Pre-Release Document

Oracle Financials for India (OFI)

Goods and Services Tax (GST)
Withholding Tax (TDS)
Configuration

Author: Parijat Mallick

Revanth Vennalakanti
Creation Date: 28-Feb-2017
Last Updated: 24-Jul-2017
Document Ref:
Version: 1B

Organization: Oracle India Private Limited.

OFI- GST Withholding Tax Configuration

Document Control

Change Record
5
7

Date Author Version Change Reference

28-Feb-17 Parijat & Revanth 1A Initial document

01-May-17 Parijat & Revanth 1B Modifed the Introduction
Modified Supplier additional
24-Jul-17 Parijat 1C Information setup

Reviewers

Name Position

Rajnish Kumar Director, Tax Development

V S Baburaj Product Strategy Director

Audience

Name Position
12.1 & 12.2 Implementation team
12.1 & 12.2 Customers

OFI- GST Withholding Tax Configuration

Contents

Document Control .............................................................................................. 2

1 - Introduction .................................................................................................... 4
2 - Scope ............................................................................................................... 4
3 - Setups for Tax Configuration .................................................................... 5
4 - Setups for Withholding Tax (TDS) ........................................................... 6
4.1 Define Tax Authority .............................................................................. 6
4.2. Define TDS Tax Calendar ................................................................... 7
4.3. Define Regime Registration ................................................................ 8
4.4. Define Tax Type .................................................................................... 9
4.5. Define Tax Rate .................................................................................. 10
4.6. Define Tax Category .......................................................................... 11
4.7. Define Common Configuration ......................................................... 12
4.8. Define First Party Registration .......................................................... 13
4.9. Define Third Party Registration ........................................................ 14
4.10. Define Threshold Setup ................................................................... 17
5. Applying TDS on Manual Invoice ............................................................ 19
6. Applying TDS on Prepayment Invoice. .................................................. 22
7. Summary ........................................................................................................ 26
8. Call to Action................................................................................................. 26

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OFI- GST Withholding Tax Configuration
1 - Introduction
A withholding tax, also called a retention tax, is a government requirement for the payer of an item of
income to withhold or deduct tax from the payment, and pay that tax to the government.

TDS is a withholding tax which is a direct tax administered by Central Board of Direct Taxes (CBDT)
under Income Tax Department.

GST, an indirect tax, is administered concurrently by the Federal and State Governments through Central
Board of Indirect taxes (CBIC which was formerly known as Central Board of Excise and Customs -
CBEC) and respective state commercial tax departments. GST being an indirect tax, will not impact TDS
provisions and requirements

Provisions of the current Income tax for TDS and all procedural requirements including classification
through sections, threshold computations, taxable events, tax accounting, tax settlement and tax
reporting will not be impacted with introduction of GST.

Once GST is introduced, we could expect a notification from CBDT with procedural guidelines on deriving
the taxable basis (whether the TDS need to be calculated on the entire payable amount which includes
GST type of taxes or to calculate TDS from the payable amount excluding the GST type of taxes).

You may note that in the solution infrastructure we have already built in previsions for user to configure
this based on the law. Our TDS functionalities and solution capabilities remain unchanged with the GST
solution. However, the way in which TDS need to be configured had undergone a change where
customers will have to use the GST infrastructure to configure the TDS type of taxes through regime to
rate flow.

2 - Scope
This document provides the details of Functional flow for Oracle Financials for India (OFI) Tax Deducted
at Source (TDS) Cycle from GST infrastructure configuration perspective.

Post GST the TDS solution capability and functionality will remain same. The way in which the TDS setup
need to be configured in OFI will undergo a change. Customers will have to use the OFI new solution
infrastructure and set up regime to rate flow instead of setting TDS using tax codes, additional supplier
information etc.

With GST patches being applied, customers will avail the latest TDS capabilities which are currently
available in R 12.2.x. These features will be available for 12.1.x customers as well.

Note: The current content has been compiled in reference to the frozen scope of the
Phase 2 deliverables (Ref: GST Phase -2 Deliverables.docx)

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OFI- GST Withholding Tax Configuration
3 - Setups for Tax Configuration
In this section, we have mentioned the required setups that has to be performed for TDS

1. Define Tax Authority

2. Define TDS Calendar

3. Regime Registration

4. Tax types

5. Tax rates

6. Tax Categories

7. Common Configuration

8. Third party Registration

9. First party Registration

10. Threshold Setup

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OFI- GST Withholding Tax Configuration
4 - Setups for Withholding Tax (TDS)
Below are the required setups to be done for Withholding Tax

4.1 Define Tax Authority

Define Supplier with type India Tax Authority.

