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From the GST Guideline,
" Input tax on any asset held on hand can be claimed on the book value within 6 years from the date of registration irrespective of when the asset is acquired."
For example,
GST registered manufacturing company purchased machinery valued at Rm5,000,000 in June 2016 and pays GST amounting to Rm300,000.
The company is registered in April 2020. At the time of registration, the book value of the machinery is Rm500,000. The manufacturing company
being a wholly taxable supplier is eligible to claim input tax on the remaining Rm500,000 (i.e.Rm500,000 x 6% = Rm30,000).
How to enter into the system?
Suggestions:
A GST registered manufacturing company purchased machinery valued at Rm5,000,000 in June 2016 and pays GST amounting to Rm300,000.
Use Journal/Cash Book - Payment Voucher to post the below double entry:
DR Machinery Rm5,300,000
DR Bank Rm5,300,000
NOTE: GST amt pay in June 2016 = Rm 300,000 cannot be claim ....because the company is register GST at April 2020.
The company is registered in April 2020. At the time of registration, the book value of the machinery is RM500,000. The manufacturing company
being a wholly taxable supplier is eligible to claim input tax on the remaining RM500,000 (i.e.RM500,000 x 6% = RM30,000).
DR Machinery Rm500,000 (TX)
DR Input Tax Rm 30,000
CR Machinery Rm500,000
CR Other Income Rm 30,000 (OS)
Balance sheet as at April 2020, the machinery cost remains = RM5,300,000
GST-03 :
Item 6a = Rm500,000
Item 6b = Rm30,000
Item 16 capital goods acquired = Rm500,000
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