[YEAR 2019]

USER MANUAL
FOR
PROCUREMENT CYCLE

FOR
 USER MANUAL- Procurement Cycle

DOCUMENT RELEASE DETAILS

Prepared by Designation Date Signature

1 Rajiv Sarkar

Reviewed By Designation Date Signature

1 N.K.Kumbhakar

Approved By Designation Date Signature

1

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DOCUMENT REVISION DETAILS

Document Name: PROCUREMENT CYCLE USER MANUAL
Version No.: 1.0

Revision Page Description Action Taken

No.

No. Date Topic

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Table of Contents
1. INTRODUCTION ..................................................................................................................................... 4
2. ORGANIZATION STRUCTURE ........................................................................................................... 6
3. PROCUREMENT PROCESS OVERVIEW ......................................................................................... 8
4. PROCUREMENT CYCLE STEPS ...................................................................................................... 11
5. MASTER DATA MANAGEMENT ....................................................................................................... 12
a. Material Master Maintenance............................................................................................................ 12
b. Vendor Master Maintenance ............................................................................................................. 38
6. MATERIAL PROCUREMENT CYCLE .............................................................................................. 55
a. Purchase Requisition ......................................................................................................................... 55
b. Purchase Order .................................................................................................................................... 70
c. Creation of Contract ........................................................................................................................... 91
d. Goods Receipt .................................................................................................................................... 102
7. SERVICE PROCUREMENT CYCLE ............................................................................................... 107
a. Service Purchase Requisition ........................................................................................................ 107
b. Service Purchase Order ................................................................................................................... 119
c. Service Entry ...................................................................................................................................... 130
8. GOODS & SERVICE TAX(GST) ...................................................................................................... 137
a. GST Related Oragnisational Change ........................................................................................... 137
b. GST Related Master Data Change ................................................................................................. 138
c. GST Related Process Change ........................................................................................................ 141

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1. INTRODUCTION
SAP ERP
 It is a packaged software integrates all business functionalities together.
 It saves time and cost in the process

SAP MM
 Is a part of logistics area and helps to manage procurement activity of an organization
 supports all aspects of material management planning and control
 Other logistics module like Sales and distribution, Production Planning, Plant maintenance,
Warehouse management are all obsessed with MM .

Features
 SAP MM deals with material management and inventory management
 SAP MM ensures there is never a shortage of materials or any gaps in the supply chain
process
 It deals with the Procurement Process, Master Data (Material & Vendor Master) , Account
 Determination & Valuation of Material, Inventory Management, Invoice Verification,
Material
 Requirement Planning etc.

Types of Basic Procurement:

1. External vs Internal Procurement
2. Procurement for Stock vs Consumption

External It is the process of procuring goods or services from external

Procurement vendors. There are 3 basic forms of external procurement generally
supported by the Purchasing component of IT system.
 One time orders are generally used for material and services
that are ordered irregularly.
 Longer-term contracts with the subsequent issue of release
orders - For materials that are being ordered regularly and in
large quantities, we can negotiate deal with the vendor seller
for pricing or conditions & record then in a contract. In a
contract you also specify the validity date.
 Longer-term scheduling agreements and delivery schedules -

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If a material is ordered on an everyday basis and is to be

delivered according to an exact time schedule, then you set
up a scheduling agreement.
Internal Large corporate organizations may own multiple separate
Procurement businesses or companies. Internal Procurement is process of getting
material and services from among identical company. So, each of
these companies maintains a complete bookkeeping system with
separate Balance, Profit & Loss Statements so that when trade
occurs between them it will be recorded.

Procurement for A stock material is a material that is kept in stock. These materials are kept
Stock in stock once received from the vendor. The stock of this material keeps
on increasing or decreasing based on amount of the quantity received or
issued. To order a material for stock, the material must have a master
record within the system.

Procurement for When procurement is for direct consumption i.e. it will be consumed as
Direct soon as it is received, the user should specify the consumption
Consumption purpose. To order a material for consumption, the material may have a
master record within the system.

