GST - How to calculate / manage / track GST.

[Derek Atkins]

Ben,

Thanks for your input.  This has been hashed and rehashed on this list
several times over the last year.  There is no "GST report" that sums
everything for you, but if you use the business features it will
compute this all for you properly.

-derek

Benjamin Carlyle <benjamincarlyle at optusnet.com.au> writes:

> 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
>
>
>
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-- 
       Derek Atkins, SB '93 MIT EE, SM '95 MIT Media Laboratory
       Member, MIT Student Information Processing Board  (SIPB)
       URL: http://web.mit.edu/warlord/    PP-ASEL-IA     N1NWH
       warlord at MIT.EDU                        PGP key available