entry is generated. Purchase order conditions will show the tax value for the respective line item

Goods Receipt Not applicable In General tax on input goods and services is not recognized at the time of goods receipt. However SAP can post the taxes at the time to goods receipt if required.

Vendor Invoice Dr. GRIR Liability A/c Dr. Input GST Credit A/cCr. Vendor Account

All Input taxes are eligible for credit unless upon receipt of vendor invoice unless otherwise specified by statutory regulations. Hence input tax account gets debited at the time of vendor invoice verification

Order to Cash Billing document generation

Dr. Customer Cr. Revenue Cr. Output GST

Output tax code is specified in the sale order and corresponding entry will be posted as the invoice document is generated and posted to Financial accounting. Generally Output GST is recognized as liability as soon as the invoice is raised to customer.

Month End Transfer of Input and Output tax to Clearing account

Dr. GST Clearing Cr. Input GST Credit A/c

Transfer of eligible input tax to GST Clearing account to offset against output tax payable

Dr. Output GST Cr. GST clearing

Transfer of output tax payable to GST Clearing account to offset against the input tax

Generally It is required that all taxable persons to account for GST based on accrual (invoice) basis of accounting i.e. all output tax and input tax are to be accounted and claimed based on the time when the

invoice was issued or received.

* All business and accounting records relating to GST transactions are to be kept in Bahasa Melayu or English for a period of seven (7) years.

Transactions in SAP for GST ComplianceAt a glance: From Purchase Order to Invoice to Accounts Payables

Transactions in SAP for GST ComplianceAt a glance: From Sales Order to Billing to Accounts Receivables

At a glance : Tax Invoice

The words 'tax invoice' in a prominent place The invoice serial number The date of issuance of the invoice The name (or trade name), address and GST

identification number of the supplier The name and address of the recipient of the

supply A description of the goods and/or services

supplied The quantity or volume of the goods and/or

services supplied, for example, litres of petrol, kilos of meat or hours of labour

Any discount offered The total amount payable excluding tax, the rate

of tax and the total tax chargeable shown as a separate amount

The total amount payable including the total tax chargeable

The tax invoice has to be issued within 21 days after the time of the supply. Particulars to be shown in the tax invoice:

Sample Foreign Currency invoice

Sample Credit Note (Local Currency)

Sample Debit Note (Foreign Currency)

Reports for GST complianceGST returns must be submitted to the GST office not later than the last day of the following month after the end of the taxable period.

Where a taxable persons taxable period does not end on the last day of the

month, the GST return should be furnished not later than the last day of the thirty

(30) days period from the end of the varied taxable period

Taxable period for taxable persons with annual taxable turnover exceeding RM 5million : One Month

GST Return form

GST Standard Reports line item

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This t-code will give list of transactions per tax code representing the line items with Tax base amount and tax amount, and generates clearing entries

GST Output Tax Report Line Item

Summary of Output tax for a given period and for a single or multiple companies22

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GST Input Tax Report Line Item

Summary of Input tax for a given period and for a single or multiple companies

GST Standard Reports line item (cont.)

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55Net Balance of Input and Output Tax

The overall GST summary report below indicates the total tax to be paid over as well as the total claimable tax.

The Net balance amount will be fill for the GST month end report.

GST Standard Reports line item (cont.)

GST Standard Reports - Additional Line items by GLInput & Output Tax Summary Per G/L Account 11

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