Special Procurement:
Special stocks are stocks that are managed differently as these stocks did not belong to company
and these are being kept at some particular location. Special procurement and special stocks
types are divided into the subsequent areas.
Consignment Stocks Material that is available at our store premises, however it still belongs to
the vendor seller/Owner of the material. If you utilize the material from
consignment stocks, then you have to pay to the vendor.
Third-party In third-party processing, a company passes on a sales order to associate
processing external vendor seller who sends the goods directly to the customer. The
sales order is not processed by your company, however by the vendor
seller. Third-party items can be entered in purchase requisitions, purchase
orders and sales orders.
Pipeline handling In pipeline handling, the company needs not to order or store the
material involved. It is obtainable as and when required via a pipeline for
example, oil or water, or another style of cable such as electricity. The
material that is consumed is settled with the vendor seller on a regular
basis.
Returnable The company orders goods from a vendor seller. The goods are delivered
Transport Stock with returnable transport packaging pallets, containers that belongs to
the vendor seller and is stored on the customer premises until they return
it to the company.
Subcontracting The vendor the subcontractor receives components from the ordering
party with the help of which it produces a product. The product is ordered

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by your company through a purchase order. The components required by

the vendor seller to manufacture the ordered product are listed in the
purchase order and provided to the subcontractor.
Stock transfer using Goods are procured and supplied within a company. One plant order the
stock transport goods internally from another plant receiving plant/issuing plant. The
order goods are procured with a special type of purchase order - the stock
transport order. You'll be able to request and monitor the transfer of
goods with a stock transport order.

2. ORGANIZATION STRUCTURE
Organization structure is the framework of company according to which business is conducted
in every company .Organization structure consists of many levels which have relationship to
one or another. Organization structure is also referred as enterprise structure. Enterprise
structure is made up of many organizational units having relationship with one another.

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Brief Description of various organization units:

Client The fundamental explanation of Client is as follows: Client is a

commercial organizational unit in R/3 system. It has its own set of
master data with independent table sets. According to hierarchy,
Client is at highest level in SAP system. Data that is maintained at
client level is valid for all organizational levels.
Company Code The fundamental explanation of Company Code is as follows:
Within Client, Company code is the independent accounting unit.
It is a legal entity that has its own profit, loss and balance
statement.
It is the smallest unit in organization for which a complete
independent account set can be replicated.
Plant The fundamental explanation of Plant is as follows:
Plant is an organizational unit within a company where activities
take place. A plant will produce goods and makes goods available
for the company.It is unit having manufacturing facility,
warehouse distribution center or a regional sales office within
logistic. It subdivides an enterprise in different aspects.
Storage Location The fundamental explanation of Storage Location is as follows:
Storage location is an organizational unit which actually
differentiates between different material stocks in a Plant. Storage
location is a place where stock is kept physically. Plant can be
consisting of multiple storage location. All data is stored at storage
location level for a particular storage location.
Purchasing The fundamental explanation of Purchasing Organization is as
Organization follows:
Purchasing Organization is an organizational unit under company
or plant which is responsible for procurement activities according
to requirements. It is responsible for external Procurement.
Purchasing organization can be at client level i.e. centralized
purchasing organization. Purchasing organization can be at
company or plant level i.e. company specific or plant specific
Different forms of purchasing can be described as follows:
Centralized Purchasing - Purchasing organization is not assigned
to any company code it procures for all company codes belonging
to different client.
Company specific Purchasing - Purchasing organization is
assigned to a company code only, Plant belonging to the company
code
can purchase through this Purchasing organization.
Plant specific Purchasing - Purchasing organization is assigned
to a Plant, only this specific Plant can purchase through this
Purchasing organization.
Purchasing Group The fundamental explanation of Purchasing Group is as follows:
Purchasing group is an organizational unit which is responsible for
everyday procurement activities within an organization.
It is a buyer or group of buyer responsible for procurement

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activities in a purchasing organization.

