NOTIONAL INPUT TAX CREDITS (NITC) IN BLACKPURL - AUSTRALIAN DEALERS ONLY 


NITC is when the Dealership elects not to claim the Input Tax Credit on their Business Activity Statement (BAS) until the Unit has actually sold


Blackpurl is setup to give the Dealership the ability to account for NITC in Blackpurl for two scenarios:


  • Accounting for NITC when stocking in a Unit through Unit Ordering > Unit Receiving
  • Accounting for NITC for Trade in Units when they are stocked through Customer Order Unit Deals


HOW TO SETUP NITC IN BLACKPURL


In both these instances, the Dealership will need to set up the NITC settings:


    1.    From the Blackpurl Header > click User-added image > System Settings 


        User-added image 


    2.    From the System Settings Dashboard > click on User-added image 


User-added image


 

    3.    Open up the Tax Setting section and let's review: 


User-added image 


A.  Accrue sales tax until units are sold - this is to have NITC logic for Trade In Units by turning the toggle to on.
B.  Enable tax accrual on order units by default - change the toggle to on if you want the NITC logic to be default on
     all order units.
C.  Notional input tax category - what category do you want to use for the Notional Input Tax.
    We would recommend that you setup a new tax category for your NITC and assign the General Ledger where you 
    want the tax to "wait" until the units are sold.  A clearing account as such.
D.  Sales tax liability category - what tax category do you want to use for the Sales Tax Liability.
E.  Purchase tax liability category - what tax category do you want to use for the Purchase Tax Liability.
F.  Notional input tax expense category - what tax category do you want to use for the Notional Input Tax Expense. 


HOW DOES IT WORK 


Accounting for NITC when stocking in a Unit through Unit Ordering 


User-added image 


If the Dealership wants to elects to Accrue purchase tax until the unit is sold when processing a Unit Order, the user will need to ensure that the relevant toggle is YES. 


User-added image


  • Confirm the relevant tax etc when processing the Unit Receiving 
  • Basically the relevant tax will be held in the General Ledger assigned to the NITC Tax Category until the unit is sold
  • Once the unit is sold, the tax can now be claimed and the General Ledger assigned to the NITC Tax Category will be cleared 


Accounting for NITC for trade in units when they are stocked through Customer Order > Unit Deal


When the Trade in is added to a Customer Order > Unit Deal and subsequently stocked, the dealership can elect to not claim the Input Tax Credit on the Trade In until the Trade In has actually sold. 


When stocking in the Trade In from a Customer Order Unit Deal, the relevant tax will be held in the General Ledger assigned to your NITC Tax Category account until the unit is sold. 


Once the unit is sold, the tax can be claimed and the General Ledger assigned to NITC Tax Category will be cleared to the Tax liability account. 


The original trade-in value then the difference in tax will be allocated to General Ledger assigned to the Notional input tax expense category.



WHAT IF THE DEALERSHIP WANTS TO CLAIM THE NITC BEFORE THE UNIT IS SOLD


There may be different scenarios that the Dealership may want to claim the NITC before the unit is sold.


Blackpurl will allow you to record that the Dealership wants to manually claiming the NITC before the unit is sold and then do the relevant journals in your accounting package to allow the claiming of on the Business Activity Statement (BAS)


  • Navigate to the relevant Unit Record for the unit that you want to claim the NITC before it has been sold
  • On the Unit Record it will show you the amount that is currently being withheld as NITC 



  • If you wish to manually claim the NITC prior to the unit being sold on the Unit Record > Price & Cost Tracking section - Click ACTION > Manually Claim NITC 



  • User will be asked to confirm > Click on YES 


  • The Unit Record will now indicate that the NITC will now be claimed



  • This will also cause a journal to go across to your Accounting Package so that you are now claiming the NITC on your Business Activity Statement (BAS)

No further action in the Accounting package is required by the Dealership - as the journal will move the NITC amount from the NITC clearing General Ledger account over to relevant GST on your Business Activity Statement (BAS)