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Issuance of CN on 1/4/15 for Cancellation

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Issuance of CN on 1/4/15 for Cancellation

Post by emhan on Mon Mar 16, 2015 11:05 am

Hi

Wish to clarify on transitional issue :-

- Company issued sales invoices on 31/3/15 for management purpose and later cancel these invoices on 1/4/15.
No delivery of goods done because accidentally issued sales invoices and immediately do the cancellation following day.

Will it trigger to be tax inclusive for sales invoices issued on 31/3/15?

Thank you.

emhan

Posts : 20
Join date : 2015-02-24

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Re: Issuance of CN on 1/4/15 for Cancellation

Post by joseph on Mon Mar 16, 2015 12:24 pm

Any cancellation after GST effective date is likely to be subjected to queries. Just cancel the invoice on 31/03/15.

_________________


DISCLAIMER:
Any opinion expressed is strictly my personal view based on my understanding and interpretation of the GST Act 2014, Regulations, Orders, DG's Panel Decisions and Customs' Guides. You should seek advice from experts and/or the Customs Dept if the subject matter is significant to your business.

joseph

Posts : 277
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Re: Issuance of CN on 1/4/15 for Cancellation

Post by wjtan7 on Thu Mar 26, 2015 10:18 am

How about goods sold in March 2015 and customer subsequently returned in April after GST started? How shall we issue CN for this?

wjtan7

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Re: Issuance of CN on 1/4/15 for Cancellation

Post by joseph on Thu Mar 26, 2015 11:14 am

Para 16 of Customs' Guide on Transitional Rules:

Issue CN to your customer as normal without GST.

If there is a sales tax and you refund the sales tax to your customer, you may claim the sales tax you refunded by using the form JKED 2.

_________________


DISCLAIMER:
Any opinion expressed is strictly my personal view based on my understanding and interpretation of the GST Act 2014, Regulations, Orders, DG's Panel Decisions and Customs' Guides. You should seek advice from experts and/or the Customs Dept if the subject matter is significant to your business.

joseph

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Re: Issuance of CN on 1/4/15 for Cancellation

Post by hueyhwayong87 on Fri Mar 27, 2015 10:32 am

Hai... I am confuse with all credit note also.
Invoice issued before 1/4/15, Return after 1/4/15
1. No GST will incur right? (no sales tax of that material before)

Invoice issued 3/4/15 , Return 10/5/15
1. What is Credit note's exchange rate? Follow original invoice exchange rate or return date? (Invoice is USD currency)

Hope can get the answer.
thank you

hueyhwayong87

Posts : 7
Join date : 2015-03-27

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Re: Issuance of CN on 1/4/15 for Cancellation

Post by joseph on Fri Mar 27, 2015 11:44 am

Invoice issued before 1/4/15, Return after 1/4/15

1. No GST will incur right? (no sales tax of that material before)
The Act is actually silent on the issue... but it is ridiculous to include a GST charge on goods return when there was no such charge originally imposed.

Invoice issued 3/4/15 , Return 10/5/15
1. What is Credit note's exchange rate? Follow original invoice exchange rate or return date? (Invoice is USD currency)
This is an accounting question, right Smile ? I believe it is covered under FRS121. If I am not mistaken, monetary transactions are converted at spot rate (or average rate) at the date of the transaction. Sale is a monetary transaction and so is stock return. So, these separate transactions should be converted at the spot rate prevailing on the respective transaction dates.

_________________


DISCLAIMER:
Any opinion expressed is strictly my personal view based on my understanding and interpretation of the GST Act 2014, Regulations, Orders, DG's Panel Decisions and Customs' Guides. You should seek advice from experts and/or the Customs Dept if the subject matter is significant to your business.

joseph

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Re: Issuance of CN on 1/4/15 for Cancellation

Post by hueyhwayong87 on Fri Mar 27, 2015 12:03 pm

Joseph thanks of your reply. Smile
Refer the 2nd question. How about GST?

Example: Invoice 3/4/15 we using ex-rate 3.7 and GST also @rate 3.7, Return 10/5/15 Credit Note and GST rate should follow original or spot rate?

hueyhwayong87

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Re: Issuance of CN on 1/4/15 for Cancellation

Post by joseph on Fri Mar 27, 2015 12:36 pm

Use the spot rate.

If you use the original exchange rates and the returns referred to different batches of stocks received under different invoices, you will have a headache computing the GST amount in Ringgit.

_________________


DISCLAIMER:
Any opinion expressed is strictly my personal view based on my understanding and interpretation of the GST Act 2014, Regulations, Orders, DG's Panel Decisions and Customs' Guides. You should seek advice from experts and/or the Customs Dept if the subject matter is significant to your business.

joseph

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Re: Issuance of CN on 1/4/15 for Cancellation

Post by joseph on Fri Mar 27, 2015 12:43 pm

BTW, why is there a GST? Aren't your exports supposed to be zero-rated?

