Managing India GST with SAP

GST POWERED BY SAP

SAP Services
May 2015
Agenda

Lessons learned from Malaysia GST Implementation

GST & SAP Landscape Impacted areas at a high
level
How SAP can Help

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Malaysia GST Implementation
Key lessons learned

Very high increase in transactional data will be required for periodic

reconciliation between the customer, business partners and government
agencies
Large customer in MY has 4 million line item transactions/day
SAPs standard tax report (RFUMSV00 ) is giving critical memory overflow
error
Even if GST reports are executed once a month, data volume processing can
have significant effect on execution success
Some batch file runs now taking 1-1 days

Seeing increased risk on other activities Financial close, data

transfers/interfaces
Not surprisingly, customers who were more proactively engaged on GST
planning & preparation had fewer Go live & support issues & smoother
implementations
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GST & SAP Landscape
High level Impacts
GST & SAP Landscape Key Questions

Compliance to legal requirements?

What needs to be done in systems and
CEO
processes to comply with GST regulations?

CFO LOB

Efficiency that reduces costs?

Do you have a solution design that automates
accounting for GST input and output tax and
CIO provide accurate data for tax returns &
auditing ?

Flexibility to respond to the pace of

business?
EMPLOYEE
How to achieve a standard GST compliant
SAP solution which support the pace of your
MANAGER EMPLOYEE
business ?

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Business Challenges

Pressure from the authorities for Legal Compliance

/ Penalties on late submission and incorrect
reporting /
Demand for accurate GST
reporting
Deadlines for submitting GST returns /Cash
Management & Tax Liability

Impacts entire sales and purchase

transactions and resultant Data Integrity /
Master Data changes and validations

Complex rules (e.g. Cross-border services,

Transition Rules, mixed supply)

Industry specific GST

requirements
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IT challenges

Need to deliver a standardized approach to

supporting GST for SAP users with low TCI to drive
business continuity

Consistent upgrade path for GST functionality

Total Cost of Development for custom GST

applications, Forms and Reports increase
the overall TCO

Maximized use of standard SAP

functionality
A solution aligned with the long-term direction
of SAP products

High pressure from government to ascertain

compliance versus high effort , restricted time line
and limited budget

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GST Compliant system Challenges

Inaccurate& delayed GST returns can attract penalty

Complex rules to manage special conditions
Interfaces and SAP customizations may pose
additional challenges for GST enablement
Impacts entire supply chain and related financial
accounting
Regression testing of SAP and all connected systems
Managing transition scenarios such as Taxable Goods
/ Services Sold Before 1 April 2016 and Returned On
Or After 1 April 2016
Sub optimal implementation of GST can even result in
cash flow issues for organization

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Multiple business areas will be impacted by GST
Summary of key business impacts

Sourcin Inter-State procurement could prove to be a viable strategy

g This may also open opportunities to consolidate
suppliers/vendors

Distribut Changes in tax system could also warrant changes in

ion distribution arrangements
Current arrangements for distribution of finished goods may
no longer be optimal with the removal of the concept of
excise duty on manufacturing
Current network structure and product flows may need
review and redesign
Pricing Tax savings resulting from the new GST structure would
and require re-pricing of products
profitabi Margins or price mark-ups would also need to be
lity reexamined
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Multiple business areas will be impacted by GST
Summary of key business impacts

Cash flow Removal of excise duty on manufacturing can result in

improvements in cash flow and inventory costs since GST
will now be paid at the time of sale/supply rather than at
the time or removal of goods from the factory
System Required changes affect multiple areas including master
changes data, supply chain transactions, Audit and Reporting
and Open transactions and balances will need to be migrated
transactio on the cut-off date to ensure smooth transition to GST
n Changes to supply chain reports (e.g., purchase register,
managem sales register, services register), other tax reports and
ent forms (e.g., invoices, purchase orders) will need review
and adjustments
Enhanced need for reconciliation of data with suppliers,
government and other partners
Training Training and education of employees to understand new
compliance requirements under GST to ensure a smooth
transition
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GST Impact on SAP Landscape - Summary
SAP Materials Management (Procure to Pay)
Material/Service Master Purchase orders
Subsequent Credit /Debit
Purchase Info Records Debit/Credit Notes
Invoices
SAP Sales & Distribution (Order to Cash)
Sales Orders Distribution Channel
Pricing (Types of Conditions) Sales Area Billing
Schedule
Debit/Credit Notes Invoicing
SAP Financial Accounting
Delivery
Accounts Payable and Receivables Invoicing (Non-PO)
Management of Master Records Billing (Non-SO) Petty
Cash
Invoices and Credit Notes General Voucher G/L
Account
SAP Forms & Master Data
SAP FI, SD, MM, G/L Reports Other Statutory Reporting
Vendor, Customer G/L Account Reporting

SAP Human Capital Management

Employee Benefits Travel & Expenses

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Companies should proactively identify areas impacted and
prepare and test business scenarios to measure impacts

Understand key areas of impact in their business

Prepare different scenarios for the application of GST
Continually
track policy development regarding GST
and update prepared scenarios accordingly
Identify
issues and concerns needing representation
to the authorities and develop a strategy for effective
management of these
Prepare a business and IT transition roadmap and
align relevant teams
PrepareIT systems to build and test process
scenarios

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How SAP can help
SAP Consulting Value Proposition

Pre-assembled catalog of modular service offerings allowing for a

customized approach to engage SAP at various levels

In-depth knowledge of GST requirements and consulting expertise to

map GST into SAP ERP

Learnings from GST implementation in other countries

Innovative delivery leveraging the use of predefined content &

configuration, tools, accelerators, templates, questionnaires etc. to
reduce overall project cost and time to value

Leverages SAP internal teams with global access to development labs

and Active Global Support teams.

