Get the Igst Invoice Format for Purchasing Effortlessly

Igst invoice format for Purchasing

okay so in this session what are we going to discuss is first we'll start with the taxation part okay and then if time permits we will introduce the new topics of new general ledger accounting okay i'll explain you what exactly is new generalization later on let's first concentrate on the taxation part okay so normally when we work on ar and ap okay so as of now whatever scenarios we have seen in ar and ap in those scenarios we have not used any taxation okay so which is very rare in most of the countries whenever you receive a invoice from your vendor or whenever you are giving the invoice to your customer normally most of the countries have some taxation okay so for example if you take the example of maybe u.s or india everywhere you will see that there is some part of taxation which is assigned to the invoice okay so each country has their own different taxation okay so some countries are following the taxation at the national level which means all over the country the same taxation will be applicable in some of the countries there is a tax session applicable at the state level let's take a example of india in india we have a separate taxes applicable for different states okay so for example if you go to maharashtra there might be some other tax requirements but if you go to some other state there will be some different state different taxation which can be applicable now after gst it has become little bit simpler okay most of the states are having the common taxation but otherwise if you just go maybe three four years back the taxation in india was very complicated because there were multiple components to it that service tags excise everything was different everything was to be posted differently in different accounts and that is the reason depending upon the country okay we may need to have a separate taxation requirements okay so if you go to us in u.s you have the separate taxation for jurisdiction okay so they have first level is country within country they have stayed and then again within state they have jurisdiction level okay and in some of the countries there is no taxation at all although it is very rare but there are some of the countries where there is no taxation at all so whenever we are working on taxation in sap okay you have to check which country we are talking about okay and what i am going to explain today is the universal tax codes how they are created okay so irrespective of which country i will just show you how you can create a tax code how can you assign the multiple rates to the tax code but it totally depends upon the country where you are working there might be some different requirements as the country's legal requirement may be different okay so just remember whatever we are discussing is basic tax it totally depends upon where you are working in which country you are working there will be separate taxing taxes and requirements so for example if if you consider any consultant let's say if i am a consultant who only worked in india then definitely i may not be uh like need to be aware about how the u.s taxation works and how the uh like malaysian singaporean or maybe european taxation works but if you are working on the european project then definitely slowly first of all whenever you are starting working on that particular project you have to start understanding their taxation path okay so that will come with the experience taxation is not something where you learn before going on for the project because you itself don't know which project you are going to work okay so maybe you will be getting first project itself as a european project the taxation requirements are completely different than india and u.s okay so again just to summarize taxation you need to understand for which project you are working for that particular client you have to understand what are the taxation requirements okay but otherwise the basic tax how it is configured how you can create the new tax codes that part we will cover today okay so let me assume let us assume here that in ar and ap we have a tax code okay we have a taxation of maybe five percent so let's say there are two taxations for some of the products i need to charge five percent and for some of the other products i need to charge maybe 12 okay so these are the two text codes i want to create okay i need to create this for ap also and ar also so whenever i am buying anything again i may need to pay five percent or i may need to pay 12 now apart from this there might be another requirement where i'm using taxes but in some of the products i don't have any tax so it is zero tax code so you also need to create three tax code with zero rate all right so these are the examples okay so let us say for example if i am getting the invoice let me enter the invoice so vendor number maybe whatever it is winter this data okay he's sending the invoice so total cost of invoice is equal to 1000 plus gst or maybe bad service tax whatever it is okay gst is let's say five percent so which is 50 so the total cost after tax will become 1050 right so this is something which we want the system to calculate and post into the transaction okay so i'll just go to fb60 the normal way of posting the vendor involves let's say we received the invoice from the vendor so till now whatever invoices we posted we have not selected anything on this text code column right you are not selected anything on this textbook okay what we will do now is we will start using this text code okay i'll show you one example and it will become very clear so my company code is a b c i a b c i this one okay and i have to select the vendor here so let's do f4 enter so this is my vendor invoice date 10 12 2019 just write something test or something here okay so the amount is one zero zero or maybe with tax it is 1 0 5 0 okay what i need to do is i need to click on this calculate tax indicator okay and i need to specify the tax code now as