Knowhow: GST Bad Debt Relief [BDR] Handling

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1 Knowhow: GST Bad Debt Relief [BDR] Handling Understanding GST Bad Debt Relief: Conditions: No. Requirements Supply Acquisition 1 Goods and/or services Provided to customers Provided by suppliers 2 6% GST on Invoices issued Declared in GST-03 Return, 5[a] & 5[b] Paid output tax to Customs 3 Invoice status Outstanding amount after 6 months from invoice month, full or partial Debtor s company closed down Declared in GST-03 Return, 6[a] & 6[b] Claimed input tax from Customs Outstanding amount after 6 months from invoice month, full or partial Creditor s company closed down GST Regulation for Bad Debt Relief and Bad Debt Recovered No. Requirements Supply Acquisition 1 Outstanding balances exceeding 6 months from invoice month, MUST process Bad Debt Relief [BDR] on the 7 th month If the bad debt relief is not claimed by the supplier in the immediate taxable period immediately after the expiry of the sixth month, then the taxable person has to notify the Director General (DG) within 30 days after the expiry of the sixth month on his intention to claim at a later date. (DG s decision : 28/10/2015) Tax code used will be AJP and declared in GST-03 Return, 6[b] A GST registered person who has made the input tax claim but fails to pay his supplier within six months from the date of supply shall account for output tax immediately after the expiry of the sixth month (s.38(9) GSTA) (DG s decision : 28/10/2015) Tax code used will be AJS and declared in GST-03 Return, 5[b] 2 When BDR processed invoices are paid, Bad Debt Recovered [BDV] must be processed Tax code used will be AJS and declared in GST-03 Return, 5[b] Tax code used will be AJP and declared in GST-03 Return, 6[b] P a g e 1 8

2 Accessing Bad Debt Relief function: The Bad Debt Relief function is located at Accounting > Transaction > GST Bad Debt Journal (AR) > Bad Debt Relief Bad Debt Relief Listing screen: The bad debt relief processed and saved will be listed on the grid section for user view and track User can click on the record line + to view the list of outstanding invoices selected for the bad debt relief processing o Open status Bad Debt transaction included in GST03 but not submitted yet. o Submitted status Bad Debt transaction is included in GST03 and save as FINAL. P a g e 2 8

3 Bad Debt Relief entry screen ADD: The bad debt relief processing screen comprises of 3 sections: Click Save 1 Section 1 - Header This is the filtering criteria section for user to set and selectively process the bad debt relief for individual customer, if preferred Date From / To Auto display date range and allow user to manually input date range for selective viewing. This field is enable for new transaction ONLY. Batch No. Batch number for this Bad Debt Relief transaction. Period Financial period for this Bad Debt Relief transaction. Reference Allow to manual key in OR auto numbering. Description Defaulted to Bad Debt Relief Claim and user has the option to add or replace with own preferred description. Date Defaulted to today s date and user has the option to change the date. Taxable Period Defaulted to current taxable period and user has the option to change the taxable period. P a g e 3 8

4 2 3 Section 2 Body Section 3 - Footer This section will list and mark ALL outstanding documents exceeding 6 months by default for immediate processing, if user wishes to process the list all at one go User has the option to unmark to deselect the document[s] for the bad debt relief processing The total GST value for the financial entries to be displayed at the footer section will be generated automatically based on the selected transaction. This section display the financial entries for the GST value computed from the marked/selected documents in body section The tax code AJP is auto defaulted to avoid wrong tax code selection Description is defaulted to GST Bad Debt Relief and GST Bad Debt Liability and user has option to add or replace the description Click on the [Save] button to save the financial entries and this bad debt relief journal will be updated to the Bad Debt Relief Listing screen Bad Debt Relief entry screen EDIT: User can click on the record line + to edit the existing Bad Debt Relief transaction. Please take note that button is disabled if the taxable period for the selected Bad Debt Relief transaction is LOCKED. P a g e 4 8

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6 Allowed to reselect other debtor/s. Listing at the body will refresh once the original debtor is change to other debtor. Allowed to edit at the existing reference number. Not allowed to save if there is any duplicate reference number. Date From / To Enabled for editing ONLY. Allowed to select the outstanding bill to be added into Bad Debt Relief. Auto display date range. Allow user to manually input date range for selective viewing. Display all the outstanding invoices which already over 6 months for all debtors. Bad Debt Relief Journal [under Transaction File Maintenance] The system generated Bad Debt Journal is located at Accounting > Transaction File Maintenance (Go to the selected batch at the Bad Debt Relief Transaction) P a g e 6 8

7 GST Reports Tax Report GST-03 Return P a g e 7 8

8 Lampiran 2 GAF ****** END ****** P a g e 8 8