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Calculating GST for imported goods

by Intuit Updated 1 year ago

When a business imports goods from overseas, they'll often pay the overseas company directly. This means that GST doesn't apply to that payment, but the freight company pays GST when they pay the import taxes and duties.

This causes a situation where the business has to record the GST, taxes, and insurance to a different entity than the payment of the goods.

Two entries are required.

  1. Payment of the Goods to the supplier.

Create a supplier payment for the goods without GST.

  1. Payment of GST, Taxes, and insurance.

Create a supplier payment with the Transactions as follows.

GST Free
GST Free
GST Free

This means the total amount on the invoice will equal the GST of the product plus insurance and taxes.

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