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12.2 Implementation team
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Document Control..........................................................................................................................2
1- Introduction....................................................................................................................................5
8- Call to Action................................................................................................................................55
Note: The current content has been compiled in reference to the frozen scope of the EBS GST
Infrastructure deliverables (Ref: GST Phase -1 Deliverables.docx)
Intended Audience
Audience for this document is user groups, consultants and support team.
Transition Taxes
GST Taxes will be mapped under Transition Taxes which is nothing but the Indirect Taxes.
Withholding Taxes are for the Direct Taxes. Tax Deducted at Source can be mapped here.
2. Define Regime
This is the Mandatory setup which decides on how the Tax defaulting mechanism should happen. It can
be defined at either the Inventory Organization Level or at the Operating Unit level.
Rule Basis
This is identical to the existing Oracle Financials for India Tax Defaulting engine where Taxes are
defaulted on the Sales Order or AR Invoice basing on the information shared at the Customer
Additional Information Screen.
Precisely, on choosing this, system checks for the relevant item category setup which is assigned to
the item along with the Third Party registration.
It can also be referred to as Traditional Way of Determining Taxes basing on Item Category. This
Setup is done at the Organization level.
b. Rule Basis:
This determines set of Rules for the Tax Category Defaulting. This gives us an approach to create a
Tax Determination model basing on the business requirement and pick the relevant tax category
among the defined Tax Categories.
(N) Oracle Financials for India Tax Configuration Define Common Configuration
We can change the Defaulting Mechanism by end-dating the current active Determination Basis and
entering the new value. These details can be entered in the form under Transaction Tax tab.
Here, we will define the respective Tax Regime used. This Regime name entered is a user-configurable
field and we can enter a value for the Regime Name.
Field Description
First Party
Item
Third Party
In the below example , we have shown for Entity as Item with Reporting Usage as Tax Determination
which means that if Tax Rules are defined for Item Reporting Code with a value , on matching on this
entry , Tax Category defined in the Rule will be defaulted for these transactions.
Legal Reporting
Reporting
Tax
Determination
Transaction
Attribute
For the tax defaulting ,
only Value Tax
Determination from the
LOV is useful
Under the Reporting Code Details, we will enter Reporting Code value, its valid description along with the
Effective dates.
Taxes in GST are broadly classified as Central Goods and Service Tax (CGST), Integrated Goods and
Service Tax (IGST), State Goods and Service Tax (SGST).
(N) Oracle Financials for India Tax Configuration Define Tax Type
Here, we specify the rate of tax which is supposed to be calculated on the transaction. As per our
requirement, if the tax is Recoverable or inclusive in nature.
(N) Oracle Financials for India Tax Configuration Define Tax Rule
Screen shot of the form where we have defined the tax as 100% Recoverable.
1. Operating Unit User will select the Respective Lists down the
Operating Unit, from the LOV Operating Units.
2. Tax Regime Code User will have to select the Lists down the Regime
Regime defined. defined under the OU.
3. Tax Regime Name Displays the Tax Regime Regime Name auto
name populates.
4. Tax Type Code User will select the Tax Types Lists down the define
defined Tax types for that OU
and regime.
5. Tax Type Displays the Tax Type name Tax Type name auto
populates.
6. Tax Rate Type LOV where we chose how the List of values are:
tax rate should be calculated
as Adhoc Amount
Percentage
UOM
UOM Adhoc
Exempted
Higher
Lower
Reduced
Standard
Zero
Under Rate Details Tab, we specify the required Tax Rate percentage. This comes with a Start and End
date. So, if required to define a new rate, we can end-date the existing rate and enter the new date.
This setup is required for both Defaulting Basis specified at the Common Configuration Screen. If the
defaulting Basis is Tax Determination Basis basing on the value of Item Classification at the Tax
Rules form the value gets defaulted. Else, if the defaulting Basis is Item Category basis, this setup is
required for the Tax category defaulting on the transaction basing on the item setup.
On clicking Find, if the setup already exists, below form opens up.
