Microsoft® Business Solutions–Navision® 4.0- Indian Value Added Tax

Microsoft® Business Solutions–Navision® 4.0- Indian Value Added Tax Table of Contents Overview of Functionality ...................................................................................... 4
Detailed Setup ................................................................................................... 4
Comprehensive Functionality ............................................................................ 5
Reports .............................................................................................................. 5
Definitions ............................................................................................................. 6
Value Added Tax (VAT) .................................................................................... 6
Input VAT .......................................................................................................... 7
Output VAT........................................................................................................ 7
Input VAT Credit ................................................................................................ 8
Input VAT Credit on Capital Goods ................................................................... 8
Input VAT and Input VAT Credit ........................................................................ 8
VAT Rounding Off ............................................................................................. 9
VAT Setoff and Carry Forward .......................................................................... 9
Inter State Purchases, Sales, and Branch Transfers ......................................... 9
Exports, Deemed Exports, and Supply to EOU Units ........................................ 9
Composition Scheme ........................................................................................ 9
Lease Transactions ......................................................................................... 10
Debit Notes/ Credit Notes ................................................................................ 10
Adjustments in TAX Credit Due to Changes in Usage .................................... 10
Adjustments in TAX Credit Due to Goods Lost / Destroyed or Consumed ...... 10
Setup- Sales Tax (Value Added Tax) .................................................................. 11
Schedules........................................................................................................ 11
States .............................................................................................................. 13
Deferment Period ............................................................................................ 14
Schedule ......................................................................................................... 16
Forms .............................................................................................................. 17
TAX Jurisdictions ............................................................................................. 18
Tax Details ...................................................................................................... 19
Company Information ...................................................................................... 20
Location Card .................................................................................................. 22
Customer Card ................................................................................................ 23
Vendor Card .................................................................................................... 24
Item Card......................................................................................................... 25
Calculation of Input VAT on Item ........................................................................ 25
Viewing the Ledger Entries.............................................................................. 27
Calculation of VAT on Capital Goods. ................................................................. 30
Viewing the Ledger Entries.............................................................................. 33
Calculation of VAT if the Vendor has opted Composition Scheme ..................... 36
Viewing the Ledger Entries.............................................................................. 37
Calculation of Retention Limit on VAT. ............................................................... 40
Viewing the Ledger Entries.............................................................................. 41
Calculation of Vat able Purchase Tax on CST .................................................... 45
Viewing the Ledger Entries.............................................................................. 46
Calculation of VAT if Purchases are meant for Export or Deemed Export .......... 49
Purchase Credit Memo. ...................................................................................... 49
Viewing the Ledger Entries.............................................................................. 50
Calculation of Output VAT .................................................................................. 54
Viewing the Ledger Entries.............................................................................. 54
Calculation of Output VAT in case of Standard Deduction .................................. 57
Viewing the Ledger Entries.............................................................................. 58
Sales of Goods in case of Export or Deemed Export / VAT Exempted ............... 60
Sales Credit Memo ............................................................................................. 61
Viewing the Ledger Entries.............................................................................. 62
VAT Adjustment .................................................................................................. 65
VAT Settlement ................................................................................................... 76
View the posted Ledger Entries....................................................................... 81
VAT Reporting .................................................................................................... 87
Interstate Sales and Purchases....................................................................... 88
Intrastate Sales and Purchases....................................................................... 90
Purchase Book VAT ........................................................................................ 92
Sales Book VAT .............................................................................................. 94
VAT Settlement ............................................................................................... 95
VAT Deferment................................................................................................ 97
VAT Credit Carried Forward ............................................................................ 99
Viewing and Printing the Tax Invoice ............................................................ 100
Appendix ........................................................................................................... 103 Overview of Functionality VAT functionality comprehensively covers the Indian VAT scenario. This functionality is a standard solution for the States / Union Territories (UT) that have implemented or are implementing VAT in India. This functionality provides a common solution for the requirements under all Indian States / UTs VAT Acts. Detailed Setup