3. PROCUREMENT PROCESS OVERVIEW

Procurement Cycle
 Every organization acquires material or services to complete its business needs. The
process of buying materials and obtaining services from vendors or dealers is procurement.
Procurement process should be done in such a way that it is ordered in correct quantity,
with a proper value at the proper time. It is subdivided into following parts:

 Basic Procurement
 Special Procurement

Basic Procurement

 It is a process of acquiring goods or services in the right amount, at the right price at the
right time.So the method of getting services, supplies, and equipment from a vendor seller,
at the right price at the right time in right amount is termed as Procurement. The quality of
procurement is attempting to “get the right balance”, consider the following example:

 Organizations try and keep inventory levels at a minimum due to the prices associated with
high levels of inventory; however at identical time it is very expensive to prevent
production due to shortages in raw materials.

 Getting the minimum price for a product or service is often necessary, however the balance
between product availability, quality, and vendor seller relations is also necessary.

Procurement Lifecycle

Most modern organizations procurement follow some sequential steps which are described
below:

Requirement and Information Gathering

Procurement process starts with gathering information about product and its quantity. Then for
required products and services, it is necessary to look for suppliers who can satisfy the
requirements.

Supplier Contact

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After gathering requirements one will look for the suppliers who can fulfil the requirements.
Based on that quotation request or information request can be made to suppliers or direct
contact can be made with them.

Background Review

Once the supplier is known product/service quality is checked, and any necessities for services

such as installation, warranty and its maintenance are investigated. Some samples of the
products can be obtained for quality examination.

Negotiation

Some negotiations with suppliers is made regarding price, availability and delivery schedule of
the products/services. After this a contract is signed that is a binding legal document between
supplier and ordering party. A contract will include all necessary information like price and
quantity of material, delivery date, etc.

Order fulfilment

Ordered material will be shipped, delivered to the ordering party and supplier is paid
accordingly. Training and Installation of product or services may also be included.

Consumption, Maintenance and Disposal

As the products/service is consumed the performance of the products or services is evaluated

and any follow up service support if required is analysed.

Contract Renewal

Once the product or services are consumed or contract expires and needs to be renewed, or the
product or service is to be re-ordered, company experience with vendors and service provider is

reviewed. If the products or services are to be re-ordered, the company decides whether to
order from previous supplier or think about new suppliers.

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Basic Procurement Activities

Basic Procurement activities flow is given in the following image:

Determination of What material/services are

Requirements required ?

The form or electronic transmission used to

Requisition
inform the purchasing department. That the
item or services are needed for a business
purpose

When requisition is approved

Purchase Order
purchase order is created

Goods
Received/Invoice The material is received. Condition and quality
Received are verified. The invoice is received from
Vendor

Invoice
Verification/Vendor
Brief introduction of the procurement activities: Reconciliation of the invoice and PO
Payment is accomplished. The vendor is paid.

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Procurement activities Description

Determination of It is the logical subdivision where it is determined that
requirement what material or services are required to company, and
which supplier can fulfill the requirement.

Creating Purchase It is the phase in which purchasing department is informed

Requisition about the requirement of items or services required for
business purpose. A requisition is a internal document.
Creating Purchase It is the phase when order is created from requisition and it
Order is approved and assigned to a supplier.

Goods receipt/ It is the phase in which the material is received by the

Invoice Received company and the condition and quality are verified. In this
phase Invoice is received from the vendor seller.
Invoice verification/ It is the phase in which the vendor seller is paid from the
Vendor Payment company and reconciliation of the invoice.

4. PROCUREMENT CYCLE STEPS

Procurement Cycle steps have been organised into the following three sections.

a) Master Data Management

b) Material Procurement Cycle
c) Service Procurement Cycle

Each of the above is elaborated into detailed steps as below.

A. Master Data Management

The following key master data required to run the procurement process are explained.
 Material Master
 Vendor Master
B. Material Procurement Cycle
The following basic steps of procurement cycle are elaborated
 Purchase Requisition Creation/ Change & Display
 Purchase Order Creation Change and Display
 Goods Receipt
C. Service Procurement Cycle
 Service Requisition Creation/ Change & Display
 Service Order Creation Change and Display
 Service Entry

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5. MASTER DATA MANAGEMENT

a. Material Master Maintenance

a) Creation of Material Master. T-code-MM01

Ster 1: Enter the T-code or go to the Menu path

Step 2: Select the Industry Sector and Material type. Press Enter

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Step 3: Select the relevant views and press Enter.