Specifying the
item Assignment to the
classification regime
If the setup doesnt exist, we are supposed to define a new setup, by entering Organization name, Item,
Item Classification at the header level.
Under Item Attributes Tab, we specify to which Tax Regime is this setup applicable.
Tax Determination can also be carried out on the basing of Item Reporting Code. This is done by
defining attribute Item Reporting Code under a Tax Rule.
3. Reporting Type Name LOV lists out the reporting type It contains the defined
Reporting Types where
usage is defined as
Tax Determination
only.
6. Description Description --
(N) Oracle Financials for India Tax Configuration Define Tax Type
Customers are referred to as Third Parties . So, when transacting in Order to Cash cycle, defining
Customers is necessary for the Tax Defaulting.
(N) Oracle Financials for India Party Registration Define Third Party
4. Secondary Registration -- --
Name
5. Secondary Registration -- --
Number
If Tax Determination Basis is Tax Rules and defaulting attribute is Customer Reporting Code, then we
need to define this Reporting Code in the Third Party Registration form.
In order to default the tax category on the transaction basing on the Inventory Organization we need to
specify this setup.
(N) Oracle Financials for India Party Registrations Define First Party Registration
As observed from the above screen shot, we have assigned the regime GST_Tax_D_O2C with the
respective registration name and its number.
To default Tax Category basing on the Reporting code at the Organization level, we need this setup to be
performed.
In the same First Party Reporting Code form, select the Tab Reporting Code .
For Tax defaulting on the transaction basing on the Item Reporting code such that all items with these
reporting codes ,the respective tax category will be defaulted, we need define this setup.
(N) Oracle Financials for India Item Definition Define Item Classification
Select Reporting
Code Tab
As mentioned from the inception of this document, Tax Category will be defaulted on the transaction
basing on the respective setups. Now, we will define the Tax Category itself.
(N) Oracle Financials for India Tax Configuration Define Tax Categories
To default taxes basing on the Registration Number of the Customer we select the Third Party
Registration Number in the tax rules.
(N) Oracle Financials for India Party Registration Define Third Party Registration
For defaulting Tax Category on a transaction basing on a set of Rules as per business requirement, we
define this setup. If at the Common Configuration screen under Tax Determination basis it is Tax Rules
then, as per the rules defined in this setup are defaulted on to the transaction.
(N) Oracle Financials for India Tax Configuration Define Tax Rules
For the sake of understanding we are splitting the form as header and line section where lines determines
information under Tax Determination Rules basis and header is above it.
Header Details
Tax Determination Basis / Rule contains below Value as shown in the screen shot.
Below is the screen shot of the form, showing that Item Category setup is active.
Here, we are going to create Item Category List where this is assigned to a specific Item along with the
respective Tax Category.
(N) Oracle Financials for India Item Definition Define Item Categories
3. Item Pick the relevant item on LOV lists down all the
which the tax category items.
should be defaulted
After creation of Item Category, we now need to add this setup at the Third Party Registration or for the
respective Customer.
As observed, the Description of the Created Tax Category gets shown in the LOV, where the respective
Item Category Setup will be checked.
On saving, now the Item Category basis method of Tax Defaulting works and on creating an Order taxes
will be defaulted basing on this setup.
Is Item No
Is Item
Category
Category
Defined?
Defined?
Yes
Check if Item No
Check if Item
Category No Tax
Category
Assigned at Third Category
Assigned at Third
Party
Party
Registrations
Registrations
Yes
Taxes defaulted
basing on Tax
Rules setup End
End
Start
Start
Item Category
Check for Value
of Check for Value
Common
of Common
Configuration
Configuration
Tax Rules No
Yes
If Attributes are
If Attributes No
Matching fromare Pick Rule of
Two or Morefrom
Matching Lower Priority
Two or More
Rules Value
Rules
Yes
Taxes defaulted
basing on Tax Tax Category
Rules setup End
End Defaulted
Approach:
GST_TR_D GST_TC_D_O2C 2
Sl.no. Tax Determination Rule Basis / Rule Tax Determination Values Sub
Values
Step 4: Go Back to Order Header Information. Click on Tools India Tax Details Form.
