Impact of GST on Project processes

Projects are considered as work contracts from legal point of view. GST impacts business processes such as manufacturing, sales, and purchasing. VAT and Service taxes are applicable for work contracts. GST is considered as a comprehensive indirect tax (which replaces the existing indirect taxes such as VAT and Service taxes), which impacts the work contracts.

Contract lines

Contract line is an agreement of one customer with one supplier, about both commercial and logistic conditions, related to the supply of one item, during a period of time.

If the GST functionality is implemented:

  • The Tax Method field is set to Not applicable for the new contract lines.
  • Tax codes are destination based taxes (based on the ship to address of the business partner).
Contract Deliverables / Deliverable Schedules

A contract deliverable is a tangible or intangible item that is produced or purchased as a result of a contract.

If GST is implemented:

  • The Tax Method field is set to Not applicable for the contract deliverables.

  • Tax codes are destination based taxes (based on the ship to address of the business partner).

Estimate Versions

Estimate versions are used to compare estimates for a project. If GST is implemented, Tax Code is disabled.

Estimate Lines

Tax code is specified in the Estimate Lines (tpest2100m000) session, as there are some non-claimable taxes such as CST and Octroi, can increase the cost of the project . So, a Tax code is required to identify the variations occurred in the landed cost between intra-state and inter-state purchases. If GST is implemented, all taxes can be claimed. Hence, tax codes and assessable values are not required.

Bids

Bid is usually considered as an offer to sell, when a response is sent to a request for quotation or proposal. Tax Code specified in the Bids (tpest3100m000) session is of the type aggregate tax. If GST is implemented, the Sales Tax Amount is calculated based on this tax code.

Budget

If GST is implemented, all the taxes can be claimed and hence, tax codes are not applicable.

If GST is implemented and Tax Method is set to Not Applicable, Tax-Costs and Tax-Sales tab are hidden.

Project Invoicing

If GST is applicable, the invoice is calculated based on the GST amount. The Tax code is of the type aggregate tax and is defaulted based on the address of the ship to business partner. This is applicable for all project invoices (Advance, Installment, Progress, and Cost Plus).

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