GST Treatment: Partial Exemption

Introduction

This guide will explains how Partial Exemption, Apportionment and Annual Adjustment are made in respect of residual input tax which is attributable to both taxable and exempt supplies in SQL Financial Accounting.

Partial Exemption Rules

Input Tax Recoverable Ratio (IRR)

Formula:

IRR = (T-O)/(T+E-O)

T = SR + ZRL + ZRE + DS + OS + RS + GS

E = ES

O = ES43 (Incidental financial supplies)

ES

1st Interim - Tax Invoice

2nd Interim - Tax Invoice

3rd Interim - Tax Invoice

4th Interim = Tax Invoice

Total Retention - Tax Invoice

NOTE: 
GL Account : 399-999 - Retention (Create under the Current Asset)
You have to adjust each progress retention sum by less the previous progress retention sum and reverse back to the account use for the value of material and works.

Value of Material and Works Report by Project

[GL | Print Ledger Report...]

1. To check the total value of material and works balance report. See the screenshot below.

2. You can see the total value of material and works adjusted with final result: Rm300,000.

Retention Report by Project

[GL | Print Ledger Report...]

1. To check the retention balance report. See the screenshot below.

2. If the retention balance is zero, it means the full settlement of retention sum.

Highlight Changes

Date	Initiated by	Remarks
12 December 2015	Loo	Initial document.
16 December 2015	Admin	Correct the retention sum to Rm15,000

See also

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