VAT functionality contains a detailed setup, which will used in mapping the Tax rate, calculation of Input VAT Credit, Output VAT, VAT Adjustments, and the VAT Settlement process. Setup Area	Description
T.I.N. Nos.	Various TIN Nos. of the firm are defined.
States	State/UT, first two-digits of the TIN of the State, Deferments for the Capital Goods, Schedules of the State, Specified Period for Refund, Tax Period, Retention Limit incase of Branch Transfer, GL account for Input VAT credit, GL account for Output Tax, GL account for VAT Deferred Account, GL account for VAT payable Account, GL account for VAT Refund, and GL account for Excess Input VAT Credit Carried forward are defined.
Tax Groups	Item Categories and the Item category, which is a Works contract, are defined.
Tax Jurisdictions	Tax Jurisdiction, the State under which it falls, Tax Type, Retention Limit for Non Taxable Sales and whether this retention limit is loaded on the item are defined.
Tax details	Tax Jurisdiction and the Item Category, the Schedule, Tax Rate, Capital Good, Creditable Good, Standard Deduction, VAT able Purchase Tax, VAT retention limit are defined.
Schedules	All Schedules for States are defined.
Tax Area Locations	Tax jurisdiction applicable for Customer/ Vendor State with the Location is defined.
Item Card	If the item is fixed asset, and the Tax Group code for the item are defined.
Vendor Card	TIN No of the Vendor and whether opted for Composition is defined.
Customer Card	TIN No of the Customer and whether the Sale to customer is Export/ Deemed Export Sale or VAT Exempted Sale are

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Descriptive Flexfield Basics in Oracle Apps

Descriptive Flexfield Basics in Oracle Apps

A training article on Descriptive flexfields, also refered as DFF

First some basic Question and answers, and then we will do screenshots detailing how flexfields are configured.

Question: What does DFF mean?
Answer: DFF is a mechanism that lets us create new fields in screens that are delivered by Oracle.

Question: Oh good, but can these new fields be added without modifying/customization of the screen?.
Answer: Yes, certainly. Only some setup is needed, but no programmatic change is needed to setup DFF.

Question: Why the word Descriptive in Name DFF?
Answer: I think Oracle used this terminology because by means of setup...you are describing the structure of these new fields. Or may be Oracle simply used a silly word to distinguish DFF from KFF(discussed in latter training lesson).

Question: Are these DFF's flexible?
Answer: A little flexible, for example, depending upon the value in a field, we can make  either Field1 or Field2  to appear in DFF.

Question: So we create new fields in existing screen, but why the need of doing so?
Answer: Oracle delivers a standard set of fields for each screen, but different customers have different needs, hence Oracle lets us create new fields to the screen.

Question: Are these new fields that get created as a result of DFF free text?
I mean, can end user enter any junk into the new fields that are added via DFF?
Answer: If you attach a value set to the field(at time of setup of dff), then field will no longer be free text. The entered value in the field will be validated, also a list of valid values will be provided in LOV.

Question : Will the values that get entered by the user in dff fields be updated to database?
Answer: Indeed, this happens because for each field that you create using DFF will be mapped to  a column in Oracle Applications.

Question: Can I create a DFF on any database column?
Answer: Not really. Oracle delivers a predefined list of columns for each table that are meant for DFF usage. Only those columns can be mapped to DFF segments. These columns are named similar to ATTRIBUTE1, ATTRIBUTE2, ATTRIBUTE3 ETC. Usually Oracle provides upto 15 columns, but this number can vary. 

Question: Can I add hundreds of fields to a given screen?
Answer: This depends on the number of attribute columns in the table that screen uses. Also, those columns must be flagged as DFF enabled in DFF Registration screen. Don't need to worry much about this because all the ATTRIBUTE columns are by default flagged for their DFF usage.

Question: Hmmm, I can see that DFFs are related to table and columns...
Answer: Yes correct. Each DFF is mapped to one table. And also each segment(or call it field) is mapped to one of the attribute columns in that table.

