Checking the figures for your GST return.
Introduction
The General Ledger Tax Report can assist you to check the figures for your GST / VAT returns. It shows the Gross and Tax for Income and Expenses and Other (Non-GST) items.
This report example shows figures for a two-month GST period.
We would expect that the TAX figures for income and expenses that we can see in the top left section would match the corresponding figures in the top right section. If they do not, we should investigate to locate any discrepancies.
Analysing the GL Tax Report Figures
In example report in these screenshots, we've drawn boxes round sections of the report to help explain what the numbers mean, and highlighted rows to show the areas that might need attention for this particular example. This should give some guidance of the sort of things that you might need to look for, if your numbers don't match.
The top left section of the report in the red box shows the summary of the Gross and Tax amounts for Income and Expenses. These GST figures have come from the amounts of the General Ledger codes for GST on Purchases (GSTPUR) and GST on Sales (GSTSAL) that have been posted from the Receivable and Payable modules at the end of each month for the relevant tax period. The Expected Gross amounts have been calculated i.e. grossed up, from these GST amounts. These are the figures for the GST / TAX period, which in this example is a two-month period.
The lower red box shows the detail of the Gross and Tax amounts for Income and Expenses for each of the two months.
The top right section in the pink box shows the GST added from all the General Ledger Account codes for purchases/expenses and sales/income, where these GL account codes have a default Tax of GSTPUR or GSTSAL. We can see the analysis of these figures with a value for each General Ledger Account Code in the lower section of the report.
The top right section also shows the variance for the GST Income and the GST Expense, comparing the GST amounts for income and expenses from the red box and the pink box.
These variances can arise where transactions might have been coded and posted to the wrong General Ledger Account Code, so GST has been calculated incorrectly for the category of transaction, or that a General Ledger Account code has been set up with an incorrect Tax Status, i.e. that it is not calculating GST and it should be, or vice versa.
The process to correct this is to analyse the figures to check if the correct GST / TAX status has been applied. Where transactions have been coded incorrectly, or accounts have been set up incorrectly, we can then update the coding or re-code the relevant transactions.
In the example above, we can see that:
- In the Expenses / Purchases:
- The Overseas Travel line has had GST calculated and it should not have GST.
- The Equipment Purchases should have GST calculated and has not.
- In the Income / Sales:
- The Overseas Sales line has had GST calculated, and it should not have GST.
- The Asset Sales has not had GST calculated and it should have.
When we adjust for these variances, we can balance the GST calculations. We've used excel to help add up the figures.
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