GST Reconciliations

ATO Business Activity Statement

a. First, as per BAS return, we need to Fill in an Excel sheet

- For some clients, Monthly BAS Return will be there

- For some clients, Quarterly BAS Return will be there

GST Collected (Sale) + 5500

GST paid (Purchase) -2000

PAYG(Withheld) +4500

PAYG(Installment) +5000

Balance 13000

Accrual for sale and purchase will be given by the client

Book vs BAS Difference we need to calculate in Excel

Book vs BAS Difference will Move to GST Adjustment account

Owed to ATO (GST Collected)

Owed by ATO (GST Paid)

Provision for income tax la how much I need to pay under Tax return it will come under this account

Provision for Income Tax Expenses Dr $17000

To Bank $17000

(PY Income Tax Expenses Paid During CY)

Income Tax Expenses Dr $ 15000

To Provision for Income Tax Expenses $ 15000

(Provision created for Income Tax Liability of CY based on Tax Reconciliation Worksheet, This Expenses Separately shows in Financial Statement)

Activity Statement Look Like

Following Ledger Account need to be considered at the time of finalizing the Financial Statement?

Under	Account	Description		Balance
Current Liability	PAYG (Instalment)	Installment Payable	Cr	4th Quarter payable
Current Liability	Provision for Income Tax	Installment paid will be in Debit	Dr	4th Quarter of PY. Four Quarters for CY.
Current Asset	GST Paid	Sometimes setoff	Dr	4th Quarter
Current Liability	GST Collected	Sometimes setoff	Cr	4th Quarter
Current Liability	PAYG (Withholding)	With Hold Payable	Cr	4th Quarter Payable
Expenditure	Income Tax Expenses		Dr	Four Quarters for CY

The interest charge for late payment of fees will come under🡺 Interest Expenses (Expenditure Side)

Interest Expenses Dr 500

To Bank 500

Next, take the ICA Report for CY and PY, Cross check the Transaction

ICA (Process Date) as per activity statement is there is any balance on 30th June it will be shown under this ICA account (You need to Pass Entry)
For the Current Year, 2022 Cash Flow Boost (Covid-19) will be not there so Ignore
Interest Expenses from activity statement Pass entry if any

Interest Expenses Dr xxx

To ICA xxx

As per Books, there are Two Methods

If BAS is Accrual, then check the book balance also in accrual

If BAS is in Cash, then the check the Book balance is also in cash

GST Accrual Concept

If a client maintains Debtors and Creditor then there will be an accrual concept

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