How to Avoid Costly GST Errors: Difference between revisions

From eStream Software
 
(130 intermediate revisions by the same user not shown)
Line 7: Line 7:
::1. Standard Rated Supply (5a) and Output Tax (5b)
::1. Standard Rated Supply (5a) and Output Tax (5b)
::2. Stanadard Rate and Flat Rate Acquisitions (6a), and Input Tax (6b)
::2. Stanadard Rate and Flat Rate Acquisitions (6a), and Input Tax (6b)
::3. Carry forward refund for GST?
::3. Local Zero-Rated Supplies
::4. Local Zero-Rated Supplies
::4. Export Supplies
::5. Export Supplies
::5. Exempt Supplies
::6. Exempt Supplies
::6. Supplies Granted GST Relief
::7. Supplies Granted GST Relief
::7. Goods Imported Under Approved Trader Scheme and GST Suspended
::8. Goods Imported Under Approved Trader Scheme and GST Suspended
::8. Capital Goods Acquired
::9. Capital Goods Acquired
::9. Bad Debt Relief  
::10. Bad Debt Relief  
::10. Bad Debt Recovered
::11. Bad Debt Recovered
::11. Output tax value breakdown into Major Industries Code (MSIC Code)
::12. Output tax value breakdown into Major Industries Code (MSIC Code)
::12. Other important info required in GAF
::13. GL Ledger vs GST-03
::14. Foreign currency exchange rate
<br />
<br />


==Example of Data Entry==
==Standard Rated Supply (5a) and Output Tax (5b)==
:1. IES - '''Interest income from deposits placed with a financial institution in Malaysia'''
:<big>'''Mapping of GST Tax Code:'''</big>
::Screenshot below from '''Journal Entry'''.
::{| class="wikitable"
::[[File: GST GST-03 Item12-14.jpg]]
|-
! GST-03 !! Description !! Tax Code
|-
| 5a || Total Value of Standard Rated Supply || '''SR''', '''DS'''
|-
| 5b || Total Output Tax (Inclusive of Tax Value on Bad Debt Recovered & others adjustments) || '''SR''', '''DS''', '''AJS'''
|}
:1. Sale or disposal of business assets
 
:2. Goods given free as gift.
 
:3. Inter-company transactions
 
:4. Margin Scheme
 
==Standard Rate and Flat Rate Acquisitions (6a), and Input Tax (6b)==
:<big>'''Mapping of GST Tax Code:'''</big>
::{| class="wikitable"
|-
! GST-03 !! Description !! Tax Code
|-
| 6a || Standard Rate and Flat Rate Acquisitions || '''TX''', '''TX-CG''', '''TX-ES''' (DMR is fulfilled only), '''TX-IES''' (Total/Full amount), '''TX-RE''', '''IM'''
|-
| 6b || Total Input Tax (Inclusive of Tax Value on Bad Debt Relief & other Adjustments)|| '''TX''', '''TX-CG''', '''TX-ES''' (DMR is fulfilled only), '''TX-IES''' (GST Claimable only based on IRR), '''TX-RE''', '''IM''', '''AJP'''
|}
:Not all input tax claims are allowable. You can claim input tax on your purchases only if the below conditions are fulfilled.
::1. Tax invoice / Simplified Tax Invoice / Custom K1 / Custom K9
:::a. The buyer can use '''simplified tax invoice''' if the '''total amount GST payable is RM30 or less'''.
:::b. if the '''total amount of GST payable is more than RM30''', the buyer must request for a '''tax invoice''' with the name and address of the buyer.
:::c. Tax invoice issued by approved person for Flat Rate Scheme.
:::d. '''K1''' form for imported goods
:::e. '''K1''' and '''K9''' for goods removed from bonded warehouse <br />
::2. Supplies made outside Malaysia which would be taxable supplies if '''made in Malaysia'''.
::3. To be eligible for input tax claim relating to goods that are exported, a registered person (exporter) must ensure that:-
:::a. prescribed customs form for export (K2 / K8) must have an endorsement on Remarks column in '''Sistem Maklumat Kastam (SMK)''' – “A claim for input tax under the GST Act 2014 will be made”; and
:::b. Customs Official Receipt.
::4. '''Disregarded supplies''' (supplies within group, supplies made in warehouse, supplies between venture operator and venturers and supplies between toll manufacturer and overseas principal).
::5. Directly attributable to taxable supplies (ie. standard rated supplies and zero rated supplies). Click [http://www.sql.com.my/wiki/GST_Treatment:_Partial_Exemption here] to learn more about '''Partial Exemption'''.
::6. Must not be disallowed expenses (or known as '''Blocked Input Tax''').
:::a. Passenger motor cars ('''not more than 9 passengers''' including driver and unladen weight does not exceed 3,000 kg) including hiring of car
:::b. Repair and maintenance for motor cars
:::c. Family benefits
:::d. Club subscription fee
:::e. Medical and personal accident insurance
:::f. Medical expenses
:::g. Entertainment expenses for potential customer or others than employees. <br />
::7. Must be taxable purchases (ie. purchases made from GST registered suppliers)
<br />
<br />