of now you can see there is no tax code available for five percent and you can see there is no tax code available for five percent and twelve percent the tax codes which are available are for eighteen percent okay there is only one text code available which is 18 but let us say i have a requirement i want to use the text code with five percent how am i going to do that so as of now these are the text codes created a 0 g d g i g r g gs and v0 okay so if i want to create a new tax code i have to go to transaction ftxp ftxp is a transaction to create the new text code okay and tax code is also created at the country level so you have to specify for which country you are creating this tax code so i am creating this for india okay this is where you need to specify the two digit code whatever you want to use so i will go with v1 okay normally input exports which means which we are going to use for vendors are started with v it is not necessary but normally we do that so v1 just press enter it will ask you the description so i will say this is the input text code input means the one which we are going to use in ap transactions the one which we are going to use when we are inputting any services whenever we are buying any services or goods okay input tax five percent this tax type also would be input whenever you are creating the tax code system will always ask you that you are going to use this text code in ap or ar so if it is ap then v if it is a r then a okay so we all other fields are not relevant just press enter and this is where you need to specify how much percentage of tax you are going to charge or your vendor is going to charge okay so you can see central gst you can see state gst okay you can see integrated gst so this is example of the tax code which is created for india as per the gst requirements so let us say i will divide this 5 into 2.5 as central gst and 2.5 as state gst okay and click on save so now this tax code has been created okay we have a text code where the rate is five percent so if i go back to this one maybe i need to come out and try it once again so fb 60 slash n this was my vendor this was the invoice date okay this is the amount i'll click on this calculate and then i have to select this v1 okay click on this and just continue the way a new normally too so gl account i will select as 4000 okay this is let's say david here i will put star okay which means i want to copy the values automatically and then just press enter and see which field is mandatory see we are getting this error you may get this error this is a warning message account is not tax relevant tax code would be ignored okay this means this gl account when you created this gl account we are not told the system that there will be the taxation applicable on this tl account okay how can you tell that if you go to the gl master data so fs 0 0 and for gl 4000 in control data there is a field related to tax code you can see this tax category in this tax category if you keep it blank this means you are not going to use any tax code for this particular gl account okay if you want to use the tax code you have to select a text category from here you can tell the system that only input taxes are allowed so this is the expense account so most of the time this will be only used for the input tax you can tell the system only output tax is allowed or even you can tell the system that which text code is allowed on this particular gl account so i can tell the system that this gl will only allow v1 as a text code it will not allow any other text code okay but normally we don't do that normally what we say is all the text types allowed so input output all the different types of text codes are allowed for this chain okay so start okay and also please take on this indicator posting without text allowed so sometimes if i don't want to use any text code system should not throw me error that tax code is mandatory if i don't do this what will happen if i do not enter the text code in my fb60 screen then system will throw error that this account is relevant to tax code but you are not entered any tax code so this both star and tick should be activated okay and click on save okay now if you go back once again let me completely come out again so i'll go to fp60 vendor invoice rate okay amount calculate tax and i have to select the textbook which is v1 so again if i select my gl account 4000 star just press enter see now i am not getting that error the earlier which i was getting right it is different error difference is mandatory so i'll just enter the reference now system is asking me the cost center okay so let's provide the cost center here okay so let's provide the cost center here so cost center in our case is test just press enter then try to simulate how exactly it is working so document simulate okay we are getting the error system is saying transaction key j ic chart of account abc0 not defined in table this one what does it mean see we are using the tax code and in our tax code we defined two different things 2.5 percent of central gst and 2.5 percent of state gst the question is where exactly this postings will go which is a gl account for central gst and state gst have we created an easier we have still not created any gl for central gst and state gst right so we have still not assigned the accounts to this account cjic and gis so you are getting the error because there is no gl assign cjic which means system is asking you which gl should be posted okay which gl should be posted for central gst 2.5 percent okay so we need to create two gls central gst and state gst and can you tell me what kind of gs this would be is it a s8 or reliability or what input tax codes are assets or liabilities that's it that's it why is it because we are paying to the vendor but we can claim later on right so it is the asset so gl account type would be balance sheet account account group also would be asset and here we will say this is central gst input right we need to very clearly say this is input this means this is used at the time of ap invoice control data the tax category should be input tax account so this is the gl account which is actually going to post the tax related postings okay so input tax account and in create bank entries tab field status group can be g or maybe let's see if there is anything related to tax so if i do f4 normally we don't use anything else let's go with g001 only okay and click on save same way i will copy this and i'll create one for state gst so copy this it would be 2017 okay and i'll just change the description to state state tst input okay let's click on save then let's also create because we will need later on so let's create liability also which would be used in at the time of ar postings so which is one zero zero four the next number available is one zero zero four gl account type would be balance sheet this would be liability and this would be state gst for output okay in control data you have to select the tax category as output tax output tax account and this one would be 0 1 itself save it enter let's copy this to 1 0 0 5 and here instead of state i'll change it to state sorry instead of instead of central i'll change it to state okay and click on save so now we have four gls which we can assign to our tax codes okay so let us go to the tax codes so here itself you can see just select this line and there is option to assign the text code let us go to the text accounts for chart of account abc0 okay and for jic we need to do this for jic just double click i think it is in the display mode let's let's try one more time otherwise i'll show you another option of doing this so country in enter x accounts abc0 okay if it is not allowing from here there is another screen called as ob40 ob40 is a screen which will allow you to specify the gl accounts for the tax codes okay so which is our transaction key j i c and j i s so this is j i c sorry this is j 1 c we need to assign for jic j i c this one cgst receivable so double click on this and this is where you have to provide the accounts accounts uh just a minute i think rules are not maintained so jic click on it is going for display why not change mode let's try once more so ob40 data can only be displayed data is still being processed okay so maybe i need to come out of this it is in the display mode let's try ob 40 yes now it's okay so j i c okay and you can have the option of based on the tax code you can have a separate gl account okay so i am telling the system if my tax code is v1 then the account that should be posted in case of jic is h1 we created central gst for input okay save it so now system knows okay the taxation needs to go into this gl account okay so this is for cgst similarly for state level which is jis also i need to provide the account again based on the tax code i can provide if i don't do this i will provide the common gl account so it is not based on the tax code it is a common gl account which should be used for every tax code wherever state gst is applicable okay so this would be two zero one seven enter and save it okay so now system very clearly knows which gl accounts to be posted so again if i just go to document and try to simulate from scratch uh let's forget about this let's again go to fp60 invoice date test whatever amount calculate tags okay and just select v1 here specify your gl account star okay and just pick constant enter and document simulate what is this one i think this is the same error that we were getting yesterday just let me do one thing it's pro img okay please you don't try to do this thing what i am doing this is something technical any questions till now in the time this gets executed please don't try to do this because this is a technical activity this actually creates the cds views in the background okay so it is updating the tables in the background in short okay so this activity seems to be completed now let's once again try and execute this i hope this error should be resolved by now okay gl account star and cost center okay let's try to do document and simulate okay yes that error is resolved now you can see very clearly what is happening is vendor is getting credited with one zero five zero which means we need to give this much amount to the vendor we need to pay this much amount to the vendor one zero five zero but is it the complete expense no expense is only one thousand remaining fifty is tax which you can claim from the government later on you can take the credit of this particular amount right you can see 25 and 25 which means five percent central gst five percent state gst and in which years it is going it is going to 2016 and 2017. these are the gl accounts that we have created just now okay so what is happening is whenever you are creating the invoice whenever you are booking the invoice in fb60 or fb70 till now whatever transactions we have done we we are not selecting this tax code okay now normally whenever you are working in a company each and every transaction is relevant for tax so you can simply create a tax code based on whatever requirements you have whether the rate is five percent in percent whatever it is okay and if the tax code is available you can directly use this tax code at the time of posting the invoice okay creation of tax code is one time activity you don't need to do it on day to day basis only if there are changes in the government regulations or there is a new tax code in place only in that case you need to create a tax code okay so just remember how are you going to create a new text code for creation of new text code use transaction ftxp okay even if you don't want to use transaction i will also show you the path where you can go and find how to create an export so if you go to spro img so this creation of tax code is a configuration activity user will not create the text code tax code has to be created by the consultant that is the reason i am going to spro so financial accounting financial accounting global settings tax on sales and purchases okay calculation and then you have defined tax code for sales and purchases this will open the same screen which is fdxp okay so this is where you will be able to configure the text code okay and if you come down in the postings this is where you define the tax accounts ob40 screen which i shown you okay so this is screen ob 40 where you can go and specify the gl account okay whatever gl accounts you want to specify this is the same thing just another way of looking into the same transaction right so if you want to save it you can save this transaction document overview just come out and try to post this document okay post okay so the document has been posted if you go to document and display you can see it has been posted and i can clearly see if i go to this gl account if i see the balance i can clearly see how much input credit i need to take from the government right same way just one recap we will create another tax code this time we will create the tax code for ar okay and we will create for 12 percent okay so how to do that i will go to transaction ftxp if it is already open if not let us go to transaction ftxp it is saying it is already being processed so i think this is blocking it this come out try to execute once again yes so we are creating this in country i n okay and we are creating another text code this time it is output so normally output starts with a a1 press enter provide the description so this is output text code for output tax okay press enter it will take you to the screen where you can specify what is the total percentage so central gst is six percent and state gst six percent total is 12 okay let's try to go to the accounts from here itself okay it is allowing this time so normally it doesn't allows but this time it is allowing one more thing here normally this is this is actually wrong because for we are not going to use the same key for input as well as output there should be the separate line here created for output text okay so we cannot use the same gl we cannot use the same uh tax account keys for input as well as output okay normally it should be different to segregate the input versus output okay i'll tell you what exactly is this and how it is controlled but as of now i am going with the six percent and this also six percent but what i need to do now is first let's save it i will go to ob 40 okay and again j i c and j i s so jic in jic i already maintained using tax code so i'll tell the system that if the tax code is a one then i don't want to use 2016 i want to use one zero zero four right this is the gl account that we created for output tax okay same way if i go to jis what are done in jis is i directly provided the account without the text code okay so what i can do is i can go to rules and i will click on this tax code so that i can provide the gl account ing to the tax codes okay so if my tax code is v1 then go for 2017 but if my tax code is a one then go for one zero zero five okay and save it right so now let's try to create one more transaction using fb70 because this time it is output tax so i'll select one of the customer let's take this one invoice day 10 12 2019 this is let's say test again amount i will keep one one one two zero right twelve percent calculate tax and specify your tax code so a1 okay gl account related to revenue so if i do f4 we have few gl accounts which we created for revenue which is this one three zero zero zero okay amount i'll put it again star okay and system will ask me for cost object but if you remember yesterday i told you cost object should be revenue so the cost object should be profit center in case of revenue booking not the cost center so go to the profit center column and provide the profit center press enter okay you will get this message you know how to solve this account is not tax relevant tax code would be ignored what does it mean that we need to go to the gl account okay fs00 for gl account three zero zero zero we need to tell the system that this gl is relevant to tax so tax category i can either specify a star or i can say only output tax is allowed so if i go with plus it will only allow to use output tax for this gn okay so let me this time go to the tax category for output tax and hosting without taxes allowed save it okay now if you go back and try to post this so document simulate it is still showing the same error let us go back and come again so fb 70 this customer this invoice date amount calculate and a1 this yellow account start and profit center okay now let's go to the document and do the simulation correct so sixty sixty six percent is central gst and six percent is state gst okay so this is how you can manage the tax postings in sap system okay so it is handled through the use of tax codes okay now one more last thing which i want to explain you so if i go to ftxp okay in order to create a new or if i want to see the existing tax code here i can see central gst state gst why i am not able to see what service tags excise there are lot of other options available earlier right in sap like if you go three to four years back there was rad gst and all the reason is depending upon the country's requirement you can use a separate tax procedure here okay so sap already provided what are the different kinds of taxations which are applicable in each country okay so one very important activity that you need to do is if you go to spro img in financial accounting in the same folder that i showed you for taxation financial accounting financial accounting global settings and in this one if you go to tax on sales and purchases basic settings the first thing itself is assigned country to the calculation procedure so sap has already provided many standard taxation procedures for each country okay so for example if i go for india that is country i n you can see it is assigned to z gstim okay previously it was assigned to tax i n this one tax i n if you use this then what will happen is system will use the old taxation procedure which includes vat service tag exercise and all so it totally depends upon the country's requirement based on the country's requirement you have to properly select the tax procedure let me show you how exactly the tax procedure looks like so if you go out and go to the calculation procedure okay and let's say if i want to see tax i n x i n and this one control data so you can see here you can see service tax basis uh basic exercise duty additional exercise duty okay what are it is already three years now so i don't remember the uh exactly names but you can see all those previous conditions where service tax everything you'll be able to see here okay sales tax then you have if you just come down okay these are the different types of taxes which were applicable in india earlier right similarly if you go to u.s taxation you will be able to see whatever taxations are currently related to us so if you go to tax u.s you can see this one so this is sales tax for usa and this is with jurisdiction so normally most of the countries use this jurisdiction code okay so for us also there are three options based on the country's requirement based on the customers requirement we can use this one this one or this one okay so just to summarize what we discussed is what exactly is a taxation there are two types of taxations first of all input tax and output tax input tax means the tax that we pay to our vendors okay and output tax is the tax which we collect from our customers right so in order to use the taxes in sap we need to create a tax code using transaction ftxp and whatever tax code we create we also need to assign the proper gl to that tax code using transaction ob40 okay and once this is done [Music] we can use that tax code at the time of posting whatever invoices you are posting and system will automatically generate the taxation lines okay if you want to generate the report if you want to generate the taxation based reports now again each country has their own format of generating the reports for example i cannot generate the standard report in sap and give it to the gst department definitely they will not accept it okay they have their own format of the report they want to upload they are asking customers to upload automatically in the gst portal so it will get only uploaded if it is in the proper template okay so in that particular case most of the time we need to develop this report on our own as a customer sap provides only one report which is standard if you go to accounting financial accounting okay here if you go to accounts payables or maybe accounts receivables within this reporting there is you'll be able to see the tax related reporting or maybe let's go to just give me a minute there is only one report which is sorry it is not ap and ar it is in general ledger so general ledger tax reports okay these are the different countries okay based on the countries requirement you can have different reporting requirements so for some of the countries sap provides the report in their template but otherwise you can execute this general report okay i'm talking about this first one which is advanced return for tax on sales and purchases if you double click on this okay if you just provide your company code so a b c i and for fiscal year 2019 okay you can always specify the posting date also if you want so if you want to generate this report for only particular month you can come here okay and execute this uh select the posting date officially documented or run late okay so let me enter this date here which is let's say 0 1 12 2019 to 31st 12 2019. i'm generating only for 12th month okay so if you just come down you can see this is the report so the total what is the total output tax here you will be able to see the tax codes so the total output tax is how much is this 120 okay this is the total output tax this is something which i have collected from the customer but i need to pay to the government and total input is 50 okay which means i already paid to the vendor so remaining is 70. this is the balance that i need to pay to the government right this is the concept of value-added tax which means total output tax minus total input tax equal to what you need to pay to the government so this is your liability okay so this is the report which will show you the same thing again and again in different formats okay if you are happy with this report you can use it but otherwise normally most of the customers have their own requirement their own template which they need to develop on their own okay so any questions still now have you understood test one more scenario of igst igs yes see whatever scenario it is it is not relevant to what exactly is your condition it totally depends upon so whatever you want to enter there i just shown you the tax code where whichever condition you want to use you can use it okay so just give me a minute let me come out of this let's go to ftxp okay so country ia let's say i will create another text code which is a2 for output okay this is output tax code 5 just for example and this is igst okay and output tax so a so in this one instead of specifying jic or gis i can just enter the value here as five percent okay so complete five percent is igst okay again this is not enough because i also need to assign the tax accounts so i can go in the tax accounts i have still not maintained the rules that is the reason i need to go for transaction would be 40. to assign the gl accounts but before that i also need to create a gl account or i can use any of the gl accounts that i already created so it is liability because it is output tax so i will copy this to 1 0 0 6 and then i will just change it to igbc ok click on save so this is a gl account that i will use for igst 1006. so maintain tax codes this is done let's come out of this and go to ob40 so what was the transaction after jis i think this one joi if you are not sure you can go back and check what was the transaction because that is very important so in the calculation if i go to the tax code i n and a two so it is j