GST - How to calculate / manage / track GST.

[Benjamin Carlyle]

Fistly, I am not an accountant. Even better, I'm not exactly a gnucash
user at this point. These minor quibbles aside I'll try to shed some
light on the question, at least.

On Tue, 2004-06-08 at 15:38, Serkano wrote:
> I´m still not sure how to manage / track / gst (tax) stuff...
> How do you manage GST in GnuCash?
> Where do you set the GST Value 10%?

Serkano is using the acronym GST to refer to the Australian Goods and
Services Tax, currently set at 10% by federal law. Just about all Aussie
businesses must charge this tax on (almost) all their sales, and may
claim credit for GST they pay on (almost) all their purchases. According
to my accounting textbook, accounting for GST can look something like
the following but can also be done in some very weird and wonderful
ways:

Payable, Vendor 110CR
Inventory 100DR
GST Clearing 10DR
Purchase Some Stock

Recievable, Customer 220DR
Inventory 100CR
GST Clearing 20CR
Sell some stock

Out of that set of transactions we now owe the government $10 of the $20
taxes we've collected on their behalf. Things get complicated when it
comes to handling debts and all that jazz, but I won't get into that.

One interesting aspect of Australian GST is that is not added on-top of
the value of a sale, instead it is taken as a chunk out of the sale.
You're not allowed to advertise a product as $100 and charge $110
GST-inclusive. If you advertise at $100, the GST amount is
total*rate/(rate+1) = $100/11 = 9.090909091, according to my
calculator.. presumably this is actually a recurring number. This is
messy, especially at tax time when I suspect the tax department will be
looking for GST Clearing to equal rate*total sales-rate*total purchases.
Oh well.

Now, how does gnucash help? To be honest I'm not too sure. I'm not that
familiar with the business features of gnucash. Hopefully my explanation
of the Australian requirements here will spark someone to be able to say
"Well, all you have to do is ... because we thought of that long ago".
Hopefully I've expressed the requirements somewhat truthfully.

Benjamin