GST

## **GST Treatment**

The system is a GST ready solution; a gateway to your localized GST implementation. We have simplified GST tax settings whereby users are able to set input and output tax correctly to its code and linked accounts. Users are also able to further define tax types such as Import Tax, Export Tax and Blocked Tax.

The system provides a GST Summary Report that summarizes tax movements, dates, accounts, invoices, tax amounts and total transaction values. This report includes an accurate list of Output Taxes, Input Taxes, Zero-Rated Taxes and Non-Claimable Taxes in separate sections. New added functions include GST Return History and GST Summary by Year which enables users to make GST adjustment for Mixed Supply whilst keeping track of the GST Report the company had created/submitted to Royal Malaysian Customs (RMC).

The system auto-calculates tax values enabling users to check journal entries as well as GST reports at real time. Furthermore, it able to trace any transactions that is due to be paid or receive payment and declare the transactions for GST purposes.

For Malaysian accounts, the system summarizes crucial information related to the GST-03 Form, which closely follows the standardized format supplied by the Royal Malaysian Customs (RMC). This makes it easier for users to submit their GST-03 reports according to the predetermined reporting period. For RMC’s audit purpose, it also provides GST Audit File or known as GAF.

## **GST Tax Setup**

GST tax codes have been predefined in the system and pre-linked for your account. The explanation below is for information purposes only. It is not advisable for you to change the tax codes and its account linkage.

**To date there are 23 active tax codes in Malaysian**

## **GST Implementation**

However, not all of them are active for your business. This depends on the nature of your business activities. The system will be able to tag these tax codes to the items and services in your business based on their advice and it can be changed at anytime

Your business GST setup should be recommended by a certified GST Consultant or Accountant. However, our recommended settings are for the nature of the GST movements:

* Liability accounts to record GST movement:
	+ Account for GST Input
	+ Account for GST Output
	+ Account for GST Adjustment

* Expense account
	+ Account for Blocked GST Expense
	+ Account for GST Paid
* Other Income account
	+ Account for GST Claimed

To access the tax listing in Swan; move your mouse to **GST**>> **GST Setting**

### **GST Tax Setup for INPUT TAX**

Move your mouse to **GST** >> **GST Setting** >> **GST Tax Setup**

### **GST Setup for Individual Tax Code**

You can also set up each tax code to its specific account, as per your company CoA.

1. To do so, go to GST >> GST Setting >> Tax List >> Select the Tax Code and Click "Edit"
2. You may change the tax name, tax description, and tax rate. However, we DO NOT RECOMMEND you to do so as Swan is following the standard RMC regulation.
3. Depending on the nature of the tax code, either it is Input Tax or Output Tax, you can change the tax linked account and linked it to the respective Account Code in your CoA. Kindly ensure that your Input Tax and Output Tax linked to a correct Account Class.

\*\* **Please be warned that once the setting for the tax linked account has been set and a transaction has been created, you will not be able to change the linked account again. Therefore, this feature is highly recommended for advance user.**

## **GST/Tax Report**

1. The system provides a GST Summary Report that summarizes tax movements, dates, accounts, invoices, tax amounts and total transaction values. This report includes an accurate list of Output Taxes, Input Taxes, Zero-Rated Taxes and Non-Claimable Taxes in separate sections. The system auto-calculated tax values thus enabling users to check journal entries and GST reports at real time.
2. GST Adjustment Account must be selected before users able to view the taxes. This account will used should there are any adjustment is done in the GST Report.
3. Enter the date range to be viewed and click View Report button to view the report or click **Generate GAF** to create GST Audit File (GAF).
4. **View GST Details** - The report will list the details of transactions that the tax occurred. Click on the transaction number to view the invoice. The report was segmented to five sections; Output Tax transactions, Input Tax transactions, Total of Output minus Input (the total will determined whether GST is claimable or payable), Zero-Rated Tax transactions and Non- Claimable Tax transactions.
5. **View GST Summary** – This report provides essential information of GST-03 form. Users will able to extract the data from this report and incorporated it into the company GST-03 form to be submitted to Royal Malaysian Customs.
6. **Declaration of Outstanding Invoices** – Users will be able to declare the outstanding invoices in certain period (users will need to refer to Royal Malaysian Customs for the exact period). Users will be given lists of all the outstanding invoices within the period given. Users then will need to check the invoices to be included in the particular month and choose the tax code for the transactions. The chosen transactions will be included in the GST report.

## **Generating GST Reports**

Once you have completed all the previous processes, you are now ready to generate and process your GST report for your monthly submission.

By performing the previous steps, Swan has now recorded, calculated and prepared Input Tax and Output Tax and GST movement records.

