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How do I enter a purchase invoice with GST

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Contributing Cover User Lingdan
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How do I enter a purchase invoice with GST

Hi there,

 

If an agency gave an invoice with descrition about "GST on rent " totalling $130 with 0.00 GST that we need to pay as they should give an rent invoice $1300 + GST but gave the wrong previous invoice $ 1300 includes GST, do we still need to claim GST $130 -$118.18 GST paid on previous invoice = $11.82 GST to ATO?

 

For example,

 - paid $1300 includes $118.18 GST already.

 - received a new invoice on GST $130 to be pay with 0.00 GST (as correct rent amount is $1430 with $130 GST).

 we still owe them $130 difference.

 

If we do not need to claim GST on GST on rent as the amount of $130 is the GST on the rent charged and no GST is payable on GST, what account name is best to use for this invoice with GST free? Can I use account name "rent" but select GST Free?

 

Thank you.

 

9 REPLIES
MYOB Moderator Hayden_B
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Re: How do I enter a purchase invoice with GST

Hi @Lingdan

 

That's a question I would expect to be answered by the accountant if you have one. Though there are some experts on this who might be able to give you a bit of help on this I'll mention them below to see if they're able to lend some insight onto this.

 

(CC: @DuncanS @GDay53 @Kym__Yeoward @Julie_A_C @ronatbas @AlanT)

Ultimate Partner Kym__Yeoward
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Re: How do I enter a purchase invoice with GST

Hi @Lingdan - please provide more details.

 

How much was the original invoice for , intotal (including any GST).

Did it say  "includes GST" or perhaps  "GST  imclusive".

Was the amount of the GST charged (if any)  shown on the invoice ?

 

If the agency did  not charge  GST on that invoice,  but later realises that they should have charged it, they should (1) issue a credit for the full value of the invoice, and then (2) raise a fresh replacement invoice - this time charging the GST.  They should not just issue a "make-up" invoice, just for the GST (that is, sales item "GST adjustment" with tax code N-T) - as errors are likely to occur, in calculating the GST adjustment.

 

Note:  No GST is payable on residential rent - these payments should have the tax code "FRE".

GST does apply to commercial rent - such as for shops and offices (use tax code "GST" and "inclusive')

 

Kym Yeoward

Palmerston NT

Contributing Cover User Lingdan
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Re: How do I enter a purchase invoice with GST

Hi @Kym__Yeoward,

 

The detail of each invoice:

 

The first invoice (already entered and paid in MYOB):

 

Description                                                      due date            amount           credit              owing

Commercial rent includes 118.18 GST             20/06/18            1300.00           0.00              1300.00

 

 

The second new invoice ( not enter and pay in MYOB):

 

Description                                                         due date               amount             credit       owing

 

GST on Commercial rent includes 0.00 GST      05/11/18                129.93              0.00         129.93

 

****don't know why it is $129.93, not $130

 

 

 

Ultimate Partner DuncanS
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Re: How do I enter a purchase invoice with GST

@Lingdan @Kym__Yeoward @Hayden_B

 

Following Kym's comments, the first step is determine the nature of the Rent eg Residential or Commercial.

The next step is to confirm the GST status of the Supplier at ABN Lookup.

I believe Commercial Rent can have no GST if the Landlord is not registered for GST.

 

I agree with Kym that a catchup Tax Invoice is not the preferred method.

There does appear inconsistencies with the Tax Invoices provided to you.

 

The GST Law is quite complex with regard to Commercial Rent and Water - you may like to read the GST Ruling.

 

I tend to setup a recurring entry/Bank feed Rule for Rent..

As always have a talk to your Tax Accountant/BAS Agent.

 

Duncan

Duncan Smith
Business Advice + Tax
Helping business owners build a better business since 1998
E expressgst@optusnet.com.au T 02 9904 3672 7 days
Ultimate Partner Kym__Yeoward
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Re: How do I enter a purchase invoice with GST

To check whether the supplier's registered for GST, go to their Card and in Buting Details, click the button alongside their ABN. A pop-up  should appear, showing their status (registerd or "not registered"). Alternatively, you can check their GST status by going to Australian Business Register - ABN Look-up

 

P.S. Duncan, did you instead mean "a catch-up invoice is not the preferred method" ?

 

Kym Y

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Re: How do I enter a purchase invoice with GST

Hi @Kym__Yeoward,

 

I checked they registered for GST since 2011.

 

I agree with you on not just gave a invoice with just for GST and I told them about my concern yesterday, but they still insisted on there's no GST on GST payable.

 

Not sure what to do now. 

Ultimate Partner Kym__Yeoward
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Re: How do I enter a purchase invoice with GST

Hi @Lingdan - As they are refusing to replace their original invoice, just code their "GST fix-up" invoice as 6-xxxx Expense - Rent $129.93  with tax code  N-T.  (You will need to find the 6-xxxx  Rent number in your Accounts List)

 

Kym Y

 

Postscript (P.S.): They are correct. They cannot charge GST on their GST adjustment - so "there's no GST on GST payable".

 

GST corrections can be mis-calculated when they're just handled through a "GST fix-up" invoice.

I's better for the supplier to cancel the original invoice, then issue a replacement - with the correct GST.

Contributing Cover User Lingdan
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Re: How do I enter a purchase invoice with GST

Very helpful. Thank you very much Smiley Happy

Ultimate Partner DuncanS
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Re: How do I enter a purchase invoice with GST

@Lingdan @Kym__Yeoward @Hayden_B

 

Kym,   I have edited my reply to include the word "not".

Thank you for your observation.

 

Furthermore, the ABN Lookup feature in MYOB is easier than using ABN Lookup.

I have spent nearly 19 years of my life since GST started in July 2000 checking supplier Tax Invoices/Invoices - maybe I need a change..

Every Business Owner/Agent should be using the Buying details in the Supplier Card File.

 

Back to Lingdan's situation, and the reluctance of the supplier to issue a compliant Tax Invoice for the correct amount.

 

I understand we have a Tax Invoice for $1300 and a followup Tax Invoice for $130 for the GST.

We have checked the nature of the Rent ie Rent on which GST is charged and that the Supplier is GST Registered.

If a correct Tax Invoice was issued we would have a Tax Invoice stating $1430 including GST or a Tax Invoice stating $1300 plus $130 GST = $1430.

 

I would code both the $1300 and $130 GST inclusive as we need to enter two transactions in MYOB.

$1300/11 + 130/11 = $130.

 

Duncan

Duncan Smith
Business Advice + Tax
Helping business owners build a better business since 1998
E expressgst@optusnet.com.au T 02 9904 3672 7 days
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