Donate goods > RM500 to charitable organization without benefits in return, how to handle the GST treatment?

Company donated goods exceed RM500 to a charitable organization without any benefits in return, however a sales tax invoice was generated from the accounting system due to withdrawal of physical inventory and sales order creation to recognize the outward delivery of goods with tax code “DS”.  In the AR ledger, the  charitable organization shown an outstanding balance hence need to credit out.  Please advise how to do and not impacting the GST.

Asked on January 3, 2017 2017-01-03 10:38:00 Business (商家)
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3 Answer(s)

You do a Journal entry :
DR. Donation A/C – Tax code is OP
CR. Accounts Receivable – Tax code is OP
No GST incurred for this entry.

Answered on January 4, 2017. 2017-01-04 01:06:28
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How do we accountable for the GST for “DS” since the GST for journal reclass to donation is “OP” = zero value?  Tax invoice issued for the donation was RM1460 inclusive GST under tax code “DS” – DR AR $1460 CR Sales $1377.36 CR Output Tax $82.64.

Answered on January 4, 2017. 2017-01-04 10:02:22
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DR. Accounts Receivable – RM1,460.00
CR. Purchases A/C (if you have purchased those goods) or Stock A/C (if you have taken out from your company stock) – RM1,377.36
CR. Output Tax Payable – RM82.64

Answered on January 5, 2017. 2017-01-05 00:38:28
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