Australia GST setup

[Christopher Lam]

Hi

(Bookkeeping rather than Gnucash issue)

Australia has an interesting concept called an RCTI (recipient created tax
invoice) which means that your supplier/agent (to whom you pay a service
fee + tax) creates the invoice for you.

Please note this does not require Gnucash's business features.

Let's say I earn $1000 doing a contract. Let's assume I add 10% GST on this.
My agent earns 30% of this fee, plus 10% GST.
We really want to track these GST quarterly for tax obligations.
The invoice would look like this:

Tax Invoice... dated 9/8/XX

DESCRIPTION         |   Amount
Contracting Fee     | 1,100.00
 (incl $100 GST)    |
Service Fee         |   330.00
 (incl $30 GST)     |
-------------------------------
My earnings         |   770.00

For this transaction, I'd be owing $70 to the people when completing my BAS
(business activity statement) quarterly.. With regards to Gnucash, there
are 2 ways of recording this transaction. Either:

(1) One split transaction per invoice (how I'm trying to make happen)

    Income:Contracting        1000
  Expenses:Service           300
  GST:Sales                  100
  GST:Purchases               30
  Assets:Bank                770
  GST:BAS                     70

(2) Or, easier, 2 transactions per invoice

   Income:Contracting       1000
   GST:Sales                 100
   Assets:Bank              1100

   Expenses:Service          300
   GST:Purchases              30
   Assets:Bank               330

As above, (1) is much more technically correct, ie single transaction with
split showing all disbursements from this RCTI, however, the GST:* accounts
are confusing - are they assets? liabilities? what about the BAS account?
Is this an asset or a liability account? What do we do every quarter? Add a
transaction into the BAS account when we've paid the taxman the GST owed?

(2) is *much* simpler to record and report on, however, each RCTI now
creates 2 bank transactions. Every quarter, I'd total up the GST:Sales,
minus GST:Purchases, and send a bank transfer to taxman, and record this
transaction to Expenses:Govt:GST

I'd love to use (1) however (2) seems the way forward.....