Work with GST on Sales and Purchases

If your country or region requires you to calculate and report value-added tax (VAT) on sales and purchase transactions, you can set up Business Central to calculate VAT. For more information, see Setting Up to Calculations and Posting Methods for Goods and Services Tax.

There are, however, some GST-related tasks that you can do manually. For example, you might need to correct a posted amount if you discover that a supplier uses a different rounding method.

Tip

You can let Business Central validate VAT registration numbers and other company information when you create or update documents. For more information, see Validate VAT Registration Numbers.

Calculating and Displaying GST Amounts in Sales and Purchase Documents

When you choose an item number in the No. field on a sales or purchase document, Business Central fills in the Unit Price and Line Amount fields. The unit price comes from either the Item card or the item prices allowed for the item and customer. Business Central calculates the line amount when you enter a quantity for the line.

If you want the unit prices and line amounts to include GST, for example, if you are selling to retail consumers, choose the Prices Including GST check box on the document. For more information, see Including or Excluding GST in Prices and Line Amounts.

You can calculate and display GST amounts in sales and purchase documents differently, depending on the type of customer or supplier you're dealing with. You can also change the calculated GST amount manually, for example, so that it matches the GST amount calculated by your supplier on a given transaction.

Including or Excluding GST in Prices and Line Amounts

If you choose the Prices Including GST check box on a sales document, the Unit Price and Line Amount fields will include GST. By default, the values in these fields do not include GST. The names of the fields reflect whether prices include GST.

You can set up the default setting of the Prices Including GST for all sales documents for a customer in the Prices Including GST field on the Customer card. You can also set up item prices to include or exclude GST. Typically, prices on the Item Card will exclude GST.

The following table provides an overview of how application calculates the unit price amounts for a sales document when you have not set up prices on the Sales Prices page:

Price Includes GST field on Item Card Prices Including GST field Action Performed
Not Enabled Not Enabled The Unit Price on the Item Card is copied to Unit Price Excl. GST field on the sales lines.
Not Enabled Enabled The application calculates the GST amount per unit and adds to the Unit Price on the Item Card. This total unit price is then entered in the Unit Price Incl. GST field on the sales lines.
Enabled Not Enabled The application calculates the GST amount included in the Unit Price field on the Item Card using the GST percentage related to the GST Bus. Posting Gr. (Price) and the GST Prod. Posting Group combination. The Unit Price on the Item Card, reduced by the GST amount, is then entered in the Unit Price Excl. GST field in the sales lines. For more information, see Using GST Business Posting Groups and Customer Price Groups.
Enabled Enabled The Unit Price on the Item Card is copied to Unit Price Incl. GST field on the sales lines.

Using GST Business Posting Groups and Customer Price Groups

If you want prices to include GST, you can use GST business posting groups to calculate the amount based on the GST posting setup for the group. For more information, see Set up GST business posting groups.

Depending on what you want to do, you can assign a GST business posting group to customers or sales documents in the following ways:

  • To use the same GST rate for all customers, you can choose a group in the GST Business Posting Group (Price) field on the Sales & Receivables Setup page.
  • To use a GST rate for a specific customer, you can choose a group in the GST Business Posting Group (Price) field on the Customer Card page.
  • To use a GST rate for a specific of customers, you can choose a group in the GST Business Posting Group (Price) field on the Customer Price Group page. For example, this is useful when you want a price to apply to all customers in a certain geographical region or a specific industry.
  • On all sales documents in the GST Business Posting Group field. The GST amount specified for the group is used only for the document you're currently working on.

Note

If you do not specify a group in the GST Business Posting Group (Price) field GST will not be included in prices.

Examples

Factors such as the country or region you're selling in, or the type of industries you sell to, can impact the amount of GST that you must account for. For example, a restaurant might charge 6% GST for meals that are eaten in-house, and 17% for takeaway. To accomplish that, you create a GST business posting group (price) for in-house and one for takeaway.

Correcting GST Amounts Manually in Sales and Purchase Documents

You can make corrections to posted GST entries so that you can change the total sales or input tax credit amounts without changing the GST base. For example, if you receive an invoice from a supplier with an incorrect GST amount.

Although you may have set up one or more combinations to handle import GST, you must set up at least one GST product posting group. For example, you can name it CORRECT for correction purposes, unless you can use the same general ledger account in the Input Tax Credit Account field on the GST posting setup line. For more information, see Setting Up to Calculations and Posting Methods for Goods and Services Tax.

