Goods and Service Tax (GST) Configuration (Required Masters) in Microsoft Dynamics 365 Finance and Operations -Part-2

Hello Everyone, welcome to the next part of the “GST Blog Series”, in last part we imported the configuration and activated for a legal entity “INMF”, now in this part we will see basic masters require to setup the GST.

So, let’s start.

Step-1: Tax Authority, we need to create Tax authority and this will be used when we need to file the returns in the month end. In this we have to map the vendor account to which we will create GST liability or recoverable during our return, in general it can be Govt.

Navigate to Tax > Indirect Tax > Sales Tax > Sales Tax Authorities > Click New and Enter required details and map Vendor Account

Step-2: Sales Tax Settlement Period, in this we define our settlement period similar to how we define “Fiscal period” for financial posting.

Navigate to Tax > Indirect Tax > Sales Tax > Sales Tax settlement period > New > Enter required details

Step-3: HSN Codes, as we all know HSN codes are used to define the Tax rates for traded goods, so we have to create the masters for the HSN codes which will be used in our business

Navigate to Tax > Setup > Sales Tax > HSN Codes

Note: As per my Experience, please try to maintain the uniformity in number of digits for HSN codes and go as much as possible for more digits e.g. 6 or 8

Step-4: SAC Codes, as we all know SAC9Service accounting codes) codes are used to define the Tax rates for services, so we have to create the masters for the SAC codes which will be used in our business. SAC codes are always started with “99”

Navigate to Tax > Setup > Sales Tax > Service Accounting Codes

Step-5: GST Reference number Group, this is most critical part of entire GST setup which most of us forget to plan this properly, this has to be defined very carefully after discussing with customer. We should have proper discussion with customer and understand their requirement for defining the number sequence for GST transactions for each location. Mostly in India most of the customers follow one GST number sequence for “Each state”. In that case you can create number sequence group for each state and map it to the addresses e.g. Legal entity address, warehouse, site etc…

Navigate to Navigate to Tax > Setup > Sales Tax > GST Reference number group

Step-6: Enterprise Tax Registration Number, this master is to define the GSTIN number master for each type Company (For our internal locations), Vendor’s and Customer’s.

Navigate to Navigate to Tax > Setup > Sales Tax > Enterprise Registration Number

Step-7: Main Accounts, Now here is the final and most critical master, defining the GL codes in cart of accounts for each type of posting. We should plan our chart of accounts properly after discussing with customer.

What level of granularity is required to define the GL codes, It can be one GL code for all component, One GL code for each Component or One GL code for each Component each posting type or one GL code for each component each posting type each state?

In my opinion, best practice to have GL code or each posting type for each component.

Note: All the GL codes defined for GST should have “Posting type” “India Tax” otherwise it will not work during transaction.