Sales Tax Credit Deduction

This article is for:

• ABSS Premier v23.1
• ABSS Accounting v28.1

Under the sales tax deduction facility, any registered manufacturer may obtain a sales tax deduction on the purchase of inputs such as raw materials, components and packaging materials that have been tax paid purchased from the supplier for the purpose of manufacturing of his taxable goods. This facility is introduced because there are registered manufacturers who have no choice but to obtain inputs (raw materials, components and packaging materials) from suppliers rather than purchased from other registered manufacturers or imported by using exemption under Schedule C, Sales Tax (Persons Exempted From Payment Of Tax) 2018.

PD02 and PD04 are for SST-registered person to record Purchases which entitle to claim Sales Tax Credit Deduction of 2% and 4% respectively. With the use of these tax codes, the Sale Tax Credit Deduction amount will reflect in field 13(b) of SST02 report.

How to record Sales Tax Credit Deduction in ABSS Software 

1) Setting up the PD2 and PD4 tax code

    PD2

• Go to list > Tax codes >click on PD2
• In the Rate field, kindly change the default rate from 5% to 0%. For Claimable Rate field field, put 2% as the default rate. ( Refer to the image below)

   PD4

• Go to list > Tax codes >click on PD4
• In the Rate field, kindly change the default rate from 10% to 0%. For Claimable Rate field field, put 4% as the default rate. ( Refer to the image below)

         

2) Record Purchases

• Kindly go to Purchases > enter Purchases
• Enter the purchase transaction with tax code PD. Example PD2

• Refer to the image above. The total purchase amount is RM 100 and, there is no double entry affected for PD2. ( same goes to PD4).

3) Generate SST 02 report - End of the Submission period 

At the end of the submission period, you need to generate SST 02 report for submission. The PD02 amount that you enter previously will appear in Field 13 (b). ( Refer the image below)

4) Record claimable transaction

To record the claimable transaction ( only after the submission period end), kindly go to Banking > Received Money. 

The entries that you need to record are :

Debit - Bank Account

Credit : SST Claimable ( Income) 

P/s : Please note if you do not have SST Claimable account, kindly create it under Income category.