Category Archives: GST

Amending GST amount on Purchase Invoice

Software: MoneyWorks accounting software

There are two methods of computing the GST on Tax Invoice when the invoice contains more than one item with the standard rated supplies. The line item method, which commonly used in accounting software; this method computes the GST on each line item and then sums up the GST amount. The second is a subtotal method, which calculates GST based on the total payable.

Document Preferences

Assuming you sold 9 pieces of product A at $13.98 each and 7 pieces of product B at $17.38 each.

Method one (the line item method):

9 x Product A @$13.98 = $125.82 x 7% GST = $8.80
7 x Product B @$17.38 = $121.66 x 7% GST = $8.51
Total GST = $17.31

Method two (Subtotal method):

9 x Product A @$13.98 = $125.82
7 x Product B @$17.38 = $121.66
Subtotal: $247.48
7% GST = $247.48 x 7% = $17.32

Amend GST

Both methods of computing the total GST are acceptable so long as you apply the chosen method consistently.

IRAS Calculating GST on invoice

Due to a different method used or rounding between two systems, the GST amount on supplier invoice may differ from your entry. You need to set to show tax column from the MoneyWorks Document Preferences to allow amending the GST amount on Purchase Invoice transaction. A warning message may prompt when printing the GST report, and the report highlights those transactions in question.

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How to use RCM GST code in MoneyWorks accounting system?

The Tax Rate list includes RCM, which mapped to the ES33 (Reg 33 Exempt) GST code when localisation in MoneyWorks has set to ‘Singapore G.S.T.’. You are supposed to tag RCM GST code to the exchange gain/loss account once the multiple currencies feature has turned on, it helps to segregate exchange gains and loses and record the absolute value to the Box 3 (Total value of exempt supplies) of the GST Form 5 report.

RCM GST Code

An absolute value is to report a negative value, such as exchange losses, as a positive value. Please refer to IRAS e-Tax Guide ‘How do I prepare my GST Return?‘ for more information on filing GST Return.

The exchange gains and losses realised when payment (or receipt) and invoice is at a different exchange rate, currency revaluation of a bank account, the exchange rate of a fund transfer is different from the system rate, etc. Moneyworks calculate the exchange gains and losses automatically when payment transactions entered, and a currency revaluation journal recorded once new exchange rate has applied.

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Changing GST rate in QuickBooks Desktop accounting system

You can change the GST rate of those affected GST code from 6% to 0% on the effective date that the Malaysia government scrapped off the GST. You should not amend the existing transactions once the rate has changed to prevent QuickBooks from recalculating the GST base on the new GST rate.

Change GST rate

It is better to complete the transactions with 6% rated GST before amending the GST rate since QuickBooks does not have a change over date set in the GST profile.

As a QuickBooks administrator, you should lock the account by setting up a closing date and password to prevent other users from editing the existing transactions. Do a backup before the rate change, just in case you need to roll back after rate changed; and an integrity check (Rebuild and Verify Data) before and after rate changed.

 

Note:
For users who are using an older version of QuickBooks (especially Reckon QuickBooks version) may consider adding a new GST code than replacing the current rate. There is a risk that the old rate may get replaced when migrating to the latest version.