If a payment discount has been calculated based on an invoice amount that includes GST, you revert the payment discount part of the GST amount when the payment discount is granted. Note that you must activate the Adjust for Payments Disc. field in both the general ledger setup in general and the GST posting setup for specific combinations of a GST business posting group and a GST product posting group.

To set the system up for manual GST entry in sales documents

The following describes how to enable manual GST changes on sales documents. The steps are similar on the Purchases & Payables Setup page.

  1. On the General Ledger Setup page, specify a Max. GST Difference Allowed between the amount calculated by application and the manual amount.
  2. On the Sales & Receivables Setup page, place a check mark in the Allow GST Difference field.

To adjust GST for a sales document

  1. Open the relevant sales order.
  2. Choose the Statistics action.
  3. On the Invoicing FastTab, choose the value in the No. of Tax Lines field.
  4. Edit the GST Amount field.

Note

The total GST amount for the invoice, grouped by GST identifier, is displayed in the lines. You can manually adjust the amount in the GST Amount field on the lines for each GST identifier. When you modify the GST Amount field, application checks to ensure that you have not changed the GST by more than the amount you have specified as the maximum difference allowed. If the amount is outside the range of the Max. GST Difference Allowed, a warning will be displayed stating the maximum allowed difference. You will be unable to proceed until the amount is adjusted to within the acceptable parameters. Click OK and enter another GST Amount that is within the allowed range. If the GST difference is equal to or lower than the maximum allowed, the GST will be divided proportionally among the document lines that have the same GST identifier.

Calculating GST Manually Using Journals

You can also adjust GST amounts in general, sales, and purchase journals. For example, you might need to do this when you enter a supplier invoice in your journal and there is a difference between the GST amount that Business Central calculated and the GST amount on the supplier's invoice.

To set the system up for manual GST entry in a general journals

You must perform the following steps before you manually enter GST in a general journal.

  1. On the General Ledger Setup page, specify a Max. GST Difference Allowed between the amount calculated by application and the manual amount.
  2. On the General Journal Templates page, choose the Allow GST Difference check box for the relevant journal.

To set the system up for manual GST entry in a sales and purchase journals

You must perform the following steps before you manually enter GST in a sales or purchase journal.

  1. On the Purchases & Payables Setup page, choose the Allow GST Difference check box.
  2. Repeat step 1 for the Sales & Receivables Setup page.
  3. After you complete the setup described above, you can adjust the GST Amount field on the general journal line, or the Bal. GST Amount field on the sales or purchase journal line. Business Central will check that the difference is not greater than the specified maximum.

Note

If the difference is greater, a warning will be displayed stating the maximum allowed difference. To continue, you must adjust the amount. Choose OK and then enter an amount that is within the allowed range. If the GST difference is equal to or lower than the maximum allowed, Business Central will show the difference in the GST Difference field.

Posting Import GST with Purchase Invoices

Instead of using journals to post an import GST invoice, you can use a purchase invoice.

To set up purchasing for posting import GST invoices

  1. Set up a supplier card for the import authority that sends you the import GST invoice. The Gen. Bus. Posting Group and GST Bus. Posting Group must be set up in the same way as the general ledger account for the import GST.
  2. Create a Gen. Product Posting Group for the import GST and set up an import GST Def. GST Product Posting Group for the related Gen. Product Posting Group.
  3. Choose the Lightbulb that opens the Tell Me feature. icon, enter Chart of Accounts, and then choose the related link.
  4. Select the import GST general ledger account, and then choose the Edit action.
  5. On the Posting FastTab, select the Gen. Prod. Posting Group setup for import GST. Business Central automatically fills in the GST Prod. Posting Group field.
  6. Choose the Lightbulb that opens the Tell Me feature. icon, enter General Posting Setup, and then choose the related link.
  7. Create a combination of the Gen. Bus. Posting Group for the GST authority and the Gen. Prod. Posting Group for import GST. For this new combination, in the Purchase Account field, choose the import GST general ledger account.

To create a new invoice for the import authority supplier once you have completed the setup

  1. Choose the Lightbulb that opens the Tell Me feature. icon, enter Purchase Invoices, and then choose the related link.
  2. Create a new purchase invoice.
  3. In the Buy-from Supplier No. field, choose the import authority supplier, and then choose the OK button.
  4. In the purchase line, in the Type field, choose G/L Account, and in the No. field, choose the import GST general ledger account.
  5. In the Quantity field, type 1.
  6. In the Direct Unit Cost Excl. GST field, specify the GST amount.
  7. Post the invoice.