Question: I want these fields to appear in screen only when certain conditions are met. Is it possible?
Answer: Yes, we have something known as Context Sensitive Descriptive Flexfields.

In Order to do this, we will follow the below steps(screenshots will follow) :-
1.    Navigate to the DFF Registration screen in Oracle Apps and query on Table AP_BANK_BRANCES. Now click on Reference Field
2.    Navigate to DFF Segments screen and query on the Title of the “Bank Branch” and Unfreeze the Flexfield and add segments as to Section "GLOBAL Data Elements" as shown in screenshots.

Here are the screenshots......The descriptions are embedded within the screenshots.

Financials (GL, AP, AR and FA) along

1

My Experience in setting up

Financials (GL, AP, AR and FA) along

with OU setups

2

Executive Overview

...................................................................................................... 3

Introduction

..................................................................................................................... 3

Scope

................................................................................................................................ 4

Feedback

........................................................................Error! Bookmark not defined.

Business Cases

................................................................................................................ 4

Environment Creation

.................................................................................................. 5

General Ledger Basic Setups

..................................................................................... 7

Organization Hierarchy Setup

.................................................................................... 9

Payables (AP) Basic Setups

....................................................................................... 15

Fixed Assets Basic Setups

........................................................................................... 20

Accounts Receivables (AR) Basic Setups

............................................................. 24

References

..................................................................................................................... 33

3

Executive Overview

This document discusses about how I did the complete setups of Oracle

Applications Financial modules (GL, AP, AR, FA) along with required

Organization Hierarchy setups.

Introduction

I did this setup as an experience for myself and to develop an

understanding of the various modules and to get a global idea of what

setups are done and how they interact with each other.

As of now there is no document which talks about the setups at Financials

level. There are beautiful descriptions of setups, that too at length, in

individual user guides. But mostly I found myself lost in those long pages of

user guides. Also my objective was just to understand the basic setups (just

to make it working) and not advanced setup. So I prepared this

document to achieve that objective.

I used this document at least few times to do some test setups and found

to be pretty handy to fix the issues in the setups.

4

Scope

Scope for this document is a very basic setup from scratch for Oracle

Financials. The setup will be a working setup but certainly a very basic

setup and not an advanced kind of a setup.

This document tries to understand the setups required and interaction of

the various setups that we do at various modules level. This will prove to be

useful to do the setups as well as troubleshoot at the very basic level.

Note that, what I show here is my understanding of financials setup, under

no case I can claim that this is accurate and is the only possible way of

setting up Oracle Applications. But this certainly shows my understanding.

Business Cases

I have worked extensively in support a financial module and hence I used

to face the peculiar problem wherein the data is transferred across the

sub-ledgers. E.g. all sub-ledgers transfer data to GL, AP transfers data to

FA, FA in turn to GL. To troubleshoot something in one module needs data

transfers and hence interaction with other sub-ledgers. Also to study

changes in setups on one module, the effect of the same on other

modules needs to be tested before applying in Live instances.

So I had to use the AP, AR, and FA as well. Lot of times, we have test

instances which have most of the setups already in place. But there are

times when existing setups do not help and one is working on a

completely different line of thinking. This means a completely new and

different setup to be done on your own to understand what goes in

setting up. Also to understand, implications of setups done in one module

on other module.

For the beginners there is no joy like joy of setting up complete Oracle

Application and see it doing the basic transactions. It is a really good

learning as well for beginners.

5

Environment Creation

This would involve creation of Users, Responsibilities and assigning the

responsibilities to users.

1] I created a new User for myself.

Navigation = System Administrator Responsibility : Security > Users

2] Assign the following responsibilities to him

•

System Administrator

•

These responsibilities were required since the Organization hierarchy and

related setups are done in Inventory Responsibility.

Inventory Super User

6

3] Now I defined a new GL responsibility as well and assign this to my user.

Navigation = System Administrator: Security > Responsibilities

7

General Ledger Basic Setups

4] Logged into the GL responsibility and created a chart of accounts.

