Malaysia GST - Item Master Tax Setting

ERPNext Accounting
1

Implementing for Malaysia GST, in Malaysia, the Item Master Tax should be allowed for Purchase ( Input ) and Sales (Output).

Say Item A is a Standard Rated Item , 6% - Tax Code SR.

When sell to Local Customer, an Item should be SR 6%.
But the same item if sell to Oversea Customer, the same item should be ZRE 0%.

Wondering how could the Item Master Tax Setting works for this ?
Have currently setup for SR at Sales Taxes Templates. But Leave it empty for Item Master.

Another Scenario, Item B, could be Zero Rated Item, 0%, with Tax Code ZRL. But when sell to Oversea customer, it should be captured as ZRE 0% instead of ZRL, even though both is 0%. This is the local country requirement, any idea on the setting on this ?

2

Can try the tax rule feature

https://erpnext.org/docs/user/manual/en/accounts/setup/tax-rule

1 Like
3

Hi, have set for tax rule too, but I would say it doesn’t fulfil the Malaysia GST requirements , we have the quite complicated GST calculation.

For Supplier , Depends on registered or Non Registered and Local or Oversea.

For Customer, depends on Local or Oversea.

In Malaysia, should be Item Master as the basic tax setting, setup for both Input and Output Tax Code.

then Supplier Tax Setting or Customer Tax Setting should overwrite the Item Master Tax.

This is quite different with ERPNext setting , wondering anyone could have idea on workaround for this.

4

@alan

can you list the requirements? A Malaysian GST can be perhaps contributed to the system.

For reference:

https://github.com/frappe/erpnext/issues/11632

5

Another way of work around is use item variant.
Create Attribute - Local , Ovesea
Create Attribute - Register, non-Register

Grant each item desire item tax. Select the correct variant item while sales/purchase.

I try not to customise ERPNEXT as it would cause a lot of compatible problem while upgrading.

43 AM

6

The work around would be ,

  1. Create Supplier Type, local, import and non register.

  2. Tax Rules, when Supplier Type chosen, it reflected the correct type of GST.

  3. For special type item, it would follow the rate at item.

This is temporary solution.

However, one thing I’d like to suggest a feature that when there’s item wise tax being setup, it will use the tax code at item master. Because according to Malaysia GST, it will use the different tax code if the rate is different. While in ERPNEXT, only the tax rate change, but the code would be remained.

For example, we have Blocked Input Tax at 6%, BL, which this part of tax should be recorded but cannot be claimed.
We have Normal Purchase Input Tax at 6% too, TX, which can be claimed as Input Tax.

On the other hand, there’s certain purchase item as Out of Scope, 0%, OP, which should be filed as 0% but Tax Code at OP.

There’s exempted supplies, at ES, must be file, but NULL %.

and Imported Goods , 0%, IM.

Imported Services, a more complicated one, Reverse Charge Mechanism must applies.

7

If we are allowed to choose item level tax code if for Malaysia GST cases, then it can solve the issues I mentioned above. However, when I try to Unset the Read Only field, it doesn’t allow. Anyone have any idea why we must block the the selection of item wise tax code ?

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8

I’m trying to do some customisation as following -

  1. Adding a new field call “Item Tax Rate 2”, which allow the user to choose the Tax Code for Item if there’s special cases.

  2. If (1) is trigger, it will override the Tax Code and Tax Rate for this item only.

Question :-

  1. Whether this will have any effect on some other reports ?

  2. When I try to put the “Item Tax Rate 2” as Link to Item Tax, it doesn’t show the Tax Code or Rate but show some other strings. Could anyone advise how to resolve this ?

08 AM