Bid Farewell to Tax Management Challenges with GST Setup in Business Central

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Setting up Goods and Service Tax

Summary:  This article throws light on setting up GST in Microsoft Dynamics 365 Business Central. By leveraging the core capabilities of this business management software solution, businesses can easily overcome tax management issues and meet regulatory compliance without any hassle.

GST or Goods and Services Tax is a comprehensive and destination-based tax. It means any tax on goods and services or both and generally levied at all stages—Right from manufacture, supply, sales, and up to the final consumption with credit of taxes paid at previous stages; at the national level. Also, it subsumes indirect taxes like excise duty, countervailing duty, and service tax, and state levies like Value Added Tax, Octroi, Entry Tax, Luxury Tax, etc.

It is introduced in the economic landscape to integrate the entire country into a uniform tax rate and multiply economic growth holistically. Considering the challenges in tax management, Microsoft Dynamics 365 Business Central has included the GST feature in Indian localization.

For the most part, this India Localization features in Microsoft Dynamics 365 Business Central cover GST, TDS, TCS, and Voucher Interface. For the most part, Microsoft Dynamics GST India supports thriving businesses that meet local financial and legal requirements, and manage taxation with business automation. 

Setting Up Goods and Service Tax

GST has two types of setups— Automatic and Manual.

Automatic Setups are pre-configured with the help of Tax Engine, which includes

  • Tax Types
  • Component
  • Rate Setup
  • Attributes

Setting up Goods and Service Tax in Microsoft Dynamics 365 Business Central will assist business companies in calculating and recording GST amounts on inward and outward supplies. For the most part, such GST-collected entries are stored centrally in GST ledger entries. Additionally, you will find a scope for GST credit adjustments and GST settlements. Also, GST Settlement in Business Central helps you export GST reports from your systems across different formats.

Setting up Goods and Service Tax

Scope of Functionality

  • Tax Accounting Period
  • State codes and multiple GST registrations for company/customer/vendor
  • GST group and linking HSN/SAC code
  • GST posting profile to cater to all transaction scenarios
  • GST rate setup in combination with HSN/SAC and GST Group
  • Configuration of rate for GST components
  • Assign HSN/SAC and GST group codes to items
  • Define customer as registered, un-registered, export, deemed export
  • Define vendor as registered, un-registered, composite, import, exempted
  • Calculate GST on purchase/sale of items, services, charges, and fixed assets
  • Automatic calculation of GST for intrastate and interstate transactions
  • Compliant with GST reverse charges mechanism
  • Create a GST hierarchy for the settlement
  • GST settlement as per the registration number and period
  • Generation of GSTR3B
  • GST reconciliation for input credit
GST

TDS and TCS

TDS or Tax Deducted at Source was introduced to collect tax from the very source of income. Any registered person getting specified services mentioned under the Income Tax Act is required to deduct tax at the time of invoice or payment, whichever is earlier.

Incomes subjected to TDS

  • Salary
  • Interest
  • Dividend
  • Interest on Securities
  • Winnings from Lottery
  • Horse Races
  • Commission and Brokerage
  • Rent
  • Payments to Non-Residents
GST Setup in Dynamics 365 BC

TCS or Tax Collected at Source is a tax collection method to eliminate tax evasion in certain trades.  It simply says to pay while you earn; requires the receiver or seller to collect tax at source and remit it to the Government.

Interestingly, Microsoft Dynamics 365 Business Central has included both the TDS and TCS features in the Indian Localization. Businesses can set GST in Business Central and avail of inventive functionalities to deduct TDS/TCS during payments and invoice posting. This way, Business Central allows for these taxes to be recorded in the respective ledger.

Also, Microsoft allows for the configuration of different types of Income Tax sections for TDS/TCS along with rates, in addition to offering TDS and TCS challan registers. Additionally, GST and Navision or GST settlement in Business Central gives you an option to pay TDS/TCS for updating payment details in the system.

Scope of Functionality

  • Maintaining company TAN and PAN numbers
  • Provision of assessed type to company/customer and vendor
  • Define concessional code and attach it to the vendor
  • Define TDS/TCS sections as per the rule
  • Define TDS/TCS rates as per sections along with threshold limit
  • Define posting profile as per TDS/TCS types
  • Calculate TDS/TCS on invoices and payments as per the requirement along with GST
  • Generate TDS certificate for vendor
  • Settlement of TDS/TCS in addition to maintaining the register

Vouchers Interface

For the most part, Indian business requirements cover several vouchers to record day-to-day transactions.

  • Journal Voucher
  • Bank Receipt Voucher
  • Bank Payment Voucher
  • Cash Receipt Voucher
  • Cash Payment Voucher
  • Contra Voucher
Set up GST

Microsoft Dynamics 365 Business Central’s inclusion of the Voucher Interface feature to the Indian Localization allows the creation of different journals for bank payment, bank receipt, cash payment, cash receipt, and contra vouchers with an option to separately configure voucher series.

Furthermore, it provides vouchers for posting payments, receipts, expenses, invoices, and adjustments. This readily helps businesses in posting respective entries. These include India-specific reports like Day book, Bank book, Cash book, Ledger, Voucher register, and GST-related reports, assisting in additional reporting, and voucher printing.

By leveraging the core capabilities of Dynamics 365 Business Central, you can set up

  • GST Rates
  • GST Registration Number
  • Tax Accounting Period
  • GST Groups
  • GST Posting Setup
  • GST on Location
  • GST on General Ledger Setup
  • GST on Bank Account
  • GST on Service Cost
  • GST on Vendor or Vendor Order Address

Why NavisionIndia?

At NavisionIndia, you can connect to our skilled and accredited Business Central Consultants and make the best of their rich expertise, deep knowledge of the product, and years of experience across the robust digital transformation. Our experts’ research and deliveries are based on business and market trends and hence, setting up GST in Business Central or GST Settlement in Business Central under their aegis can help you save substantial business hours, resources, and of course the cost. 

For more details, write to us at info@navisionindia.in Or Schedule A Demo