Processing Certificates of Supply

When you sell goods to a customer in another EU country/region, you must send the customer a certificate of supply that the customer must sign and return to you. The following procedures are for processing certificates of supply for sales shipments, but the same steps apply for service shipments of items, and return shipments to suppliers.

To view certificate of supply details

  1. Choose the Lightbulb that opens the Tell Me feature. icon, enter Posted Sales Shipments, and then choose the related link.
  2. Choose the relevant sales shipment to a customer in another EU country/region.
  3. Choose Certificate of Supply Details.
  4. By default, if the Certificate of Supply Required check box is selected for GST Posting Group setup for the customer, the Status field is set to Required. You can update the field to indicate whether the customer has returned the certificate.

Note

If the GST Posting Group setup does not have the Certificate of Supply Required check box selected, then a record is created and the Status field is set to Not Applicable. You can update the field to reflect the correct status information. You can manually change the status from Not Applicable to Required, and from Required to Not Applicable as needed.

When you update the Status field to Required, Received, or Not Received, a certificate is created.

Tip

You can use the Certificates of Supply page to get a view of the status of all posted shipments for which a certificate of supply has been created.

  1. Choose Print Certificate of Supply.

Note

You can preview or print the document. When you choose Print Certificate of Supply and print the document, the Printed check box is automatically selected. In addition, if not already specified, the status of the certificate is updated to Required. If needed, you include the printed certificate with the shipment.

To print a certificate of supply

  1. Choose the Lightbulb that opens the Tell Me feature. icon, enter Posted Sales Shipments, and then choose the related link.
  2. Choose the relevant sales shipment to a customer in another EU country/region.
  3. Choose the Print Certificate of Supply action.

Note

Alternatively, you can print a certificate from the Certificate of Supply page.

  1. To include information from the lines on the shipment document in the certificate, select the Print Line Details check box.
  2. Choose the Create Certificates of Supply if Not Already Created check box to have Business Central create certificates for posted shipments that do not have one at the moment of execution. When you choose the check box, new certificates will be created for all posted shipments that do not have certificates within the selected range.
  3. By default, the filter settings are for the shipment document that you have selected. Fill in the filter information to select a specific certificate of supply that you want to print.
  4. On the Certificate of Supply page, choose the Print action to print the report, or choose the Preview action to view it on the screen.

Note

The Certificate of Supply Status field and the Printed field are updated for the shipment on the Certificates of Supply page.

  1. Send the printed certificate of supply to the customer for signature.

To update the status of a certificate of supply for a shipment

  1. Choose the Lightbulb that opens the Tell Me feature. icon, enter Posted Sales Shipments, and then choose the related link.

  2. Choose the relevant sales shipment to a customer in another EU country/region.

  3. In the Status field, choose the relevant option.

    If the customer has returned the signed certificate of supply, choose Received. The Receipt Date field is updated. By default, the receipt date is set to the current work date.

    You can modify the date to reflect the date that you received the customer's signed certificate of supply. You can also add a link to the signed certificate using standard Business Central linking.

    If the customer does not return the signed certificate of supply, choose Not Received. You must then send the customer a new invoice that includes GST, because the original invoice will not be accepted by the tax authority.

To view a group of certificates, you start from the Certificates of Supply page, and then update the information about the status of outstanding certificates as you receive them back from your customers. This can be useful when you want to search for all certificates that have a certain status, for example, Required, for which you want to update their status to Not Received.

To update the status of a group of certificates of supply

  1. Choose the Lightbulb that opens the Tell Me feature. icon, enter Certificates of Supply, and choose the related link.

  2. Filter the Status field to the value that you want in order to create the list of certificates that you want to manage.

  3. To update the status information, choose Edit List.

  4. In the Status field, choose the relevant option.

    If the customer has returned the signed certificate of supply, choose Received. The Receipt Date field is updated. By default, the receipt date is set to the current work date.

    You can modify the date to reflect the date that you received the signed the certificate of supply. You can also add a link to the signed certificate using standard Business Central document linking.

Note

You cannot create a new certificate of supply on the Certificate of Supply page when you navigate to it using this procedure. To create a certificate for a shipment that was not set up to require one, open the posted sales shipment, and use either of two procedures described above:

  • To manually create a certificate of supply certificate
  • To print a certificate of supply.

See Also

Setting Up Calculations and Posting Methods for Goods and Services Tax
Report GST to a Tax Authority
Validate a VAT Registration Number