:2. IES - '''Realized foreign exchange gains or losses'''
==Local Zero-Rated Supplies==
::a. '''Realized Gain in Foreign Exchange'''
:<big>'''Mapping of GST Tax Code:'''</big>
:::Screenshot below from '''Customer Payment'''.
::{| class="wikitable"
:::[[File: GST GST-03 Item12-15A.jpg]]
|-
<br />
! GST-03 !! Description !! Tax Code
|-
| 10 || Total Value of Local Zero-Rated Supplies || '''ZRL''', '''ZDA'''
|}
:This refer to the following types according to '''GST (Zero Rate Supplies) Order 2014''':-
::1. Local supply of goods and services ('''ZRL'''):
:::a) Zero-rated supply of goods of any of the descriptions as in Appendix (Zerorated Supply) Order 2014 based on tariff code in such as milled-rice, fresh fruit, and live animals (cattle, buffalo, goat, sheep and swine),
:::b) Medicaments and medical gases in the National Essential Medicines List issued by the Ministry of Health and approved by the Minister and put up in measured doses or in forms of packaging for retail sale,
:::c) The supply of treated water by a person who is licensed under the Water Services Industry Act 2006 [Act 655] to domestic consumers irrespective of minimum or non-usage,
:::d) The supply of raw materials and components made to a person who belongs in a country other than Malaysia for the treatment and processing of goods by any taxable person under the Approved Toll Manufacturer Scheme, and etc.
::2. Supply of goods from Malaysia to Designated Area, ie. Pulau Langkawi, Labuan, & Pulau Tioman ('''ZDA''')


::b. '''Realized Loss in Foreign Exchange'''
==Export Supplies==
:::Screenshot below from '''Customer Payment'''.
:<big>'''Mapping of GST Tax Code:'''</big>
:::[[File: GST GST-03 Item12-15B.jpg]]
::{| class="wikitable"
|-
! GST-03 !! Description !! Tax Code
|-
| 11 || Total Value of Export Supplies || '''ZRE'''
|}
:This refer to the Supply of goods or services '''from Malaysia to Oversea''' according to '''GST (Zero Rate Supplies) Order 2014'''.
::1. Movement of goods is supported with '''Customs K2''' form which must stated the following:-
:::a. Supplier's name and address as the consignor.
:::b. Recipient's name and address in overseas recipient as the consignee.
:::c. Supply of services must attached with supporting documents such as invoice for an international services. Examples includes sales of air-tickets and international freight charges.
<br />
<br />


:3. ES - '''Financial Institution’s interest charges to customers for loan'''
<big>'''How to check the transactions correctly entered?'''</big>
::Screenshot below from '''Customer Invoice'''.
:At the invoice entry, please ensure the following are entered correctly:-
::[[File: GST GST-03 Item12-16.jpg]]
::1. '''Customer name''' and '''address''' must be a '''foreigner company'''.
::2. '''Country''' to define the destination of goods deliver.
::3. '''Permit No''' to record the '''Custom K2 no''' for supporting document reference.
::4. Tax code must be '''ZRE'''.
::[[File: GST-ZRE-01.jpg]]
<br />
<br />


