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Down Payment

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Down Payment

Post by Evon on Wed Mar 18, 2015 3:07 pm

Hi,

I wish to seek advice on the invoice raised asking for down payment before 1st Apr 2015, but the supply of goods is after 1st Apr 2015.


1. Is the down payment paid before 1st Apr 2015 subject to GST?

2. Can we ask customer to pay the GST amount on the down payment invoice which is raised before 1st Apr 2015? p.s : Goods is to be delivered after 1st Apr 2015.


Evon

Posts : 27
Join date : 2015-03-13

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Re: Down Payment

Post by joseph on Wed Mar 18, 2015 10:40 pm

Section 183(2) of the GST Act 2014 (Transitional Provisions): where any payment is made or invoice is issued for a supply of goods or services that will be made on or after the effective date (01/04/15), GST is applicable and has to be account for on an inclusive basis in the first taxable period.

You cannot charge and collect GST before 01/04/15. You can however include 6% into the downpayment amount.

_________________


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
Join date : 2014-09-25

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Re: Down Payment

Post by Evon on Thu Mar 19, 2015 10:19 am

Hi,

Just to clarify, if we cannot charge and collect GST before 1/4/2015, how should I include the 6% into the down payment amount? i.e by including the 6% GST into the down payment amount , does is mean that charge and collecting GST before 1/4/2015?

Evon

Posts : 27
Join date : 2015-03-13

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Re: Down Payment

Post by joseph on Thu Mar 19, 2015 10:41 am

Just add in the 6% and don't mention it is for GST purpose.

Value of contract = RM100,000*
10% downpayment required = RM10,600

* not including 6% GST payable after 01/04/15

Explain to your customer you are required to account for GST in the first taxable period on the downpayment received.

_________________


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
Join date : 2014-09-25

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Re: Down Payment

Post by bubu1101 on Wed May 20, 2015 12:24 am

We receive deposit payment from customer, the invoice will issue on end of June as we will deliver the goods on end of June, the deposit received has to include together 6% gst or I can receive the deposit payment without gst & the balance payment+gst can be received after we deliver the goods??

So for this case, The tax point is still Invoice date or delivery date??

What is the tax code for deposit payment?

bubu1101

Posts : 16
Join date : 2015-03-08

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Re: Down Payment

Post by joseph on Wed May 20, 2015 9:49 am

You have to account for GST on the deposit you received if it is for taxable supply. Tax code to use is SR.

_________________


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
Join date : 2014-09-25

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