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Fintric
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Hi Chrislck,
You are correct that both options gave you the same result. As an accountant, I would prefer option A as it is cleaner. However, if you have to do option B, here is what you need to do to not get fined if the agent doesn’t transfer the GST on your behalf to the ATO:
1) Get the message from the agent above “don’t worry about the GST on sales; we’ll send it to ATO on your behalf. It means you don’t have to transfer this $100 to ATO; you’ll claim the $30 as usual from ATO via BAS” in writing and save it where you can find later
2) Get an invoice from the agent for $300 + $30 GST. Make sure you get this or you can’t claim the $30 GST in your BAS
Accounting entry is:
Cr Account Payable 330
Dr Agent fee expense 300
Dr GST account 30
Then “fake” pay it with a clearing account
Cr Clearing account 330
Dr Account payable 330
3) Raise a sales invoice for $1000 in your accounting system, put it under GST Free category and send it to the agent.
Accounting entry is:
Cr Sales 1000
Dr Account receivable 1000
Then “fake” receive it with a clearing account
Cr Account receivable 1000
Dr Clearing account 1000

Now the net effect in the clearing account should be exactly $670

When you receive $670 in your bank, instead of putting it to your sales, put it to your clearing account.

In your BAS, you will report 1000 under GST free sales and $330 under non-capital purchase. You will pay nothing under GST but claim $30 from the ATO.

On the other hand, the agent has to pay $130 to the ATO and not $100. Because at the end of the day, the ATO needs to collect a net $100 from the transaction. If the agent only remits $100 and you claim $30, the ATO only get s$70 and they will come down on you very hard with fines.

I understand that some times you need to follow the agent’s process to maintain a good relationship. After all they get you works. So doing it this way will save you hassles in the future. If you get questioned by the ATO, show your methodology, show your written confirm and you will likely to be off the hook. The ATO will chase the agent if they do it wrong.

Hope this helps. I’m new here too so please be gentle as well :)