Handling specific GST transactions in Sage One

We discuss important GST related transactions in the following topics.

Handling GST on Advance Payments / Prepayments

The following financial entries are required:

DR GST Suspense RM XXXX

CR Tax Payable [SR] RM XXXX

Sage One does not raise tax on customer receipts you will therefore need to do a Customer Adjustment in order to record the Output Tax payable on the advance payment:

  • Record the Advance payment normally as a Customer Receipt in your cashbook.
  • Create an account called GST Suspense (this can be a current asset account)
  • Process a Customer Adjustment using the Customer Adjustment Quick Entry Grid:
  • Customers Menu…Transactions…Customer Adjustments…Quick Entry Grid.
  • You need to process 2 adjustments (1 increase an 1 decrease).
  • Customer can be either:
  • The customer the advance payment was received from
  • Or, a dummy customer set up to process this adjustment “GST Clearing Customer”
  • Tax Type should be as follows:
  • Adjustment 1 (line 1) – S [SR] Standard-rate supplies
  • Adjustment 2 (line 2) – No Tax
  • The inclusive amount for both lines should be the value of the advance payment received. f. The by Affecting account should be the new account GST Suspense.

Reversing this entry

When the sale is made and the invoice is generated for the advance payment you will need to reverse the customer adjustment that you did:

  • If you have already submitted your GST then – Process the same entries in reverse (ie. same adjustment just swap the increase and decrease effects)
  • If you have not submitted your GST you can simply delete the original adjustments.

Screen Shot 2015-07-20 at 12.19.14 AM

Handling GST on Imported Services

When a partial payment is made against a supplier invoice for imported services, GST must be computed [based on reverse mechanism; input tax [TX] against output tax [DS] on the payment made [not on the supplier invoice]. The financial entries will be:

DR Supplier RM 3,000.00

CR Bank RM 3,000.00

DR Tax Payable [TX] 180.00

CR Tax Payable [DS] 180.00

Sage One does not raise tax on supplier payments you will therefore need to raise the tax effect manually in the system.

You will need to capture the purchases tax “P [TX] Taxable Supplies” using a Supplier Adjustment and you will need to capture the supply tax ‘S [DS] Deemed Supplies” using a Customer Adjustment.

  • Record the Supplier payment normally as a Supplier Payment in your cashbook.
  • Create a new account:
  • GST Suspense (Current Asset)
  • Create a dummy supplier:
  • GST Clearing Supplier
  • Create a dummy customer:
  • GST Clearing Customer
  • Process a Supplier Adjustment:
  • Suppliers Menu…Transactions…Supplier Adjustments
  • You need to process 2 adjustments (1 increase effect an 1 decrease effect)
  • The Supplier will be the dummy supplier set up “GST Clearing Supplier “.
  • Tax Type should be as follows:
  • Adjustment 1 (line 1) – P [TX] Taxable Supplies
  • Adjustment 2 (line 2) – No Tax
  • The amount (exclusive) for both lines should be the value of the supplier payment.
  • The by Affecting account should be the new account GST Suspense.

Screen Shot 2015-07-20 at 12.51.45 AM

Process a Customer Adjustment

  • Customers Menu > > Transactions > Customer Adjustments
  • You need to process 2 adjustments (1 increase effect and 1 decrease effect)
  • The Customer will be the dummy customer set up “GST Clearing Customer “.
  • Tax Type should be as follows:
  • Adjustment 1 (line 1) – S [DS] Deemed Supplies
  • Adjustment 2 (line 2) – No Tax
  • The amount (exclusive) for both lines should be the value of the supplier payment.
  • The by Affecting account should be the new account GST Suspense.

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