Sap Accounting: [sap-acct] Canada HST

[sap-acct] Canada HST

Posted by Vamsi_FICO
on Jul 28 at 8:48 PM

SAP,
We are implementing SAP for our client in Canada.
We have an issue with implementing HST for relevant provinces
In provinces like Ontario and British Columbia, the federal and provincial portion of taxes have been combined to Harmonized Sales Tax (HST)
However, as we are a large business we are not allowed to take complete input tax credit on some purchases. We need to account for Recaptured Input Tax credit.
RITC is only valid for certain types of purchases like food, gas and toll free telephone charges etc
There is no standard way for computing RITC. The amount would vary by the type of purchases.
Example:
If we are purchasing fuel, 100% PST component will be accrued as the RITC
Some other type of purchase, 50% of PST component will be accrued as the RITC
Please find the document on how to record RITC in Canada attached.
So, since there is no automatic way to get this via tax code / tax determination configuration. I was wondering how other clients implemented in Canada are able to achieve this.
Is there a way to input the RITC amount manually while entering the invoice and the expense should adjust automatically to balance the invoice?
Please advice.
Accounting entry
Case 1: 100 % PST portion (8%) is accrued as RITC
Description D/ C Amount GL Account No.
Accounts Payable C 1130
Expense D 1080
HST / GST A/C D 130 Liability
Recaptured ITC (RITC) A/C C 80 Liability
Case 2: 50 % PST portion is accrued as RITC
Description D/ C Amount GL Account No.
Accounts Payable C 1130
Expense D 1040
HST / GST A/C D 130 Liability
Recaptured ITC (RITC) A/C C 40 Liability

Thanks
Vamsi

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