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

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