The India Localization features in Microsoft Dynamics 365 Business Central will be available from April 2021 and include GST, TDS, TCS, and Voucher Interface to meet local financial and legal requirements.
Ever since Microsoft Dynamics 365 Business Central was launched in April 2018, there has been a wait for India localization – adaptation of this business management software to meet India’s requirements in terms of functionality and legality. With the 2020 release wave 2 launched on October 1, 2020, this wait came to an end. While this was purely in public preview, the general availability is expected to be available on April 13 this year with the 2021 release wave 1.
While this new release will have several new features launched from April 2021 through to September 2021, here is a look at those pertaining to India localization:
GST
What is GST: Goods and Services Tax (GST) is an indirect tax used in India on the supply of goods and services. This destination-based tax is levied at all stages, from manufacture up to final consumption. It is hence collected on both inward and outward supplies and requires both the customer and the seller to file their returns and pay this tax or take credit of taxes paid at previous stages as setoff. Briefly, only value addition is taxed, and the burden of tax is to be borne by the final consumer.
India localization: Microsoft Dynamics 365 Business Central has included a GST feature to Indian Localization. This will help companies to calculate and record GST amounts on inward and outward supplies. Such GST collected entries will be stored centrally in GST ledger entries. In addition, there will be scope for GST credit adjustments and GST settlements. Users will also be able to export GST reports from their systems across different formats.
Scope of functionality:
- Tax Accounting Period
- State codes and multiple GST registration 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 code 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 GST hierarchy for the settlement
- GST settlement as per the registration number and period
- Generation of GSTR3B
- GST reconciliation for input credit
TDS and TCS
What is TDS: Tax Deducted at Source (TDS) was introduced with an aim to collect tax from the very source of income. Any registered person acquiring specified services mentioned under the Income Tax Act is required to deduct tax (TDS) at the time of invoice or payment, whichever is earlier for such transaction. Examples of incomes subjected to TDS are salary, interest, dividend, interest on securities, winnings from lottery, horse races, commission and brokerage, rent, and payments to non-residents.
What is TCS: Tax Collected at Source (TCS) is a tax collection method which follows the principle – ‘You pay while you earn’. It requires the receiver or seller to collect tax at source and remit it to the Government. The purpose of this provision is to eliminate tax evasion in certain trades.
India localization: Microsoft Dynamics 365 Business Central has included both the TDS and TCS features to the Indian Localization. It offers functionality to deduct TDS/TCS during payments and invoice posting thereby allowing for these taxes to be recorded to the respective ledger. Microsoft also allows for configuration of different types of Income Tax sections for TDS/TCS along with rates, in addition to offering TDS and TCS challan registers and the option to pay TDS/TCS for updating payment details in the system.
Scope of functionality:
- Maintaining company TAN and PAN numbers
- Provision of assessee type to company/customer and vendor
- Define concessional code and attach to 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 invoice 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
What are vouchers: As per Indian business requirements, there are several vouchers required to record day-to-day transactions. For example:
- Journal Voucher
- Bank Receipt Voucher
- Bank Payment Voucher
- Cash Receipt Voucher
- Cash Payment Voucher
- Contra Voucher
India localization: Microsoft Dynamics 365 Business Central has included the Voucher Interface feature to the Indian Localization. This allows creating different journals for bank payment, cash payment, cash receipt, bank receipt, and contra vouchers with separate voucher series configuration options.
It further offers vouchers for posting payments, receipts, expenses, invoices, and adjustments which help posting respective entries. It includes India-specific reports like Day book, Bank book, Cash book, Ledger, Voucher register, and GST-related reports which will help in additional reporting and voucher printing.
Scope of functionality:
- Set up general journal template with various fields
- Set up general journal batch with various fields
- Voucher setup on company information
- Voucher setup on location
- Post general ledger entries for each voucher
- Provide opening balances for – GST Credit, GST Liability, GST TDS Credit, and GST TCS Credit
- Select TDS and TCS sub-ledger entries by applying filters like companies/non-companies, etc.
In our future series, we will bring in more details related to the India localization. Do stay tuned.
In the meantime, if you are interested to get in touch with our experts to know how you can leverage these new features to your advantage, do write into info@saglobal.com or visit us to learn more about Microsoft Dynamics 365 Business Central.
Tags:
