Oracle Financials for India is a tax product that supports India Tax requirements across regimes with respect to tax defaulting, computation, accounting, and repository updates. The tax regimes that are currently supported in the product are GST, Tax Deducted at Source & Tax collected at source.
Indian indirect tax regimes transitioned to GST Regime in July of 2017 where majority of the indirect taxes have been condensed in to the Goods and Services Tax (GST). By amalgamating a large number of central and state taxes into a single tax, the aim was to mitigate cascading or double taxation and pave the way for a common national market. The India GST is a country-level destination based indirect tax Applied on Supply of goods or services as against the previous concept of tax on the manufacture of goods, on sale of goods, or on provision of services.
Based on the principle of destination based consumption taxation, the state portion of the revenue from GST goes to the consuming state Central GST (CGST) and State GST (SGST/UTGST) is applied in the course of intra-state supplies where both the taxes are computed on the same taxable basis Integrated GST (IGST) is levied on inter-State supply. IGST is applicable for Interstate supplies as well as for cross-country supplies (import and export).
GST is applicable on supply of all goods and services based on Harmonized System of Nomenclature (HSN codes). Certain products are not in the scope of GST currently, and these items continue to be taxed as per the old structure, for example, alcohol for human consumption, petroleum products might be included in GST in the future. GST may be applied per the following formats – Standard transaction tax Self assessed tax, for example, non-registered suppliers, imports, specified commodities, and as Withholding tax in specific circumstances, for example, e-commerce entity making a supplier payment.
Oracle Financials for India now supports the indirect tax regime through Goods and Service Tax (GST). You can now customize and add any newly introduced tax at any point in time. Tax regimes are user-configurable. Using the new GST functionality, you can define regimes, tax types and determine the attributes for a selected tax type.
Following are the basic setups required to use Oracle Financials for India:
Defining tax configuration
Defining reporting types
Using Tax Configuration, you define different tax regimes based on business requirements, the tax types, tax codes and so on.
Following are the topics covered in the tax configuration:
Defining Regime
Defining Tax Types
Defining Tax Rates
Defining Tax Categories
Defining Tax Rules
Defining Common Configurations
Defining Specific Functionality
Defining Party Registration
Creating Item Classification
Defining Item Category
Defining Document Sequencing
Defining Interface Tax Mapping
Setting Up Exemptions
You can define any new tax regime introduced by using the Regime definition window. You define regime and it's attributes, such as effective dates here. You can define all the regimes in one place and also review the historical data. You define a new tax regime called India GST, and configure the system to handle the transactions that have the GST applicability.
Using Regime you can perform the followings:
Specify the effective start date for those regimes. You can also specify an end date for the regime.
Classify a Regime as Transaction Tax Regime or Withholding Tax Regime. Based on the selection, the attributes on the Tax Type window and Rates window are determined and relevant repository is updated.
Assign Calendar at the Regime Level, which determines downstream impacts like tax invoice number generation.
Assign Tax Authority at the Regime level that determines settlement invoice generation.
Assign regime classification type to a regime and code can also define regime. Classification code can be modified on the transaction and can be used in the settlement.
Define rounding at the regime level. Rounding can be determined for the tax basis level and also for the computed tax with effective start date and end date for rounding basis.
Provide Rounding Rule to configure the same either at the document level or at the line level.
Following are the fields available in the Regime window:
Navigate to the Define Regime window using (N) Oracle Financials for India > Tax Configuration > Define Regime.
Provide a unique short code for the tax regime in the Regime Code field. For example, GST.
Define the name of the Tax Regime in the Regime Name field. It is a mandatory field. For example, Good and Services Tax.
Specify the Start Date which is the date from when the regime is effective. Start date is always the current date by default. This is a mandatory field.
Specify the End Date until when the tax regime is valid. If you enter end date for a tax, then the tax will become ineffective from that date.
Regime Attribute Region
Select the type of regime you want to use in the Regime Type field. Valid values are:
Transaction Tax
Transaction Tax includes taxes like GST, Excise, CST, Custom duty can be mapped to this.
Withholding Tax
Withholding Tax includes taxes like TDS - Tax Deducted at Source and TCS - Tax Collected at Source can be mapped to this.
Based on the value selected, the attributes of the tax type and tax rate are shown in the respective windows. Transaction Tax Regime is the default value.
Enter the valid Tax Authority. You assign Tax Authority at the Regime level and site is assigned at the Registrations level. The field displays all the suppliers with the classification of India Tax Authority. A new classification, India Tax Authority is seeded.
Define the tax calendar to use from the list of calendars defined in General Ledger in the Tax Calendar field. This is a mandatory field only when the Regime Type is Withholding Tax. This calendar is used for determining the tax invoice number and in case of withholding taxes if any threshold are used, then they are also considered.
Displays the default Conversion Rate Type. The value is picked up from GL daily conversion. You can override the conversion at the transaction level.
Rounding Tab
Indicate the Rounding Basis to which the tax basis amount is rounded off to. Select the valid value from the following options:
Enter the Quantity. If taxes are based on the quantity and there is a requirement for rounding of the quantity, then this value is used for computing taxes.
Enter the Tax Amount. Rounding rule for the tax is determined based on the value setup here. If the rounding rule is defined as zero (0), then tax has two decimal places. If the rounding rule is defined as one (1), then tax is rounded to the nearest rupee. Tax Rounding default value is one (1).
Enter the amount that is taxable in the Taxable Amount field. In the current architecture rounding is defined at the Tax code level and a regime can have multiple tax codes and you can define each tax code differently.
Indicate if the amount should rounded to the nearest decimal or to the nearest unit in the Rounded To field. Valid values are:
Nearest Decimal
Nearest Rupee
Indicate the Rounding Factor. The valid values are:
1
2
3
4
5
If 1 is selected, then the taxable basis is not rounded and the line amount is considered without any rounding factor for tax computation.
If 2 is selected, then the taxable basis is rounded to the nearest rupee.
If 3 is selected, then the taxable basis is rounded to the nearest ten rupees.
If 4 is selected, the taxable basis is rounded to the nearest hundred rupees.
If 5 is selected, then the taxable basis is rounded to the nearest thousand rupees.
