Reverse Charge / Bill of Entry

Reverse Charge:

In a normal supply transaction, a seller is required to pay value added tax (VAT) to government on supplies made by him. In reverse charge, buyer is required to pay VAT to government on purchases made by him. Reverse charge is only applicable if purchases are made outside the Base Country. If all purchases are made locally, reverse charge is not applicable.

The reverse charge is required when imports are made from outside the Base Country and seller is from another country, which may or may not have a business in Base Country. Since a seller does not have business in Base Country, it will be difficult for the tax authorities to track these sellers or suppliers. Hence, buyers who are residents of Base Country are made responsible to charge VAT on reverse charge basis.

To Create Reverse Charge, Click Purchase Invoice -> Create New

Once the details are entered, Click Add

Note: Reverse Charge is applicable only on following conditions.

1. The item type should be only Service Items (Non Inventory Items)
2. The Tax Treatment selected for Supplier/Vendor is not VAT Registered or Non VAT Registered.
   

Bill of Entry:

        A Bill of Entry is a legal document that is filed by importers or customs clearance agents on or before the arrival of imported goods. It is submitted to the customs department as a part of the customs clearance procedure. Bill of entry is used to record the expenses of Customs charges or duty. Bill of Entry can be created only for the item types such as Inventory, Assets & Consumables.

To Create a Bill of Entry, Item Receipt is mandatory.

To Create a Bill of Entry, Click Purchase -> Bill of Entry -> Create New

Once all the details are entered, Click Add.