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Extending Tax Engine Configurations

Extending Tax Engine Configurations (also referred to as GTE) lets you configure tax rules that determine tax applicability, calculation, posting, and settlement, based on legal and business requirements. This article walks you through the Tax engine configuration extension process using the following example scenarios that apply to India.

  • Extending Tax Engine Configurations for Union Territory Goods and Services Tax (UTGST).
  • Use a reference model to apply a tax rate of Basic Customs Duty (BCD) for import order of goods from different countries or regions.

Extending Tax Engine Configurations Prerequisites

Before you can complete the Extending Tax Engine Configurations example scenarios, complete the following tasks, Import GTE configuration from LCS.

Add a configuration provider and make it the active provider
  1. Go to Organization administration > Workspaces > Electronic reporting.
  2. Click Configuration providers.
  3. Create a new configuration provider and close the page.
  4. Click  > Set active on the configuration provider that you created.
Configuration

Configuration

Extend the Tax Engine Configuration for UTGST

For union territories that don’t have a legislature, the GST Council introduced UTGST, which is comparable to SGST.

For UTGST, the following combinations of taxes can be applied for any transaction:

  • Supply of goods and services within a state (intrastate): CGST + SGST
  • Supply of goods and services within union territories (intra-UT): CGST + UTGST
  • Supply of goods and services across states or union territories (interstate/inter-UT): IGST

To support this Extending Tax Engine Configurations scenario, you must complete the following tasks:

  1. Create extension configurations
  2. Extend the taxable document so that it includes the IntraStateInUnionTerritory flag
  3. Complete data mapping for the extended taxable document
  4. Change the data model of Tax (India GST Contoso)
  5. Change the applicability of State GST (SGST)
  6. Configure the UTGST task component
  7. Modify the formulas of lines to include UTGST
  8. Complete the tax document configuration
  9. Import the extended configuration and deploy it to a specific company
Create Extension Configurations

The following steps are needed to create extension configurations:

  • Create a new taxable document that is derived from Taxable Document (India)
  • Create a new tax document that is derived from Tax (India GST)
  1. In the Localization configurations workspace (Organization administration > Workspaces > Electronic reporting), click Tax configurations.
  2. In the tree, find the Taxable Document (India) configuration  and then select the Create configuration.
  3. Select the Derive from Taxable document model option and then type a name and description for the derived taxable document. For this example, enter the name Taxable Document (India Contoso).
  4. Click Create configuration.
  5. In the tree, select the Tax (India GST) configuration, and then click Create configuration.
  6. Select the Derive from Tax configuration option and then type a name and description for the derived tax document.
  7. Click Create configuration.
Extend the Taxable Document so that it includes the IntraStateInUnionTerritory Flag

Complete the following steps to add the IntraStateInUnionTerritory flag to Taxable Document (India Contoso).

  • In the tree, find the Taxable Document (India Contoso) configuration that you created in Create extension configurations and then select Designer.
  • In the tree, go to Taxable document > Header > Lines, and then click New to create a new node.
  • Enter a name for the node, and select the item type:
    • Name: IntraStateInUnionTerritory
    • Item type: Enum
  • Click Add.
  • On the Node FastTab, click Switch item reference.
  • Select NoYes in the tree, and then click OK.
  • Save the configuration, and close the designer.
  • With Taxable Document (India Contoso) still selected in the tree, click Change status > Complete in the Versions list.
Versions

Versions

  • Enter a description such as UTGST, and then click OK.
  • If there are any errors, open the designer, click Validate, and fix the errors.
  • After the status is updated to Complete, the configuration is ready for deployment.
Complete Data Mapping for the Extended Taxable Document

There are data mappings for each taxable document, such as a purchase order or sales order, and reference mode in the taxable document.

The purpose of data mapping is to get the value from taxable transactions and pass it into GTE for tax applicability or tax calculation. For convenience, there is a special data source called Taxable document source, which encapsulates most common tax relevant fields like assessable value, HSN, or SAC.

Change the Data Model of Tax (India GST Contoso)
  • Go to the Tax (India GST Contoso) configuration and then click Designer.
  • Click Tax document, and then select Taxable Document (India Contoso) as the data model, and select 1 as the data model version.
Tax Document

Tax Document

  • Click Save to save the configuration.
Change the Applicability of SGST
  • Go to the Tax (India GST Contoso) configuration, select the version that has a status of Draft, and then click Designer.
  • Go to the Tax document > Header > Lines > GST > SGST, and then select the Lookups tab.
  • Click Columns.
  • Select IntraStateInUnionTerritory from the Available columns list, and then select the right arrow button to move the column to the Selected columns list.
  • Click OK.
  • For the IntraStateInUnionTerritory column, select No.
  • Click Save to save the configuration.
Configure the UTGST Tax Component
  • Go to the Tax (India GST Contoso) configuration, select the version that has a status of Draft, and then click Designer.
  • Add the UTGST tax component.

  1. Go to Tax document > Header > Lines > GST. Click Add, and then select Tax component.
  2. Enter a name and description for the UTGST tax component, and then click OK.
  • Configure tax measures for the UTGST tax component.
  1. Expand the tax document tree, and click the UTGST tax component to create a measure for.
  2. Click Add, and then select Tax measure.
  3. All the logic, such as properties, lookups, formulas, postings, and accounting, except applicability of UTGST, is the same as it is for SGST. Therefore, select all the tax measures that SGST uses in the Name list and then click OK.
UTGST List

UTGST List

  • Configure rate/percentage lookups.
  1. Expand the UTGST tax component node in Extending Tax Engine Configurations
  2. Select the measure of the Rate or Percentage type.
  3. Click Lookups > Columns to see a list of the attributes that are relevant to the tax rate/percentage value.
  4. Select the same attributes that SGST uses.
  5. Save the tax document.
  • Configure properties.
  1. Go to Tax document > Header > Lines > GST > UTGST. Click the Properties tab.
  2. Click Edit (the pencil icon) next to Condition.
  3. Enter the same condition that SGST uses.
Properties

Properties

4. Save the tax document.

  • Configure tax applicability lookups in Extending Tax Engine Configurations

  1. Go to Tax document > Header > Lines > GST > UTGST. Click the Lookup tab.
  2. Click Columns in Extending Tax Engine Configurations
  3. Select Import Order and IntraStateInUnionTerritory as lookup columns.
  4. Select Configuration as the source type.
  5. Click Add. Select No for the Import Order column and select Yes for the IntraStateInUnionTerritory column.
  6. Save the tax document.
  • Configure formulas. Formulas can be configured at either the group node level or the measure node level.
  • However, we recommend that you always configure tax calculation formulas at the group node level. The Tax amount distribution formulas can be setup at either the group node level or the measure node level.
  1. Go to Tax document > Header > Lines > GST > UTGST. Select the Formula tab.
  2. Click Add Tax formula.
  3. On the Details FastTab, click Calculation as the category and then edit the formula and condition.
  4. Repeat steps 2 through 3 until the UTGST tax component has all the similar formulas as SGST.
  5. Save the tax document.
  • Configure a posting profile. Only the nodes of the Tax Component type support a posting profile definition.
  1. Go to the Tax document > Header > Lines > GST > UTGST. Select the Postings tab.
  2. Select Add Posting Profile to create a new posting profile definition.
  3. On the Details FastTab, enter the accounting treatment for the tax measures that you defined in the previous task, and provide the names of the debit and credit accounting subledgers.
  4. Click Edit to enter a condition for the posting profile.
  5. Optional: Enter a description for the posting profile.
  6. Repeat steps 2 through 5 until the UTGST tax component has all the same posting profiles as SGST.
  7. Save the tax document.
  • Configure accounting lookups. Only nodes of the Tax Type and Tax Component types support an accounting lookup definition.
  1. Go to Tax document > Header > Lines > GST > UTGST. Select the Accounting tab.
  2. Click Columns to see a list of the attributes that can be used to determine the main accounts that will be used for accounting taxes.
  3. Select the same attributes that SGST uses.
  4. Save the tax document.
  • Configure credit pools. Only the nodes of the Tax Component type support a credit pool definition.
  1. Go to Tax document > Header > Lines > GST > UTGST. Select the Credit Pool tab.
  2. Click Columns to see a list of the attributes that are relevant to the tax settlement of this component. Typically, the selected column is the appropriate tax registration number, like GST Registration Number.
  3. Select the same attributes that SGST uses.
  4. Save the tax document.
Modify the Formulas of Lines to include UTGST
  • Go to Tax document > Header > Lines. Select the Formulas tab.
  • Change any formulas that consists of the Base AmountLine tax amount, and Tax amount included in price measures, so that the formulas reflect UTGST.
Formulas

Formulas

  • Save the tax document.
  • Close the designer.
Complete the Tax Document Configuration in Extending Tax Engine Configurations
  • In the Localization configurations workspace (Organization administration > Workspaces > Electronic reporting), click Tax configurations.
  • In the Configurations workspace, click Change status, and then select Complete.
  • Enter a description such as UTGST, and then click OK.
  • If there are any errors, open the designer, click Validate, and fix the errors.
  • After the status is updated to Complete, the configuration is ready for deployment.
Import the Configuration and Deploy it to a Specific Company
  • Go to Tax > Setup > Tax configuration > Tax setup.
  • Create a new record and define tax setup.
Tax Setup

Tax Setup

  • Click Configurations.
  • Click the Tax configuration tab.
  • In the Available configurations section, click New to create a tax configuration.
Configurations

Configurations

  • Select the required configuration, such as Tax (India GST). Click Save.
  • Click Synchronize.
  • Click Activate.
  • Click Close.
  • Click the Companies FastTab.
  • Click New and then select INMF in the Companies field.
  • Click Save.
  • Click Activate to activate the configuration for the company.
  • Click Setup to set up data for the new version.

For more information on Extending Tax Engine Configurations, please contact us.

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