2016

[Key Nuggets on SAP TAXINJ to TAXINN

Migration( A prerequisite to GST)]

Likely Asked Questions

Document Change Control

Version Created / Changed by Create / changed on Remark

No.

1.0 Sudipto Roy / Mobashir Azam Ansari 28th Nov 2016 Initial Draf
/ Anurag Bahety / Kumar Gaurav/
Indranil Banerjee
Contents
General FAQs.........................................................................................................................................3
1. What are TAXINJ and TAXINN?...................................................................................................3
2. Objective of Tax Migration.........................................................................................................3
3. Advantage of Tax INN.................................................................................................................3
4. Scope of this Project..................................................................................................................3
5. Why is Bangladesh Impacted though it doesnt come under the regime of GST?.....................3
6. Will there be any business downtime during the migration process.........................................4
Procurement related FAQs.....................................................................................................................4
1. What is cutover data?................................................................................................................4
2. What is considered as Open PO ?..............................................................................................4
3. We heard that in TAXINN the number of tax codes will be drastically reduced. Why we went
for multiple Tax Code?.......................................................................................................................4
4. What benefit will we get by going with the approach of creating multiple tax codes................4
5. How many Tax codes will be used now with respect to earlier TAXINJ process?.......................5
6. From where Rates of Taxes will flow in document ?..................................................................5
7. Who will create or maintain existing Tax codes and rate of Excise and Tax ?............................5
8. Who will create or maintain new Tax codes and rate of Excise and Tax ?.................................5
9. Testing for which company is required?.....................................................................................6
10. What needs to be tested........................................................................................................6
Sales related FAQs.................................................................................................................................6
1. TAXINJ to TAXINN Migration (Sale/Stock Transfer Scenarios).....................................................6
2. What is the master data migration plan?...................................................................................7
3. What needs to be done while cancelling, creating return orders for invoices posted during
TAXINJ period?...................................................................................................................................7
4. How the records will be maintained and who will be maintaining the same?...........................7
5. What is the Cut-Over strategy?..................................................................................................8
Finance & Accounting related...............................................................................................................8
1. In TAXINN for direct FI transaction (FB01, FB60, FB70 etc.) postings, do we need a tax code. . .8
2. Does this migration to new tax procedure (TAXINN) Support rate determination from J1ID?...8
General Testing Guidelines....................................................................................................................9
1. What should I test?....................................................................................................................9
2. What is the risk of not performing proper testing.....................................................................9
3. Why do we need to test the migration two times once in Mock Server and next in Quality
Server?...............................................................................................................................................9
3. What are the server details for mock system?...........................................................................9
 4. What are the server details for quality system?.......................................................................10
5. Migration Strategy & Date.......................................................................................................11

General FAQs
1. What are TAXINJ and TAXINN?

TAXINJ and TAXINN are the two tax procedures provided by SAP for country India version.

It is a calculation procedure defined for each country (here CIN), containing the
specifications required to calculate and post tax on sales/purchase transactions
TAXINJ is a tax calculation procedure for country version India and it supports formula-
based tax and excise determination. We were using a copy of TAXINJ procedure named as
TAXIN1 for India and TAXBD1 for Bangladesh
TAXINN is a tax calculation procedure for country version India and it supports condition
based tax and excise determination. The corresponding tax procedure will be TAXIN2 for
India and TAXBD2 for Bangladesh

2. Objective of Tax Migration

GST patch to be released by SAP will be on a TAXINN platform. SAP will not support or
release GST related patch for TAXINJ procedure. The main objective of this migration is to
fulfill the pre-requisite for being able to apply GST patches provided by SAP.

3. Advantage of Tax INN

It is a pre-requisite to be statutorily compliant under GST regime. Condition based

maintenance provides flexibility in maintenance and determination of tax and excise rates.

4. Scope of this Project

The Migration will impact the following Entities
Emami LTD India (Company Code 1000 )
Hema Herbs ( Company Code 5000)
3Ps ( Company Code 9000)
Bangladesh ( Company code 1010 )

5. Why is Bangladesh Impacted though it doesnt come under the regime

of GST?
SAP did not give any tax procedure for Bangladesh. As such TAXINJ was copied and adopted
for Bangladesh. The internal components - conditions and access sequences are same as
that of country India version. Due to the hard-wired dependency, we also have to migrate
Bangladesh to new Tax Procedure.

6. Will there be any business downtime during the migration process.

Yes. The current estimate of the downtime is around 19 hours. We are working to check the
possibility of reducing the downtime. We will communicate the downtime with more
accuracy post Quality server Migration

Procurement related FAQs

1. What is cutover data?

The open POs which were created in TAXINJ process and are still open, for which delivery
and invoice are expected ( MIGO & MIRO ) afer migration are considered as cutover data.
Such POs during the period of 1st of April 2015 to till date will be migrated to TAXINN
procedure. We will refer to them as MIGRATED PO

2. What is considered as Open PO ?

If PO is not marked as deleted, delivery completion indicator is not set and PO Qty , delivery
Qty and Invoice qty is not same , they are considered as open PO.

3. We heard that in TAXINN the number of tax codes will be drastically

reduced. Why we went for multiple Tax Code?
We had initially planned for reducing the tax codes to maximum possible but we could not
reduce them to a single TAX code on procurement Side. The reasons being:-

For FI and Service related tax we need to maintain different tax codes as we are
maintaining now.
Exception cases like concessional rates of CST needs to be tracked which are
currently done base on tax codes
Multiple Open POs found where Deductible as well as Non-deductible excise
charged on same material, vendor & plant combination on the same day at Vapi , as
Common Material is used for the production of Excisable and non-excisable FG
Actual purchase order with sample qty for which tax is different in same PO
PO raised to non-excisable vendors with future delivery when Vendor will become
excisable.

4. What benefit will we get by going with the approach of creating multiple tax codes

No change required for Form tracking report Opt suite

No change required for purchase order report
 No need of Training of Tax Rate maintenance Assuming there will be no change in
tax rate before GST. However, training for maintenance of excise rates through
FV11/FV12 will be given.
Tax code mapping for Cut over Data becomes easy
Reconciling of PO afer and before cutover data becomes easy.
Stabilization period post go-live will be much shorter

5. How many Tax codes will be used now with respect to earlier TAXINJ
process?
In TAXINJ we had 502 tax codes. In TAXINN we will be having around 132 tax codes

6. From where Rates of Taxes will flow in document ?

All taxes except Excise related rate will derived based on the current rates maintained in TAX
Code. We have internally handled the creation of conditions records based on tax rates.
For Excise we need to maintain different condition type as per our requirement. The
condition types are mentioned below
JM01 Deductible excise,
JM02 nondeductible,
JMOQ for Excise fix rate for deductible excise ,
JMIQ for Non-Deductible Excise fix rate
No Cess on Excise has been considered as it is not existing now, confirmed by unit
commercials and legal department.
All excise related Rates will be maintained through Tcode FV11 with Plant , vendor , material
and validity rate.

7. Who will create or maintain existing Tax codes and rate of Excise and
Tax ?
For non-excise related rates, we have maintained the condition in table Country/Tax code
combination (table A903) as per the TAXINJ tax codes.

For Excise,
We have maintained deductible and non-deductible rate% based on POs created
during 1st April 2015 till dated. Validity period is as per PO date with the latest rate
being extended till 31st Dec 9999.
We have maintained fixed excise rates ( E.g. 10 INR/ kg ,etc. ) from J1ID exceptional
rates

8. Who will create or maintain new Tax codes and rate of Excise and Tax
?

As per Legal Department, there will be very rare case of new Tax code or new duty rates
introduction before GST.
In case it is required, IT will help in creating or maintaining the rates along with Business
users. Key business users to be identified in due course.
Maintenance of excise for new material / vendor will be the responsibility of the
corresponding Unit.