#### GST Monthly Movement Report

Move your mouse to **GST** >> Click on **Generate GST Submission**

In order to generate the report:

1. Select GST Adjustment account number 4020/0003 in the ‘GST Adjustment Account’ selection
2. Enter your date range from 1st of the reporting month to the last day of the reporting month e.g. 1st November 2016 to 30th November 2016
3. Click on the **‘View Report’** button to generate the GST Movement report for the selected period
4. Click on the **‘Generate GAF’** button to generate the GST Audit File should you are requested to do so by the Customs Department

    The GST Movement report summarized 4 key GST movements in your business:

**1.    Output Tax**

* Taxes generated from your sales data and other incomes receive.
	+ Sales import excel uploads
	+ Other Receive payments made via the Accounting >> Receive A Payments module

**2.    Input Tax**

* Taxes generated from your purchases and expenses from
	+ Purchase import excel uploads
	+ Other payments made via the Accounting >> Make A Payments module

**3.    Zero Rated Tax**

* Combined zero rated/exempted tax amounts from your sales and purchases

**4.    Blocked Tax**

* Any purchases for personal consumption which input tax is incurred but not claimable

### **GST Summary / Submission Processing**

In order to continue processing your monthly submission; click on the **‘View GST-03’** button at the top right of the page.

The GST Summary segment displays a mock-up of your actual GST-03 submission form. Please review the information displayed and once you are ready, scroll down to the ‘GST Submission’

Your Input Tax if greater than your Output Tax. Which means your taxes paid on your purchases exceeds your taxes collected from your sales; therefore you will be claiming your taxes from Customs. Your GST Submission remarks will begin with a “GST Claimable …” sentence.

Your final posting account selection will look like below:

We recommend selection “General Debtor (Account Receivable) | 3000/0001” for your DEBIT account and leave the CREDIT account as “GST Input Tax | 4020/0001”

**Payable Mode:**

Your Output Tax is greater than your Input Tax. Which means your taxes collected from your sales exceeds your taxes paid from your purchases; therefore you will be paying the balance to Customs. Your GST Submission remarks will begin with a “GST Payable…” sentence.

Your final posting account selection will look like below:

We recommend selection “General Creditor (Accounts Payable) | 4000/0001” for your CREDIT account and leave the DEBIT account as “GST Output Tax | 4020/0002”

Click on the “Generate GST Return” button. The system will then post a journal for your final GST movement for the reporting period selected.

### **GST Submission History**

Generating a GST Submission can be done only once in Swan. Once you have generated your submission file; a GST Submission History is automatically generated by the system. You cannot regenerate a GST submission for the same reporting period.

Should you make a mistake and want to correct your submission data, you can however delete this record by clicking on the ‘Delete’ icon on the specific reporting period and regenerate your submission.

    From the GST Return History view, you can:

1. Generate you GST-03 Form for manual submission.

* Click on the  magnifying glass icon on the ‘**GST-03 Form**’ column to generate your GST-03 Form

2. Generate your TAP Submission
file.

* Click on the magnifying glass icon on the ‘**Generate File**’ column to generate your TAP Submission file
* Download the submission.TXT file when the Save File prompt appears
* You can then log in to your TAP in Custom’s GST portal and submit this file for your online TAP file submission

### **GST Adjustment Function**

This function is unlike other function in GST Treatment whereby the other function will include the total amount of the document (i.e. invoices, debit note, credit note and tax journal). GST Adjustment made adjustment on the Tax Value Only, and user may choose to add the total amount of the document or just the tax value into the GST report.

### **View GST Return History**

Generating a GST Submission can be done only once in Swan. Once you have generated your submission file; a GST Return History is automatically generated by the system. You cannot regenerate a GST submission for the same reporting period.

Should you make a mistake and want to correct your submission data, you can however delete this record by clicking on the **‘Delete’** icon on the specific reporting period and regenerate your submission.

### **GST Yearly**

Under this function, you may able to view your GST yearly summary.

To view, go to **GST >> click on GST Yearly Summary**

## **GST Applied Date Function**

This function allowed the user to change the source documents GST submission date due to various reasons. The user able to keep the date of which the transaction occurred for accounting purposes and declare the transaction’s GST in other months.

**Note**: This feature will not create a new journal entry and will only affect the GST reports. Kindly use with caution as this feature will affect your monthly GST submission.

*Disclaimer: The instruction of this feature is provided for the users. This feature may not be used for unlawful purposes and that use is expressly prohibited under the terms and conditions of its use. Use and misuse of this feature could involve serious impact on GST submission. Users are required to fully understand this feature before using it. Rofarez Solutions Sdn Bhd will not bear any responsibility for any frauds, problems or losses caused by users' use and misuse of this feature.*

This feature is available at the **GST >> GST Applied Date** menu.

