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 to analyse the non-deductible expenditure for company income tax purposes.

Income Tax Act 1967 (ITA)

Section 39 Deductions not allowed:

1. Registered taxpayer and claims input tax from RMCD. For example, the company purchase RM64,000 worth of stock, and was charged an input tax of Rm3,840. The input tax claimed from RMCD is not part ::of the cost for the stock and is not an allowable expenditure under paragraph 39(1)(o) ITA.

2. Registered taxpayer and does not claim input tax from RMCD even thought it is claimable. If the company does not claim input tax from RMCD. Input tax not claimed from RMCD is not part of the cost ::for the stock and is not an allowable expenditure under paragraph 39(1)(o) ITA

3. Input tax claims from RMCD after company is liable to register.

4. Company is not registered even though it is liable to register with RMCD

Subject to GST:
FIZ Local sell to FIZ Local → SR
FIZ local sell to LMW Local → SR
FIZ/LMW local sell to non-FIZ/LMW → SR
FIZ/LMW Local sell to Oversea → ZR

For example,

Item	Item Description	Qty	Unit Price (RM)	Value(RM)	Import Duty (RM)
1.	Shirts	300 pcs	25.00	7,500.00	1,500.00
2.	Paints	100 pcs	30.00	3,000.00	600.00
			Total	10,500	2,100.00

Assuming 20% import duty (RM10,500 x 20% = 2,100.00)

GST on value + Import Duty are subject to GST (SR) = (10,500.00 + 2,100.00) x 6% = 756.00

Therefore, the Tax Invoice will be presented as per below:

Item	Item Description	Qty	Unit Price (RM)	Value (RM)
1.	Shirt	300 pcs	25.00	7,500.00
2.	Paints	100 pcs	30.00	3,000.00
	GST (SR-6%)			756.00
	Total Amount Payable			11,256.00

How to enter the Tax Invoice if there is a FIZ/LMW transactions to another party?

[Sales | Invoice...]

According to the example mentioned in above.
1. Insert and select the stock items sold with empty tax code. Because the stock items are under FIZ/LMW control.

Item Code	Description	Qty	Unit Price	Subtotal	Tax Code	Tax Amount	SubTotal(Tax)
SHIRT	SHIRTS	300 pcs	25.00	7,500.00	<BLANK>	0.00	7,500.00
PAINTS	PAINTS	100 pcs	30.00	3,000.00	<BLANK>	0.00	3,000.00

2. Inser new row and enter the GST on total supply value (Rm7500 + Rm3000 = Rm10,500) direct into Taxable Amount column (C1)

Description	Taxable Amount	Tax Code	Tax Amount	SubTotal(Tax)
GST on value Rm10,500.00	10,500.00	SR	630.00	630.00

NOTE : 

A1 : Key-in "GST on value" into description.

B1 : Must select tax code.

C1 : Key-in the Total Supply Value into Taxable Amount.

3. 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