About GST Adjustments Due to Discounts/Allowances
Select the Tax Discount/Allowance field on the Tax Systems form to specify this. The adjusted tax amounts can be viewed on the A/R Payment Distributions and A/P Payment Distributions forms.
If you have a mix of taxable and exempt line items on one invoice, the discount is taken on the entire invoice. Tax is calculated on the taxable part of the discounted amount.
Adjustment Example
Without tax adjustments, when an invoice or voucher is created, the tax is calculated on the full amount. If a discount is part of the payment on an invoice or voucher, the tax amount is not adjusted. For example:
Sale 100.00 Tax 5.00 --------------------- Total Invoice 105.00 Payment 101.00 Discount 4.00
If the Tax Discount/Allowance field is selected, this example would change as follows:
Sale 100.00 Tax 5.00 --------------------- Total Invoice 105.00 Payment 100.80 Discount 4.00 Tax Adjustment .20