Software: MoneyWorks accounting software
Oversea suppliers are not supposed to charge GST if they are not a GST registered trader. The GST is paid to the Custom or a forwarder (if they paid the GST on your behalf) when goods arrived.
You can use the cost of goods sold or an expense account as a dummy account in the account tab of a payment transaction to record the GST paid. For example, you paid $700 GST on goods purchased; the entry will be:
Detail line 1:
Account: Cost of Goods Sold
Taxable amount: 10,000
Tax Code: IM
Detail line 2:
Account: Cost of Goods Sold
Taxable amount: -10,000 (negative)
Tax Code: OP (or *)
The Cost of Goods Sold contra off with each other and left the GST paid.
Due to differences between the internal exchange rate and the rate used by the Custom, the taxable amount could be different from the purchase value in Singapore dollar.
Note: You are supposed to record the import permit number in either Transaction user field 1, 2, or 3 on both purchase invoice and the GST payment, which will use in the IAF (Iras Audit File) report later if required. The Transaction User field label can be renamed to ‘Permit No’ from the Document Preferences to ease the data entry.
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The below information is from IRAS web site: http://iras.gov.sg/irasHome/page04.aspx?id=676
For such purchases with GST, your supplier has to indicate the GST payable on the tax invoice in Singapore dollars at the approved rate of exchange determined by him. You should claim input tax on such purchases based on the Singapore dollar amounts shown in the tax invoices. This requirement applies even if you have recorded the purchases at different exchange rate in your books.
For your imports, you should claim input tax based on the Singapore dollar amounts shown in the import permits issued by Singapore Customs.
The above information from IRAS web site is very helpful for those who are importing goods into Singapore in foreign currency.
MoneyWorks version 6.0.3 is available for download, please check your software updates from the help menu.
For Singapore user, version 6.0.3 added a new GST tax code ‘IM’. ‘IM’ GST code is set as 0% rate. ‘IM’ code is to be use together with ‘A’ code.
How to use these GST code?
You imported goods from an overseas Supplier, ABC Co, Bill amount US$10,000.00. At Custom or sometime was paid on behalf by the forwarder, GST will be charged for the goods imported.
Assume: the exchange rate used by the Custom was US$1 : S$1.35.
In MoneyWorks, you recorded the Bill from ABC Co as US$10,000.00, ABC Co was not a GST register company but the goods you bought from them were GST taxable (GST on Imports), so in this case, ‘IM’ code will be used in the bill. Since ‘IM’ code was set as 0%, there will not have any GST amount but US$10,000 will show in the GST report as a taxable purchase.
‘A’ code will be used in the cheque payment to Custom (or bill from forwarder) for the GST paid (S$945.00) for this imported goods. ‘A’ code by default was set as All Tax, the amount recorded in the payment or purchase invoice (bill) will be 100% go into GST Paid account (Input tax, Current Assets account).
Using two GST Code is better and easier to manage imported goods as there is more than one supplier (accounts payable) involved.
Please check with IRAS web site for more details on GST on Imported Goods.