Enter the Start Date. This is a mandatory field. This date is when the specified taxable rounding rules are considered while computing taxes for the transactions.
Enter the End Date when the specified taxable rounding rules ceases to exist.
Reporting Codes Tab
The values are configurable or seeded based on the selected reporting type.
Indicate the reporting type for the tax, such as if it is First party Registration or Custom Type in the Reporting Type Name field. This helps store any business-specific requirements.
Displays the associated Reporting Code.
Displays the description of selected reporting code in the Reporting Code Description field.
Enter the Start Date. The date when the specified setup is considered while computing taxes at the transactions. This is a mandatory field.
Enter the End Date when the specified setup ceases to exist.
The Tax Type window lets you define the tax type and its attributes. You can define any new tax type introduced by a Statute using the Tax Type definition window. For example, in the current context, you can define the tax types, CSGT, SGST, and IGST. These tax type codes can further be attached to the transaction flows as applicable.
In case of upgrade customers migration is provided for the existing regimes to the new tax type window for the new implementations there is no impact of migration from previous releases.
Enter the following options:
Navigate to the Tax Type India Localization window using (N) Oracle Financials for India > Tax Configuration > Define Tax Type.
Select the Tax Regime Code from the list of values for which the tax code is defined. List of values displays all the tax regime codes that are effective on the date of Tax Type creation. This is a mandatory field.
Displays the Tax Regime name for the selected Tax Regime Code.
Specify a unique short name for the Tax Type Code. This is a mandatory field.
Specify the Tax Type. For example, CGST. This is a mandatory field.
Enter the Start Date from when the tax type is effective. This is a mandatory field.
Enter the end date until when the tax type is valid.
Details Tab
Indicate if the tax is recoverable or not by checking the Recoverable Tax option. If the option is selected, then the specified tax type is recoverable and the input tax can be availed in setting off the tax liability incurred.
Note: If this option is not enabled, then you cannot avail the input tax credit and cannot offset against the corresponding tax liability.
Indicate if the abatement is allowed by checking the Allow Abatement option. Abatement is used in the tax regimes where there is movement of goods or services. In abatement, the tax is computed only on a portion of the invoice or tax. Define where the tax must be computed at the tax rate level.
If a value is specified, then the taxable basis for the invoice is computed based on the value. For example, if you specify 75%, then tax is computed on 75% of the invoice value only. If abatement is specified as 65% and the actual tax rate is 10%, then tax is computed on the whole invoice value but the rate is 65% of 10%, that is 6.5%. The setups for the percentage of the tax rate or invoice are an attribute which will be available on the tax rate.
Enable the Applicable for Off Set option, to offset the tax liability of other tax type codes. You can use the recovery of this tax type against the liability of another tax type or use the other tax recovery to adjust the liability of this tax type.
Indicate is the tax type code is a Self Assessed/Reverse Charge tax. For example, it is like Service Tax reverse charge.
Indicate if you are setting the tax for reporting purposes only in the Set Tax for reporting purpose only option and there are no accounting involved.
If the tax is set as self assessed tax, then the tax is paid by the buyer not by the seller. In the Accounts Receivables side if this tax is used, the same is not updated to the Receivables and update the tax repository for liability at the time shipment or completion of Accounts Receivables invoice.
If this option is checked, then taxes are computed on the transaction but are not updated to the supplier liability or customer's recoveries. It will not be updated to the liability of the tax accounts on the tax repository and this amount can be used for computing other taxes.
Enable the Update Vendor on Transaction if you want to override the vendor name defaulted for the tax code during the transaction flow. This is used when one person buys the goods and another persons ships them, and the third person raises the invoice. In such cases, the tax invoice is raised for the supplier and claims are settled. In case of freight, attach any transporter to the tax and you can change it during transaction.
Indicate if the Withholding Tax Applicable option is enabled. When enabled, the tax type code being defined is a withholding tax.
Note: If the Withholding Tax Applicable option is enabled, the above mentioned options are disabled,
Indicate the Tax Point Basis. It lets you specify the point at which Tax is accounted and posted to repository. This feature makes the tax type user-configurable. This determines the taxes for accounting, credit, liability and update of repository on the transactions. Valid values are:
Accounting
Delivery
Invoice
Payment
Note: Set the tax point basis as Delivery for GST taxes for manufacturing organizations and as Invoice for Services Organization.
Select Accounting when there is no requirement from the tax authorities for tax point basis as accounting. The taxes are accounted, credit or liability is determined and repository is updated only on accounting of the documents, that is, invoices or payments or debit memos or credit memos.
Delivery Taxes are accounted and updated to the repository at the delivery event on the transactions.
When Tax point basis is Invoice, the non recoverable part of Tax is still computed at Receipts. Only, recovery is done on invoicing.
If tax point basis is payment, the taxes are accounted, liability or credit is available only as payment of the document in case of Payables invoice or application of debit memos or credit memos.
Accounting Tab
Indicate whether the regime type is withholding or transaction type in the Ledger field. Define the ledger and select the operating unit and inventory organization and location under the certain ledger scope.
Indicate if Operating Unit is withholding or transaction type. If you indicate a ledger to be Withholding regime type, then only operating unit displays. If the ledger is a Transaction regime type, all the attributes display. Operating Units will be shown here based on MOAC.
For a transaction tax type, this field displays the Inventory Organizations for which you have access to. In the case of withholding tax type, it shows the operating units. If it is for the withholding regime tax, location is grayed or disabled. The same cannot be updated on saving and it is grayed out and disabled on query. This is a mandatory field.
Indicates the applicable HR location code. Location includes a list of values and it shows all the locations associated with an Inventory Organization.
Select Interim Recovery Account when taxes are defaulted on a transaction, the interim recovery account is shown. At the time of accounting, interim recovery account is updated and at the time of claim the interim recovery account is knocked off and recovery account is updated. Recovery account is updated at the time of claim based on the tax point basis. The account is debited or credited for the recoverable taxes with reference to Purchase to Pay transaction flow.
Recovery Accounts is enabled only if tax type is checked for Interim Recoverable Tax and in only for Transaction tax regime. The account is debited or credited for the recoverable taxes with reference to Purchase to Pay transaction flow.