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Step 4: Enter the Plant and Storage Location. Press Enter

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Step 5: Enter the relevant field data i.e. BASIC DATA-Description, Base unit of Measure, Material group,
External material group and press Enter.

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PURCHASING- Purchasing Group, Tax indicator for material, GR processing time and press Enter

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Foreign Trade Import : Enter Control Code(HSN), Press Enter

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Purchase Order Text: Enter the Long Description of that Material and select the next View.

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MRP 1: Enter MRP group, MRP type, MRP controller, Lot Size and press Enter.

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MRP 2: Enter Planned Delivery time, Scheduling Margin Key and press Enter

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Planned delivery time is 0 for ext. procured material

MRP 3: Enter the Availability Check.

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Plant Data/ Storage Location 1: Period indicator for SLED

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Plant Data/Storage Location 2: enter the Profit Center

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Accounting 1: Valuation Category, Valuation Class, Price Control, Price(Standard/ Moving) and press
Enter

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Step 6: Click on to save .

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Material is created.

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Change of Material Master. T-code:MM02

Step 1:Enter the t-code or go to the menu path

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Step 2: Enter the Material No. and press Enter

Step3 : Select the View/views to change the field data.

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Step 4: Enter the relevant Plant and press Enter.

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Step 5: Do the necessary changes in relevant field .

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Step 6: Click on Button to save the Change.

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C) Display Material Master: T-code: MM03

Step 1: Enter the T-code or go to menu path

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Step 2: Enter the Material No. and Press Enter.

Step 3: Select the view/views has to be display and press Enter .

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Step4: Enter the Plant and press Enter

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b. Vendor Master Maintenance

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A) Creation of Vendor Master Data. T-code: XK01

Step 1: Enter the T-code or go to the menu path

Step 2: Enter Company code, Purchasing Organization, Account group and press Enter

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Step 3: Enter Title, Name, Search term ½, Street/House number, Postal Code/City, Country, Region,
Telephone, Fax, E-Mail and press Enter

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Step 4: Enter Tax Number 1, Tax Number 3, Industry

Step 5: Enter Country, Bank key, Bank Account,

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Step 6: Enter Recon. Account, Cash mgmnt group, Release group, Certification date and press Enter

Step 7: Enter Payment Terms, Payment methods, House Bank, Check double inv.

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Step 8: Enter Account Statement and press Enter

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Step 9: Enter Order currency, Terms of payment, Incoterms, Schema Group, Vendor, GR based inv.
Verification .

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Step 10: Click on to crate Vendor master data.

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Vendor has been created for company code GRSE Purchasing Org. GRSE.

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B) Change Vendor master Data. T-code:XK02

Step 1: Enter the T-code or go to menu path.

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Step 2: Enter Vendor no., Company code, Purchase Org. and select the relevant view/views. Press
Enter .

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Step 3: Click on to save the Changes.

C) Display Vendor master Data. T-code:XK03

Step 1: Enter T-Code or go to Menu path.

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Step 2: Enter Vendor, Company Code, Purchase Organization and select the Views and press
Enter.

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Step 3: Do the necessary Changes in Relevant Field

6. MATERIAL PROCUREMENT CYCLE

a. Purchase Requisition
a) Creation of Purchase Requisition: Tcode –ME51N

1. Step 1: Enter the tcode or go to the below menu:

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2. Step 2 : Press enter after entering tcode or double click on the selected menu

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3. Step 3: Enter Documet type, Text at Header note, material , quantity, plant, purchasing group,
requested by , tracking no, valuation price

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4. Click on the button to check if the document is complete.