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GST Toolsof GST ToolsProject Phase
Sample Description
GST Assessment Tool Discovery Analysis on current
Configurations
Analysis on current Master Data
setup
Technical Feasibility analysis.(
SAP version , Support Pack
Level and etc)
High-level analysis on As-Is
transactions

GST Migration tool Realization Mass updates for Master Data

Managing open transactions
during transition period
Managing Tax re-determinations

GST Testing Tool Realization Regression testing

Load testing
Embedded test scenarios

GST Content Realization /Post Go Rapid GST end user training

content creations
Development tool Live Rapid GST demo creations
Rapid GST Exam creations

GST Audit Tool Post Go live Exception reports on deviations

Transaction accuracy analysis
GST Compliance analysis
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Run with SAP for 100 % Compliance

Visibility to GST impact on entire supply chain

Fully automated AR/AP GST capability to handle complex
supply chains
Automated GST accounting for inputs and outputs
GST accounting for multiple registrations of single entity
Automated input tax credit
Invoice compliance
Reduce manual intervention
Easy to adapt & scale to new business models
Clear and easier audit by local tax authorities
Transparency and clarity to aid cash management for tax
liabilities

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SAPs GST Service Categories - a 4 Pillar Approach
We are actively engaged with our partner network & tax authorities

Government agencies
Assessment Implementatio QA Audit
Partner Network

Services n Services Services Services

Supported by Global Delivery/AGS/Education/SAP Labs

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GST Implementation Framework

SAP Assessment Services SAP Implementation Services

Education Service
Advisory Services

Realization QA and Final Preparation

Advisory

Assessment & Blueprint Design

Go Live & First Submission
Support

QA Services Testing Services Audit Services

Discovery Evaluation Design Realization Operation Support

Phase

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 GST Implementation Framework

SAP Assessment Services SAP Implementation Services

Phase

Discovery Evaluation Design Realization Operation Support

Continuity
Understand the Deliver Impact and Develop the Stabilize & evolve and
Goal

Running GST
scope Approach report solution design GST operations sustainabilit
y

Impact on Identify Business Define GST related Execute roadmap Execute cutover Manage
Developments and process processes based on Drive Start of production continuous
/Forms/Reports improvement SAP best practices Implementation Adopt GST improvement
Subset of Activities

Master Data Analysis potential Validate customer fit with engineered innovations quickly Manage new
System configuration Define Assess data service Monitor live business
impacts implementation complexity methodology environment requirements
approach Run Integration &
Review Business Identify Delta Close open issues Adopt new and
processes Perform change requirements ( acceptance tests changes to
impact analysis Quality check: Go
Scope of GST technical & Conduct Planning GST
Live
implementation Identify functional) for production compliance
implementation Validate support and
Address GST
risks organizational cutover
concerns
configuration Provide Key user
Define Governance Trainings
and support model Quality check:
Final preparation

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SAPs GST Assessment service - Benefits

Visibility of GST impact on SAP across entire

business process.
Road map for GST implementation provides
clear insights to system changes, cost and time
line
Risk reduction and assured legal compliance
Reduced manual intervention in AP/AR and full
benefit of input tax credit
Recommendation in line with standard SAP /
best practice guidelines
Leverage learnings from SAP GST
implementations world wide (Brazil, Australia,
Malaysia etc.)

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GST Check points
What customers can do now

Review General Ledger Master Records

Review Customer Master Records

Review Vendor Master Records

Review Material Master Records

Review Service Master Records

Review Pricing Procedure Configuration

Review external interfaces

Review Custom Programs

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Business Processes Review

Procure to Pay process How to maximize Input Tax

Credit
Supplier Invoice Management & Record keeping
Material classifications
Review supplier base and categories
Order to Cash Process Output Tax determination,
Tax Benefits
Payment terms
Financial Accounting Process
Cash Flow Management
Organizational structure

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Configuration & Customization Review

Purchase Pricing Procedures

Sales Pricing Procedures
FI Configuration
HCM Configuration
Reports, Enhancements, Forms & GST impact
3rd Party interfaces (Inbound & Outbound)
SAP modules beyond SD, MM, FI - PS, PM
Beyond ECC SRM, CRM, Industry Solutions

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Data Cleansing and Update Requirements

Vendor Maser Update for GST Registration #

Customer Master Update for GST Registration #
Material Master
Change of Tax classification in the existing PO
Change of Tax classification in the existing SO
Pricing Procedure
GL Accounts

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Change Management & Training Needs

Enterprise wide GST Awareness & readiness

Project Team training
Key User and End User Training
Change Management

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Testing , Cutover & Go live Needs

Regression testing to ensure non GST functions

works properly
Explore Test Automation possibilities
Impact of other projects in parallel
Availability of business / IT team
Trial cutover, Technical Go live, Business Validation
Business Go live & Post go live support

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Transition Related Requirements

Taxable Goods / Service Sold Before 1 April 2016 and

Returned On Or After 1 April 2016
Taxable Service Provided Before 1 April 2016 and Terminated
On Or After 1 April 2016
Progressive And Periodic Supply Spanning GST
Implementation
Long Term contracts
How to switch off current tax configuration

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Thank you

Contact information:

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