Interim Recovery Account is not in use.
Select from the list of service tax liability account values. Liability Accounts is enabled for tax liability that are created by Order to Cash tax settlement transactions, such as Ship Confirm and AR Invoice flow. The liability is enabled for Purchase to Pay flows too when debit memos are accounted.
Expense Accounts are used for writing off taxes for Bill of Entry where small amounts remained or left over due to rounding difference. Also, needed for the GST reversal feature. This is enabled for only transaction tax regime only.
Rounding Account is not in use.
Suspense Account is used in the Order to Cash flow. For example, if the Tax Point Basis (TPB) is Delivery, then for a ship confirm transaction, this account is debited and the Liability account gets credited.
Advanced Suspense account is used for Advance Receipt (AR) transactions. It is debited or credited for any receipt confirmation or application as applicable,
ISO Suspense Account is used in the IR-ISO transaction flow.
Reporting Codes Tab
Indicate the reporting type for the tax, such as if it is First party Registration or Custom Type in the Reporting Type Name field.
Displays the associated Reporting Code.
Displays the description of the selected reporting code in the Reporting Code Description field.
Enter the Start Date from when the tax type will be active. This is a mandatory field.
Enter the End Date when the tax type ceases to exist.
Tax Rate window lets you define the rate of tax used for calculating tax rate percentage on the transaction. This tax rate code is attached in the tax category definition so that a group of taxes can be attached to the transactions during the transaction flow.
Following are the attributes of the Tax Rate window:
Navigate to the Tax Rates window using (N) Oracle Financials for India > Tax Configuration > Define Tax Rate.
Select or enter the Operating Unit. This is a mandatory field.
Select from the list of Tax Regime Codes displayed based on the selected Tax Regime. This is a mandatory field.
Select from the list of regimes displayed that are active on the day of tax rate creation in the Tax Regime Name field.
Select from the valid Tax Type Codes for which the tax rate details are defined. This is a mandatory field.
Enter the short name for the Tax Rate in the Tax Rate Code. This is a mandatory field.
Select from the valid Tax Types that are attached to the regime selected and are active, displays.
Specify the Tax Rate Name. Should be a unique value. This is a mandatory field.
Select the Tax Rate Type. Valid values are:
Percentage
Adhoc Amount
Unit of Measure
Unit of Measure – Adhoc
Note: The selected regime code should be a transaction tax regime code.
Specify the Tax Status. Valid values are:
High
Low
Medium
Zero
Exempted
Enter the applicable Recovery Rate.
Indicates if the tax rate is an Inclusive Tax.
Rate Details Region
Enabled based on the selected Tax Rate Type value. Percentage is the default value for the Tax Rate Type.
If Percentage is selected as the Tax Rate Type, then the following attributes are enabled:
Percentage
Mandatory
Start Date - Mandatory
End Date
If Adhoc is selected as the Tax Rate Type, then Rate Details region is grayed out.
If Unit of Measure is selected as the Tax Rate Type, the attributes are enabled:
Unit of Measure
Mandatory
Unit of Measure Rate – Mandatory
Start Date – Mandatory
End Date
If Unit of Measure – Adhoc is selected as the Tax Rate Type, then the following attributes are enabled:
Unit of Measure
Mandatory
Start Date – Mandatory
End Date
If Rate Percentage has multiple records, then the first rate percentage is end dated. The Start date for the next record should be greater than the End Date of the previous record. Recovery Percentage is enabled only if the Tax Type selected is marked as Recoverable. The Tax is used for reporting purpose and it does not impact the tax determination.
Exemptions Region
Enter or select the Tax Rate Classification from the following list of values. Valid values are:
Concessional Rate
Exemption Rate
Standard Rate
Enter or select the Original Rate for the exempted tax.
If Concessional or Exemption Rate is selected as the Tax Rate Classification, then the standard rate and Form Type are enabled. Tax Rate Percentage defined is lower than the Standard Rate, if Concessional Rate and Exemption Rate are selected in the Tax Rate Classification.
Enter the Remark for the tax rate being exceptional.
Abatement Region
Abatement is enabled only when the selected Tax Type is marked for Allow Abatement.
Select the Abatement Type. Valid values are:
On Invoice Value: If On Invoice Value is selected, then item line value is considered and on that a percentage of the amount is excluded for tax computation. For example, if Invoice Value is Rs 10,000 and Tax Rate is 10% and abatement is given for 60% of the invoice value, then taxable basis will be 10000 X 60% =6000 and on this 10% Tax is to be computed, that is, Rs 600.
On Tax Rate: If On Tax Rate is selected, then the tax is computed on a reduced rate. For example, if normal Tax Rate is 15% and abatement is 25%, then the effective tax rate is 15% X 25% = 3.75%.
Enter the amount of abatement to be availed as Percentage here.
Select the Start Date from when the abatement comes into effect. This is a mandatory field.
Enter the End Date when the abatement ceases to exist. Once the abatement is end dated, it cannot be used in transactions.
In case of non-item transactions, abatement is applicable on a new tax rate and must be created. Otherwise, the abatement is considered on all transactions. Assignment Tab is enabled for all Tax Rates.
Accounts for the Tax Rate is default from the Tax Type and can be overridden wherever you want to specify separate accounts at the tax rate level.
No new accounts are allowed for addition at the tax rate level.
Accounts Region
All the accounts related to this tax rate are defined here. All the accounts are default based on the selected tax type, but you can override them here.
Displays a valid Ledger from the list of values. This is a mandatory field.
Displays the operating unit.
If the regime assigned is a transaction tax regime, then the Inventory Organization displays. If the withholding tax regime is selected, then this option is grayed out.
Dsiplays the corresponding organization's Locations for transaction tax. If it is withholding tax regime, then this option is greyed out.
Recovery Accounts has the following options:
Interim Recovery: This option is enabled only when the Recoverable Tax Flag is selected.
Recovery: This option is enabled only when the Recoverable Tax Flag is selected.
Liability Accounts has the following options:
Select the Interim Liability. This account tracks liability for interim purpose, which is more like suspense account.
Select Liability. This account tracks liability accounting of Tax.