GST Applied Date function is applicable for certain transactions only; **Sales Invoice, Receivables, Credit Note, Purchase Invoice, Expenses and Debit Note**. Steps to apply the feature on the transactions are as below:

* Select the type of transaction of which you would like to adjust its taxable period.
* Filter the documents either by ‘Transaction Date’ or ‘GST Applied Date’.
* Select the range of the documents that you would like to adjust.
* Drill down your selection via specific contact or document’s number.
* Click Find button once you have made your filter selection to process.
* The system will retrieve all related documents that fall under your selected criteria and display them in the list.
* You may tick one or multiple documents that you would like to adjust its declarable tax period.

* Once you have made your selection(s), click on the GST Applied Date field.

* Click submit when you have selected the new GST Applied Date for the documents.
* The documents’ GST declaration date has been changed to the new GST Applied Date.

**Note**: You will need to rerun your GST Processing for the applicable period for these changes to take effect in your GST Reports.

## **GST Reverse Charge Mechanism**

The reverse charge mechanism setting allows you to set which tax codes you will be applying a reverse charge mechanism to base on Customs' guidelines and your business operation practices. Once the setting is done, you will be able to tell SWAN when to trigger the reverse charge mechanism process upon creation of your Purchase Invoices or Payment Vouchers.

This feature is accessible via **GST >> GST Reverse Charge Mechanism.**

Before user able to apply the reverse charge mechanism in the purchase invoice or payment voucher, you will require to set the tax code of which the feature applicable on.

Though you can create more than one tax code setting, the system will retrieve the latest setting when there is a similar tax code occur. For example, you have selected Input Tax (TX) and Output Tax (SR) as the first setting. The second and latest setting is Input Tax (TX) and Output Tax (DS). When you would like to apply Reverse Charge Mechanism on your transaction, the system will retrieve the latter setting.

To set the reverse charge tax code:

* Select the transaction Tax Code (Input Tax) from the drop down list.

* Select the transaction Tax Code (Output Tax) from the drop down list.

* Click Add Record.
* To delete the setting, click on the X button.

To apply the Reverse Charge Mechanism on Purchase Invoice, the steps are as following:

* Create purchase invoice.
* Before posting the invoice, at the transaction option field, select “Apply Reverse Charge” option from the drop down list.

* Save or Post the transaction once you have selected the “Apply Reverse Charge” option.
* Once you have saved or posted the invoice, the system will create a double entry for your GST Input Tax and GST Output Tax.

## **Gift Allocation**

Gift allocation is a requirement from Royal Malaysia Customs Department (RMCD) to record the value of tangible gifts from a GST registered company to another personnel or company. To apply gift allocation feature to record the gift that you have given to others (employee, supplier or customer), there are few RMCD regulations that you will need to take note.

* No GST will be charged on the gift made in the course or furtherance of business to the **same person** in the **same year** where the total cost of the gift does **not exceed RM500**. If the total cost is more than RM500, GST needs to be accounted for and input tax is claimable.

* **Gift bought** by a taxable person **from a non-GST registered person worth more than RM500** and given free without consideration (as a gift) **is not subject to GST** **but no input tax is claimable as the gift is acquired without tax.**

* **The gift purchased is subject to 6% of GST**, gifts which were purchased with subject to GST 0% or not liable to account GST will not be calculated in the RM500 total cost.

Once the gift given to your contact fit the criteria as per RMCD regulations, you may utilize the Swan Gift Allocation to record your gift transactions.

### Recording Gift Allocation

To record gift given to another personnel, go to GST >> Create >> Gift Allocation

* Select the Fiscal (Tax Year) Period
* Select Receiver. If the receiver is new, scroll down to create new receiver
* For the new receiver, you may add new receiver details and its gift record. Enter the receiver code (the code must be unique for each receiver). The system allows for you to create the receiver code created the same as the existing contact code.
* Enter the Document No. This number may be referred to your Purchase Invoice to purchased the gifts.
* Enter the date of which the gift transaction to be recorded.
* Enter the description of the gift transaction.
* Enter the gift total amount, inclusive of GST amount.
* Save the transaction.
* The YTD Accumulated Amount will be accumulated for the same person within the same year. If the YTD Accumulated Amount exceed RM500, the system will calculate the GST Taxable Amount and required you to select the Gift Expense Account.
* Click Save to record the gift transaction.

