GST Implementation for Malaysia

Localisation – GST Implementation for Malaysia

About Swisslog

Swisslog designs, develops and delivers best-in-class automation solutions for forward-thinking hospitals, warehouses and distribution centers. Swisslog is an inspiring global organization in more than 20 countries on four continents and customers in more than 50 countries. Headquartered in Buchs/Aarau, Switzerland, the Swisslog group is organized in two business areas, Healthcare Solutions (HCS) and Warehouse & Distribution Solutions (WDS). 

GST Malaysia:

The Goods and Services Tax (GST) is a value added tax in Malaysia. GST is levied on most transactions in the production process, but is refunded to all parties in the chain of production other than the final consumer.

GST Implementation challenges:

• Limited knowledge on Tax codes by business
• Short duration for GST implementation
• Migration of master data and transaction data from legacy system (MYOB) to SAP
• Fulfilling legal compliance
• Generation of FORM-03

Implementation methodology:

There are 12 work packages in the implementation

• GST Project plan: Project plan to implement GST.
• GST Business blueprint: Blueprint covering Tax codes and business scenarios
• GST Issue tracker: Tracks GST regulation, process and technical issues
• RMCD inquiry register: Tracks GST inquiries
• GST IT Blueprint: Blueprint covering the IT process landscape
• GST OCM: GST change management
• GST IT Landscape strategy: IT landscape covering interface to RMCD
• GST Testing strategy: Testing strategy and test coverage
• GST Master data management: Vendor and Material master maintenance
• GST RICEFW: GST related forms, reports and interfaces
• GST Training strategy: Training strategy covering all the stake holders

GST Implementation:

GST Implementation covers organization structure, master data and documents that is affected by the implementation of GST in the SAP system

Organization structure:

• Company code: Swisslog Malaysia has one active company code in SAP system and the company is located in Kuala Lumpur. The company is not located in Duty-Free Zone or Free Trade Zone or Super Economic Corridor.

•  Plant code: Swisslog Malaysia has one active plant code.

Master data:

• General Ledger: The GL accounts are activated and the standard chart of accounts (COA) is being used across the groups. 

• Customer master data: Around 250 active customer master records and ship to parties are maintained in SAP. There is no interface to/from for customer master records in SAP system. 

• Vendor master data: Around 250 active customer master records and ship to parties are maintained in SAP. There is no interface to/from for customer master records in SAP system. 

• Material master data: Approx. 10000 active materials are maintained in SAP. There is no interface to/from for customer master records in SAP system.

Business Process coverage:

GST on Sales and Purchases between Group companies.

• Import of Services.
• Bad Debt Relief
• Credit Memo / Debit Memo processing
• Rebate Processing
• Asset Disposal / sales
• Automatic Calculation of GST expected
• Customer Down Payment Processing
• Export Sales for Goods /Services.
• Free of Charge Sales
• AP & AR Down Payment
• Sales with Foreign Currency
• Third Party Processing.
• Subcontracting
• Employee benefits – Loans and Advances
• Travel claims and reimbursements

Documents:

The below list of documents are affected by GST:

• Purchase Order
• Sales order
• Billing document
• Accounts receivable – open item
• Accounts payable – open item
• External vendor invoice
• External customer invoice

Reports and Forms:

The below list of forms and reports are required for GST:

• FORM-03
• GST Audit File (GAF)

Requirement Insight:How to avoid software requirement chaos

Requirement challenges:

The biggest challenge in the software industry is collecting the requirements. Most of the requirements comes with one line. The customer himself might not be clear on the requirement. The delivery manager will have a lot of pressure to accept the requirement and to make sure the requirement is understood and the application is developed. The pressure percolates to the design and development team and at the end the schedule gets slipped, project cost is increased and poor quality in delivered.

Requirement collection:

Requirements has to be collected like a story writing.Based on the information provided by the  customer the story has to be developed. The story should have the sequences i.e. the business cases, should have a actors i.e. the roles played by each users, should have the screen plays i.e. for each roles the different types of events, should have a good looking i.e. the user interfaces must be very user friendly, characters should know the limitations i.e. constraints of the applications.

The collected requirements should be told as a story like how our Grandma's tell stories during our childhood days. By doing so the customer connects easily on the understanding of the requirement and confirms the understanding.

Requirement documentation:

Different tools are available to document the requirement. There should be a clear categorization of requirements and each requirements have to be documented with properly tagged along with meaningful numbers. This tagging will help to do a complete traceability so that at any given point of the time it can be traced back if it is missed in any of the phases during the project.

Last but not least requirement collection and requirement documentation is an art. The perfection will be achieved only by writing and practicing.