Goods & Service Tax (OFI)

White Paper on Accounting

Author : Srikanth Reddy

Creation Date : 08-Jul-2017
Last Updated : 10-Jul-2017
Document Ref :
Version : 1A

Organization: Oracle India Private Limited

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 Table of Contents

I. Background of OFI Accounting Architecture: ................................................................................................................................3

II. List of GL Sources & GL Categories generated by OFI: ..........................................................................................................3

III. List of Natural Accounts used by OFI: .......................................................................................................................................3

IV. Functionality wise accounting ……………………………………………..........................................................................................

i. Goods & Service Tax Accounting at Procure To Pay (Inventory Item)............................................................ ………………4

ii. Goods & Service Tax Accounting at Procure To Pay (Expense Item)……………………………………………………………5

iii. Goods & Service Tax Accounting at Reverse Charge Mechanism ……………………………………………………………...5

iv. Goods & Service Tax Accounting at BOE…………………………….…………………..………………………………………..6

v. Goods & Service Tax Accounting at Order To Cash………………..……………………………………………………………..6

vi. Goods and Service Tax Accounting for ADVANCE RECEIPT…………………………………………………………………..7

vii. Goods and Service accounting at RTV/RMA……………………………………………………………………………………..7

viii. Goods and Service Tax Accounting at IRISO cycle (FOB: Shipment)……………………………………………………….……………………8

ix. Goods and Service Tax Accounting at IRISO cycle (FOB: Receipt)………………………………………………………………………………..9

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 i. Background of GST(OFI) Accounting Architecture:

In OFI product, accounting entries for the Goods and Service Tax posted directly to the General ledger
interfaces from the respective tax repositories at each event in Procure to Pay cycle, Order to Cash Cycle
and other functionalities like RCM, BOE, Advance Receipt and IRISO etc.
User need to be import the tax accounting entries from Gl_Interface to General Ledger

II. List of GL Sources & GL Categories generated by OFI :

GL Source GL Categories Event

Financial India PO Receiving PO Receipt -Receiving
Financial India Delivery PO Receipt - Delivery
Financial India AP Validate AP Invoice Accounting
Financial India Prepay Apply Prepayment Application
Financial India Bill of Entry Bill Of Entry Accounting
Financial India Ship Confirm Sale Order ship confirm
Financial India AR Complete AR Transaction Complete
Financial India Receipt Create Advance Receipt Creation
Financial India Receipt Apply Adv Receipt application on Transaction
Financial India Receipt Reverse Advance receipt reverse
Financial India Inter-Org Ship Inter-Org transaction

III. List of Natural Accounts used by OFI

Natural Account Segment Qualifier Associate Place

Receiving Inventory Assest account Receiving Options
Inventory AP accrual Liability account Organization Parameters
Expense AP Accrual Liability account Purchasing Options
Material account Assest account Organization Parameters
Interim Recovery Assest account Tax Type
Recovery Assest account Tax Type
Interim Liability Liability account Tax Type
Liability Liability account Tax Type
Rounding Expense/Revenue Tax Type
Expense Expense Tax Type
Suspense Revenue Tax Type
Advance Suspense Revenue Tax Type

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 1. Goods and Service Tax Procure To Pay (Inventory Item)

Document/Accountin Condition Accounting DR CR Amount

g Event Amount

Purchase Order PO Approve No Accounting

Receipt Receiving Recoverable:

CGST/SGST/IGST Interim Recovery a/c XXX

XXX
To Inventory AP Accrual a/c

Non-Recoverable:

Receiving Inventory a/c XXX

To Inventory AP Accrual a/c XXX

Delivery Recoverable:

No Accounting for recoverable tax

Non-Recoverable:

Inventory Material a/c XXX

To Receiving Inventory a/c XXX

Claim CGST/SGST/IGST Recovery a/c XXX

To CGST/SGST/IGST Interim Recovery a/c XXX

Invoice Receipt Matched Inventory AP Accrual a/c XXX

Invoice To Supplier Liability a/c XXX

PO Matched Invoice Item Expense a/c XXX

To Supplier Liability a/c XXX

Standalone Invoice CGST/SGST/IGST Interim Recovery a/c XXX

To Supplier Liability a/c XXX

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 2. Goods and Service Tax accounting at Procure To Pay (Expense Item)

Document/Accountin Condition Accounting DR Amount CR Amount

g Event

Purchase Order PO Approve No Accounting

Receipt Receiving Recoverable:

CGST/SGST/IGST Interim Recovery a/c XXX

XXX
To Expense AP Accrual a/c

Non-Recoverable:

Receiving Inventory a/c XXX

To Expense AP Accrual a/c XXX

Delivery Recoverable:

No Accounting for recoverable tax at Delivery event

Non-Recoverable:

Expense Item a/c XXX

To Receiving Inventory a/c XXX

Claim CGST/SGST/IGST Recovery a/c XXX

To CGST/SGST/IGST Interim Recovery a/c XXX

Invoice Receipt Matched Expense AP Accrual a/c XXX

Invoice To Supplier Liability a/c XXX

3. Goods and Service Tax Accounting at Reverse charge Mechanism

Document/Accounting Condition Accounting DR Amount CR

Event Amount

Prepayment Prepay with RCM CGST/SGST/IGST Suspense a/c XXX

tax To CSGST/SGST/IGST Liability a/c XXX

Standard Invoice SI with RCM tax CGST/SGST/IGST Interim Recovery a/c XXX

To Supplier Liability a/c XXX

Prepayment application on Prepay Application CSGST/SGST/IGST Liability a/c XXX

standard Invoice To CGST/SGST/IGST Suspense a/c XXX

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 4. Goods and Service Tax Accounting for BOE

