Do You Know GST Reimbursement & Disbursement

Welcome to series of GST educational posts --> Do You Know  GST Reimbursement & Disbursement.

As always, this is a 5 minutes education posts to explain WHAT, WHY,  and HOW.

 Do You Know GST Reimbursement & Disbursement

In REIMBURSEMENT  scenario

When agent / service provider purchased goods / services, on behalf of clients, in the course of furtherance of business. Such expenditure is regarding as Reimbursement, if it has the following characteristics:-

(1) Agent / Service Provider purchased goods / service; and is responsible for payment; and

(2) Itemized tax invoice (and GST) was billed to Agent / Service Provider; and

Example in RM - 100 + 6 = 106

(3) Agent /service provider  was authorized  / approved to acts on behalf of client; and

(4) Agent / service provider paid tax invoice (reimbursement amount) owned to its supplier; and

(5) Agent billed reimbursement amount + GST in Tax Invoice to its client.

Example in RM - 106 + 6.36 = 112.36

 

In Disbursement Scenario

When client purchased goods / services, in the course of furtherance of business. Such expenditure is regarding as Disbursement, if it has the following characteristics

(1) Client received the goods / service; and responsible for payment; and

(2) Itemized tax invoice was billed to client; and

Example in RM - 100 + 6 = 106

(3) Agent /service provider  was authorized to acts on behalf of client; and

(4) Agent / service provider paid tax invoice on behalf of client (disbursement); and

(5) Agent billed disbursement amount only to client. No GST.

Example in RM - 106

Do You Know GST Reimbursement & Disbursement
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GST Reimbursement & Disbursement

 

Do You Know GST Reimbursement & Disbursement

Control and Solution 

 

(A) Vendor Sourcing SOP -

-->SOP must have a validation check on supplier with GST number

(B) Reimbursement Cash Purchases tax invoice (hand written invoice) -

--> Must avoid hand written invoice to ensure no query from Custom

(C) Reimbursement Cash Purchases tax invoice  -

--> Should ensure such cash purchase tax invoice were billed to taxpayer only

 

Please refer to GST Employee Handbook for additional information

Feel free to comment or posts us your GST question, or tell us your problems.

Thank you

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