GST Pricing Procedures in SAP SD Module: CGST, SGST, IGST Explained

India implemented the Goods and Services Tax (GST) changing the way indirect taxes work. Instead of multiple taxes being applied one after the other, there can be a single tax. Organizations using SAP SD (Sales and Distribution) module need to learn to configure GST to make tax calculations work and stay compliant.

SAP SD is important for managing the complete order-to-cash cycle, and making pricing procedures GST compliant means tax determination for sales transactions will work. This guide will help you learn to implement and configure GST in pricing procedures in SAP SD. It will deal with CGST, SGST, and IGST.

GST Components: CGST, SGST, and IGST

India’s GST offers 3 components based on the nature of transactions:

CGST (Central Goods and Services Tax) is the tax charged by the Central Government for intrastate supplies. When goods or services are sold in the same state, SGST is charged along with CGST. For example, if a company in Maharashtra sells to a customer in Maharashtra, both CGST and SGST are applicable.

State Goods and Services Tax (SGST) is a tax collected by State Governments on intrastate transactions. It's the same rate as for CGST to keep the revenue sharing between the centre and the states aligned. Together SGST and CGST will account for a replacement of the previous structure of VAT and service tax.

Integrated Goods and Services Tax (IGST) is applicable for supplies between different states. The Central Government collects IGST and distributes it among the states. It eliminates the complexity of dual taxation and makes interstate transactions much easier. Knowing when to use CGST/SGST as opposed to IGST is critical for the accuracy of SAP SD configuration.

Basics of Pricing Procedures in SAP SD

Pricing procedures in SAP SD describe how a certain structure of pricing, discounting, surcharging, and taxation is applied to a sales document. The pricing procedure is made of different condition types that are sequenced to determine the final price that is payable by a customer.

Key components are the condition types – each representing a slice of the pricing puzzle (e.g. base price, discounts, freight, taxes), the access sequence, and the condition tables. For the purpose of GST, certain condition types are created such as JICG (for CGST), JISG (for SGST), and JIIG (for IGST).

Configuring GST in SAP SD Module

When configuring GST in SAP SD module, a step-by-step approach is needed, as the setup is required in multiple places. First, suitable condition types need to be created. In a standard SAP environment, the condition types provided for GST implementation are JICG, JISG, and JIIG, though organizations may create their own custom condition types.

Condition tables are required to store GST rates. These tables generally include country, customer tax classification, and material tax classification. Access sequences define the order in which tables are searched. Master data setup is critical, including GSTIN details in customer master records.

Step-by-Step Setting up GST Pricing Procedures

1. Setting up Condition Tables (V/08)
2. Set up Access Sequences (V/07)
3. Setting up GST Condition Types (V/06)
4. Setting up Tax Rates (VK11)
5. Set up Pricing Procedure (V/08)
6. Set up Account Determination (VKOA)

Intrastate vs. Interstate Transactions

When customers and suppliers are in the same state, CGST and SGST are applied. SAP SD determines this based on plant and ship-to party location and triggers the correct condition types automatically.

For interstate transactions, IGST is applied. Determines this using shipping details and place of supply information to ensure correct tax calculation.

GST Tax Codes and Account Determination

Tax Code Setup (FTXP)

• V0: 0% (Export/Exempt)
• V1: 5% GST
• V2: 12% GST
• V3: 18% GST
• V4: 28% GST

Account Determination (VKOA)

• CGST Payable: 254100
• SGST Payable: 254200
• IGST Payable: 254300

Testing GST Pricing Procedure

Sales orders are tested using VA01 to verify intrastate and interstate scenarios. CGST and SGST must appear for same-state transactions, while only IGST must appear for interstate transactions.

End-to-end testing includes delivery creation, billing, and accounting document verification using FB03.

GST Reporting and Compliance in SAP

GST compliance in SAP includes transactions such as J1INRGSTR for registers and J2IUN for GST portal data extraction. These reports support GSTR-1, GSTR-2, and GSTR-3B filing.

Best Practices for Accurate GST Compliance

Accurate GST compliance requires correct master data, standardized processes, regular reconciliation, and timely updates to condition records. All configuration changes should be tested before deployment.

GST Data Consistency Checks in SAP SD

GST data consistency checks ensure accurate tax calculation and compliance reporting. Regular verification of master data, condition records, and accounting postings helps prevent errors and statutory issues. Follow us on WhatsApp to get more detailed information and updates.