*\*\*You may create a new gift expense account to record all the gift transactions recorded.*

### Example of Recording Gift Allocation

The example of recording Gift Allocation will be as such:

* Selecting fiscal year and receiver
* Creating new receiver
* Entering gift details - Scenario 1: CNY Hamper
* Saving the gift transaction details. The system will record the transaction and a gift history list will be created for the receiver.
* Entering gift details - Scenario 2: Raya Hamper.
* The gift recorded for the same receiver within the same fiscal year exceed the amount RM500, therefore, the GST on Gift will be calculated and recorded. The system will prompt you to select the Expenses account to record this transaction.
* Saving the gift transaction and the system will record the transaction and include it on the gift history list. As GST was calculated, a journal entry will be created and the GST amount is included in the monthly GST submission.
* Entering gift details - Scenario 3: Xmas Hamper.
* The accumulated gift total includes CNY Hamper and Raya Hamper values; exceeding RM500. Therefore, any gift recorded for the same person will incur GST.

## 21-Day Rule

The 21-day rule is applicable when you delivered the goods before creating any invoice to your customer. RMCD regulations stated that “if the tax invoice is not issued by supplier within 21 days from the date of goods delivered or services performed and no payment is made since then, then the Time of Supply will fall back to the date of delivery”. RMCD required all the Delivery Order (DO) created must be converted as Tax Invoice within 21-day of the deliverable.

### Identifying Delivery Order (DO) Without Invoice

In Swan, there are many ways for you to identify DO which do not have any invoice tagged to it.

DO Listing

* To view DO listing, go to Sales >> Lists >> Deliver Order List
* DO listing will show all the DO created within the selected period.
* At the column label as “Invoiced”, the table will indicate whether the DO has an invoice tagged to it. DO with the “Invoiced” column label as “NO” means that the no invoice is created for the DO yet.

* To generate tax invoice for the DO, click on Alter button and at the bottom of the page, generate invoice option is available.

GST Report

* When generating your GST report, the DOs which did not yet have any invoice tagged to it will appear in the GST Details Listing.

* The list will show the DOs details such as creation date, numbers of days issued as of the GST report date, view the DO and the option to generate the invoice for the DO.
* Clicking generates invoice option will bring you to the Tax Invoice page, enter the details such as price and tax code. Once you have entered all the relevant information, post the invoice

* The GST report for DO listing will no longer show the DO and the transaction will be posted in the Output Tax transactions.

### Converting DO to Sales Tax Invoice

* From DO listing, you can click on “Alter” button
* From GST Report, you can click on “Generate Invoice” button
* Both actions above will direct you to the tax invoice page

* Enter the details of the transaction and post the invoice

## **GST Declare Simplified Tax Invoice**

Simplified tax invoice can be used to claim input tax. In the case of an approved tax invoice without the name and address of the recipient, the allowed input tax amount claimable is RM30.00 or less.

This function allows user to convert the purchase invoice to simplified tax invoice and declare the allowable amount of input tax which does not exceed RM30.00 (6% GST).

**Note**: This feature will create a new journal entry and will affect the Financial and GST reports. Kindly use with caution as this feature will affect your monthly GST submission.

*Disclaimer: The instruction of this feature is provided for the users. This feature may not be used for unlawful purposes and that use is expressly prohibited under the terms and conditions of its use. Use and misuse of this feature could involve serious impact on GST submission. Users are required to fully understand this feature before using it. Rofarez Solutions Sdn Bhd will not bear any responsibility for any frauds, problems or losses caused by users' use and misuse of this feature.*

This feature is available at the **GST** >> **Declare Simplified Tax Invoice**

Declare Simplified Tax Invoice function is applicable for Purchase Invoice transactions only. Steps to apply the feature on the transactions are as below:

* Select **Date Range** of transaction of which you would like to convert/adjust its purchase invoice.
* Select the **Vendor** (optional).
* Drill down your selection via specific contact (vendor name)
* Click **Search** button once you have made your filter selection to process.
* The system will retrieve all related documents that fall under your selected criteria and display them in the list.
* You may tick one or multiple documents that you would like to adjust its claimable amount.

* Once you have made your selection(s), click on the Select **Expense Account** field.

***Note**: This field will show default expenses tax account only, should you want to add new tax expense account, kindly refer to our mini guide (**How to** >> **Accounting**).*

Click **Submit** buttonwhen you have selected the Expense account for the documents.

Now, The Purchase Invoice document has been changed to the new Simplified Tax Invoice.

    Once you have submitted your transaction, the system will create a double entry and reflected in the GST details report for the adjustment amound made.

To view journal, go to **Accounting** >> **View Journals**

To view GST Report, you may go to **GST** >> **Generate GST Submission**

    **Note**: You will need to rerun your GST Processing for the applicable period for these changes to take effect in your GST Reports.

To reverse this transaction, you may go to Simplified Tax Invoice list and click at **Reverse** button as shown below:

*\*This action will revert back all the transaction to the original documents.*