Tax Liability Report understanding/issue

Abdul Rehman · ‎October 22, 2019

Hi All,

I entered a Bill with purchase tax and paid without any issue. But the 'Tax Liability Report' is reflecting the tax amount while the amount is paid to supplier with detail of original amount and tax amount. I suppose the report should not reflect any data.

Step by step detail is attached for review and feedback.

Regards,

Abdul Rehman.

JamesDuanT · ‎October 23, 2019

I appreciated the details and the screenshot, Abdul Rehman.

Based on the screenshot, you used the TST - 10% Expense (1950.00) as one of the affected accounts when you created the bill. Hence, the amount reflected on the Tax Liability Report.

There are different ways to show the sales tax amount without affecting the Tax Liability Report. You can do either of the following:

Use a different expense account (not the TST - 10% Expense account). You can create a new one if necessary.
Enter the total amount (including the sales tax paid by the vendor) for the Interest Expense account.

Go back to the bill and change the affected accounts. Make sure not to use the TST - 10% Expense account.

It's also best to discuss this with your accountant. They might have a different way to record your bills.

I got you if you have more questions about this.