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D365 Tax Engine Configurations for UTGST

This article walks you through the Dynamics 365 Tax Engine Configurations extension process using the following example that applies to India. Eg: Extend the Tax engine configuration for Union Territory Goods and Services Tax (UTGST).

The Tax engine (also referred to as GTE) lets you configure the tax rules that determine tax applicability, calculation, posting, and settlement, based on legal and business requirements.

D365 Tax Engine Configurations Prerequisites

Before you can complete the example scenario, complete the following tasks

Add a configuration provider and make it as the active provider

  • Go to the Organization administration > Work spaces > Electronic reporting.
  • Click Configuration providers.
  • Create the new configuration provider and close the page.
  • Click > Set active on the configuration provider that you have created.
Dynamics 365 Tax Engine Configurations

Localization configurations

Extend D365 Tax Engine Configurations for UTGST

For the union territories that don’t have a legislature, the GST Council introduced UTGST, which is comparable to SGST. SGST can also be applied in union territories, which have their own legislatures and can be considered “states” per the GST process.

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

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

The order of utilization for Input Tax Credit of UTGST is the same as it is for the Input Tax Credit of SGST. Therefore, the Input Tax Credit of SGST or UTGST is first set off against SGST or UTGST, respectively. The Output Tax liabilities and any balance can be set off against the IGST Output Tax liabilities.

1. Create Extension Configurations

The following steps are needed to create extension configurations for Microsoft Dynamics 365 Tax Engine Configurations:

  1. Create a new taxable document that is derived from the Taxable Document (India)
  2. Create a new tax document that is derived from the Tax (India GST)
  • In the Localization configurations work space (Organization administration > Work spaces > Electronic reporting), click Tax configurations.
  • In the tree, find the Taxable Document (India) configuration, and then click the Create configuration.
  • Select the Derive from Taxable document model option, and then enter a name and the description for the derived taxable document. For this example, enter name Taxable Document (India Contoso).
  • Click Create configuration.
  • In the tree, select the Tax (India GST) configuration, and then select Create configuration.
  • Select the Derive from Tax configuration option, and then enter a name and the description for the derived tax document. For this example, enter name Tax (India GST Contoso).
  • Click Create configuration.
2. Extend the Taxable Document so that it Includes the IntraStateInUnionTerritory flag

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

  • In the tree, find the Taxable Document (India Contoso) Dynamics 365 Tax Engine Configurations that you created in the Create extension configurations, and then click Designer.
  • In the tree, go to the Taxable document > Header > Lines, and then click New to create a new node.
  • Enter the name for the node, and select the item type:
  1. Name: IntraStateInUnionTerritory
  2. Item type: Enum
Create node

Create node

  • Click Add.
  • On the Node FastTab, click Switch item reference.
  • Select NoYes in the tree, and then select OK.
  • Save the Dynamics 365 Tax Engine Configurations, and close the designer.
  • With the Taxable Document (India Contoso) still selected in the tree, click Change status > Complete in the Versions list.
Versions

Versions

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

There are data mappings for each taxable document, such as the purchase order or sales order, and reference mode in the taxable document. The purpose of the 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 the Taxable document source, which encapsulates the most common tax relevant fields like assessable value, HSN, or SAC.

4. Change the Data Model of Tax (India GST Contoso)
  • Go to the Tax (India GST Contoso) configuration and then select Designer.
  • Click the 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.
5. Change the Applicability of SGST
  • Go to the Tax (India GST Contoso) configuration, select the version that has a status of the Draft, and then click Designer.
  • Go to Tax document > Header > Lines > GST > SGST, and then click the Lookup’s tab.
  • Click Columns.
  • Select IntraStateInUnionTerritory from Available columns list, and then click 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 Dynamics 365 Tax Engine Configurations.
6. Configure the UTGST Tax Component
  • Go to the Tax (India GST Contoso) configuration, select the version that has a status of the Draft, and then click Designer.
  • Add the UTGST tax component.
  1. Go to the Tax document > Header > Lines > GST. Click Add, and then select Tax component.
  2. Enter a name and the 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 UTGST tax component to create a measure for.
  2. Click Add, and then select Tax measure.
  3. All the logic, such as properties, lookup’s, formulas, postings, and accounting, except applicability of UTGST, is the same as it is for SGST. Therefore, select all the tax measures that the SGST uses in the Name list and then click OK.
UTGST list

UTGST list

  • Configure rate/percentage lookup’s.
  1. Expand the UTGST tax component node.
  2. Select the measure of the Rate/Percentage type.
  3. Click Lookup’s > 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 the 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.
Condition

Condition

4. Save the tax document.

  • Configure tax applicability lookups.

  1. Go to the Tax document > Header > Lines > GST > UTGST. Click the Lookup tab.
  2. Click Columns.
  3. Select Import Order and IntraStateInUnionTerritory as lookup columns.
  4. Select Configuration as the source type.
  5. Click Add. Select No for Import Order column and select Yes for the IntraStateInUnionTerritory column.
  6. Save the tax document.
  • Configure formulas. Formulas can be configured at either group node level (line, tax component, or tax type) or the measure node level.

  1. Go to the Tax document > Header > Lines > GST > UTGST. Click the Formula tab.
  2. Click Add Tax formula.
  3. On the Details FastTab, select Calculation as the category, and then edit the formula and the condition.
  4. Repeat steps 2 through 3 until the UTGST tax component has all the same formulas as the 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. Click the Postings tab.
  2. Click Add Posting Profile to create the 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 the credit accounting sub-ledgers.
  4. Click Edit to enter the 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 the SGST.
  7. Save the tax document.
  • Configure accounting lookups. Only the nodes of the Tax Type and Tax Component types support an accounting lookup definition.
  1. Go to the Tax document > Header > Lines > GST > UTGST. Click the Accounting tab.
  2. Click the 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 the Tax document > Header > Lines > GST > UTGST. Click the Credit Pool tab.
  2. Click the 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 the GST Registration Number.
  3. Select the same attributes that SGST uses.
  4. Save the tax document.
7. Modify the Formulas of Lines to Include UTGST
  1. Go to Tax document > Header > Lines. Click the Formulas tab.
  2. Change any formulas that contain the Base AmountLine tax amount, and the Tax amount included in price measures so that the formulas reflect UTGST. For example, change Tax amount inclusive formula as shown here.
Formulas tab

Formulas tab

3. Save the tax document and Close the designer.

8. Complete the Tax Document Configuration
  • 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 the UTGST, and then click OK.
  • If there are any errors, open the designer, select Validate, and fix the errors.
  • After the status is updated to Complete, the Dynamics 365 Tax Engine Configurations are ready for deployment.

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