9. Testing for which company is required?

Emami Ltd
Hema herbs
3Ps
Bangladesh
Paper Mill (To perform negative test if the access sequence is same or not )

10. What needs to be tested

Migrated POS( Pos as part of cutover, created during TAXINJ and Migrated to
TAXINN )
o Verify that TAX rates are coming as was created.
o Good Receipt, excise capture ( Part 2 )and Invoice Capture ( for non-excisable,
deductible excise and non-deductible excise scenario )
o Reversal of Invoice and Good Receipt.
o Verify the accounting entries with proper GL & Segment Posting
o PO printout , Purchase Register, Opti suite Report.
TAXINJ non-Migrated POs
o Reversal of Invoice and Good Receipt.
o Verify the accounting entries with proper GL & Segment Posting
o PO printout , Purchase Register, Opti suite Report.

Freshly create POs in TAXINN

o PO creation using old contract
o PO creation using new contract
o Import PO
o Verify that TAX rates are coming correctly
o Good Receipt, excise capture ( Part 2 )and Invoice Capture ( for non-excisable,
deductible excise and non-deductible excise scenario )
o Reversal of Invoice and Good Receipt.
o Verify the accounting entries with proper GL & Segment Posting
o PO printout , Purchase Register, Opti suite Report.
The scenarios are suggestive and any other scenario which you think is applicable
should be tested
Please mail all your further queries related to procurement from TAX/EXCISE perspective to
Sudipto Roy sudiptoroy@emamigroup.com mentioning TAXINJ TO TAXINN on the subject
line.
Sales related FAQs
1. TAXINJ to TAXINN Migration (Sale/Stock Transfer Scenarios)

In TAXINJ procedure the tax/excise rates were maintained in Tax Codes.

In transaction VK11(create condition records) the tax code was assigned to UTXJ
condition type.

In TAXINN procedure the tax/excise rates (condition records) are determined based
on the given conditions and hence this methodology is called Condition Technique.
Excise condition type (JMOD) & Tax condition type (JIN1, ZUPT, JIN2, JIN4, JIN5, JIN6,
JINB, JIN7, JIN8 etc.) will be directly maintained in transaction VK11 with applicable
rates for the given conditions.
E.g. If the excise rates are maintained for a given Sales Org/Dist
Chnl//Plant/Material combination, system will always fetch the applicable rates
from the condition records maintained for above condition.
Similarly, Tax condition type (JIN1, ZUPT, JIN2, JIN4, JIN5, JIN6, JINB, JIN7, JIN8 etc.)
will also be directly maintained in transaction VK11 with applicable rates for the
given conditions.
E.g. If the tax rates are maintained for a given Country/Tax Classification of
Customer/Tax Classification of Material/Region of Delivering Plant/Region of Ship
to Party/Material Group combination, system will always fetch the applicable rates
from the condition records maintained for above condition.
Going forward with TAXINN, all tax & excise rates will be determined from condition records
only and Tax Code will only be used for posting for taxes to different GLs in FI.

2. What is the master data migration plan?

All the master data (excise & tax rates) maintained in J1ID and respective Tax Codes
needs to be migrated to condition records under corresponding condition types.
Excise Rates (JMOD) - Currently we have taken a list of all materials maintained in
J1ID with a valid excise rates and have maintained the same in VK11, based on the
sales/stock transfer history of last 5-6 years. Tax Rates (JIN1, ZUPT, JIN2, JIN4, JIN5,
JIN6, JINB, JIN7, JIN8 etc.) - Currently we have taken a list of all the tax rates
maintained in tax code within a valid period and have maintained the same in VK11
under corresponding condition types.

3. What needs to be done while cancelling, creating return orders for

invoices posted during TAXINJ period?
System will throw tax code error as it wont get tax code which was maintained in TAXINJ procedure.
Hence we need to re-run the pricing through UPDATE button maintained at item level data in
Condition Tab.