Order header
Tax Category
Defaulted.
Taxes on the
Order Line
level
Taxes which are defined as per the Tax Category are defaulted on Saving the order, as per the created
Tax Rule setup.
7.2 Example:
To Determine Tax Defaulting Basing on Item Classification and Third Party Registration of the customer
so that when an order is created for this customer, Taxes should populate automatically.
Approach:
GST_TR_D GST_TC_D_O2C 2
Sales Order
Number
The relevant Taxes defined for the tax category are defaulted on to the order where item is defined as
RMIN and for customer where the Third Party registration setup is defined for.
7.3 Example:
To determine tax defaulting basing Customer Reporting Code Setup along with Item Classification setup.
Approach:
GST_TR_D GST_TC_D_O2C 2
Step 5: Create Sales order for customer IL Customer02, for which this Third Party Reporting Code and
Item setup are defined.
Taxes are getting defaulted on to the order basing on the defined setup.
7.4 Example:
Approach:
Refer section Define Third Party Reporting Code, for setup details.
Refer section Define Reporting Type, under which check for the setup with Reporting Usage as Tax
Determination and Entity as Item.
GST_TR_D GST_TC_D_O2C 2
Sl.no. Tax Determination Rule Basis / Rule Tax Determination Values Sub Values
Step 7: Screen shot of the Tools India Tax Details form, where the taxes are defaulted on to the Order.
To Determine taxes on to the Order basing on the First Party Reporting Code Setup , First Party
Registration Number along with previous setups.
Approach
Refer section Define Third Party Reporting Code, for setup details.
Refer section Define Reporting Type, under which check for the setup with Reporting Usage as Tax
Determination and Entity as Item.
GST_TR_D GST_TC_D_O2C 2
Sl.no. Tax Determination Rule Basis / Rule Tax Determination Sub Values
Values
If there are two Tax Determination Rules defined in the system, which Tax Category is picked up for
Defaulting Taxes on the order?
Approach:
Sl.No Tax Rule Code Tax Rule Name Priority Tax Category Defaulted
Tax Rule Name Tax Rule Code Priority Tax Rule Tax Determination Value
Here, both taxes rules are defined with Tax Determination value as Item Classification.
Since, Both are having the same number of attributes and Tax rules being the same, lets see which tax
Category will be the system pick for Tax defaulting .Ideally, as per the design, if the Attributes are of same
number and matching across two different tax rules, then system will take lower number as priority for
precedence over the larger number.
7.7 Example:
Which Tax Rule will the system pick , the scenario where Two Tax Rules are defined in the system where
both one has more number of matched attributes than the other but with there is a Priority difference.
Tax Rule Code Tax Rule Name Tax Category Priority Start Date End Date
Tax rule code Tax rule Name Tax Category Priority Start Date End Date
Item Classification
Step 7: On saving the order, Tax Category GST_TC_D_O2C is defaulted which means Tax Rule "
GST_TC_D_O2C is picked though this is having priority as 2. (1 means highest)
Step 8: It means that, it checks for the number of matching attributes where for Tax rule O2C_1, only the
item Classification setup is matching. Whereas in this Order, there are other attributes which are matching
with another tax rule.
Hence system picks the rule where all the attributes in Tax Determination Rule are matching.
7.8 Example:
Wanted to know on how to default Tax Category on the Order where Sales order is created with two
different Items?
Approach:
a. JAITRAD
b. JAIRMIN
Since there are two different rules created for two different items where for both only 1 attribute (item
classification) is matching, we are not mentioning about priority.
a. Screen shot of tax category defaulting O2C for line number 1. You may check for the Taxes section
7.9 Example:
How to default tax category on the order with Item Classification setup defined.
Approach
At the common configuration setup, ensue that Item Category Basis is active.
Step 3: Assign Item Category Created in Step 2 in Third Party Registration form for the Customer.
Item
Classification
setup
attached
For further reference, you can also refer the below Pre-Release documents released as a part of the
EBS GST Infrastructure Scope: