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The overseas supplier, who are not GST registered trader, will not have the GST charges on the invoice. The Customs (or the forwarder may pay on your half) will impose the GST on the imported goods when goods arrived in Singapore.
The exchange rate used in the supplier invoice could be different from the Customs' exchange rate. You may have received the supplier invoice before receiving goods and could have entered using your in-house exchange rate. Whereas you paid the GST based on the Customs' exchange rate, convert upon goods arrived in Singapore.
Assuming you paid $700 GST to the Customs based on $10,000 worth of goods. The payments entry in MoneyWorks:
First detail line:
Account: Cost of Goods Sold
Net: 10,000
GST Code: IM (import GST code)
GST amount: 700
Second detail line:
Account: Cost of Goods Sold
Net: (10,000)
GST Code: OP (or *)
GST amount: 0.00
(**Check with your accountant on the GST code use).
The Cost of Goods Sold used in the Payment transaction is a dummy account to facilitate the tax calculation. The taxable amount reversed on the second detail line to give a net (tax amount) of 700, which will then capture in the GST report.
The journal for the payment will be:
DR. Cost of Goods Sold
DR. GST Input
CR. Cost of Goods Sold
CR. Bank
MoneyWorks is a hybrid accounting system. You can purchase MoneyWorks Data centre and install the software on to your in-house or cloud server, or subscribe to MoneyWorks Now and host the data on MoneyWorks' cloud server. Contact us to find out more.