==GST-03 Item 12: Total Value of Exempt Supplies==
==Exempt Supplies==
''[GST | Print GST-03...]''<br />
:<big>'''Mapping of GST Tax Code:'''</big>
::{| class="wikitable"
|-
! GST-03 !! Description !! Tax Code
|-
| 12 || Total Value of Exempt Supplies || '''ES''', '''IES'''
|}
:This refer to the following types according to '''GST (Exempt Supplies) Order 2014''':-
::'''1. Services''' ('''ES'''):-
:::a. Private education
:::b. Private health services
:::c. Childcare services
:::d. Domestic transportation of passengers for mass Public Transports (eg. by rail, ship, boat, ferry, express bus, stage bus, school bus, feeder bus, workers bus and taxi)
:::e. Toll highway


:1. For instances, the '''GST-03 Item 12''' = '''Rm62.886.40
::'''2. Financial Services''' ('''IES'''):-
::[[File: GST GST-03 Item12-01.jpg]]
:::a. Interest income from deposits placed with a financial institution in Malaysia
<br />
:::b. Interest received from loans provided to employees (factoring receivables)
:2. You can check the details by double click on the amount in '''Item 12'''.  
:::c. [http://www.sql.com.my/wiki/GST-03_Item_12_(ES_%2B_IES)_:_How_to_compare_the_Total_Value_of_Exempt_Supplies_between_GST-03_and_Ledger#Special_Posting_for_Net_Realized_Gain_Forex_.28IES.29 Realized foreign exchange gains]
:3. Pop-up the item 12 detail.
::'''3. Goods''' ('''ES'''):-
::[[File: GST GST-03 Item12-02.jpg]]
:::a. Residential properties
:::b. Land for agricultural use
:::c. Land for general user (ie. burial ground, playground or religious building)
<br />
<br />
:4. You can insert additional column, ie. '''From Doc Type''' and '''Trans Type'''.  
<big>'''How to check the transactions correctly entered?'''</big><br />
::a. '''From Doc Type''' will help you to identify the documents where it posted;
'''A) GST Listing'''
::b. '''Trans Type''' will tell you the document posted from special case, eg. Realized Gain in Foreign Exchange.
:1. After GST Return processed, go to '''Print GST Listing...'''.  
::[[File: GST GST-03 Item12-03.jpg]]
::[[File: GST-ES-03.jpg]]
:2. Preview and select the report name '''GST Detail 2'''.
:3. To ensure the '''document detail descriptions''' are clearly stated and map to the correct tax code.  
::[[File: GST-ES-04.jpg]]
<br />
<br />


'''NOTE:'''
'''B) GST-03'''
Trans Type = _X, it means the posting entry related to '''Realized Gain or Loss in Foreign Exchange'''.
:1. To quick do amendment before submit the GST-03 to RMCD. Click [http://www.sql.com.my/wiki/GST_-_GST-03_Amendment here] to learn more about the '''GST amendment'''.
 
:2. Double click on the item 12 in GST-03.
==Cross Check Reports==
::[[File: GST-ES-01.jpg]]
===GST Listing===
:3. Drill down the documents to open and correct it accordingly.
''[GST | Print GST Listing...]''<br />
:4. Lastly, you have to '''Recalculate''' the amended GST Return.
:1. Select the '''date range''' or '''GST Process'''.  
:2. You can select the tax parameter for '''ES''' and '''IES'''.
:3. Apply the '''GST Listing'''.  
::[[File: GST GST-03 Item12-04.jpg]]
<br />
<br />


==Supplies Granted GST Relief==
:<big>'''Mapping of GST Tax Code:'''</big>
::{| class="wikitable"
::{| class="wikitable"
|-
|-
! Tax Code !! Local Amount !! Explanation
! GST-03 !! Description !! Tax Code
|-
|-
| IES || style="text-align:right;"| 5,000.00 || Local amount from Sales/Customer/Journal Entry/Cash Book (OR) documents related to tax code : '''IES'''  
| 13 || Total Value of Supplies Granted GST Relief || '''RS'''
|}
<br />
 
