When I purchase something for business, typically a 10% GST tax code is applicable. I record this in an expense account. Manager increment the total purchases and total tax on purchases paid against the 10% GST tax code. This information is displayed in the “Tax Summary” report. The same information is given to a localisation of type “Tax Summary”. It is used there to set the tax amounts for each tax code. So after this single transaction that would result in
| Localisation variable | Amount |
|---|---|
| netSales[GST_10] | 0 |
| taxOnSales[GST_10] | 0 |
| totalSales[GST_10] | 0 |
| netPurchases[GST_10] | 90.91 |
| taxOnPurchases[GST_10] | 9.09 |
| totalPurchases[GST_10] | 100 |
| taxOnSalesMinusTaxOnPurchases[GST_10] | -9.09 |
If I physically return the item and record it in Manager by posting a negative value cash transaction to an expense account, Manager will assume it is a sale. The payment type setting only changes if I enter a positive or negative amount in the payment / receipt. In both cases it will be add to the total sales recorded against that tax code. This is show both in the “Tax summary” report and the localisation of type “Tax Summary” resulting in
| Localisation variable | Amount |
|---|---|
| netSales[GST_10] | 90.91 |
| taxOnSales[GST_10] | 9.09 |
| totalSales[GST_10] | 100 |
| netPurchases[GST_10] | 90.91 |
| taxOnPurchases[GST_10] | 9.09 |
| totalPurchases[GST_10] | 100 |
| taxOnSalesMinusTaxOnPurchases[GST_10] | 0 |
Now if I actually provide a service or sell goods as part of my business for which 10% GST is applicable that will also add to my (real) GST 10% sales.
As a result what is reported in the tax summary (and GST Calculation Worksheet) as income will include my real income as well as the value of any goods I have returned.
This quantity is the first item in the printed GST Calculation Worksheet, labelled G1. It is one of the quantities reported to the tax department each time BAS (Business activity statement) is submitted.