GST: the return built from your own transactions

What the GST screen does

Open GST and ByteBook shows the return for the period you choose, built from the transactions in your books. Nothing is typed in twice and nothing is estimated: every box is a sum of coded entries, and every figure can be traced back to the transactions that produced it.

The boxes you will meet:

Box	What it is
5	Total sales and income from taxable supplies, including GST
6	Zero-rated supplies included in box 5
7	Sales subject to GST (box 5 minus box 6)
8	GST on sales
9	Debit adjustments
10	Total GST collected (box 8 plus box 9)
11	Total purchases and expenses for GST, including capital purchases
12	GST on purchases
13	Credit adjustments
14	Total GST credit (box 12 plus box 13)
15	GST to pay, or refund due (box 10 minus box 14)

If you registered part-way through a year, enter the date in Settings → Tax → Registered from. Transactions before that date are outside the GST return, and a period that ends before it is not a filing period.

Selling a business asset is a taxable supply when the asset was used in the taxable activity: the proceeds go in Box 5, the sale is part of Box 7, and the GST is Box 8. It is not an "adjustment".

The numbers are those on the GST101A return you file in myIR, and ByteBook shows the same boxes. Box 11 is the standard-rated side of purchases and expenses, including capital purchases; exempt, imported and settlement transactions are outside it. Boxes 9 and 13 are for adjustments, and are zero unless something like a bad debt adjustment has been entered.

Box 5 covers sales and income from your taxable activity: standard-rated sales with their GST, and zero-rated sales. Exempt supplies - residential rent, interest, bank fees - are not part of the GST return at all, so they do not appear in Box 5 or Box 8. Keeping sales and the GST on them apart is the point of the box structure, and mixing them up is the most common GST error in small-business records.

Work out a period

1. Choose the period. ByteBook offers the cycles that match your filing frequency, and you can set any start and end date.
2. Press Recalculate. The boxes fill in from the ledger.
3. Read the Result: GST on sales less GST on purchases, which is box 15, the amount to pay or the refund due.
4. Check the period against the ledger before you go further. The GST reconciliation procedure (A06) checks that the GST in the return is the GST in the ledger, transaction by transaction.
5. Save this as a snapshot. The snapshot is a record of what you filed, at the date you worked it out, and it stays after the transactions move on.
6. Mark as filed once you have entered the figures in myIR. If the ledger is changed after that, ByteBook warns that the filed return no longer matches the books.

Invoice basis and payments basis

The basis you chose when you set the business up decides which transactions fall inside a period:

• Invoice basis. GST is accounted for when the invoice is issued or received, whether or not the money has moved. A sale invoiced in March is in the March period even if the customer pays in May.
• Payments basis. GST is accounted for when money actually moves. The same March invoice belongs in the period the payment arrived.

Most small businesses can use the payments basis; larger ones cannot. The choice changes the figures in every period, and it is the reason two businesses with identical invoices can have different returns.

ByteBook works the return out on the basis in your settings, and the basis is shown beside the figures. Read it before you read the numbers: a figure without its basis is a figure you cannot check, and changing the basis can move the same transactions to a different period.

When a sale carries no GST

Not every sale is taxable. The Marine Parade Rentals practice business earns exempt rent beside taxable supplies. Exempt supplies are outside the GST return: they do not appear in box 5 or box 8, and the business cannot claim GST on costs that relate to them. Zero-rated supplies are different: they are taxable supplies at 0%, so they do appear in box 5 (and box 6) with no GST.

This is where a bookkeeping exercise becomes a tax question, and it is worth being plain about the limit: ByteBook adds up what you coded. Whether rent, a particular financial service or a going concern is taxable, zero-rated or exempt is a question about the specific supply, and Inland Revenue's own guidance is the authority for it. Getting the treatment wrong is easy to do and expensive to fix.

A note on income tax

GST is not income tax, and the two should never be mixed in your thinking. GST is a tax on the supply of goods and services, collected by the business on Inland Revenue's behalf. Income tax is a tax on profit. A GST return says nothing about whether the business made money.

For income tax, ByteBook prepares the working papers: Reports → IRD working papers builds the IR3, IR10 and IR4 figures from the same ledger. Current tax is measured at the amount expected to be paid to the taxation authorities, using the tax rates and laws that have been enacted or substantively enacted by the reporting date NZ IAS 12.46.

Common mistakes

• Filing before every bank line is coded. The return is built from transactions. A line still waiting is a transaction the return has not seen.
• Recording a GST-inclusive figure as the GST amount. At 15%, the GST inside a GST-inclusive amount is three twenty-thirds of it: $15 in $115. ByteBook works that split for you. Reading box 5 as though it were box 8 is the mistake to avoid.
• Filing without saving a snapshot. Then there is no record of what was filed, and the reconciliation has nothing to compare against. If the ledger is changed later, ByteBook warns that a filed period no longer matches its snapshot — read that warning, because the return you filed and the books you now hold disagree.
• Filing on the wrong basis. The basis is a setting, not a rule of bookkeeping. Check the word beside the figures before signing the return.
• Treating a refund as negative sales in the wrong period. A credit note or a refund reverses the sale it corrects, and the period it lands in matters.