Set up goods and services tax

Business Central supports goods and services tax (GST) for India.

“Goods and Services Tax” means any tax on supply of goods, or services or both except taxes on the supply of the alcoholic liquor for human consumption.

It's a destination-based tax on consumption of goods and services. It's levied at all stages from manufacture up to final consumption with credit of taxes paid at previous stages available as set off. Briefly, only value addition is taxed and burden of tax is to be borne by the final consumer.

GST replaced several indirect taxes, including excise duty, countervailing duty, service tax, and state levies such as value added tax.

Plan the GST setup

GST has two different types of setups, Automatic and Manual.

The following is the list of Automatic Setups that are pre-configured with the help of Tax Engine

• Tax Types
• Component
• Rate Setup
• Attributes

For more information about Automatic Setup, see Tax Engine information.

The following is the list of Manual Setups that are required to be configured manually

• GST Rate
• GST Registration Number
• Tax Accounting Period
• States
• GST Groups
• HSN/SAC
• GST Posting Setup
• GST on Company Information
• GST on Location
• GST on General Ledger Setup
• GST on Purchase and Payable Setup
• GST on Source Code Setup
• GST on Masters
• GST on Vendor
• GST on Vendor Order Address
• GST on Customer
• GST on Customer Ship to Addresses
• GST on Service Cost
• GST on Bank Account

Set up GST rates

Rate of GST is defined in combination of HSN/SAC, group, and states.

1. [!INCLUDE [open-search](../../includes/open-search.md)] Enter Tax Types, and then choose the related link.
2. Select GST, and then choose Tax Rates.

3. Fill in the fields as described in the following table.

   Field	Description
   HSN/SAC	Specifies the HSN/SAC code.
   GST Group Code	Specifies the GST group code.
   From State	Specifies the vendor state code.
   Location State Code	Specifies the location state code.
   Date From	Specifies the starting date.
   Date To	Specifies the ending date.
   SGST	Specifies the SGST rate.
   CGST	Specifies the CGST rate.
   IGST	Specifies the IGST rate.
   KFloodCess	Specifies the historical Kerala Flood Cess rate.
   POS Out of India	Specifies whether POS out of India functionality is activated or not.
   POS as Vendor State	Specifies whether POS as Vendor State functionality is activated or not.

Configure compensation cess separately under GST CESS. For more information, see Set up GST compensation cess.

Set up GST registration number

Registration Number under GST is called Goods and Service Tax Payer Identification Number (GSTIN). It's a state-wise PAN based 15-digit number.

Before you add registration numbers, enter the company's P.A.N. No. on Company Information. Business Central checks the registration number's length, state prefix, and PAN against this setup.

1. [!INCLUDE [open-search](../../includes/open-search.md)] Enter GST Registration Nos., and then choose the related link.

2. Fill in the fields as described in the following table.

   Field	Description
   State Code	Specify the relevant State Code of the company for which registration number has been assigned.
   Code	Enter the valid registration number provided by authority.
   Description	Specify the description of the registration number.
   Input Service Distributor	Specifies whether the registration belongs to an input service distributor.

Tipp

State Code (GST Reg. No.) and first two digits of GST Registration Number should be same.

Set up tax accounting period

Accounting Periods and sub-periods are created and closed here. Under GST, Fiscal year would be normally from 1st April to 31st March and Sub-Accounting Periods are months.

1. [!INCLUDE [open-search](../../includes/open-search.md)] Enter Tax Accounting Periods, and then choose the related link.
2. Choose Create Year. Select the Tax Type for GST, enter the Starting Date, No. of Periods, and Period Length, and then confirm creation.

3. Review the generated periods. The following table describes the period information and GST-specific dates.

   Field	Description
   Tax Type Code	Specify the type as GST to identify the accounting period.
   Starting Date	Enter a date to specify the beginning of the period.
   Ending Date	Enter the last date to specify the end of the period.
   Financial Year	Specifies the generated financial year of the period.
   Quarter	Specifies the generated quarter of the period.
   Credit Memo Locking Date	Specify the last date by which credit memo can be entered for this period.
   Annual Return Filed Date	Specifies the annual return date used for GST credit memo posting validation.

