GST claimed in error

[TaniaSS]

Hi I have claimed GST paid on a land purchase when it should have been a GST-free transaction.  What journal entry is required to reverse this so that the GST i owe is captured in the next GST return?

[jenniek]

You will need to do a journal entry which reverses the GST and pays it back in the next return.

Say you land was $115,000 inc GST.

You journal should then be

DR  Asset acc 1-xxxx                115,000                     E

CR  Asset Acc 1-xxxx                                115,000     S15

The GST inclusive tick should be ON

Make sure that your GST Paid does not end up in a negative, as you cannot lodge a GST return with a negative amount.

[Steven_M]

Hi @TaniaSS

I trust that @jenniek's response has been of assistance to yourself.   Do let us know if you require further assistance.

Also welcome to the MYOB Community Forum, I hope you find it a wealth of knowledge

[TaniaSS]

many thanks for your help Jennie 

[TaniaSS]

Hi again Jennie - unfortunately this does put me in a situation where I have a negative GST paid figure.  What can I do about this?

[Steven_M]

Hi @TaniaSS

I would recommend speaking to the IRD in regards to the implications of having a negative GST paid value. They may advise that it is acceptable due to it being an adjustment or give you additional information on how to report that value.

Do let us know if you require further assistance in regards to making that adjustment.

[TaniaSS]

thanks Steven

[Mike_James]

Hi @TaniaSS the IRD will not accept negative amounts. The amount of the adjustment will need to be reported as a positive amount in Box 9 of the return form, ie as a payable. The current period GST, and their related inclusive amounts, should be reported in the normal boxes.

[jenniek]

Thanks Mike - I thought that was the way around it - but wasn't 100% certain.

[Mike_James · Accepted solution]

Hi @jenniek and @TaniaSS, adjustments in the next period for corrections are limited to $NZ500, so if it is more, then you should write and request an adjustment in the same period, giving reasons and calculations. Interest may be charged if a refund turns in to a payment, as it may with large transactions.