Introduction to Goods and Services Tax

Goods and Services Tax (GST) is chargeable on any supply of goods or services sold or delivered in any country - when it is a taxable supply and made by a taxable person in the course or furtherance of the business carried on by him. GST is applicable on nearly all types of goods and services.

In China, the price tax separation is required to be divided by the tax collected from charges and accrued income in real-time. This covers the charges collected for banking transactions and accrued incomes collected for loans and deposits or payment due to interests, and letter of credit or miscellaneous deals commissions.

The bank has to pay VAT to government for the generated income. When VAT is already part of the customer payment (could be paid or accrued), it is necessary to separate the real income and VAT portion into the respective GL account codes or internal accounts.

The TAXGST.VAT.DETAILS application is created to store the VAT information extracted from the income. The TAXGST.VAT.TRANS.REF application is created to store the payments Id for the tax entry by contract in the form of a funds transfer or payments Id. The TAXGST.TAXRATE.CHANGE application is created to initiate the VAT adjustment whenever there are backdated changes in the VAT rate.

Various versions are created that allow the user to capture the VAT tax for loans and deposits, payments due, letters of credit, miscellaneous deals, accounts, money markets, and drawings.

The Taxgst Vat Details (ENQ TAXGST.VAT.DETAILS) enquiry is created to allow the user to view the VAT posting for transactions.

This functionality allows the user to:

• Calculate the one time flat VAT charges for transactions.
• Calculate the VAT charges for accrued income, including LD and PD.
• Adjust the tax entries when a back dated tax rate is applied.
• View the VAT posting transactions by dates.

Click here to understand the terms and abbreviations used in this module.