==Goods Imported Under Approved Trader Scheme and GST Suspended==
:<big>'''Mapping of GST Tax Code:'''</big>
::{| class="wikitable"
|-
|-
| IES || style="text-align:right;"| Gain=7,886.40 || Net realized forex gain calculated
! GST-03 !! Description !! Tax Code
|-
|-
| ES || style="text-align:right;"| 50,000.00 || Local amount from Sales/Customer/Journal Entry/Cash Book (OR) documents related to tax code : '''ES'''
| 14 || Total Value of Goods Imported Under Approved Trader Scheme || '''IS'''
|-
|-
| '''Total''' || style="text-align:right;"| '''62,886.40''' || Total value shown in '''GST-03 Item 12'''  
| 15 || Total Value of GST Suspended under item 14 || '''IS''' x Tax Rate
|}
|}
<br />
<br />


:4. Click on each tax type, you able to view the details. See the example in the screenshot below.
==Capital Goods Acquired==
::'''a. IES'''
:<big>'''Mapping of GST Tax Code:'''</big>
::[[File: GST GST-03 Item12-05.jpg]]
::{| class="wikitable"
<br />
|-
::'''b. IES (Net Realized Forex Gain ONLY)'''
! GST-03 !! Description !! Tax Code
::[[File: GST GST-03 Item12-06.jpg]]
|-
<br />
| 16 || Total Value of Capital Goods Acquired || '''TX-CG''', '''TX''', '''IM''' (Transaction GL Account related to '''Fixed Asset''')
::'''c. ES'''
|}
::[[File: GST GST-03 Item12-07.jpg]]
<br />
<br />


===GL Ledger===
==Bad Debt Relief==
''[GL | Print Ledger Report...]''<br />
:<big>'''Mapping of GST Tax Code:'''</big>
 
::{| class="wikitable"
====General Posting for IES & ES====
|-
:1. In the General Ledger report, you have to insert the '''Tax''' grid column.
! GST-03 !! Description !! Tax Code
:2. Filter the Tax Code '''(ES and IES)'''.
|-
::[[File: GST GST-03 Item12-08.jpg]]
| 17 || Total Value of Bad Debt Relief Inclusive Tax || '''AJP''' ('''AR only''')
<br />
|}
:3. Transactions related to '''ES'''. See the screenshot below.
::[[File: GST GST-03 Item12-09.jpg]]
<br />
:3. Transactions related to '''IES'''. See the screenshot below.
::[[File: GST GST-03 Item12-10.jpg]]
<br />
<br />


====Special Posting for Net Realized Gain Forex (IES)====
==Bad Debt Recovered==
:1. Check the Foreign Exchange Rate Gain or Loss Account setting at '''Tools | Options...(General Ledger)'''. For example,
:<big>'''Mapping of GST Tax Code:'''</big>
::{| class="wikitable"
::{| class="wikitable"
|-
|-
! Default Account !! GL Account Code
! GST-03 !! Description !! Tax Code
|-
| Foreign Exchange Rate Gain Account || 530-000
|-
|-
| Foreign Exchange Rate Loss Account || 980-000
| 18 || Total Value of Bad Debt Recovered Inclusive Tax || '''AJS''' ('''AR only''')
|}
|}
::[[File: GST GST-03 Item12-11.jpg]]
<br />
<br />
:2. Select the '''Foreign Exchange Rate Gain or Loss Account''', click '''APPLY'''.
 
::[[File: GST GST-03 Item12-12.jpg]]
==Output tax value breakdown into Major Industries Code (MSIC Code)==
:1. This part usually require you to breakdown the total output tax reported in 5b according to your '''main business'''.
:2. You have to map to [https://sites.google.com/site/sqlestream/sql-financial-accounting/9-good-and-service-tax-gst---malaysia/9-23-major-industries-code-msic MSIC code].<br />
 
<big>'''Where to set the MSIC Code?'''</big><br />
''[GL | Maintain Account...]''
 