Indicate the Expense Account applicable.
Other Accounts has the following options:
Indicates Rounding Account.
Indicates the Suspense Account where liability is accounted.
Indicates the Advanced Suspense account to track tax liability for advanced receipts.
Reporting Region
Displays all the Reporting Type Names that are created in the Reporting Code window as the First Party entity. For a Regime there can be more than one Reporting Type Name but the Reporting Codes have to be unique.
Select from the Reporting codes that are associated with the selected Reporting Type and are created for use as the first party entity. If the Reporting Type Name for the Reporting Code is user configurable, then you must enter the reporting code manually. List of values is not displayed.
Enter or select the Reporting Code Description.
Enter the Start Date as the system date or lesser than system date. Start date indicates that the specified rounding is applied to the regime. This is a mandatory field.
Enter the End Date until when the rounding rule will cease to be applied to the specified regime.
A group of different tax codes having applicable tax rates belonging to different regime codes are defined in Tax Categories. This is a mandatory setup to enable Tax defaulting and automatic calculation at the transaction line level. Tax Categories are based on the taxes that will be applicable to the transaction and the Tax Base Amount calculation are determined.
You can associate an Item Class to the Tax category. This Tax category can be applied to all items under this class.
Tax Category is a group of relevant Tax Codes with precedence applicable to them.
Header level
Navigate to the Tax Category Setup indow using (N) Oracle Financials for India > Tax Configuration > Define Tax Categories.
Select or enter the relevant Operating Unit. This is a mandatory field.
Enter a Unique name for Tax Category. The Tax Category Name should be Suggestive, you should be able to identify the applicability of the Tax Category.
Enter meaningful Description for the Tax Category. This should describe the Tax Category Name in detail.
Enter an Item Class. One Tax Category cannot be applied to more than one Item Class and vice-versa. The Tax Category defined with an Item class defaults at the transaction level based on the Item Class that has been associated to the transaction level 'Item Attribute'. Once an Item Class (Predefined by Oracle Financials for India) is associated to a Tax Category, the same Item Class cannot be associated to any other Tax category. Based on this Item Class the GST Register update is done for an item.
Enter the Item Class Code.
Enter the Start Date as the system date or lesser than system date. Start date indicates that the specified tax category is effective from. This is a mandatory field.
Enter the End Date when the tax category ceases to be effective.
Details Region
Displays auto-generated line Number. This value is used to define precedence.
Select or enter the Tax Name. The Tax Rate applicable on the date is applicable for the transaction.
Enter or select from the list of valid Regime Code available based on the selected organization type. If Withholding Tax Regime is selected as the Regime Type, then the list of values only displays the Withholding Tax Regime Names. If Transaction Tax Regime is selected as the Regime Type, then the list of values only displays the Withholding Tax Regime Names.
Select from the valid Tax Types that are attached to the regime selected and are active, displays.
Precedence refers to the manner in which the tax will be applied in the Tax Precedence 1-10 field. The Tax Rate may be applied on the transaction base value or on another tax line or compounding them or combination of all. The base amount or material sale value is by default given a precedence value of '0'. The subsequent precedence are assigned to the Tax Names' respective Line Numbers. A maximum of five levels of precedence are permitted.
The taxes included in Tax Category would default on a transaction line. But, you would also have a provision to add new tax lines manually. Tax precedence for Additional CVD Tax Type should be set to the Tax on which it is calculated.
If a tax name is defined as adhoc or as Amount Per Unit of measure then the Precedence has no Relevance in tax computation of such tax, however, calculation of other taxes can be based on this tax. A tax cannot be dependent on itself. However, interdependent taxes can be set up in precedence e.g. tax at line 1 can depend on tax at line 2. Similarly, tax on line 2 can depend on tax at line 1.
For example Define a Tax Category for an Item A purchased for Location B and the following taxes are applicable.
Define the above Tax Names and percentages in the Tax Name Definition.
Associate the above Tax Names in the Tax Categories window accordingly for tax calculations. At this point, the dependence of tax on other tax needs to be defined in the system. If Sales Tax needs to be calculated on both line price and GST Duty, the same can be defined in this screen. If '0' is defined then tax will get calculated only on the line price. In the 2nd line if it is 0 and 1, then the 2 nd line tax will be calculated on the line price and the 1st tax.
Select the Recoverable Flag, if the selected Tax Rate has a recoverable percentage greater than Zero.
Select the Inclusive Flag. In this example line amount is Rs. 1000/-. The taxes mentioned below are applicable.
Select the Self Assessable flag.
Indicates the Tax Calculation.
Tax Rules window lets you define tax defaulting and tax determination rules. You setup rules for operating units based on which tax determination is determined. Tax Determination basis is defined by using the Tax Rules feature. A Tax rule code is defined in which, the you can attach the tax category.
Navigate to the Define Tax Rules window using (N) Oracle Financials for India > Tax Configuration > Define Tax Rules.
Select the valid Operating Unit. This is a mandatory field.
Enter the Tax Rule Code. This is a mandatory field.
Select or enter the Tax Category available with the selected operating unit. This is a mandatory field.
Displays the Description of the selected tax category selected.
Enter the relevant Priority value. The lower the value, the more the priority. Priority value must be unique to the Tax Rule definition.
Enter the Start Date as the system date or lesser than system date. Start date indicates that the specified tax rule is effective from. This is a mandatory field.
Enter the End Date until when the tax rule will cease be effective.
Tax Determination Rule Details Region
Select the appropriate Tax Determination Basis. The valid values are:
Application
Bill To
Customer Reporting Code
First Party Reporting Code
Item Classification
Item Reporting Code
Ship From
Ship To
Supplier Reporting Code
Third Party Registration Number
Select or enter the Tax Determination Values.
Note: If no value is selected for Tax Determination Basis, then the treatment would be that the tax rule would be applicable for all the possible combinations. For example, if Ship From is blank, then it implies that the rule is applicable for all the States.
Indicate if the Ship From or Ship To has value of Other. If no value is selected, then it means the same is applicable for all the countries.
The Common Configuration lets you define Tax Determination Basis. Common configuration determines the tax defaulting and determination basis by operating unit. You can modify the same at any point of time based on the date attributes.