4. How the records will be maintained and who will be maintaining the
same?
As mentioned earlier, all condition record (excise/tax rates) will be maintained under corresponding
condition types in transaction VK11 for the given sale/stock transfer scenario. The condition
technique stops searching once it gets the record in any of the below given conditions in the given
sequence. The Legal department expectation is very minimal excise/tax rates changes going forward
to GST, hence the same can be maintained by the IT.

Sales org./Distr. Chl

Sales org./Distr. Chl/Plant/Customer/Material
Sales org./Distr. Chl/Plant/Material
Country/Plant/Customer/Matl group
Plant/Country/RecipCntry
Departure Country / Destination Country
Country/Plant/Customer
Country/TaxCl.Mat/TaxCl1Cust/PlntRegion/Region/Sales org./Ma
Country/Plant/TaxCl.Mat/TaxCl1Cust/PlntRegion/Reg/Mat/SLoc
Country/Plant/TaxCl.Mat/TaxCl1Cust/PlntRegion/Region/Materia
Country/Plant/Sales org./SalesDocTy/TaxCl1Cust/TaxCl.Mat
Country/Plant/Bill. Type/TaxCl1Cust/Region/PlntRegion/TaxCl.
Country/Plant/Matl group/TaxCl.Mat/TaxCl1Cust/PlntRegion/Reg
Country/Plant/Matl group/TaxCl.Mat/TaxCl1Cust/PlntRegion/Reg
Country/Matl group/TaxCl.Mat/TaxCl1Cust/PlntRegion/Region

5. What is the Cut-Over strategy?

As per SAP best practice we should close all the open (undelivered/unbilled) orders in TAXINJ
procedure pre migration and again open the same in TAXINN post migration.

Please mail all your further queries related to sales/stock transfer from TAX/EXCISE
perspective to mobashir.ansari@emamigroup.com mentioning TAXINJ TO TAXINN on
the subject line.

Finance & Accounting related

1. In TAXINN for direct FI transaction (FB01, FB60, FB70 etc.) postings,
do we need a tax code

Yes. On FI Side we will continue to use the tax codes as it was done in TAXINJ. We will
create the current tax code as a part of the cutover activity. Any further tax code needed will
be created as per the current process

2. Does this migration to new tax procedure (TAXINN) Support rate

determination from J1ID?

J1ID rate determination is not supported in TAXINN. However, apart from rate determination
other feature of J1ID will still be supported.
General Testing Guidelines
1. What should I test?
Please refer to the corresponding section (Procurement / Sales / Finance) for detailed scope

2. What is the risk of not performing proper testing

The Migration is process is non-reversible. We will not be able to revert back to the situation
of TAXINJ if serious issues are found late afer go-Live. As such, it is the responsibility of
Business user to ensure that all the scenarios are completely tested and no scenario is lef to
chance. We will still support the closure of issue in the shortest possible time, but the
responsibility of disruption of business activates due to the lack proper testing will lie with
the business

3. Why do we need to test the migration two times once in Mock Server
and next in Quality Server?

The current migration is being carried out in the Mock Server so that we do not impact the current
production landscape (Development, quality and production server). Once the Mock system is
validated then we will import the transport, confirmation and cutover in the Quality server. 2 nd round
of testing in QA server is required to ensure that
1. All the configurations will be correctly moved to production and impact on live system is
minimized
2. The Development and Quality Systems are ready to support further change requests post
TAXINN Migration

3. What are the server details for mock system?

You can either use the batch file to log on to the Mock system directly. You can login using
the Production user ID and Password as on 3rd of October 2016. You will find the data till 3rd
of October 2016. However, Please note that POs created in month of September many not
reflect correctly as we have used for testing purpose during initial study.

ECC-ED1 900.rar
System Details
 4. What are the server details for quality system?
You can either use the batch file to log on to the Mock system directly. You can login using
the Production user ID and Password as on 18th of September 2016. You will find the data
till 18th of September 2016. This shall be available for testing only afer Mock testing is
confirmed. We will confirm the dates for testing in Quality system in due course.

ECC-EQS 900.rar
System Details
5. Migration Strategy & Date