Customer Accounting for Prescribed Goods

Software: QuickBooks Desktop accounting software

The rule of Customer Accounting for Prescribed Goods applied when supplying of mobile phones, memory cards and off-the-shelf software exceeds $10,000 to a GST-registered customer for his business purpose.

A customer accounting tax invoice has to issue to your customer if you are a GST-registered supplier supplying prescribed goods. The invoice has to include:

a. Your customer’s GST registration number,
b. A statement to inform the customer that your sale is subject to customer accounting. He has to account for the GST on the sale and the GST amount.

Customer Accounting

There are a few things you need to set if you are using QuickBooks desktop to issue a customer accounting invoice. You first have to create a new GST code (such as CAS – Customer Accounting) and link it to a new GST item for Customer Accounting with 0% rated. Next, consider using the Business Number field in the debtor profile page for the customer’s GST number and add it to the invoice template. Create a new Customer Message for Customer Accounting statement, such as ‘Customer accounting: Customer to Pay GST** to IRAS’. This message should add to the invoice template too. Finally, enter the GST amount manually in the invoice description (below the last item) or a custom field if you prefer.

The ‘taxable amount’ of the Customer Accounting GST should include in the Box 1 of the GST Return. No GST includes in the Box 6 of the GST Return as there is no Output Tax in this case.

QuickBooks Invoice

As a GST-registered customer, you can claim the Input Tax purchase if you satisfy the input tax claiming condition. The input tax shows in the report when you enter a Bill with the relevant GST code. You need to include a Customer accounting Clearing account (an Other Current Liabilities account) in the Bill to balance up the payable amount.

QuickBooks Enter Bill.png

The double-entry of the bill transaction debit the Expenses account 15000, the GST input 1050, and credit the Customer Accounting Clearing account 1050.

You need to record the output tax on your supplier behalf via a dummy Sales Receipt (or sales invoice). Use a dummy item which links to the Customer Accounting Clearing account to record the output tax.

QuickBooks Sales Receipt.png

The receipt credits the Customer Accounting Clearing account 15000 and the GST Output Tax 1050, and then the second line item debits the Customer Accounting Clearing account 16050.

The ledger of the Customer Accounting Clearing account:

Credit Enter Bill 1050
Credit Receipt 15000
Debit Receipt 16050

With a little tweak, you can still use QuickBooks Desktop to record a Customer Accounting transaction.

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