How do I deal with situations whereby the GST is less than 10% of the transaction value?
In these situations, the transaction needs to be ‘split up’ into GST taxable and non-GST taxable lines. For GST taxable lines, the GST amount is always 1/10th (exclusive basis) or 1/11th (inclusive basis) of the line total. In this way, BASlink can correctly calculate GST collected and paid at G9 and G20 by dividing G8 and G19 by 11. Example A purchase is made for $10,000 whereby $5,000 is subject to a 10% GST and $5,000 is a GST-free supply. The total tax inclusive value of the purchase is therefore $10,500. When entering the purchase in your software, you need to split the transaction into two lines. Assuming the purchase is entered as tax inclusive, the first line should have $5,500 allocated to the GST tax code, so that $500 GST is calculated. The second line should have $5,000 allocated to the FRE (GST-free) tax code, so that no tax is calculated. In this way, the GST is stated as 1/11th of the taxable supply and BASlink can calculate the correct GST paid at G20.
