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Goods and service tax commonly refereed as GST in India, is a compliance companies must follow properly. So, what is goods and service tax and how it is applicable in Treasury Transaction. In this blog we will learn, how the Treasury and risk management module cope with the GST Changes.

Complete GST information can be found in the below Link.


When coming to Treasury, we generally Deals with IGST, CGST and SGST .so we'll discuss briefly on these 3 taxes on treasury management perspective. for any instrument mainly money market instruments and security instruments require tax compliances like if you're paying your bank charges the CGST, SGST &  IGST is applicable based on the scenario. In our first example we'll take bank charges with SGST & CGST.

So, the accounting entries in case of Bank Charges Looks like below.

Bank Charges A/c             Dr

SGST Receivable             Dr

CGST Receivable             Dr

To Customer.     Cr


In the case of IGST, Accounting entries are as per below.

Bank Charges A/c             Dr

IGST Receivable               Dr

To Customer       Cr


Let’s take an Interest Rate instrument into Example.


As usual we need to do the basic configuration of Product type – transaction type-flow type – update type and it’s accounting.

We have configured here the flow type Bank Charges as below.

In the same line we must configure, another three flow types for CGST, SGST & IGST.

Assign flow types to Update Type:

Please remember the update type as its important in TBB1.

Next in the assignment of GL A/c you can assignee the tax GLs or Treasury Clearing A/c as its not important. The tax GLs will be picked based on the FI tax Configuration.

Note: I have not configured here as Derived flows as the tax types are different business place wise. In derived flows we can’t set it business wise as like in SAP FI Module.

Now let’s do a transaction to see the effect of the transaction.

User Testing.

I have taken one interest rate instrument in Borrowings scenario as an example for the tax calculations.

In the Other flows tab I have taken two expenses flow (Bank Charges & Processing Fees) and added SGST & CGST on Bank Charges, where as charged IGST on Processing Fees.

Please note the tax amount will not be calculated in System by Tax code, so you must enter the tax amount by calculating manually.  Also, the tax flow is always calculated based on the customer, so please make sure the customer posting in Payment details tab as below.

Now we must maintain AT210 Table.

Please remember to get the tax codes from SAP FI & its sequence. You can see, G3, JIS is maintained where the tax code is G3 & Sequence is JIS. This information you can get from OBYZ.

This table need to be maintained with Product type and business partner as maintained above.

Now let’s run TBB1 in test mode.

TBB1 (Test Run)

You can see there are two different entries for Bank charges and Processing fees. Also, you can mark the tax flows got clubbed along with the expenses flows. This is because of AT210 table, where we have maintained the base update type as the expenses update type and dependent update types are tax update types.

You can mark here instead of tax flows, Treasury Clearing A/c are getting picked. I have configured it deliberately to check if the Tax GL are getting picked at the of actual run.

Now let’s run TBB1 in the in real.

TBB1 (Actual Run)

Now you can see the tax flows are getting clubbed and posted and the tax codes are picked along with tax GL based on the tax configuration.

You can see the tax information in the document itself.

Please ignore the tax amount here as its not according to 9%. I have made it deliberately to show you, that treasury will not calculate tax, it will capture the tax amount only. So in the Other flow tab, you need to calculate the tax and enter the amount.


This is a good functionality provided by SAP, so that the tax reposting can be done in a proper way for Treasury & Risk Management module.

Below Enhancement from SAP is expected in this scenario, so that the treasury and risk management module will be more organized in tax matter.

  1. Multiple customer lines are getting generated even after clubbing the entries, where as in the case of the withholding tax, customer line is clubbed

  2. Tax calculation should happen on tax code level like withholding tax, as the manual entry is prone to error.

Thanks for reading.
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