Set up states

List of State codes to be defined with relevant GST registration number state code and eTDS/TCS state code.

1. [!INCLUDE [open-search](../../includes/open-search.md)] Enter States, and then choose the related link.

2. Fill in the fields as described in the following table.

   Field	Description
   Code	Specifies the state code.
   Description	Specifies the name of the state.
   State Code (GST Reg. No.)	Specifies the code for GST registration number.
   State Code for eTDS/TCS	Specifies the code for eTDS/TCS.

Set up GST groups

List of GST groups need to be defined. A group can be of two types Goods or Service.

1. [!INCLUDE [open-search](../../includes/open-search.md)] Enter GST Group, and then choose the related link.

2. Fill in the fields as described in the following table.

   Field	Description
   Code	Specifies the group code.
   Description	Specifies the name of the group.
   GST Group Type	Specifies whether the group is defined as goods or service.
   GST Place of Supply	Specifies GST place of supply of the GST group.
   Reverse Charge	Specifies whether the group is defined as reverse charge or not.

Set up HSN/SAC

List of HSN/SAC codes against relevant GST groups need to be defined.

1. [!INCLUDE [open-search](../../includes/open-search.md)] Enter HSN/SAC, and then choose the related link.

2. Fill in the fields as described in the following table.

   Field	Description
   GST Group Code	Specifies the GST group code.
   Code	Specifies the HSN/SAC code.
   Description	Specifies the description of the HSN/SAC code.
   Type	Specifies the type of the HSN/SAC code, e.g HSN, SAC.

Set up GST posting setup

General Ledger Account for each component and state combination is defined state-wise.

1. [!INCLUDE [open-search](../../includes/open-search.md)] Enter GST Posting Setup, and then choose the related link.

2. Fill in the fields as described in the following table.

   Field	Description
   State Code	Specifies the state code of company that have valid GST registration number.
   GST Component Code	Specifies the relevant component code.
   Receivable Account	Specifies the general ledger account for which GST receivable amount for this state and component is to be posted.
   Payable Account	Specifies the general ledger account for which GST Payable amount for this state and component is to be posted.
   Receivable Account (Interim)	Specifies the general ledger account for which GST receivable interim amount for this state and component is to be posted.
   Payables Account (Interim)	Specifies the general ledger account for which GST payable interim amount for this state and component is to be posted.
   Expense Account	Specifies the general ledger account for which GST expense amount for this state and component is to be posted.
   Refund Account	Specifies the general ledger account for which GST refund amount for this state and component is to be posted.
   Receivable Acc. Interim (Dist)	Specifies the general ledger account for which GST distribution for receivable interim amount for this state and component is to be posted.
   Receivable Acc. (Dist)	Specifies the general ledger account for which GST distribution receivable amount for this state and component is to be posted.
   GST Credit Mismatch Account	Specifies the general ledger account for GST credit mismatch postings for this state and component.
   GST TDS Receivable Account	Specifies the general ledger account for which GST TDS receivable amount for this state and component is to be posted.
   GST TCS Receivable Account	Specifies the general ledger account for which GST TCS receivable amount for this state and component is to be posted.
   GST TCS Payable Account	Specifies the general ledger account for which GST TCS payable amount for this state and component is to be posted.
   IGST Payable A/c (Import)	Specifies the general ledger account for which GST import payable amount for this state and component is to be posted.

Set up GST on company information

Legal entity's GST registration number needs to be defined.

1. [!INCLUDE [open-search](../../includes/open-search.md)] Enter Company Information, and then choose the related link.

