GST Treatment: Construction Business

GST - Construction Business

Introduction

This guide will teach you the way to enter the tax invoice to the Developer from Main Contractor.

We have to look into and show the following items in order to calculate the GST amount in the Tax Invoice:

1. Certified value - Progress claim value certified by Architect.
2. Retention Amount - the amount of progress payment which is not paid until the conditions specified in the contract for the payment of such amounts have been met or until defects have been rectified.
3. Progress payment

For example, the Progress Payment:-

1st interim certificate	Amount (Rm)	Calculation
Value of material and works (A1)	30,000.00
Less: Retention Sum (B1)	1,500.00	Rm30,000 x 5%
Amount Paid (excl GST)	28,500.00	A1 - B1
GST Amount	1,710.00	Rm28,500 x 6% (SR)

2nd interim certificate	Amount (Rm)	Calculation
Value of material and works (A2)	90,000.00
Less: Retention Sum (B2)	(4,500.00)	Rm90,000 x 5%
Less : 1st Interim Certificate (C2)	(28,500.00)
Amount Paid (excl GST)	57,000.00	A2 - B2 - C2
GST Amount	3,420.00	Rm57,000 x 6% (SR)

Tax Invoice Entry

[Sales | Invoice...]

1. Create the oversea supplier invoice at Purchase Invoice.

2. Select the tax code “IM-0”. Tax amount = 0.00

Highlight Changes

Date	Initiated by	Remarks
12 December 2015	Loo	Initial document.

See also

• GST Treatment: How to report GST-03 item 16 Capital Goods Acquired for Purchase of machinery from Oversea