:1. Select and edit your main business supplies GL Account, eg. my main business is selling handphones.
:2. Select an appropriate '''Industries Code'''.
:3. You can change the search pattern to '''-A-'''. See screenshot below. So you can type-in the keywords, eg. Phone.  
::[[File: GST-MSIC_01.jpg]]
<br />
<br />
:3. You can see the '''Foreign Exchange Rate Gain or Loss''' posting transactions in '''GL Ledger'''.  
 
::[[File: GST GST-03 Item12-13.jpg]]
==Other important info required in GAF==
:The GST Audit file is a way for taxpayers to submit information relevant to auditors in response to an audit request on information for auditing purposes. The information provided includes company identifications, names, supply & purchases, and general ledger transactions. There is also a footer record to ensure file integrity.
<br />
<br />
::1. Record types  are:-
:::{| class="wikitable"
|-
! Record Type !! Description || Where it update???
|-
| C || Company || Company Profile
|-
| P || Purchase || Supplier invoice (PI) , Supplier Debit Note ('''SD'''), Supplier Credit Note (SC), Cash Book (PV) and Journal (JE)
|-
| S || Supply || Customer Invoice (IV), Customer Debit Note (DN), Customer Credit Note (CN), Cash Book (OR), Gift/Deemed Supply (GI), and Journal (JE)
|-
| L || Ledger || From the GL Ledger reports
|-
| F || Footer || GAF file integrity check
|}<br />
==GL Ledger vs GST-03==
''[GL | Print Ledger Report...]''<br />
:1. '''GST-Ledger-Vs-GST-03''' is a very useful report to identify the unrealized human errors immediately. Possible errors may be due to documents had selected:-
::a. Wrong tax code or category
::b. Wrong account code
::c. Use Tax Date which is different from Document Date
::d. 5 Cents rounding had selected Tax Code.<br />
:2. It comprises of 2 reports:-
::{| class="wikitable"
::{| class="wikitable"
|-
|-
! Account !! style="text-align:right;"| Local DR !! style="text-align:right;"| Local CR || Explanation
! !! style="text-align:left;"| Report Name !! style="text-align:left;"| GL Acc !! style="text-align:left;"| Explanation
|-
| Total Gain on Foreign Exchange || style="text-align:right;"| 0.00 || style="text-align:right;"| 8,480.00 ||
|-
|-
| Total Loss on Foreign Exchange || style="text-align:right;"| 593.60 || style="text-align:right;"| 0.00 ||
| 1 || GST-Ledger-Vs-GST-03_5b || style="text-align:left;"| GST-201 (GST - Payable) || To reconcile the GST Payable account between the GL Ledger and GST-03
|-
|-
| Net Realized Forex || style="text-align:right;"| 593.60 || style="text-align:right;"| 8,480.00 || 8,480.00 - 593.60 = '''7,886.40 GAIN (IES)'''
| 2 || GST-Ledger-Vs-GST-03_6b || style="text-align:left;"| GST-101 (GST - Claimable) || To reconcile the GST Claimable account between the GL Ledger and GST-03
|}
|}
<br />


'''NOTE: '''
:3. For example,
RMCD has confirmed that '''Net Realised Gain in Forex ONLY''' need to add into '''GST-03 item 12 Total Value of Exempt Supplies'''.
::Supplier invoice date (15 Sept 2016) received in Oct 2016 and GST-03 Sept 2016 has submitted. Input tax will be claim in Oct 2016 by set the tax date (31 Oct 2016). In GL Ledger, the input tax will be posted in Sept 2016. However, this input tax will be appear in GT-03 Oct 2016. <br />
Tax code = '''IES'''
<br />
'''Net Realised Loss in Forex''' will be '''NIL'''.


