Deposit from Customer

Output Tax has to be reported either upon Invoice or Collection, whichever comes first. Thus, creation of Deposit will have to account for the Output Tax too.

1. Creation of Deposit

GST on Deposit is only calculated based on the Open Balance amount, and not the Total Receipt Amount.

Amount in open balance is always inclusive of GST regardless of the setting at configuration. The Journal Transaction for Deposit will be as below :

	Dr	Cr	Tax Code	Tax Rate
cash	150.00
accReceivable		150.00	SR	6%
Default GLCode for Output Tax		8.49
GLCode for GST Output Suspended on Deposit	8.49

2. Deposit Settlement

No changes to the way a Deposit is used to knock off other document

3. Output Tax Filing

During filing, Deposits with GST will be treated based on the scenarios below :

3.1 The Deposit has not been used to settle any document

The deposit will be filed. Its GST amount will increase the total Output Tax amount

3.2 The Deposit has been used to settle other document

The deposit will be filed twice.
First filing is to report its GST amount, which will increase the total Output Tax amount
Second filing is to reverse the GST amount based on the Deposit amount used, which will reduce the total Output Tax amount
The second filing is needed to prevent duplication of Output Tax, as the Invoice which was settled with the Deposit already contributed to the Output Tax
Thus, in this scenario, the Deposit will appear twice in the Output Tax Report

Besides the above, a Journal will also be created to reduce the Output Tax amount

	Dr	Cr
Default GLCode for Output Tax	8.49
GLCode for GST Output Suspended on Deposit		8.49

Example

1. 1 Jan 2016 : Customer pays deposit of RM150

Journal as below

	Dr	Cr	Tax Code	Tax Rate
cash	150.00
accReceivable		150.00	SR	6%
Default GLCode for Output Tax		8.49
GLCode for GST Output Suspended on Deposit	8.49

Total Output Tax for the month = RM8.49

2. 2 Feb 2016 : Goods is delivered to the customer and Invoice is created

Journal as below

	Dr	Cr	Tax Code	Tax Rate
accReceivable	150.00
generalSales		141.51
Default GLCode for Output Tax		8.49	SR	6%
inventoryCost	XXX
inventory		XXX

Total Output Tax for the month = RM8.49. Based on the above Journals, you will noticed that the Output Tax of RM8.49 was reported twice (once for Deposit, once for Invoice).

3. 3 March 2016 : You use the Deposit to knock-off the Invoice

Journal will be created as below :

	Dr	Cr
Default GLCode for Output Tax	8.49
GLCode for GST Output Suspended on Deposit		8.49

Total Output Tax for the month = -RM8.49. Thus, this will offset the double reporting of Output Tax mentioned above.

The journal entries above are illustrated and explained in the following screenshots from EMP system.

Refer to the following link for more explanation on Reverse RCT after filing Output Tax.
What happens to GST Output Tax when RCT is Reversed after filing?