Special-GST Treatment: Non-deductible Expenditure

How to enter and to retrieve the non-deductible expenditure?

Introduction

This guide will teach you the way to key-in the data entry and help you to analyse the non-deductible expenditure related to GST. It is follow to the latest 2015 amendment in Income Tax Act 1967.

GST Expenditure (Effective from YA 2015)
1. para 39(1)(o): GST input tax paid or to be paid not allowed as deduction if:-

a. Non-registered person with turnover exceed GST threshold of Rm500,000.

b. Registered person fail to claim input tax credit his entitled to claim.

2. section 39(1)(p): Output tax absorbed by GST by registered person is not allowed as tax deduction.
3. GST block input tax & deductible expenses:-

Block Tax	GST input Tax	Tax deductible?
Passenger car (Cost and maintenance)	Blocked	Deductible (to claim capital allowance)
Club subscription fee	Blocked	Non-deductible
Medical insurance/personal accident insurance	Blocked	Deductible
Family benefits	Blocked	Depend (check with your auditors or tax consultant)
Entertainment expenses (Potential customer)	Blocked	Non-deductible
Entertainment expenses (Supplier) (p	Blocked	Allowed 50% deduction

How does this work?

Setup New Tax Code

[GST | Maintain Tax ...]
1. Click New.
2. Follow the below SETTINGS to create.

Field Name	Field Contents
Code	ND-0 (Recommended code)
Description	Non-Deductible
Tax Type	(Non GST - Both Sales & Purchase)
Tax Rate	0% (please key-in)
Tax Account	GST-301 (This field is compulsory. Due to tax rate is 0%, therefore no posting)
Tax Inclusive	Untick

3. Click Save. See below screenshot.

NOTE : 

Do not click the tax rate arrow key down if the tax account is not defined yet.

Data Entry

1. Insert new row and enter the GST on total Import Duty (Rm1,500 + Rm600.00 = Rm2,100) direct into Taxable Amount column (C2)

Description	Taxable Amount	Tax Code	Tax Amount	SubTotal(Tax)
GST on Import Duty 20%	2,100.00	SR	126.00	126.00

NOTE : 

A2 : Key-in "GST on Import Duty" into description.

B2 : Must select tax code.

C2 : Key-in the Total Import Duty value into Taxable Amount.

GST Return

[ GST | New GST Return...]

1. Process GST Return for the month
2. Click on print GST-03

RESULTS : 

5a Total value of supplies = 12,600.00

5b total output tax = 756.00

See also

• Input Entry For ATS