How to record the GST paid on behalf of a customer?

The GST paid on behalf of your customer to the Custom for the goods imported (usually happened in logistic business) are not your expenses nor your tax liability since you are not the owner of the goods imported. You may use a Current Asset account (we name it as "GST Paid On Behalf" in our example) to capture the GST paid on behalf of the customer.

Use a Payment transaction to record the payment made to the Custom for the GST paid on behalf. This payment transaction will debit the GST Paid On Behalf account and credit the Bank account.

Next, use a Sales Invoice transaction to create a sales invoice to your customer for the GST Paid On Behalf. This will debit the Accounts Receivable and credit the GST Paid On Behalf account.

The GL (General Ledger) balance of the GST Paid On Behalf account will be zero

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