a) There are the three-line item on the purchase invoice. First record purchased “Services” line items at their costs, using as many lines as necessary, just as though no withholding tax and GST was involved. Post these line items to the same accounts you normally would.
Second, add a line item for withholding tax at the amount indicated on your supplier’s sales invoice.
Third, add a line item for GST at the amount indicated on your supplier’s sales invoice.
Entered the withholding tax and GST as a negative quantity so it reduces the balance due on the purchase invoice.
Post these lines item to Withholding tax payable and to General sales tax payable, the account we created for this purpose under Liabilities group because we owe that tax to the tax authority.
We are only acting as collection agent for the tax authority of amounts that will eventually be due from the supplier.
Remitting withheld tax and GST:
Later on, withheld tax and GST are remitted to the tax authority, a payment is posted to the Withholding tax payable account and to the General sales tax payable account.
Please confirm our transections are true.
b) How can recording GST in Manager io, if supplier paid third, line item for GST to tax authority by his self. Please provide the support in this regards.
This is not possible unless you post the Edit screens of the purchase invoice and the payment. View screens are almost never useful for troubleshooting.
Your question is not clear. The answer would depend on what type of tax GST is and what it is assessed on. If it is a value added tax, you apply it by selecting the appropriate tax code on every relevant line of the purchase invoice. The program then calculates how much to offset against taxes you collect from your customers. The supplier’s payment of the tax he collects from you is not recorded in Manager, because that transaction does not involve you.
Second question is that if supplier is registered with tax authority then supplier the same 15% GST remit it to tax authority. When the supplier remits the general sales tax (GST), either the supplier or the tax authority will send us some form of “proof” of the remittance (a
certificate, account statement, voucher, etc.). This “proof” can be recorded in Manager io?
Please note Setting up a Withholding tax payable account is clear under heading “Purchase invoice process” in Manager Guides page 412 of 539.
Your withholding tax accounting looks correct. But the GST tax accounting is confusing. Normally, a supplier would assess a tax like that on a line item, and you would apply the appropriate tax code to your line item. That way, it would offset tax you collect from customers and reduce the amount you remit to the tax authority.
It would also contribute to the balance due on the purchase invoice. You would pay the GST to your supplier. Yet you say the supplier has paid it. Why would they do that? And if they did, why would they put it on a sales invoice to you?
In the case of withholding tax, the negative entry reduces the amount you pay to the supplier. Instead, it creates a liability to remit withheld tax to the authority on behalf of the supplier. But in the case of the GST, your negative entry reduces the amount payable to the supplier for no apparent reason. You did not indicate on the purchase invoice that the supplier had assessed GST, so there was no reason to reverse it. You need to explain this situation further. It sounds very unusual.
That looks more normal, but not yet completely normal. You did not explain why you would only pay 13,517.00 to the supplier if you owe them 15,617.00 PKR. This seems related to your earlier claim that the supplier is paying GST on your behalf. But you did not explain why they would do that.
Above GST scenario is now cleared for sales tax registered supplier in tax authority.
But what will be the transection in Manager io when the same GST 2,100 PKR have to pay by company due to non registered supplier? Please advise.