==Summary: Comparison between GST-03, GST Listing and Ledger Report==
::With this  '''GST-Ledger-Vs-GST-03''' report, you can very easy identify out the reasons. See the screenshot below.
::[[File:GST-LEDGERvsGST-03-01.jpg ]]
<br />


:Here is the result summarized:  
==Foreign Currency Exchange Rate==
:1. Always update the currency exchange rate at Tools | [[Maintain Currency]].<br />
:2. Critical cost on output tax if bill in foreign currency to local customer:
::{| class="wikitable"
::{| class="wikitable"
|-
|-
! style="text-align:left;"| Description !! GST-03 !! GST Listing !! Ledger Report
! Currency ||  !! Exchange Rate !! Amount !!Local Amount !! Output Tax
|-
| style="vertical-align: top;" | IES ||  || style="text-align:right;"| 5,000.00 || style="text-align:right;"| 5,000.00
|-
|-
| style="vertical-align: top;" | IES (Realized Gain Forex)|| || style="text-align:right;"| 7,886.40 ||  
| USD  || Outdated || 3.8000 || 1,000.00 || 3,800.00 || 228.00
Forex Gain = 8,480.00 <br />
Forex Loss = -593.60 <br />
'''Net Forex Gain = 7,886.40'''<br />
|-
|-
| style="vertical-align: top;" |ES || || style="text-align:right;"| 50,000.00 || style="text-align:right;"| 50,000.00  
| USD  || Actual || 4.3000 || 1,000.00 || 4,300.00 || 258.00
|-
|-
| Total Item 12 (ES + IES) || style="text-align:right;"| 62,886.40 || style="text-align:right;"| 62,886.40 || style="text-align:right;"| 62,886.40
| || ||  || || Under declared || -30.00
|}
|}
<br />
<br />

Latest revision as of 10:03, 15 December 2017

How to avoid costly GST errors?


Introduction

This guide will help you to easily identify the common GST errors in GST Returns. To minimize GST amendment and incorrect GST Returns to RMCD.
You may wish to take note the follow errors commonly made by businesses:
1. Standard Rated Supply (5a) and Output Tax (5b)
2. Stanadard Rate and Flat Rate Acquisitions (6a), and Input Tax (6b)
3. Local Zero-Rated Supplies
4. Export Supplies
5. Exempt Supplies
6. Supplies Granted GST Relief
7. Goods Imported Under Approved Trader Scheme and GST Suspended
8. Capital Goods Acquired
9. Bad Debt Relief
10. Bad Debt Recovered
11. Output tax value breakdown into Major Industries Code (MSIC Code)
12. Other important info required in GAF
13. GL Ledger vs GST-03
14. Foreign currency exchange rate


Standard Rated Supply (5a) and Output Tax (5b)

Mapping of GST Tax Code:
GST-03 Description Tax Code
5a Total Value of Standard Rated Supply SR, DS
5b Total Output Tax (Inclusive of Tax Value on Bad Debt Recovered & others adjustments) SR, DS, AJS
1. Sale or disposal of business assets
2. Goods given free as gift.
3. Inter-company transactions
4. Margin Scheme

Standard Rate and Flat Rate Acquisitions (6a), and Input Tax (6b)

Mapping of GST Tax Code:
GST-03 Description Tax Code
6a Standard Rate and Flat Rate Acquisitions TX, TX-CG, TX-ES (DMR is fulfilled only), TX-IES (Total/Full amount), TX-RE, IM
6b Total Input Tax (Inclusive of Tax Value on Bad Debt Relief & other Adjustments) TX, TX-CG, TX-ES (DMR is fulfilled only), TX-IES (GST Claimable only based on IRR), TX-RE, IM, AJP
Not all input tax claims are allowable. You can claim input tax on your purchases only if the below conditions are fulfilled.
1. Tax invoice / Simplified Tax Invoice / Custom K1 / Custom K9
a. The buyer can use simplified tax invoice if the total amount GST payable is RM30 or less.
b. if the total amount of GST payable is more than RM30, the buyer must request for a tax invoice with the name and address of the buyer.
c. Tax invoice issued by approved person for Flat Rate Scheme.
d. K1 form for imported goods
e. K1 and K9 for goods removed from bonded warehouse
2. Supplies made outside Malaysia which would be taxable supplies if made in Malaysia.
3. To be eligible for input tax claim relating to goods that are exported, a registered person (exporter) must ensure that:-
a. prescribed customs form for export (K2 / K8) must have an endorsement on Remarks column in Sistem Maklumat Kastam (SMK) – “A claim for input tax under the GST Act 2014 will be made”; and
b. Customs Official Receipt.
4. Disregarded supplies (supplies within group, supplies made in warehouse, supplies between venture operator and venturers and supplies between toll manufacturer and overseas principal).
5. Directly attributable to taxable supplies (ie. standard rated supplies and zero rated supplies). Click here to learn more about Partial Exemption.
6. Must not be disallowed expenses (or known as Blocked Input Tax).
a. Passenger motor cars (not more than 9 passengers including driver and unladen weight does not exceed 3,000 kg) including hiring of car
b. Repair and maintenance for motor cars
c. Family benefits
d. Club subscription fee
e. Medical and personal accident insurance
f. Medical expenses
g. Entertainment expenses for potential customer or others than employees.
7. Must be taxable purchases (ie. purchases made from GST registered suppliers)


