Record a deferred GST liability

Below is the process for recording a Deferred GST Liability for your internationally imported goods.

Step 1 - Setup an account to record the deferred GST liability

1. Select the Gear Icon and select Chart of Accounts.
2. Select New.
3. In Category Type, select Credit Card.
4. Give the account an appropriate name, such as Deferred GST Import Liability.
5. Select Save and Close.

Step 2 - Record the overseas purchase

Enter the details of your overseas purchase. Use the tax code Out of Scope to ensure that GST is not payable to the supplier. This transaction can be entered in foreign-currency for those using the multicurrency function (Available in QuickBooks Online Essentials and Plus)

This task records the inventory but not the GST on landed cost.

Step 3 - Record the deferred GST liability

1. Select + New.
2. Select Expense.
3. Select the Deferred GST Liability account in the Pay From Account field.
4. Select Exclusive of Tax in the Amounts are field.
5.  In the first allocation line, select an allocation account (the Deferred Tax Liability Account) and enter the tax-exclusive cost amount. Ensure you use the tax code: GST on non-capital.
6. In the second allocation line, select the same allocation account as above, enter the tax-inclusive cost amount as a negative. Ensure you use the tax code Out of Scope.

At the end of each month, Customs will advise the ATO of the total deferred GST liability. The Business Activity Statement that the ATO issues to you will include the deferred GST liability in field 7A.

Step 4 - Record your deferred liability payment

The Deferred GST Import Liability is paid when you lodge your BAS. This liability is paid using your GST tax credit using an expense transaction when you pay the ATO for your GST, PAYG, and other liabilities.