Tax Management

I have a bill from Telco and for local calls, there is GST. But for ovreseas call, GST is exempted. These transactions come in the same bill. How do I setup and record?

Highnix ERP can handle a common issue that is difficult to resolve for users who are not using the system. This issue is the need to apply different GST rates to different types of calls on a telco bill. In this scenario, local calls are subject to GST, while overseas calls are exempt. Highnix ERP can handle this by setting up a simple one-time rule. This rule can then be applied to different vendors, customers, and products.

1. Setup a tax group:
   1. Go to System Setup > GST Tax Group.
   2. Create a new tax group and name it "Purch Invoice with TX & ZP".
   3. Under "Select the taxes that are included in this group", check the "ZP" and "TX" check boxes.
   4. Save the tax group.
2. Setup an item tax exemption type:
   1. Go to System Setup > Item Tax Exemption Type.
   2. Create a new item tax exemption type and name it "Items Not Taxable - ZP and ZR 0%".
   3. Under "Select which taxes this item tax type is exempt from", check all boxes except ZP and ZR.
   4. Save the item tax exemption type.
3. Create an item tax:
   1. Go to System Setup > Item Tax.
   2. Create a new item tax and name it "Items Taxable - SR and TX-Prevailing Rate".
   3. Under "Select which taxes this item tax type is exempt from", check all boxes except SR and TX.
   4. Save the item tax.
4. Create a supplier:
   1. Go to Purchase Mgt > Maintenance > Add and Edit Supplier Records.
   2. Enter the supplier's name as "Telephone Company".
   3. In the Tax Group pull-down box, select "Purch Invoice with TX & ZP".
   4. Save the supplier record.
5. Create products:
   1. Go to Inventory/Product Mgt > Maintenance > Add and Edit items.
   2. Create a product called "Local Phone Calls".
   3. In the Item Tax Type field, select "Items Taxable - SR and TX-Prevailing Rate".
   4. Create another product called "Overseas Phone Calls".
   5. In the Item Tax Type field, select "Items Not Taxable - ZP and SR-Prevailing Rate".
   6. Save the products.
6. Enter a bill:
   1. Go to Purchase Mgt > Create Bills.
   2. Select the "Telephone Company" supplier.
   3. Add the "Local Phone Calls" and "Overseas Phone Calls" products to the bill.
   4. Save the bill.

With this setup, the system will be able to record all the taxable and non-taxable input purchase. Note: This setup can also be used for sales invoices. If you need to bill a taxable and non-taxable service or product in the same sales invoice, you can follow the steps above, but instead of creating a purchase bill, you would create a sales invoice.

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Starting year 2024, the GST will be changed from 8% to 9%, how do I go about changing it?

Tag:#GST9

The GST rate in Singapore will increase from 8% to 9% on January 1, 2024. GST-registered users can follow these simple steps to change the Sales and Purchase GST from 8% to 9%:

1. Go to the System Setup, GST Type Setup.
2. Click on edit icon (pencil) on the right of the corresponding tax type. The tax item will appear on the form at the bottom of the listing.
3. Change the default rate to 9%.
4. Click on the Update button.
5. Repeat the above for the rest of the tax types. Note that for 0% tax, user could leave it unchnage.

Note: Highnix ERP records the value of GST at the point when a Sales Invoice (or Purchase Invoice for supplier) is created. If you create a Sales Order or Delivery before the GST rate is updated, you can still change the GST to the correct rate just before the invoices are created.

The next task is to change the descriptions of the tax group and the account descriptions. This is only necessary if the descriptions include the GST rates. For example, if the description of your GST type shows "Normal Sales Invoice with SR-7%", it is best to remove the "-7%" because it is confusing to put the rates there. Similarly, if the description of the account code shows "Output GST Collected-SR-7%", you should remove the "-7%".

To change the description, follow these steps:

1. Tax group:
   1. Go to System Setup > GST Tax Groups.
   2. Click on the edit icon (pencil) on the right of the corresponding tax group. The tax group details will appear on the form at the bottom of the listing.
   3. Remove the "-X%" from the description.
   4. Click on the Update button.
   5. Repeat the above for the rest of the tax groups.
2. Account code:
   1. Go to Finance Mgt > Maintenance > GL Chart of Account.
   2. Locate the account code from the drop down menu. (Users can type the account code if they know, the default GST account codes are beginning with "22".)
   3. Under the Account Name description, remove the rates.
   4. Click on the Update Account button.

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