Navigation = General Ledger Super User Responsibility: Setup > Financials

> Flex fields > Key > Segments

And then I defined a new Set of Book in the new responsibility.

Navigation: General Ledger Super User > Setup > Financials > Books >

Define

8

5] I set the profile option GL: Set of Books for the new GL responsibility

Navigation: System Administrator : Profile > System, query at the

responsibility level.

9

Organization Hierarchy Setup

6] Now I move to Organization setup.

Navigation: Inventory Super User Responsibility: Setup> Organizations>

Organizations

My understanding of Organization hierarchy is roughly like this:

Business Group

Set of Books

Legal Entity

Operating Unit

Inventory

Organization

Employee

Balance Entity

Asset book

Project Organization

Asset Organization

So I first define the Business Group.

This business group (BG) is attached to the responsibility that I am using for

doing organization setups (in this case the inventory responsibility). This is

done using the profile option HR: Business Group.

10

Once the BG is created and I attached the same to the responsibility,

then go again to the organization form and then define the Legal Entity

(LE).

Note that one single organization can work as legal entity + operating unit

+ inventory org, this is the setup I am doing here. Alternatively I could have

created separate organizations as well.

7] I defined the following information there:

Important Data are:

•

Date from

•

Organizations Classifications to be added – GRE / Legal Entity

•

Organizations Classifications to be added – Operating Unit

•

Organizations Classifications to be added – Inventory Organization

•

Enable all of these

11

8] I select GRE / Legal Entity and click on others, in the LOV that appears

select “Legal Entity Accounting” and Click OK

9] In the Legal Entity Accounting, I entered Set of Books name. Save and

click ok.

(This will establish a link between Legal Entity and the set of books)

12

10] After the Legal Entity, I came back to the main form. Now, Operating

Unit setup. Select Operating Unit and Click Others.

11] In the list of values I select Operating Unit Information and click ok

Provide following information there:

•

Legal Entity

•

So this creates the link between Operating Unit (OU) and Legal Entity (LE)

Set of books

13

12] Back to the main form I now select Inventory Organization and Click

Others.

Select Accounting Information and click ok

13] I Enter the following information:

•

Set of books

•

Legal Entity

•

And click ok. This creates the link between IO and OU.

Operating Unit

14

14] I again select Inventory Organization and click on Others in the main

form. Select Inventory Information this time.

15] I defined the required information in the inventory organization form as

follows:

Once the above things are done the IO and OU definition is complete.

15

Payables (AP) Basic Setups

16] Now, I go to System Administrator responsibility and create an AP

responsibility.

Assign this new responsibility to my set of books.

17] I defined the two profile options for this new AP responsibility.

•

GL: Set of Books Name

•

MO: Operating Unit

16

At this stage the basic OU and SOB setup is ready.

18] Now I need to setup AP. So here we logon to AP responsibility.

Navigation: Setup> Set of Books> Choose, here I assign the set of books to

the responsibility and this create the link of OU and SOB to the

responsibility.

19] Next Step go to Setup> Options> Financials.

I will have to enter numerous code combinations in accounting tab, but

main is the Supplier- Purchasing Tab where I will enter the Inventory

Organization. This creates the link for IO to OU for the responsibility.

17

20] Another important tab here is Encumbrance tab: (not relevant in this

case but just shown for information)

18

21] Next Step go to Setup> Options> Payables

The important setups in this form are:

Tab: Accounting Method > Primary Accounting Method -> Accrual /

Cash. In this tab I will see that the SOB name is coming automatically

based on what we entered in Books Assign form and the profile options in

earlier steps.

Tab: Transfer to GL

Now the AP responsibility setup is also complete

22] Now, I need to open the periods in AP (assuming that the GL period is

already opened. In GL navigation is Setup> Open / Close).

Navigation: Accounting > Control Payables Periods

I noticed that Adjustments periods are missing here. Just set the required

period status to Open. It will not trigger anything.

19

Here AP setup is over and I can start entering invoices, tranferring data to

GL and FA

20

Fixed Assets Basic Setups

23] I move ahead to setup FA.