5. Now click on button, the purchase requisition will be created .

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b) Change purchase requisition : Tcode ME52N

1. Step 1: Enter the tcode or go to the below menu:

2. Step 2: Press enter or double click the selected menu. Then click on the button, enter the
purchase requisition you want to change

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Step 3 : Press enter

Step 4: Change the value of the field you want to change (for example quantity)

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Step 5: Click on button. The purchase requisition is changed.

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C) Display Purchase requisition. T-code- ME53N

Step 1: Enter the T-code or go to the below menu path.

3. Step 2 : Press enter after entering t-code or double click on the selected menu

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d) Print Purchase requisition. T-code: ZMM_INDENT

Step1: Enter the T-code

Step2: Enter the Purchase requisition No. and click on button.

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Step3: Go to the menu List>Print

Step4: Select the Output Device and click on

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e) Release of Purchase Requisition. T-code: ME54N

Step 1: Enter the T-code or go to the menu path

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Step 2: Click on button and enter the relevant Purchase Requisition no. and Press Enter.

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Step 3: Click on button of relevant Release Level to release that document for 1st level

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Step 4: Click on button of relevant Release Level to release that document for 2nd level

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Step 5: click on button to release this document for further use.

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b. Purchase Order
7. CREATION OF PURCHASE ORDER. T-CODE:ME21N
Step 1: Enter the t-code or go to the menu path

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Step 2: Select the Relevant Document Type .

Step 3: Enter Vendor, Header Texts under Test tab, Purchase org, Purchasing group, Company code under
Org. Data tab

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Step 4: Click on “Document Overview on”

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Step 5: Select Purchase Requition

Step 6: enter the Purchase requisition no. in the relevant field. Press button

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Step 7: select the Purchase requisition no. and click on button to Adopt the Purchase requisition in
Purchase Order.

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Step8: Go to Condition Tab in Item Details.

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Step9: Enter the Unit price of the material

Step 10: select the other condition type (Freight, Discount etc.) by clicking .

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Step 11: Enter the Value of respective Conditions.

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Step 12: go to the invoice tab and enter the Tax code

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Step 13: Click on Taxes to see the Tax calculation.

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Step 14: Click on button to check the PO. If no message issued during Check then Click on to save
the PO.

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b) Change of Purchase Order. T-code- ME22N

Step 1: enter the t-code or go to the menu path

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Step 2: click on to put the PO no.

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Step 3: DO THE NECESSARY CHANGES AND CLICK ON BUTTON.

C) DISPLAY OF PURCHASE ORDER. T-code: ME23N

Step 1: ENTER THE T-CODE OR GO TO THE MENU PATH

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Step 2: click on to put the PO no. and press enter.

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D) Print of Purchase Order.

Step 1: Enter the MM03 and enter and click on button and enter the PO no. press enter.

Step 2: click on Print Overview

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Step 3: enter the output device and click on Print preview.

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Release of Purchase Order:

c) Release of Purchase Order: Tcode –ME29N

6. Step 1: Enter the tcode or go to the below menu path:

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7. Step 2: Click on the Release Field (L0) under Release Option column then click
on the (L3) M for Higher Authority Release and save the document.

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8. Step 3: P.O Released for both P.O creator and Manager.

4. Step 4 : Save the PO.

c. Creation of Contract

A) CREATION OF CONTRACT. T-CODE:ME31K

STEP 1: Enter T-code or go to menu path

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Step 2: Enter the Vendor, Agreement type (value/Quantity), Agreement Date, Purchase org, Purchasing
group and press Enter

Step 3: Enter Validity Start / End date, Payment terms and Incoterms.

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Step 4: Click on button and enter the Material, Target Quantity, Net Price, Plant

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Step 5: Click on

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b) Change of Contract. T-code: ME32K

Step 1: Enter the T-code or go to the menu path

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Step 2: Enter the Contract Agreement No. and press Enter.

Step 3: Do the necessary changes in the relevant field (exmpl: change in Qty). and click on button .

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Step 4: Click on to save the changes.

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Quantity Contract Changed.

B) DISPLAY OF CONTRACT. T-CODE: ME33K

Step 1: Enter the T-code or go to the menu path.