Local Zero-Rated Supplies

Mapping of GST Tax Code:
GST-03 Description Tax Code
10 Total Value of Local Zero-Rated Supplies ZRL, ZDA
This refer to the following types according to GST (Zero Rate Supplies) Order 2014:-
1. Local supply of goods and services (ZRL):
a) Zero-rated supply of goods of any of the descriptions as in Appendix (Zerorated Supply) Order 2014 based on tariff code in such as milled-rice, fresh fruit, and live animals (cattle, buffalo, goat, sheep and swine),
b) Medicaments and medical gases in the National Essential Medicines List issued by the Ministry of Health and approved by the Minister and put up in measured doses or in forms of packaging for retail sale,
c) The supply of treated water by a person who is licensed under the Water Services Industry Act 2006 [Act 655] to domestic consumers irrespective of minimum or non-usage,
d) The supply of raw materials and components made to a person who belongs in a country other than Malaysia for the treatment and processing of goods by any taxable person under the Approved Toll Manufacturer Scheme, and etc.
2. Supply of goods from Malaysia to Designated Area, ie. Pulau Langkawi, Labuan, & Pulau Tioman (ZDA)

Export Supplies

Mapping of GST Tax Code:
GST-03 Description Tax Code
11 Total Value of Export Supplies ZRE
This refer to the Supply of goods or services from Malaysia to Oversea according to GST (Zero Rate Supplies) Order 2014.
1. Movement of goods is supported with Customs K2 form which must stated the following:-
a. Supplier's name and address as the consignor.
b. Recipient's name and address in overseas recipient as the consignee.
c. Supply of services must attached with supporting documents such as invoice for an international services. Examples includes sales of air-tickets and international freight charges.


How to check the transactions correctly entered?

At the invoice entry, please ensure the following are entered correctly:-
1. Customer name and address must be a foreigner company.
2. Country to define the destination of goods deliver.
3. Permit No to record the Custom K2 no for supporting document reference.
4. Tax code must be ZRE.
GST-ZRE-01.jpg


Exempt Supplies

Mapping of GST Tax Code:
GST-03 Description Tax Code
12 Total Value of Exempt Supplies ES, IES
This refer to the following types according to GST (Exempt Supplies) Order 2014:-
1. Services (ES):-
a. Private education
b. Private health services
c. Childcare services
d. Domestic transportation of passengers for mass Public Transports (eg. by rail, ship, boat, ferry, express bus, stage bus, school bus, feeder bus, workers bus and taxi)
e. Toll highway
2. Financial Services (IES):-
a. Interest income from deposits placed with a financial institution in Malaysia
b. Interest received from loans provided to employees (factoring receivables)
c. Realized foreign exchange gains
3. Goods (ES):-
a. Residential properties
b. Land for agricultural use
c. Land for general user (ie. burial ground, playground or religious building)


How to check the transactions correctly entered?
A) GST Listing

1. After GST Return processed, go to Print GST Listing....
GST-ES-03.jpg
2. Preview and select the report name GST Detail 2.
3. To ensure the document detail descriptions are clearly stated and map to the correct tax code.
GST-ES-04.jpg


B) GST-03

1. To quick do amendment before submit the GST-03 to RMCD. Click here to learn more about the GST amendment.
2. Double click on the item 12 in GST-03.
GST-ES-01.jpg
3. Drill down the documents to open and correct it accordingly.
4. Lastly, you have to Recalculate the amended GST Return.