When you change values, the tax defaulting happens on the downstream documents based on the tax determination basis as on the date of transaction available in the setup. For Example, a purchase order is created on 25 Dec, 2010 and at the point of time the tax determination basis is item based, and you change the same on 1 Jan, 2011 to determination based on the rules. Receipt is made on 5 Jan, 2011 and on this date the tax determination is based on Rules, so the rules determine the basis for taxes on the receipt.
The tax determination basis is set up on an operating unit level. Customer can set up tax defaulting basis for transaction taxes and withholding tax.
Following options are available in Common Configuration:
Navigate to Common Configuration window using (N) Oracle Financials for India > Tax Configuration > Define Common Configuration.
You can select the following values:
Inventory Organization
Operating Unit
Operating Unit level setup is required for identifying whether the tax defaulting basis is set to Rule Basis or Item Category Basis. The inventory organization level setup is applicable for the OSP transactions.
Enter the applicable organization name. The system fetches the operating units that are part of the security profile associated with the responsibility.
Select the location for selected inventory organization. Not applicable for operating unit.
Transaction Tax Tab
Determines the basis for tax defaulting on the transaction. Select the valid value for Defaulting Basis. The valid values are:
Rule Basis -- tax defaulting rule applicable to the operating unit. The tax category is determined against tax rule setup.
Item Category Basis -- which is the same tax defaulting rule in current solution
Maximum Days of Self-assessed Tax is not applicable at this time.
Select the Start Date from when the defaulting basis comes into effect. This is a mandatory field.
Enter the end date when the defaulting basis ceases to exist.
If the Copy Tax from Source option is enabled, then taxes are copied from the source document to target document until the TPB is reached. If this option is not selected, then taxes are redetermined in the target document irrespective of any modification in the source document until the TPB is reached.
Inventory Level Setup Region
Select the Allow dispatch quantity to exceed original quantity option to allow dispatch more quantity than original quantity.
The OSP Return Days option is not used at this time. This option provides provision for GST computation on goods sent for OSP operations, not returned within the specified days.
Withholding Tax Tab
For Withholding tax, the setup is used when withholding tax registration number is not available. The tax category for withholding tax is default directly by tax regime. This is necessary only for setting up defaulting for Direct Taxes.
Enter the withholding regime in the Tax Regime field. The relevant TDS Regime for which the setup is required to be done.
Enter the tax category that includes the tax regimes in the Tax Category field.
Select the, Create Pre-Validated TDS Invoice and Credit Memo, option to allow creation of pre-validated Tax Deducted at Source (TDS) invoice and credit memo.
Select the, Create Pre-Approved TDS Invoice and Credit Memo, option to generate the TDS invoice and TDS Credit memo with Workflow Approval status Not Required.
You define the specific functionality in this window.
The tax amount treatment for a specified list of tax type codes can be determined by doing this specific setup. For example, for any Import Purchases, which would attract Basic Customs duty and IGST taxes, you must attach these tax type codes here.
These tax amounts are paid to the Customs Authority and shall not be charged to the end supplier. This setup plays a significant role in mapping the Import Purchases scenario.
Note: It is highly recommended to define a separate regime code for mapping the Customs Duty, as these taxes are adjusted against the Bill of Entry (BOE) Invoice and are not charged to the end supplier.
The Define Specific Functionality window has following options:
Select the relevant applicable value. Valid values are:
Bill of Entry
Bond Registry
Credit Reversal
Tax Collected at Source
Trading
Note: The Bill of Entry setup is of more functional significance. Therefore, you can configure this setup for BOE functionality.
Select or enter the Tax Regime Code to be associated with.
Displays the Tax Regime name associated with the selected Tax Regime Name.
Select or enter the relevant associated Tax Type. The system fetches all the active tax type codes having TPB set to Invoice or Delivery and are associated with the specific regime code for which the setup is being done.
Select or enter the relevant associated Tax Rate. The system fetches all the active tax rate codes defined for the tax type code selected and are associated with the regime code for which, the setup is being done.
The Export Oriented Unit is not used at this time.
Enter the Start Date when the functionality starts to become effective.
Enter the End Date when the functionality ceases to be effective.
There are two types of party registrations:
First Party Registration
Third Party Registration
You define all the relevant attributes of the Business unit, for example Manufacturing Unit and Service provider here. You define important attributes such as GST Registration number, PAN number.
Following are the options available:
Navigate to First Party Registration window using (N) Oracle Financials for India > Party Registration > Define First Party Registration.
Select or enter from the list of values in the Regime Type. This is a mandatory field. Valid values are:
Transaction Tax Regime
Withholding Tax Regime
Indicate if the organization is Inventory or Organization Unit in the Organization Type field. This is a mandatory field. If you select Transaction Tax Regime, then you can choose either Inventory organization or Operating Unit organization type. Location and address fields are enabled. If you select Withholding Tax Regime Type, you can only have an Operating Unit by default. Location is greyed out.
Enter or select the Organization Name based on your regime type selection. This is a mandatory field.
Enter or select the location name for which the setup is being defined.
Select or enter the Organization Activity to be Manufacturing or Trading. This field is enabled only when Transaction Tax Regime is selected. This is a mandatory field.
Enter the address of the location selected.
Registration Region
Enter or select from the list of valid regime codes available based on the selected organization type in the Regime Code field. This is a mandatory field. If Withholding Tax Regime is selected as the Regime Type, then the list of values only displays the Withholding Tax Regime Names. If Transaction Tax Regime is as the Regime Type, then the list of values only displays the Withholding Tax Regime Names.
Select the valid registration type from the list of values in the Primary Registration Name field. For example, GSTIN in the current context) System This is a mandatory field. Only one Registration Name can be assigned to a Primary or Secondary Registration Number. Valid values are:
ECC Number
GST Registration Number
PAN Number
GST Registration Number
TAN Number
TIN Number
Enter the Registration number in the Primary Registration Number field. This is a mandatory field.
Select the valid registration type from the list of values in the Secondary Registration Name field. Only one Registration Name can be assigned to a Primary or Secondary Registration Number. Valid values are:
ECC Number
GST Registration Number
PAN Number
GST Registration Number
TAN Number
TIN Number
Enter the Secondary Registration number.