The TDS standard Invoice will be generated against this supplier

Navigation for this form

(N) India Local Payables Oracle Payables Suppliers Entry

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OFI- GST Withholding Tax Configuration
4.2. Define TDS Tax Calendar

Define a special accounting period as TDS financial Year in standard AP Periods definition UI. This period
should start from 1-Apr and end to 31-Mar of next year as Year type.

After defining this TDS period, the same can be assigned to the TDS regime as TDS financial Year
Navigation for this form

(N) India Local Payables Oracle Payables Setup Calendar Accounting Periods

a) Provide Calendar as TDS_CALENDER

b) Choose Period Type as Year
c) Start data and end date should be for financial year(Apr- Mar)

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OFI- GST Withholding Tax Configuration
4.3. Define Regime Registration

Here, we will define the respective Tax Regime used. This Regime name entered is a user-configurable
field and we can enter a value for the Regime Name.

Navigation for this form is

(N) Oracle Financials for India Tax Configuration Define Regime

a) Choose Regime type as Withholding Tax.

Regime Type of Transaction Tax will be used for Indirect Taxes (GST Taxes)
b) Choose Tax Calendar which was defined in (4.2)
c) Choose the Tax Authority which was defined in step (4.1)
d) Define Rounding Rules

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OFI- GST Withholding Tax Configuration
4.4. Define Tax Type

Here, we will define the respective Tax Type.

Navigation for this form

(N) Oracle Financials for India Tax Configuration Define Tax Type

a) Choose the Regime code which was defined at step (4.3)

b) In Details Tab Select the check box Withholding tax applicable
c) In Accounting tab select Ledger and Operating Unit
d) Provide Liability Account and Rounding Account Details

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OFI- GST Withholding Tax Configuration
4.5. Define Tax Rate

Here, we specify the rate of tax which is supposed to be calculated on the transaction. As per our
requirement, if the tax is Recoverable or inclusive in nature.

Navigation for this form

(N) Oracle Financials for India Tax Configuration Define Tax Rate

a) Select Operating Unit

b) Choose the Regime which was defined at step (4.3)
c) Choose tax type code which was defined at step (4.4)
d) Provide Rate Details
e) Accounting information will be defaulted from Tax Type

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OFI- GST Withholding Tax Configuration
4.6. Define Tax Category

Define Tax category that has to be used/defaulted while creating the transactions.

Navigation for this form

(N) Oracle Financials for India Tax Configuration Define Tax Categories

a) Select the Operating Unit

b) Provide Tax category Name
c) Provide Start Date
d) Choose the Tax Rate that has been defined in Step (5)
e) Provide the precedence

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OFI- GST Withholding Tax Configuration
4.7. Define Common Configuration

Navigation for this form

(N) Oracle Financials for India Tax Configuration Define Common Configuration

a) Choose the operating Units

b) In the withholdings Tab

i) Provide tax category that has to be defaulted when Registration number is not
available
ii) Check below check boxes if The TDS invoice generated should be validated and
approved accordingly

Create Pre-Validated TDS Invoice and Credit Memo

Create Pre-Approved TDS Invoice and Credit Memo

Create Pre-Validated TDS Invoice and Credit Memo: IF this checkbox is enabled, system
will invoke Approval of TDS invoice concurrent program to validate created TDS invoices.

Create Pre-Approved TDS Invoice and Credit Memo: IF enabled, system will create TDS
invoices with approve status = NOT REQUIRED

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OFI- GST Withholding Tax Configuration
4.8. Define First Party Registration

Provide the tan number and Pan number of the Organization in the first party Registration.
Navigation for this form

(N) Oracle Financials for India Party Registrations Define First Party Registration

a) Choose Regime Type as Withholding Tax

b) Organization as Operating Unit
c) Choose the OU name
d) Click on New

In the Registrations tab

e) Choose the Regime code
f) Select Primary Registration Name
Options Available (ECC Number, PAN Number, TAN Number
, TIN Number, GST Number)
g) Provide the Value in Primary Registration Number Field
h) Select the Secondary Registration Name (PAN Number)
i) Provide the Value in Secondary Registration Number Field
j) Provide Tax authority and Tax authority Site

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OFI- GST Withholding Tax Configuration
4.9. Define Third Party Registration

Define third party registration for the Suppliers for which the TDS has to be deducted.