i i okay i need to specify the gl account in j i i j i i this one let's double click on this based on the tax code so if my text code is a2 then the account would be one zero zero six this is the account that we just now created just click on save okay and now this g this tax code can be used at the time of posting go to fb70 this is my customer invoice date whatever is amount so i'll go with one zero five zero for easy calculation this would be a two okay and here i will enter this three thousand star system will ask me for profit center okay it will tell me the c object but i need to specify the profit center in case of revenue postings ok just simulate this enter so you can see it is completely going into one gl account this is the scenario save it to post here okay any other questions oh how the payment will happen with them for taxing for taxation see as i told you the payments are done there is a transition but normally nobody uses that i think it is lp 45 yes so whatever amount you collected okay so if i go with 10 12 2019 account transaction document type i will go with essay and you need to specify this amount manually here so in this case how much tax you want to pay let us go to the report of taxation if i go to account financial accounting generally here there is some background noise okay so whatever is the amount that you need to pay execute it how much is the total amount so yes so you need to pay total of 120 to the government okay because your total output is 120 plus 50 170 and your total input is 50. so you need to pay 120 so this amount i will enter it here in the post tax payables okay so here i need to specify the bank account also from which bank account this amount will go so let's say uh the 50 which is credit i'll select the bank account bank account i think is 2000 in my case so 2 0 0 0 enter this is where i need to enter the amount okay so whatever is the amount is 120 value date is uh in my case 10 12 2019 and now whatever is the credit balance in your gl account so if you go to the gl accounts if you go to fs10n to check the balances in gl account okay maybe i'll see in this report itself is it showing the gl account i don't think so okay let's do one thing let's go to mpl3n okay and i want to see the balance of 1 0 0 6 1 0 0 4 1 0 0 5 and 2 0 1 4 right starting from 4 2 0 1 5 and two zero one six let me see if i am correct no not two zero one four it is two zero one six seven eight right zero one seven two zero one six and two zero one eight i think yes so 2 0 1 6 2 0 1 7 and 2 0 1 8 okay so let's see what is the total balance available in this gl accounts so i need to if this is a credit balance in this gl account i need to debit it so 1 0 0 4 would be debited forty one zero zero four okay how much amount sixty right whatever is the credit balance here okay then one zero zero five again i have to debit 60. next 50 will go to [Music] 1 0 0 5 again debit okay what is the next one now credit 25 credit to 2016 and 25 credit to 2017 so created 2016 25 credit 2017 again 25 okay so let's see if the amount is matching right the balance is zero so you are paying this amount from the bank to the government and all these gl accounts will be zero which means after this payment there will not be any payable to the government okay this is one way there are other ways also in which because normally this payments up to the government are done in the external system first and then the files are generated in sap system right because taxation is completely handled through gst portals as of now so you cannot directly come here and post the transaction first you have to keep the poster transaction in the gst system and then normally you come here and upload the file okay but this is how at the end of the day your bank amount should go out and all this gl account should be nullified at the end of the month so let us try to save it okay now if i go to this report to verify how much is payable okay so if you just execute this if i just want to see the all items sorry i want to see only open items yes but again it is not managed open item basis but let's see the balance so this is also zero if you come down this is this should also be zero why it is not showing zero this is zero and this is also zero the total balance should be zero okay so there is no payable no receivable from government whatever was payable we already paid clear [Music] fb 41 i'm names saying that is only transaction you can even use any transaction that'd be 50 also you can use to make this post okay so you have to specify the debit account credit account and you have to nullify whatever tax payables or receivables as a balance okay any other questions on taxes so what we discussed is this is called as tax on sales and purchase okay these are the normal taxes which are applicable at the time of sales and purchase there is another tax which is called as withholding tax right you must have heard about withholding tax but withholding tax is not applicable for all countries there are very few countries where you'll be able to see the withholding paths okay normally in india we are using it like the most complicated withholding tax score taxes are in india and i think in uh there is one more country which is south korea i think korea or south korea otherwise there are very few countries who are using withholding tax and that is the reason withholding tax is not the topic within the certification exam within the certification course okay but if you are still interested to learn withholding text how it works i will share one video with you which which explains everything from scratch so if you are getting the chance to work on the indian project at that time only you will be uh interested in withholding tax otherwise if you are working on the european project u.s project there are very few scenarios where withholding taxes applicable okay but anyways if you have that requirement i will share one video with you which will explain you how exactly the withholding text works you