Special-GST Treatment: Non-deductible Expenditure

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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


How does this work?

Setup New Tax Code

[GST | Maintain Tax ...]

1. Click New.
2. Follow the below SETTINGS to create.
Field Name Field Contents
Code ND-0 (Recommended code)
Description Non-Deductible
Tax Type (Non GST - Both Sales & Purchase)
Tax Rate 0% (please key-in)
Tax Account GST-301 (This field is compulsory. Due to tax rate is 0%, therefore no posting)
Tax Inclusive Untick

3. Click Save. See below screenshot.
440PX


NOTE : 
Do not click the tax rate arrow key down if the tax account is not defined yet.


Data Entry for Non-Deductible

For Purchase Invoice

1. Insert a new detail row and key-in the total input tax not going to claim.
2. Select the tax code "ND-0".
3. See below screenshot.
340PX


For GL Cash Book

1. Insert a new detail row and key-in the total input tax not going to claim.
2. Select the tax code "ND-0".
3. See below screenshot.
340PX


NOTE: 
Please ensure you understand the Non-Deductible expenditure from your auditors before you apply this guide.


How to analyse the total tax amount from Non-Deductible?

[ GL | Print Journal of Transaction Listing...]

1. Select the date range to APPLY.
2. Filter at the Tax grid column. See screenshot below.
240PX


3. You can see the non-deductible transactions filtered by ND-0.
240PX


4. From this instance, the total non-deductible expenditure amount is Rm3030.00
NOTE: 
This non-deductible tax amount will not post to GAF.

See also