Cadzow 2000 Accounts Payable: Handling Unusual GST Amounts
Some suppliers (for example, Government bodies, insurers) issue Tax Invoices with GST amounts which are not simply 1/11th of the total. Cadzow 2000 Accounts Payable (and many other accounting systems) does not allow GST rates which are not 0% or 10%. So how can this be entered to ensure the transaction balances and maintains fidelity with Business Activity Statement (BAS) reporting requirements?
The answer is to split the transaction into a line item with 0% GST and another line item with 10% GST.
For example, suppose you have an invoice for motor registration which has a total of $830.00, and this includes $30.95 of GST.
If the GST is $30.95, this means the GST-applicable base rate is $30.95 × 10 = $309.50.
Therefore the GST-free base rate is $830.00 − $309.50 − $30.95 = $489.55.
Thus, enter the transaction with one line item of $489.55 at 0% GST and one line item of $309.50 at 10% GST.
When entering transactions of this type, ensure the total and GST calculated is the same as the supplier's invoice.
|Invoice Total inc GST|| [A] ||$__________.___|
|GST|| [B] ||$__________.___|
|GST-Taxable Amount|| [C] || [B] × 10 ||$__________.___|
|GST-Free Amount|| [A] − [B] − [C] ||$__________.___|