Select from the list of suppliers that are defined and classified as India Tax Authority in the Tax Authority field. This is a mandatory field. On the authority only the settlement invoice is generated for transaction taxes and debit memo and tax authority invoice are generated for withholding taxes.
Note: Existing tax authorities are migrated with the same classification or with the new classification.
Select from the list of sites associated with the selected tax authority in the tax Authority Site.
The Intercompany Payables is not being used at this time..
The Intercompany Receivables is not being used at this time..
Enter the Start Date as the system date or lesser than the system date. Start date indicates the specified registration number and all the other details effective from that date for the selected regime.
Enter the End Date when the specified registration and other details are cease to exist.
Rounding Region
Displays the selected Regime code.
Select the valid Rounding Basis. Valid values are:
Quantity
Tax Amount
Taxable Amount
Select if the amount must be Rounded To the Nearest Decimal or Nearest Rupee.
Rounding Factor differs for different Tax Codes. Specify the required rounding factor for a particular Tax based on the legal requirement. If this field is left blank, then the calculated Tax figure is rounded to the nearest Rupee.
Enter the Start Date as the system date or lesser than the system date. Start date indicates that the specified rounding is applied to the regime. This is a mandatory field.
Enter the End Date when the rounding rule ceases to exist.
Reporting Codes Region
Displays the selected Regime Code.
Displays all the Reporting Type Names that are created in the Reporting Code window as the First Party entity in the Reporting Type Name field. This is a mandatory field. For a Regime there can be more than one Reporting Type Name but the Reporting Codes have to be unique.
Select from the Reporting codes that are associated with the selected Reporting Type and are created for use as the first party entity in the Reporting Code field. This is a mandatory field. If the Reporting Type Name for the Reporting Code is user configurable, then you must enter the reporting code manually. List of values is not displayed.
Enter or select the Reporting Code Description.
Enter the Start Date as the system date or lesser than the system date. Start date indicates the specified rounding is applied to the regime. This is a mandatory field.
Enter the End Date until when the rounding rule ceased to exist.
Customers are referred to as Third Parties. Defining customers is necessary for tax defaulting when transacting in Order to Cash cycle. Define all the relevant attributes of the supplier and customer, for example, dealer, Service provider, end customer here. You also define important attributes such as GST Registration number, PAN#.
Following are the options available:
Navigate to Third Party Registration window using (N) Oracle Financials for India > Party Registration > Define Third Party Registration.
Select the Operating Unit available. This is a mandatory field. The system retrieves the Operating units that are part of the Security profile associated with the Responsibility.
Indicate if the third party is a Customer or Supplier in the Party Type field. This is a mandatory field.
Select the valid party name from the list of values in the Party Name field. This is a mandatory field.
Displays the associated party number to the selected customer or supplier in the Party Number field. This is a mandatory field.
Select the party site name based on the selected Party Type in the Party Site Name field. This is a mandatory field.
Select the Item Category that is applicable. Item category displays all applicable regimes that are associated with an Item (inventory or non inventory item). This is a mandatory field.
Select the Default Tax Category for Standalone Invoice option. Displays all tax categories for which taxes are not associated with item, such as GST, Customs.
Displays the address associated with the selected Party in the Party Site Address field. You cannot modify the value.
Registration Region
Enter or select from the list of valid regime codes available based on the selected organization type in the Regime Code field. This is a mandatory field. If Withholding Tax Regime is selected as the Regime Type, then the list of values only displays the Withholding Tax Regime Names. If Transaction Tax Regime is as the Regime Type, then the list of values only displays the Withholding Tax Regime Names.
Select the valid registration type from the list of values in the Primary Registration Name field. This is a mandatory field. Only one Registration Name can be assigned to a Primary or Secondary Registration Number. Valid values are:
ECC Number
GST Registration Number
PAN Number
GST Registration Number
TAN Number
TIN Number
Enter the Registration number in the Primary Registration Number field. This is a mandatory field.
Select the valid registration type from the list of values in the Secondary Registration Name field. Only one Registration Name can be assigned to a Primary or Secondary Registration Number. Valid values are:
ECC Number
GST Registration Number
PAN Number
GST Registration Number
TAN Number
TIN Number
Enter the Secondary Registration Number.
Select the appropriate Assessable Price List based on the selected regime. If assessable price list is assigned, then the tax computation is done based on the assessable price list and not the item price or line amount. Tax Computation first looks for the Assessable Price List at the Party Site level, then at the Party Null Site level, and if one is not available then tax is computed based on the item line amount.
The Default Section is not used at this time.
Enter the Start Date as the system date or lesser than system date. This is a mandatory field. Start date indicates that the specified registration number and all the other details are applicable for that date for the selected regime.
Enter the End Date until when the specified registration and other details are effective to.
Exemptions Region
NOT Available NOW
Enter or select from the list of valid regime codes available based on the selected organization type in the Regime Code field. If Withholding Tax Regime is selected as the Regime Type, then the list of values only displays the Withholding Tax Regime Names. If Transaction Tax Regime is as the Regime Type, then the list of values only displays the Withholding Tax Regime Names.
Select the valid Registration Name from the list of values. Only one Registration Name can be assigned to a Primary or Secondary Registration Number. 12. Select or enter the Exemption Type.
Assign a tracking number.
Enter or select the Exemption Number for the selected type.
Enter the Start Date as the system date or lesser than system date. This is a mandatory field. Start date indicates that the specified registration number and all the other details are applicable for that date for the selected regime.
Enter the End Date until when the specified registration and other details are effective to.
Reporting Codes Region
If Tax Determination Basis is Tax Rules and defaulting attribute is Customer Reporting Code, then define the Reporting Code.
Displays the selected Regime Code.
Displays all the Reporting Type Names that are created in the Reporting Code window as the Third Party entity in the Reporting Type Name field. This is a mandatory field. For a Regime there can be more than one Reporting Type Name but the Reporting Codes have to be unique.