Document/Accounting Condition Accounting DR CR Amount

Event Amount

BOE BOE Confirm No Accounting

BOE Invoice BOE Invoice BOE Tax Expense a/c XXX

Accounting To Custom Authority Liability a/c XXX

BOE Invoice Custom Authority Liability a/c XXX

Payment To Cash Clearing / Cash a/c XXX

BOE Application on Receiving Inventory a/c (Custom Tax– Non-Rec) XXX

Receipt Interim Recovery a/c (Recoverable Tax) XXX

To BOE tax Expense a/c XXX

Claim (Recoverable Recovery a/c XXX

Tax) To Interim Recovery a/c XXX

5. Goods and Service Tax Accounting for Order To Cash Cycle

Document/Accountin Condition Accounting DR Amount CR Amount

g Event

Sale Order Sale Order Book No Accounting

Ship Confirm Ship Confirm CGST/SGST/IGST Suspense a/c XXX

To CGST/SGST/IGST Liability a/c XXX

AR Invoice (Import) Auto-invoice Import Account Receivable a/c XXX

To CSGST/SGST/IGST Suspense a/c

AR Transaction (Manually) AR Transaction Account Receivable a/c XXX

Complete To CGST/SGST/IGST Liability a/c XXX

AR Credit Memo (Manually) AR-CM complete CSGST/SGST/IGST Liability a/c XXX

To Account Receivable a/c XXX

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 6. Goods and Service Tax Accounting for ADVANCE RECEIPT

Document/Accounting Condition Accounting DR CR

Event Amount Amount

Advance Receipt Receipt Confirm CGST/SGST/IGST Advance Suspense a/c XXX

To CGST/SGST/IGST Liability a/c XXX

Receipt Application Receipt applied on CGST/SGST/IGST Liability a/c XXX

AR Transaction To CGST/SGST/IGST Advance Suspense a/c XXX

7. Goods and Service accounting at RTV/RMA.

Document/Accountin Condition Accounting DR Amount CR Amount

g Event

Return To Vendor Post CREDIT taken No accounting

Before CREDIT taken Inventory AP Accrual a/c XXX

To Interim Recovery a/c

XXX

Debit Memo Post CREDIT taken Supplier Liability a/c XXX

To CGST/SGST/IGST Liability a/c XXX

Before CREDIT taken XXX

Supplier Liability a/c

XXX

To Inventory AP accrual a/c

RMA Order No Accounting

AR Credit Memo Credit Memo Complete CGST/SGST/IGST Liability a/c XXX

To Receivables a/c XXX

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 8. Goods and Service Tax Accounting at IRISO / Inter-Org cycle (FOB: SHIPMENT)

Document/Accounting Accounting DR Amount CR Amount

Event

Internal Requisition No Accounting

Internal Sale Order No Accounting XXX

XXX

IS Ship Confirm Shipping Org Inter-Org Receivable a/c XXX

Shipping Org To CGST/SGST/IGST Liability a/c XXX

Receiving Org Intransit Inventory a/c XXX

Receiving Org To Inter-Org Payable a/c XXX

Inter Company AR Transaction Shipping Org Account Receivable a/c XXX

Shipping Org To Inter-Org Receivable a/c XXX

Internal – Receipt Receiving Org CSGST/SGST/IGST Interim Recovery a/c XXX

Receiving Org To Intransit Inventory a/c XXX

Receiving

Receiving Inventory a/c ( Non Recoverable tax) XXX

Receiving Org To Intransit Inventory a/c XXX

Receiving Org

Delivery No Accounting for recoverable Tax

Non- Recoverable Tax

Inventory Material a/c XXX

To Receiving Inventory a/c XXX

Intercompany AP Invoice Receiving Org Inter-Org Payable a/c XXX

Receiving Org To Supplier Liability XXX

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 9. Goods and Service Tax Accounting for IRISO / Inter-Org (FOB: Receipt)

Document/Accounting Accounting DR Amount CR Amount

Event

Internal Requisition No Accounting

Internal Sale Order No Accounting XXX

XXX

IS Ship Confirm Shipping Org Intransit Inventory a/c XXX

Shipping Org To CGST/SGST/IGST Liability a/c XXX

Inter Company AR Transaction Shipping Org Account Receivable a/c XXX

Shipping Org To Inter-Org Receivable a/c XXX

Internal – Receipt Sending Org Inter-Org Receivable a/c XXX

Sending Org To Intransit Inventory a/c XXX

Receiving

Receiving Org CSGST/SGST/IGST Interim Recovery a/c XXX

Receiving Org To Inter-Org Payable a/c XXX

Receiving Org Receiving Inventory a/c ( Non Recoverable tax)

Receiving Org To Intransit Inventory a/c

Delivery No Accounting for recoverable Tax

Non- Recoverable Tax

Inventory Material a/c XXX

To Receiving Inventory a/c XXX

Intercompany AP Invoice Receiving Org Inter-Org Payable a/c XXX

To Supplier Liability XXX

Note: This is not the final document and we will incorporate further changes in this document according to your queries and
Business Scenarios.