Supplies Granted GST Relief

Mapping of GST Tax Code:
GST-03 Description Tax Code
13 Total Value of Supplies Granted GST Relief RS


Goods Imported Under Approved Trader Scheme and GST Suspended

Mapping of GST Tax Code:
GST-03 Description Tax Code
14 Total Value of Goods Imported Under Approved Trader Scheme IS
15 Total Value of GST Suspended under item 14 IS x Tax Rate


Capital Goods Acquired

Mapping of GST Tax Code:
GST-03 Description Tax Code
16 Total Value of Capital Goods Acquired TX-CG, TX, IM (Transaction GL Account related to Fixed Asset)


Bad Debt Relief

Mapping of GST Tax Code:
GST-03 Description Tax Code
17 Total Value of Bad Debt Relief Inclusive Tax AJP (AR only)


Bad Debt Recovered

Mapping of GST Tax Code:
GST-03 Description Tax Code
18 Total Value of Bad Debt Recovered Inclusive Tax AJS (AR only)


Output tax value breakdown into Major Industries Code (MSIC Code)

1. This part usually require you to breakdown the total output tax reported in 5b according to your main business.
2. You have to map to MSIC code.

Where to set the MSIC Code?
[GL | Maintain Account...]

1. Select and edit your main business supplies GL Account, eg. my main business is selling handphones.
2. Select an appropriate Industries Code.
3. You can change the search pattern to -A-. See screenshot below. So you can type-in the keywords, eg. Phone.
GST-MSIC 01.jpg


Other important info required in GAF

The GST Audit file is a way for taxpayers to submit information relevant to auditors in response to an audit request on information for auditing purposes. The information provided includes company identifications, names, supply & purchases, and general ledger transactions. There is also a footer record to ensure file integrity.


1. Record types are:-
Record Type Description Where it update???
C Company Company Profile
P Purchase Supplier invoice (PI) , Supplier Debit Note (SD), Supplier Credit Note (SC), Cash Book (PV) and Journal (JE)
S Supply Customer Invoice (IV), Customer Debit Note (DN), Customer Credit Note (CN), Cash Book (OR), Gift/Deemed Supply (GI), and Journal (JE)
L Ledger From the GL Ledger reports
F Footer GAF file integrity check

GL Ledger vs GST-03

[GL | Print Ledger Report...]

1. GST-Ledger-Vs-GST-03 is a very useful report to identify the unrealized human errors immediately. Possible errors may be due to documents had selected:-
a. Wrong tax code or category
b. Wrong account code
c. Use Tax Date which is different from Document Date
d. 5 Cents rounding had selected Tax Code.
2. It comprises of 2 reports:-
Report Name GL Acc Explanation
1 GST-Ledger-Vs-GST-03_5b GST-201 (GST - Payable) To reconcile the GST Payable account between the GL Ledger and GST-03
2 GST-Ledger-Vs-GST-03_6b GST-101 (GST - Claimable) To reconcile the GST Claimable account between the GL Ledger and GST-03
3. For example,
Supplier invoice date (15 Sept 2016) received in Oct 2016 and GST-03 Sept 2016 has submitted. Input tax will be claim in Oct 2016 by set the tax date (31 Oct 2016). In GL Ledger, the input tax will be posted in Sept 2016. However, this input tax will be appear in GT-03 Oct 2016.
With this GST-Ledger-Vs-GST-03 report, you can very easy identify out the reasons. See the screenshot below.
GST-LEDGERvsGST-03-01.jpg


Foreign Currency Exchange Rate

1. Always update the currency exchange rate at Tools | Maintain Currency.
2. Critical cost on output tax if bill in foreign currency to local customer:
Currency Exchange Rate Amount Local Amount Output Tax
USD Outdated 3.8000 1,000.00 3,800.00 228.00
USD Actual 4.3000 1,000.00 4,300.00 258.00
Under declared -30.00


See also