Select from the Reporting codes that are associated with the selected Reporting Type and are created for use as the third party entity in the Reporting Code field. This is a mandatory field. If the Reporting Type Name for the Reporting Code is user configurable, then you must enter the reporting code manually. List of values is not displayed.
Enter or select the Reporting Code Description.
Enter the Start Date as the system date or lesser than system date. Start date indicates that the specified rounding is applied to the regime. This is a mandatory field.
Enter the End Date until when the rounding rule will cease to be applied to the specified regime.
In the Item Classification window you setup a list of attributes that are used across the regimes.
Items need to be classified in order to define recovery claim terms for them. You can define your own item classifications to fulfill multiple industry requirements. These attributes decides if credit can be taken on the item or it is a tradable item.
Item attributes are seeded values as they determine recoverability of tax.
Following functions are performed:
Define the Item Classification Template
Assign the Template to the Inventory Organization
Assign Template to different regime codes
Associate different reporting type codes to the Item classification
This feature plays a vital role in the tax rules definition. The tax defaulting mechanism is enabled by setting the value for TDB Item Classification.
Following are the attributes of the Item Classification window:
Navigate to the Item/Template Attribute Registration window using (N) Oracle Financials for India > Item Definition > Define Item Classification.
Enter or select a valid inventory organization or operating unit in the Organization field for which the relevant template is bring defined. This is a mandatory field.
Enter the valid Item name. This is a mandatory field.
Enter the name of the item template in the Template Name field. Item template lets you create the item template, assign all attribute to this template. This is a mandatory field.
Enter the item Template Description indicating the business purpose of the template.
Enter the Item Classification details. For example, Raw Material, Finished Goods and so on. This is a mandatory field.
Item Attributes Region
Enter or select the Tax Regime Name, and then enter the attribute value from list of value. This is a mandatory field.
Indicates if the selected regime is or is not applicable to this item at during transaction in the Applicable field.
Enter or select the name of the attribute in the Attribute Name field, for example, Recoverable, Tariff and so on that can be a part of the template definition.
Note: The Recoverable attribute has significant impact on the recovery management process. Therefore, use care when selecting this value.
The Template Value options is not used at this time.
Enter the value for the selected attribute in the Attribute Value field.
Enter if the item can be restored or not in the Restore field.
Reporting Codes Region
Enter the usage of the reporting type in the Reporting Usage field. You can select the appropriate reporting Usage valu, for example Reporting, Tax Determination, based on the business requirements. This value, Reporting Usage = Tax Determination, plays a vital role in tax defaulting if the user selects the Item classification option in the tax rules.
Displays the selected Regime code in the Regime Name field.
Displays all the Reporting Type Names that are created in the Reporting Code window as the First Party entity in the Reporting Type Name field. For a Regime there can be more than one Reporting Type Name but the Reporting Codes have to be unique. This is a mandatory field.
Following two seeded values are provided to attach the relevant HSN/SAC code values to the item as applicable:
HSN Code Type for GST
SAC Code Type of Item for GST
The values for the items defined here are defaulted in the HSN/SAC codes during the transaction flow.
Select from the Reporting codes that are associated with the selected Reporting Type and are created for use as the first party entity in the Reporting Code field. If the Reporting Type Name for the Reporting Code is user configurable, then you must enter the reporting code manually. This is a mandatory field. Following are seeded values:
GST_HSN_CODE
GST_SAC_CODE_ITEM
Enter or select the Reporting Code Description.
Enter the Start Date as the system date or lesser than system date. Start date indicates that the specified rounding is applied to the regime.
Enter the End Date until when the rounding rule will cease to be applied to the specified regime.
Item Category List associates the Tax Category to an Inventory Item in an Organization. You can add many items in a list and select relevant Tax Category for them. There can be many such item category lists defined and associated to the Vendor or Customer sites.
If the Item Category is attached to the Additional Customer or Supplier Information, then the Item Category is default whenever a transaction is done with the Customer or Supplier. Use this window to associate Inventory items to Tax Categories.
To setup a new item category:
Enter the unique name for item category in the Name field.
Enter the unique Description for item category.
Select the item from the list of values associated with the tax category in the Item field.
Select the Tax Category from the list of values associated with the item.
You need to define tax categories and define item category, this setup is for item based transactions. The item category could be attached with the third party or third party site while define the third party. The tax lines for a particular third party for a particular item will get defaulted according to the precedence setup in the tax category.
Important: Important: By assigning this Tax Category list to a Supplier Site in the Supplier Tax Information - India Local window, the tax lines for a particular Vendor or Vendor Site or Customer or Customer Site, for a particular Item will get defaulted according to the precedence set in the Tax Category. The user should use a unique Item Category List Name and meaningful description.
Note: In case of Standalone AP invoice where there is no item association at the transaction time, you can assign the default tax category for standalone invoice in third party setup.
You define the document sequencing and tax invoice generation set up here.
Navigate to the Document Sequencing window by using Oracle Financials for India > Tax Configuration > Document Sequencing.
Enter the unique Document Sequence Number used for generating the tax invoice number.
Enter the Start Number here. If you wish to start the document sequencing from 1, then you enter 0 as the start number.
The system displays the running sequence number of the tax invoice number generated in the Current Number option.
Enter a Prefix to be used for the tax invoice number generation.
Specify upper limit number in the Last Number field up to which the system can generate the tax invoice number value. If the document sequence is exhausted, the VAT invoice generation program will end in an error.
Enter the Start Date from when the document sequence becomes effective. It is the system date.
Enter the End Date when the document sequence ceases to exist.
Indicate if the Delivery challan is needed.
Document Sequencing Assignment Region
Select or enter the relevant Tax Regime Name for which the tax invoice number generation setup is done.
Select or enter the relevant GST Registration Number.
Select or enter the relevant Organization Type. You can select from the following options:
Inventory Organization
Operating Unit
Enter the Organization Name.
The system retrieves all the organizations for which, the active First Party Registration records exists for the Regime code, for which the setup is done. If the operating unit is selected as the organization type, then the system retrieves all the relevant Operating Units the user has access to.
Select the Location associated to the organization.
The system retrieves all the active Location codes, that have been attached with the Organizations for which the setup is being done. And for which the First Party Registration setup exists for the combination of Organization and Location for which, the setup is being done.