I start with creation and assignment of new responsibility to our user:

24] Set the GL: Set of Books Name profile option at the Responsibility Level

21

25] Now I have to create an FA Book, so I logon to FA responsibility.

Navigation: Setup > Asset System > Book Controls

Here I can create my own FA Book. I will define the link between Asset

Book and the GL Set of Book in this form.

26] Refer to Natural Accounts, I need to define numerous natural

accounts over there.

22

27] Now I move on to the Journal Categories tab to define numerous

journal categories that will be used by FA when creating journals in GL.

Now my FA Book is ready as well. But before I start entering asset I need to

do one last step.

28] Now go to Setup > Asset System > Asset Categories.

Note for people who have never worked on FA before:.

This is a bit of trick form, so be watchful on this one if you have never

worked on FA before. Query any major-minor category combination.

Keep the cursor where it is shown in the screenshot below and press the

down key. You will find that the books keep on changing for the same

category combination. So here you define the link between category

combination and the Asset Book. (Just click on new button)

If you want to add the category combination, then keep your cursor in

the Category and click on the new button.

23

Once all the required category combinations are assigned to the Asset

books, I am all set to enter the assets as well.

Steps for creation of Assets using AP (Mass Additions)

1] Enter Invoices in AP, ensure that the account that you enter in the

invoice distribution, is the Asset Clearing account or in distributions window

the flag ‘Track as Asset’ is enabled (Note that this flag is hidden, so you

need to ‘show’ the field)

2] In AP -> Run Request Set: Mass Additions Create

3] In AP -> Run Request: Payables Transfer to General Ledger

4] In GL, Post transasctions

5] In FA, go to Mass Additions> Prepare Mass Additions, enter the details

for the asset, mainly the category, the assignment (employee, expense

account and location)

6] Change the queue to POST from NEW

7] In FA, go to Mass Additions> Post Mass Additions (Note that this can be

run only in the periods in which depreciation has not been run)

24

Accounts Receivables (AR) Basic Setups

29] I create Receivables Responsibility for my user

30] I assign the user to my responsibility

25

31] I assign Operating Unit to the AR responsibility.

MO: Operating Unit Profile Option

32] Add OM Menu in AR Menu to simplify the things.

Navigation: System Administrator : Application > Menu

Navigate to OM > Setup> System Parameters > Values form in the AR

responsibility

26

33] If I had not defined the Inventory Organization classification then the

next step would not have worked for me. So far this step, it is important

that Inventory Organization is setup.

The screenshot of my IO definition are as follows:

34] Now in AR responsibility only go to Setup > System > System Options

27

28

35] Saving the setup will trigger some requests, “Flexfield PL/SQL Pre-

Processor”

36] Once these requests are finished. Please submit one more request

from System Administrator responsibility

29

37] After that, I go back to Receivable Responsibility. Open Transactions

form. Now I will not see any error. Before replicating seed data if you open

this Form it shows an error.

38] Before entering transactions ensure that the Periods are Open both in

AR and GL.

Go to Control > Accounting > Open / Close Periods

30

Now I will create Customer

Navigation: Receivable Responsibility: Customers > Standard

39] For creating customer I need to create the customer address as well

run-time

40] After that create remit-to addresses

31

41] Create a Tax Code

Setup > Tax

42] Now enter transaction

32

43] Now transfer to GL

Interface > General Ledger > Submit single request.

44] That will trigger a lot of requests

33

45] Now I go to GL … Enter > Journals form it will show the transaction

I can drilldown from GL to AR and verify that it is the same invoice.

References

•

General Ledger User Guide

•

Payables User Guide

•

Receivables User Guide

•

Fixed Assets User Guide

DISCLAIMER:

The information in this article is the opinion of the author, not of Oracle Corporation. Any

content, materials, information or software downloaded or otherwise obtained through

the use of the site is done at your own discretion and risk. Oracle shall have no

responsibility for any damage to your computer system or loss of data that results from

the download of any content, materials, information or software.