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Step 2: Enter the Contract Agreement no. and press Enter.

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d. Goods Receipt

a) Creation of Goods Receipt: Tcode –MIGO

1. Step 1: Enter the tcode or go to the below menu path:

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2. Step 2: Select Good Receipt, Purchase Order from the drop down give
Purchase Order Number, Document Date, Posting Date, Bill of Landing and Tick
the Check Button of Individual Slip press ENTER

3. Step 3: Give Storage Location, Good Recipient, Unloading Point.

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4. Step 4: Put the Actual Quantity Received from the Vendor or Party in the Qty in
Delivery Note Field and Tick the Item Ok

5. Step 5: Give the Valuation Type

6. Step 6: Click on the Check option and Post the document

A new MIGO document is created, message shown below.

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7. Step: 7 Go to Display Purchase Order and check the Good Receipt Document /
Material Document is visible under tab Purchase Order History.

8. Step: 8 Select Display and Material Document option from the dropdown to
display the Good Receipt Document.

Bill Tracking System

1. BTS: Tcode –ZBTSD01

1. Step 1: Enter the tcode: Give BTS Number press ENTER

2. Step: 2 Here we get all the details of BTS related to Vendor Bill Order.

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3. Step: 3 Give Remarks, Tick the Good Receipt No. if it contains Material and
Service Entry Sheet No. if it contains the service.

4. Step:4 i). Click on the button if you want to forward the

respective dept.
ii). Click on the button to certify the Invoice.

iii). Click on the button for cancel or rejection.

7. SERVICE PROCUREMENT CYCLE

a. Service Purchase Requisition

Service Purchase Requisition:

d) Creation of Service Purchase Requisition: Tcode –ME51N

1. Step 1: Enter the tcode or go to the below menu path:

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2. Step 2: After the enter the tcode or double click on the selected menu Purchase
Requisition screen appears.

3). Step 3: Enter the Document Type, Header Note, Account Assignment Catg. (K),
Item Category (D) Short Text, Delivery Date,Material Group, Plant, Purchase
Group, Requested By, Tracking No. press Enter then automatically a below Line
Item will open.

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4). Step 4: In the below Line Item we have to fill the Service No. Short text, Quantity and
Gross Price.

5. Step 5: In the Account Assignment Tab we have to give G/L Account Number,
Cost Center & WBS Element Number (if necessary).

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6. Step 6: Click on the check button to check and save the Service P.R,
a new document number will be created.

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b)Change of Service Purchase Requisition: Tcode –ME52N

1). Step 1: Enter the tcode or go to the below menu path:

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2). Step 2 : Click on the Other Purchase Requisition tools put the Purchase
Requisition Number/Document Number Press Enter

3). Step 3 : Change the Service Quantity of the PR (As per the requirement).

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4) Step 4: Click on the save button to save the Service P.R

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c). Display of Service Purchase Requisition: Tcode –ME53N

1). Step 1: Enter the tcode or go to the below menu path:

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2. Step 2: Click on the Other Purchase Requisition tools put the Purchase
Requisition Number/Document Number Press Enter for display

f) Print Purchase requisition. T-code: ZMM_INDENT

1). Step1: Enter the T-code

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Step2: Enter the Purchase requisition No. and click on button.

Step3: Go to the menu List>Print

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Step4: Select the Output Device and click on

b. Service Purchase Order

Service Purchase Order:

b) Creation of Purchase Order: Tcode –ME21N

1. Step 1: Enter the tcode or go to the below menu path:

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2. Step 2: After enter the tcode or double click on the selected menu a new screen
appear of Purchase Order.

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3. Step 3: Select the Document Type give Short Text

4. Step 4: Give Purchase Organization number, Purchase Group and Company

Code under Org. Data Tab

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5. Step 5: Give the Purchase Requisition Number press ENTER then all details will
be fetch from the Purchase Requisition in to the Purchase Order.

6. Step 6: Give Tax Code under Invoice Tab.

7. Step 7: In the below Line Item we can change the Conditions under Conditions
Tab.

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8. Step 8: Click on the check button to check the error and save the
Service P.O, a new document number will be created.