Define different document sequences for different types of documents in the Document Type field. If you select the default, the document sequence applies to all of the documents.
Enter the applicable Document Category for which the tax invoice sequence is applied.
The values retrieved here are based on the selected Document Type. This value plays a vital role in the tax invoice generation for different transactions flows.
For example, if the document type is selected as Sales Order, the system retrieves the order entry transaction types existing for the selected Operating Unit. If the document type selected is AR Transactions, then the system retrieves Account Receivables Batch source values defined for the operating unit. If the document type is selected as Receipts, then the system retrieves the AR Receipt method values existing for the operating unit.
Select the relevant value that indicates the Intended Use. Valid values are:
Manufacturing
Non Recoverable
Non Manufacturing
Recoverable
Select or enter the relevant Item Classification.
Enter the Start Date from when the document sequence becomes effective. It is the system date.
Enter the End Date when the document sequence ceases to exist.
You define the recovery claim terms here. This setup plays a vital role in the Recovery Management process, wherein any tax rate code is treated as a Recoverable tax, provided the relevant recovery claim terms are defined.
Navigate to the Define Claim Terms window using Oracle Financials for India > Recovery Management > Define Claim Terms.
Select the Tax Regime Code for which the recovery claim terms is defined.
Displays the Tax Regime Name.
Enter the Recovery Claim term name.
Enter the number of installments of the recovery claim.
Enter the installment number value.
Select the relevant applicable value for Claims Interval. Valid values are:
Immediate
Next Financial Year
Next Month
Next Quarter
Specified Month
Select the Day of Claim. Valid values are:
First Day
Last Day
Other Day
Same Day
Enter the Month of Claim in which you want to record the input tax credit.
Enter the Day of Month on which to record the input tax credit. This option is enabled conditionally based on the values selected before.
Enter the claim Percentage to be recorded.
Assignments Region
Select the relevant Tax Type code for which the claim terms assignment being done.
Select the relevant GST Registration Number.
Recovery Account is not in use at this time.
Select the Item classification code for which the claim terms assignment is being defined.
Select the relevant applicable value for which, the claim terms assignment is being defined.
The value specified plays a vital role in the recovery management, and the system validates the value of Intended Use entered during the transaction flow with this value for which claim terms are defined. The system processes recovery, if and only if the recovery claim terms are defined for the Organization-Location combination.
Select the relevant Organization Type. Valid values are:
Inventory Organization
Operating Unit
Select the relevant Organization Name for which the claim terms is setup. The system retrieves all the Organizations where the active First party registration setup exists for the Regime code for which, the setup is done.
Select the Location for which the Claim terms is setup. The system retrieves all the locations where the active First party registration setup exists for the combination of Organization, Regime code and Registration number.
Enter the effective start date value from when the setup becomes active.
Enter the effective end date value when the setups ceases to be active.
You setup tax mapping to be used here.
Enter or select the Operating Unit.
Enter or select the Taxable Event. Valid values are:
External
Standard
Check the Use EBS Tax Rate option.
Tax Code Mapping Region
Enter the Imported Tax Rate Name.
Enter the OFI Tax Rate Name.
Check the Inclusive Flag.
Exemption Setup Field Reference
Enter or select the Operating Unit.
Enter or select the Tax Regime Code.
Enter or select the Registration Number. 4. Enter or select the Exemption Type.
Enter or select the Tracking number.
Enter or select the Inventory Organization.
Enter or select the Location associated to the organization.
Exemption Balance Tracking Region
Enter the Tracking Account.
Displays the Tracking Balance.
Enter the Entered Amount.
Enter or select the Tax Type.
Enter the Start Date which is the system date when the exemption becomes effective.
Enter the End Date when the exemption ceases to exist.
Reporting window lets you define the reporting tax type used for calculating tax on transactions. Any business would have the requirement of storing business specific details or attributes based on various business needs. For example, the Organization or the Supplier PAN#, other contact details need to be stored and this requirement can be mapped by using the Reporting feature of OFI. In addition, there can be a requirement of tracking the service type values of the suppliers, which can be mapped by using this feature
Reporting window lets you setup thefollowing options:
Navigate to the Reporting window.
Enter the Reporting Type Code, such as Service Type. This is used in the future transaction flows. This value is mandatory.
Enter a description for the reporting type being used in the Reporting Type Name.
Select a valid Reporting Usage:
Legal Reporting
Reporting
Tax Determination
Transaction Attribute
Legal Reporting and Reporting Usage values: Select these options to use for mapping any business-specific reporting requirements. For example, for storing additional business and contact details of suppliers and vendors.
Tax Determination: Select this option to use tax-defaulting feature, which is used for determining the tax basis. For example, you can attach this to the third party registration and the tax rules based on which, the tax defaulting mechanism is defined.
Transaction Attribute: Select this option to store additional attribute values that can be attached to a supplier or a vendor, and the same details are carried forward during the future transaction flows.
Indicate which entity, item, or supplier the reporting code values are associated with in the Entity field. Based on the selected Reporting Usage value, Entity displays different values. Reporting and Legal Reporting selection, displays the following values:
First Party
Item
Regime
Tax Rate
Tax Type
Third Party
If the Tax Determination Reporting Usage is selected, then Entity has the following options:
First Party
Item
Third Party
If the Transaction Attribute Reporting Usage is selected, then Entity defaults to the only option, Third Party.
Select the following valid Data Type values:
Alpha
Alpha Numeric
Date
Numeric
Select the User-Configurable option. You would be able to define the reporting type code based on your requirements. Once you define the reporting type code, you cannot modify it.
Specify the Start Date which is the system date from when the reporting type code is effective. This is a mandatory field.
Specify the End Date when the reporting code ceases to exist.
Reporting Code Details Region
Enter the reporting type code, based on your business requirement, in the Reporting Code field. This is a mandatory field. For example, service transactions, you can track and store the values such as service type.
Enter the description for the reporting code, that clearly defines the business requirement, in the Reporting Code Description. This is a mandatory field.
Specify the Start Date which is also the system date that indicates the reporting code is effective from that date. This is a mandatory field.
Specify the End Date when the reporting code ceases to exist.