Use non-deductible VAT

This article explains how to use and report non-deductible GST.

Create a purchase invoice with non-deductible GST

1. Select the icon, enter Purchase Invoices, and then select the related link.

2. Select New to create a purchase invoice, and enter the appropriate information on the invoice header.

3. In the Lines section, create a new line of any type, based on the GST business posting group and the GST product posting group where you configure non-deductible GST.

4. In the Quantity and Direct Unit Cost fields, enter appropriate values.

   If you selected the Show Non-Ded. GST In Lines checkbox on the GST Setup page, the amounts in the Non-Deductible GST Base and Non-Deductible GST Amount fields are calculated based on the Non-Deductible GST % field on the GST Posting Setup page.

5. Post the invoice.

Create a purchase order with non-deductible GST

1. Select the icon, enter Purchase Orders and then select the related link.

2. Select New to create a purchase order, and enter the appropriate information on the document header.

3. In the Lines section, create a new line of any type, based on the GST business posting group and the GST product posting group where you configure non-deductible GST.

4. In the Quantity and Direct Unit Cost fields, enter appropriate values.

   If you selected the Show Non-Ded. GST In Lines checkbox on the GST Setup page, the amounts in the Non-Deductible GST Base and Non-Deductible GST Amount fields are calculated based on the Non-Deductible GST % field on the GST Posting Setup page.

5. Post the purchase order.

Adjust rounded GST amounts before document posting

If GST amounts aren't rounded in the same way in your environment and in the external accounting system (the original invoice document), you can adjust the GST amount before you post the document. To make this adjustment, follow these steps before you post the document.

1. On the Action Pane, select Statistic.

2. If you're working with a purchase invoice, follow these steps:

   1. On the Lines FastTab, select the GST amount or non-deductible GST amount.
   2. Set the values that you need from the original document, and then close the Purchase Invoice Statistics page.

3. If you're working with the purchase order, follow these steps:

   1. On the Invoicing FastTab, select No. of Tax Lines to open the GST Amounts Lines page.
   2. Select the GST amount or non-deductible GST amount that you want to correct.
   3. Enter the values that you need from the original document, close the GST Amount lines page, and then close the Purchase Order Statistics page.

To use adjustments of GST amounts, you must enable the adjustments. On the General Ledger Setup page, in the Max. GST Difference Allowed field, enter the maximum allowed GST amount for correction. Then, on the Purchases & Payables Setup page, select Allow GST Difference.

You can adjust the values of the GST Amount and Non-Deductible GST Amount fields. The value of the Deductible GST Amount field is the result of these two values. The amount that you enter in the Non-Deductible GST Amount field can't be more than the amount that you enter in the GST Amount field. The Max. GST Difference Allowed field on the General Ledger Setup page works independently for deductible and non-deductible GST amounts on statistic pages when you want to adjust GST amounts.

Important

You can't use non-deductible GST on the prepayment invoices.

Related information

Financial Management

Set Up Calculations and Posting Methods for Goods and Services Tax

Set up Non-deductible GST

Design details about non-deductible GST

Report VAT to Tax Authorities

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