2. Fill in the fields as described in the following table.

   Field	Description
   State Code	Specifies the state code of the company address.
   GST Registration No.	Specifies the registration number of GST for the specified address.
   ARN No.	Capture the ARN No. only when GST registration number isn't available.

Tipp

State Code (GST Reg. No.) and first two digits of GST Registration Number should be same.

Set up GST on location

GST registration number can be assigned to company for their multiple locations. These registration numbers can be defined in the location master.

1. [!INCLUDE [open-search](../../includes/open-search.md)] Enter Locations, and then choose the related link.

2. Fill in the fields as described in the following table.

   Field	Description
   State Code	Specifies the state code of the location address.
   GST Registration No.	Specifies the registration number of GST for the specified address.
   Location ARN No.	Capture the ARN No. only when GST registration number isn't available.
   GST Input Service Distributor	Specifies whether the location is registered as an input service distributor or not.
   Bonded warehouse	Specifies whether the location is treated as bonded warehouse or not.

Tipp

State Code (GST Reg. No.) and first two digits of GST Registration Number should be same.

Set up GST on general ledger setup

1. [!INCLUDE [open-search](../../includes/open-search.md)] Enter General Ledger Setup, and then choose the related link.

2. Fill in the fields as described in the following table.

   Field	Description
   State Code - Kerala	Specifies state code Kerala.
   GST Distribution Nos.	Specifies the number series code for distribution document.
   GST Credit Adj. Jnl Nos.	Specifies the number series code for credit adjustment journal.
   GST Settlement Nos.	Specifies the number series code for settlement document.
   GST Recon. Tolerance	Specifies the tolerance value to be considered for GST reconciliation.
   Custom Duty Component Code	Specifies the custom duty component code.
   GST Opening Account	Specifies the account, which is used for opening transaction of GST.

Set up GST on purchase and payable setup

1. [!INCLUDE [open-search](../../includes/open-search.md)] Enter Purchases & Payables Setup, and then choose the related link.
2. Enter exemption's start and end date for reverse charge for unregistered vendor in RCM Exempt Start Date (Unreg) and RCM Exempt End Date (Unreg)

Set up GST on source code setup

1. [!INCLUDE [open-search](../../includes/open-search.md)] Enter Source Code Setup, and then choose the related link.
2. Fill in source codes for different types of GST transactions. For Credit Adjustment Journal, Settlement, Distribution, Liability Adjustment, Adjustment Journal.

Set up GST on masters

The following is the list of masters requiring setup of GST

• Item
• Fixed Asset
• G/L Account
• Resource
• Item Charge

1. [!INCLUDE [open-search](../../includes/open-search.md)] Enter Items, Fixed Assets, Chart of Accounts, Resources, or Item Charges, and then choose the related link. Open the record to configure.

2. Fill in the fields as described in the following table.

   Field	Description
   GST Group Code	Specifies the GST Group code that is relevant for the Item, Fixed asset, G/L Account, Resources, or Item Charges. GST Group codes created in GST Group Setup appear as dropdown.
   GST Credit	Select Availment or Non-Availment to specify the input tax credit treatment for the record. Review the value rather than assuming a default.
   HSN/SAC Code	Specifies HSN/SAC Code for the GST Group selected in GST Group code field.
   Exempted	This field is checked if the item is exempted from payment of tax.

Changing GST Group Code clears HSN/SAC Code on the master record. Select the HSN/SAC code again for the new group.

1. For Price Inclusive of Tax setup go to Items > Prices & Discount > Sales Price and fill the following information

   Field	Description
   Unit Price	Specifies the unit price of the item.
   Price Inclusive of Tax	Specifies whether the unit price of the item is inclusive of tax or not.

Set up GST on vendor

1. [!INCLUDE [open-search](../../includes/open-search.md)] Enter Vendors, and then choose the related link.

