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Maintenance Contract spanning over 1st April 2015

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Maintenance Contract spanning over 1st April 2015

Post by tewleepoo on Mon Mar 23, 2015 2:11 pm

If my company has a software system support services contract with the customer from 1st Oct 2014 to 30th Sep 2015 value at RM12K for the 1 year period (payment fully received), do I have to CN RM6K on 31st Mar 2015 for the remaining contract value from 1st Apr 2015 to 30th Sep 2015, and re-issue Tax Invoice for RM6K with deemed inclusive tax of 6% on 1st Apr 2015?

And for the re-issuance of Tax Invoice for RM6K, if my company is going to absorb the GST, can I issue the Tax Invoice with the Contract Value of RM5,660.40 plus RM339.60 GST (6% of RM5,660.40)?

Thanks in advance for any reply and attention to my issue.

tewleepoo

Posts : 1
Join date : 2015-03-23

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Re: Maintenance Contract spanning over 1st April 2015

Post by joseph on Mon Mar 23, 2015 3:58 pm

If you are going to deem GST-inclusive, there is no need for you to issue tax invoice, just account for the GST output tax in your first taxable period:

Dr Support Services Clearing A/c RM6,000.00
Cr Support Services Clearing A/c RM5,660.38 (Tax Code: SR)
Cr GST Output Tax RM339.62 (Tax Code: SR)

If your customer is GST-registered and they can claim the GST on this support services, then charge them the GST amount of RM360 (RM6,000 x 6%). Do the credit note @ 31/03/15 and tax invoice @ 01/04/15.

_________________


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
Join date : 2014-09-25

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Re: Maintenance Contract spanning over 1st April 2015

Post by joseph on Mon Mar 23, 2015 10:20 pm

Sorry, the correct accounting entries should be:

Dr [BS] Support Services Clearing A/c RM5,660.38
Dr [PL] GST Expenses RM339.62
Cr [BS] Support Services Clearing A/c RM5,660.38 (Tax Code: SR)
Cr [BS] GST Output Tax RM339.62 (Tax Code: 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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Re: Maintenance Contract spanning over 1st April 2015

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