free extra items, what tax code should apply?

Example i purchase 1 carton 1.5L drinking water, then free 1 carton 0.5L drinking water.
for the free carton, what tax code should apply? those item is for selling.

Asked on July 6, 2017 2017-07-06 04:12:49 Business (商家)
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3 Answer(s)

Tied-in Goods

When a person purchases goods with free tied-in goods, the value of the tied-in goods is treated as being included in the price of the principal goods supplied.

Example :

If both tied-in and the principal goods are standard-rated

Principal goods – 1 carton of 1.5L Drinking water (standard rate)

Tied-in goods (free item) – 1 carton of 0.5L Drinking water (standard rate)

Since the principal goods is a standard rated supply, GST is chargeable on the supply. If the price of the goods with the free tied-in goods is (let’s say the 1 carton of 1.5L + free 1 carton 0.5L of drinking water) RM53.00 inclusive of GST, GST should be accounted from RM53.00 as the tied-in goods and principal goods are treated as one supply.

Price (inclusive of 6% GST) of 1 carton of 1.5L Drinking water : RM53.00

6% GST inclusive : RM3.00

(RM53.00 X 6%/106%)           

The registered retailer accounts for output tax of RM3.00

Tax code is SR when you sell those tied-in (free) 0.5L drinking water.

Answered on July 6, 2017. 2017-07-06 07:36:47
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so in the purchase invoice, free item tick FOC and then in TX code right?

Answered on July 6, 2017. 2017-07-06 09:23:26
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For the purchase invoice, you can put TX (if there is GST charged) or OP (if there is no GST charged)

Answered on July 7, 2017. 2017-07-07 01:00:57
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