About 3,000 GST-registered businesses are selected for audit annually, and the most common mistakes discovered are incorrect input tax claims. On average, more than $18,000 in GST and penalties are recovered yearly from each business due to such errors.
A good understanding of input tax recovery rules is crucial in delivering optimal GST recovery incurred on purchases, whilst mitigating the risk of penalties. With a clear understanding of these rules, you will know how to examine the conditions that determine when GST can be recovered and how to correctly post the accounting entries for purchases by applying the correct tax treatment for each transaction.
This practical workshop is designed to give you more clarity in the key areas of concern on the recovery of GST on purchases. Our highly experienced trainer will also share on the common input tax errors made by businesses and how you can avoid them.
A Highlight of Key Areas:
The Fundamental Building Blocks
- Mechanics of GST
- Basic GST concepts
- Different types of supplies / purchases
- Standard-rated, zero-rated and exempt supplies
Input Tax Recovery Rules
- Conditions
- Purchase GST that cannot be claimed
When can GST be Claimed
- Time of claiming: Claiming input tax in the right accounting period
- Evidence needed to claim GST
- Tax invoice
- Simplified invoice
- Import permit - Purchases by employees
Determining the Amount of GST to Claim
- De-minimis rule
- Attribution / apportionment
- The impact of partial exemption
Specific Expenses
- Gifts
- Fringe benefits
- Business entertainment
- Imported services and Imported Low Value Goods
- Prescribed Goods under Customer Accounting
Common Errors on Input Tax Claims
- Understanding the common errors, and avoid making them in your claims
Key Learning Points in Recent Tax Case
- GHY v. Comptroller of Goods and Services Tax : The GST Board of Review upheld a decision of the GST Comptroller denying the input tax claim of a taxpayer on its purchase of goods from a local supplier on the grounds that it failed to prove that goods were purchased and traded.