Third party registration has to be done for the null site first and then for the site level at the OU
Navigation for this form

(N) Oracle Financials for India Party Registrations Define Third Party Registration

a) Define Third Party Registration for Null Site

To define third party registration at null site, dont select Operating Unit.
b) Select Party Type as Supplier
c) Select Party Name
d) Click on New
e) In Registration Tab Choose the Regime Code
f) Provide PAN number at Primary Registration Number
g) Select the default Section Code at Default Section Field that should be defaulted at transaction

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OFI- GST Withholding Tax Configuration
h) Vendor classification has to be added in Reporting Codes Tab

Choose Reporting Type Name as Vendor Type and in the Reporting code field choose
appropriate Value.

Define Third Party Registration at Site Level

a) Provide Operating Unit

b) Choose Party Type as Supplier

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OFI- GST Withholding Tax Configuration
c) Choose Party Name and Party Site and Click On New
d) Select the regime code
e) PAN Number value will be defaulted from Null site level
f) Select the Section code that has to be defaulted
g) At Reporting codes tab classify the Vendor Type

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OFI- GST Withholding Tax Configuration
4.10. Define Threshold Setup

Define the threshold setup for the section code, Regime type and the vendor Type combination

Select Exception setup if the vendor has the TDS certificate. If the Exception setup has been selected
then assign vendors tab will be enabled to define the vendor name, certificate number, start date and end
date

Define the Operating Unit and Tax Category Name that has to be defaulted for the applicable section
code

Navigation for this form

(N) Oracle Financials for India Withholding Tax Setup Define Withholding Thresholds

a) Select the Regime , Vendor Type and Section code

b) Click on New

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OFI- GST Withholding Tax Configuration
c) Select Threshold Type , From Amount , To Amount , Start date and End date
d) In Taxes section, Select the OU and the Tax Category that has to be defaulted for the
threshold Limit

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OFI- GST Withholding Tax Configuration
5. Applying TDS on Manual Invoice
TDS section code on the invoice will be defaulted based on the Defaulting setup that has been done at
third party registration.

Tax category will be defaulted based on the setup done for the OU and the section code at the threshold
setup

a) Create an Manual Invoice with Item Line

b) Populate the account information on to the distributions
c) Save Distributions

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OFI- GST Withholding Tax Configuration
d) Navigate to TDS Tax details form
(N) Invoice header Click on Tools TDS Tax details

e) Check whether the TDS tax category and section code has been defaulted as per the setup done
f) Check the Overridden check box in case if the tax category or the section has been overridden or
manually applied

g) Save the Form

h) Validate the Invoice
i) Verify whether below concurrent programs has been triggered and completed Normally
i. India TDS Processing (India - TDS Processing Concurrent)
ii. Import TDS invoices - invoice validate (Payables Open Interface Import)
iii. Approval Of TDS Invoices (India - TDS Approval)

j) Re-query the Invoice by Appending % to the Invoice number to verify the standard TDS Invoice
against Tax authority and Credit memo against Supplier has been generated or not

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OFI- GST Withholding Tax Configuration
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OFI- GST Withholding Tax Configuration
6. Applying TDS on Prepayment Invoice.
a) Create a Prepayment Invoice

b) Save Invoice distributions

c) Apply TDS taxes

Navigation: Tools > TDS tax Details

Click on Override checkbox when the tax has been applied manually

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OFI- GST Withholding Tax Configuration
d) Validate the Invoice Check whether the TDS invoice has been generated

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OFI- GST Withholding Tax Configuration
e) Make payment for the prepayment Invoice
f) Query the invoice on which the prepayment has to be applied

g) Check whether the same section code has been applied to the invoice as of that prepayment
f) Apply Prepayment Invoice on to invoice

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OFI- GST Withholding Tax Configuration
g) Revalidate the Invoice and verify whether the RTN Invoice has been generated

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OFI- GST Withholding Tax Configuration
7. Summary
The above document will provide the below benefits:

Withholding Tax (TDS) Configuration

8. Call to Action
Please note that in the Phase 2 patch, we have bundled the solution for migration of TDS to the GST
solution which can be tested by customers to their satisfaction. There are few known issues in phase 2
solution for TDS migration which is currently bugged and dev team is working on the fix which is expected
in one of the upcoming RUP on top of phase 2

Please do the related setup according to the above documentation and perform transactions according to
your business scenarios.

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

You can also refer the document in GST Info Center (Document Tab) released as a part of Phase 1 and
Phase 2 deliverables:

E-Business Suite Release 12: India Goods and Service Tax (GST) Info Center (Doc ID 2176820.2)

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OFI- GST Withholding Tax Configuration