Booking GST Exempt Transactions (Forex Gain Loss or Interest)

A2000 ONLINE SUPPORT DEPARTMENT

KNOWLEDGE BASE

 GST EXEMPT TRANSACTIONS 

DESCRIPTION         Foreign exchange gain/loss transactions or bank interest incomes must be reported as GST Exempt in the GST tax-return, and should reflect in Box 3 of GST Form 5. How do we handle this?

1.  HOW TO CAPTURE THIS?

Assuming there is an income of $1,300 due to Foreign-Exchange-GAIN

and $300 dues to Foreign-Exchange-LOSS, the absolute value of the 

Exchange Gain/(Loss) is $1000.  

Add on to that, you also received a Bank Interest Income of $200 for the period taken (note bank interest need not be reported as it is not a supply):

Here is how to pass the transaction in the system to capture GST Exempt in the Form 5:

STEP 1: Create a new/dummy customer called CONTRA in Customer Master and map this to a normal Trade Debtor A/c.

STEP 2: Take a GL listing of the Foreign Exchange Gain/(Loss) transactions and Bank Interest for the reporting period. 

STEP 3: Enter a Receivables Debit Note (RD) transaction as follow:

2.  CONCLUSION

When this RD transaction is saved up in both examples, the system will recognize a GST-Exempt transaction amount of $1,200 in Box 3 while the GL balance amount is not doubly taken in (since we zerolized the Debit and Credit sides, canceling this account posted).

3.  REFERENCE TO IRAS REPORTING REQUIREMENT

The entry method above is based on IRAS reporting format as follow:-

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