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b) Change of Purchase Order: Tcode –ME22N

1). Step 1: Enter the tcode or go to the below menu path:

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2). Step 2 : Click on the Other Purchase Order option put the Purchase Order
Number Press Enter

3). Step 3 : Change the Service Quantity of the PO (As per the requirement).

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4) Step 4: Click on the save button to save the P.O

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c). Display of Purchase Order: Tcode –ME23N

1). Step 1: Enter the tcode or go to the below menu path:

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2. Step 2: Click on the Other Purchase Order option put the Purchase Order
Number Press Enter for Display

g) Print Purchase Order.

1). Step1: Click on the Print Preview Option

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2). Step2: Enter the Print Preview button.

3). Step3: Go to the menu Text>Print

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c. Service Entry

Service Entry Sheet:

c) Creation of Service Entry Sheet: Tcode –ML81N

2. Step 1: Enter the tcode or go to the below menu path:

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3. Step :2 Click on the Other Purchase Order option give the P.O Number press
ENTER

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4. Step :3 Click on the Create New option

5. Step :4 Give Short Text and Long Text under Long Txt Tab menu

6. Step :5 Give Quality of Service and Service Timeline.

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7. Step :6 Give Completion Date under Addnl Data tab

8. Step :7 Give Document Date and Posting Date under Accept. Data Tab.

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9. Step :8 Give Service Location, Period, Responsible Internally (Company

Person) and Externally (Vendor Name).

10. Step :9 Click on the Service Sel. Option to fetch the Service Line item.

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11. Step :10 Click on the Tick Button

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12. Step :11 A new screen will appear then select the Line item and click on the
Services option on the top left of the screen press ENTER

13. Step :12 Click the Acceptance button and save the Service Entry
Sheet. See the Green Signal which means this Entry Sheet is
Approved.

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14. Step :13 Go to Display Purchase Order and check the Service Entry sheet is
visible under tab Purchase Order History.

8. GOODS & SERVICE TAX(GST)

The new indirect taxation regime in India from July 2019, (GST) requires the businesses to
register in every state of establishment. The registration number obtained upon registration is
called as GSTIN (GST Identification Number).
The GSTINs obtained by the organization must be maintained in the system, along with their
registered addresses.

a. GST Related Oragnisational Change

In every (A/R and A/P) transaction relevant to tax, the GSTIN of the organization must be
captured in the transaction. Periodically, the GST returns are to be submitted to the
Government of India, which must contain the relevant GSTIN. GST returns are to be
submitted for each GSTIN separately
Government of India will be able to identify the organization only through its GSTIN
To facilitate this the Business Place feature needs to be activated. For every GSTIN
registration in a company, a business place needs to be created in SAP and assigned to the
corresponding company code.

In order to ensure that every A/R and A/P transaction (triggered from Materials Management
and Sales & Distribution) captures the GSTIN of the organization, the business place must
be assigned to Plant

Multiple plants in one state can be assigned to one Business Place

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b. GST Related Master Data Change

Material Master
In Material Master we have to enter “0” in the field “Tax ind. F. material” in the Purchasing
Tab which indicates that the material is taxable under GST.

After that in the tab “Foreign trade import” we will enter the HSN code of that material.

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SERVICE MASTER
Similarly, while creating service master in Tcode AC03, in the tax indicator field we
will enter “0” which means taxable under GST and in the field “Tax Tariff Code” we
will enter the relevant SAC code for that particular service.

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VENDOR MASTER

While creating Vendor in Tcode XK01, we will select the CIN details tab and there in
the GST details tab we will select “GST VEN class” as blank which means that the
vendor is registered.

Then in tax category “the TAX number 3” field we will enter the GST number of the vendor.

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c. GST Related Process Change

While creating PO we will enter the relevant tax code in the Invoice tab of Item details, and
in the India tab the control code of the material will appear.

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While creating Invoice in Tcode “MIRO”. After GST we will have to enter the Business
place and Section in Basic Data tab under “Bus.place/sectn”.

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