_________________


DISCLAIMER:
Any opinion expressed is strictly my personal view based on my understanding and interpretation of the GST Act 2014, Regulations, Orders, DG's Panel Decisions and Customs' Guides. You should seek advice from experts and/or the Customs Dept if the subject matter is significant to your business.

joseph

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Re: Issuance of CN on 1/4/15 for Cancellation

Post by hueyhwayong87 on Fri Mar 27, 2015 12:44 pm

Is local sales.. we have some local customer using the USD currency.

hueyhwayong87

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Re: Issuance of CN on 1/4/15 for Cancellation

Post by hueyhwayong87 on Fri Mar 27, 2015 12:48 pm

That is the reason we very concern about the ex-change rate issue. And we just know that, all invoice bill to customer is follow daily selling rate ...but purchase/import material is using weekly customer rate.
It is hard for us apply in our system.

hueyhwayong87

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Re: Issuance of CN on 1/4/15 for Cancellation

Post by joseph on Fri Mar 27, 2015 1:07 pm

Local sales designated in USD... I see.

Use the exchange rates used by the Customs for your imports, if possible.

_________________


DISCLAIMER:
Any opinion expressed is strictly my personal view based on my understanding and interpretation of the GST Act 2014, Regulations, Orders, DG's Panel Decisions and Customs' Guides. You should seek advice from experts and/or the Customs Dept if the subject matter is significant to your business.

joseph

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Re: Issuance of CN on 1/4/15 for Cancellation

Post by hueyhwayong87 on Fri Mar 27, 2015 3:14 pm

Sorry, I have another question.

1.Regarding Free Trade Zone, do we need to replace the Commercial Invoice to Tax Invoice ?
2.If we use Tax Invoice, what Ex-change rate we should use? Custom Weekly Ex-change rate or Daily?

hueyhwayong87

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Re: Issuance of CN on 1/4/15 for Cancellation

Post by joseph on Fri Mar 27, 2015 3:44 pm

1.Regarding Free Trade Zone, do we need to replace the Commercial Invoice to Tax Invoice ?
This is a very vague question... is your company in FTZ or your supplier/customer in FTZ?
As long as your company is registered for GST purpose, you have to issue Tax Invoice for your taxable supply.


2.If we use Tax Invoice,  what Ex-change rate we should use? Custom Weekly Ex-change rate or Daily?
If the exchange rate is stated in Customs' K Form, use that rate. Does Customs provide daily exchange rates?
Customs' weekly exchange rates: http://tariff.customs.gov.my/FOREX/

_________________


DISCLAIMER:
Any opinion expressed is strictly my personal view based on my understanding and interpretation of the GST Act 2014, Regulations, Orders, DG's Panel Decisions and Customs' Guides. You should seek advice from experts and/or the Customs Dept if the subject matter is significant to your business.

joseph

Posts : 277
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Re: Issuance of CN on 1/4/15 for Cancellation

Post by hueyhwayong87 on Fri Mar 27, 2015 3:57 pm

Sorry joseph my question is unclear...
My company is outside Free Trade Zone. Now we are supplying our material to Free Trade Zone.
When we issue Tax Invoice to Free Trade Zone customer, can we using daily ex-change rate bill to them?
I am confuse because material we send to them(Free Trade Zone Customer) need to do custom clearance.

hueyhwayong87

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Re: Issuance of CN on 1/4/15 for Cancellation

Post by joseph on Fri Mar 27, 2015 4:30 pm

Section 162 (a) of the GST Act 2014: Goods imported into free commercial zone is not subject to GST provided that they are for commercial or retail trade activities. Not sure - but I think it is zero-rated. If your invoice contains only zero-rated supply, then issue normal (commercial) invoice will do.

Yes, you can use daily exchange rates to bill them.

Please refer to DG's Panel Decision 1/2014: http://gst.customs.gov.my/en/rg/Pages/rg_fai.aspx

_________________


DISCLAIMER:
Any opinion expressed is strictly my personal view based on my understanding and interpretation of the GST Act 2014, Regulations, Orders, DG's Panel Decisions and Customs' Guides. You should seek advice from experts and/or the Customs Dept if the subject matter is significant to your business.

joseph

Posts : 277
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Re: Issuance of CN on 1/4/15 for Cancellation

Post by hueyhwayong87 on Fri Mar 27, 2015 6:08 pm

Thank you very much Josph Smile

hueyhwayong87

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Re: Issuance of CN on 1/4/15 for Cancellation

Post by joseph on Sat Mar 28, 2015 10:30 am

Cheers! Very Happy

_________________


DISCLAIMER:
Any opinion expressed is strictly my personal view based on my understanding and interpretation of the GST Act 2014, Regulations, Orders, DG's Panel Decisions and Customs' Guides. You should seek advice from experts and/or the Customs Dept if the subject matter is significant to your business.

joseph

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Re: Issuance of CN on 1/4/15 for Cancellation

Post by emhan on Sun Mar 29, 2015 11:27 am

Hi

Just wish to check.

If invoice issued on 31/3/15, customer return the stock and ask for replacement on 5/4/15. Should we issue CN on 5/4/15 and reissue invoice for replacement of goods without GST?

Thank you.

emhan

Posts : 20
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Re: Issuance of CN on 1/4/15 for Cancellation

Post by joseph on Mon Mar 30, 2015 9:12 am

If you re-issue invoice post-GST, you may have to charge GST. Better to just replace the stocks without issuing CN and subsequent re-billing.

_________________


DISCLAIMER:
Any opinion expressed is strictly my personal view based on my understanding and interpretation of the GST Act 2014, Regulations, Orders, DG's Panel Decisions and Customs' Guides. You should seek advice from experts and/or the Customs Dept if the subject matter is significant to your business.

joseph

Posts : 277
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Re: Issuance of CN on 1/4/15 for Cancellation

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