Charging and collecting GST in Zoho Books

This article is about how GST is booked in Zoho Books. From Setup to Invoicing to Lodging with the ATO.

First, the GST needs to be set up. This is done under Settings (gear icon on the top right of the application window).

Create a new tax, call it GST, and assign the appropriate rate.

In the Tax Settings, you can enter your GST number, and the GST method (Cash or Accrual - for small businesses, mostly this will be on Cash basis - if you are not sure, check with the ATO or your accountant).

Second, the GST needs to be mapped to the customer - typically, all Australian customers need to be invoiced GST - when setting up the customer record, you specify the default tax rate to be charged. 

Some goods or services can be Tax Exempt, and the eligibility of Tax (GST) needs to be set up in the item (whether a good, or a service). Go to Items, and set up the item according to the tax eligibility.

When this setup is done correctly, the GST will automatically be assigned to the invoice.

When the payment is received - the payment is matched with the total invoice amount. You do not need to match the GST amount separately. This is done automatically by Zoho Books based on the settings. You can view the journal of the invoice by opening the invoice in Sales, and select "View journal" under the button "More".

When receiving the payment, the post made is Dr Bank Account, Cr Accounts Receivable. As the Accounts Receivable is the amount inclusive the GST, and the payment is inclusive the GST, you do not need to separate the tax in receiving the payment. The tax payable is held in a separate ledger account which is cleared when you make your GST claim.

Claiming the GST is done via the BAS report (Business Activity Statement). The BAS is accessed via Reports, under the heading Taxes, select BAS. You can choose between a detailed or simpler view of your BAS report (in most cases, for lodging the BAS as a small business, the simpler view is sufficient).

Enter the amounts in the boxes on the ATO BAS lodgement form, and log it as lodged.

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