2. Fill in the fields as described in the following table.

   Field	Description
   GST Vendor Type	Vendor type can be Registered, Composite, Unregistered, Import, Exempted, SEZ. It has to be selected from the dropdown.
   GST Registration No.	Enter the vendor's 15-character GST registration number. For Registered, Composite, SEZ, and Exempted vendors, enter either a registration number or ARN No.
   Associated Enterprises	This field is activated only if GST Vendor Type is Import. This can be used for an import transaction of services or goods from sister concerns located outside India.
   Aggregate Turnover	Applicable only if GST Vendor Type is Unregistered. The available options are: More than 20 lakh, Less than 20 lakh. System allows interstate supply of services if Less than 20 lakh is selected in this field for unregistered vendor.
   ARN No.	Capture the Vendor ARN No. only when GST registration number isn't available.

Set up GST on vendor order address

1. [!INCLUDE [open-search](../../includes/open-search.md)] Enter Vendors, and then choose the related link. Open the vendor, and then choose Order Addresses.

2. Fill in the fields as described in the following table.

   Field	Description
   State	State code can be selected from dropdown for this field. appropriate State code has to be selected.
   GST Registration No.	Enter Registration No. of vendor. Registration number is mandatory if GST Vendor Type is Registered. Registration No. is of 15-digits.
   ARN No.	Capture the Vendor ARN No. only when GST registration number isn't available.

Set up GST on customer

1. [!INCLUDE [open-search](../../includes/open-search.md)] Enter Customers, and then choose the related link.

2. Fill in the fields as described in the following table.

   Field	Description
   GST Customer Type	Customer type can be Registered, Unregistered, Export, Deemed Export, SEZ Unit, SEZ Development or Exempted. Select the appropriate Customer type from the dropdown.
   GST Registration Type	Registration type can be GSTIN (Goods and Services Tax Payer Identification Number), UID (Unique Identification Number), and GID (Government Identification Number). Appropriate type shall be selected from the dropdown.
   GST Registration No.	Enter the 15-character GST registration number. Registered, Deemed Export, Exempted, SEZ Development, and SEZ Unit customers require either a registration number or ARN No.
   E-Commerce Operator	This field is activated, if sales are done through an e-commerce operator.
   ARN No.	Capture the Customer ARN No. only when GST registration number isn't available.

Set up GST on customer ship to addresses

1. [!INCLUDE [open-search](../../includes/open-search.md)] Enter Customers, and then choose the related link. Open the customer, and then choose Ship-to Addresses.

2. Fill in the fields as described in the following table.

   Field	Description
   State	Select state from the dropdown for this field. Select appropriate State code.
   GST Registration No.	Enter Registration No. of customer. Registration number is mandatory if GST Customer Type is Registered. Registration No. is of 15-digits.
   ARN No.	Capture the Customer ARN No. only when GST registration number isn't available.

Set up GST on service cost

1. [!INCLUDE [open-search](../../includes/open-search.md)] Enter Service Costs, and then choose the related link.

2. Fill in the fields as described in the following table.

   Field	Description
   GST Group Code	Specifies the GST Group code relevant for the service cost. GST Group codes created in GST Group Setup appear as dropdown.
   GST Credit	Select this checkbox if GST credit is to be availed for the service cost. Unlike the corresponding field on items, this field is a checkbox.
   HSN/SAC Code	Specifies HSN/SAC Code for the GST Group selected in GST Group code field.
   Exempted	Check if the item is exempted from payment of tax.

Set up GST on bank account

1. [!INCLUDE [open-search](../../includes/open-search.md)] Enter Bank Accounts, and then choose the related link.

2. Fill in the fields as described in the following table.

   Field	Description
   State Code	Required for GST calculation in Bank Charges transactions.
   GST Registration Status	Can be Blank or Registered. If GST registration No. is added in Bank Account Master the status is updated as Registered.
   GST Registration No.	Enter Registration No. of Bank. Registration number is mandatory, if GST Registration Status is Registered. Registration No. comprises 15-digits.

Related information

Purchase from Composite Vendor

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