Overview

In the livestock industry some buyers, e.g. Woolworths, Coles and various other meat works,  issue Recipient Created Tax Invoices (RCTIs) instead of relying on vendor-generated invoices.  They must pay GST on all purchases. This process impacts how GST is handled in Stockyard and reported to the ATO for non-GST registered vendors.  These types of vendors are Hobby Farmers in Stockyard for GST treatment purposes.

Vendors registered for GST, have no change when processing RCTIs. However, for non-GST registered vendors, the buyer applies additional GST to the invoice and remits the funds.

The agent is responsible for remitting the additional GST to the Australian Taxation Office (ATO).

Understanding RCTIs and GST Adjustments

What is an RCTI?

An RCTI is an invoice generated by the buyer rather than the vendor. These invoices:

• Include GST on all purchases, even if the vendor is not registered for GST.
• Reflect an invoice total that will not match the purchaser's original invoice/Stockyard journals when using Accounting.
• Requires the agent to adjust their accounting records and remit the GST to the ATO.

Why is This Important?

• If a vendor is not registered for GST, GST is still applied to the livestock purchase.
• This extra GST must be paid by the agent to the ATO, ensuring compliance with GST regulations.
• The agent must record the correct GST amount in Stockyard to reflect this adjustment.

Example: RCTI GST Adjustment

A sale included livestock worth $2784.48 from a non-GST registered vendor.

• The original tax invoice showed no GST amount.
• However, the RCTI issued in return with the payment included $278.65 in GST.
  
• The payment received included this additional amount of GST.
  
• An adjustment is made in Stockyard to receipt this amount and then remit the additional $278.65 in GST to the ATO at End of Month processing.

Processing the Additional GST in Stockyard

To ensure accurate GST reporting, follow these steps:

Step 1: Create a "GST Adjustment" Account

1. Check if this account exists.  If not:
   
   
2. Go to the Ledger and right-click to create a new GL account.
   
3. Update the tax code after creating the code and name.
   
   

Step 2: Create a Journal Batch

This journal batch will contain three one-sided entries:

1. Credit the GST Adjustment Account

   • Enter the net amount i.e. the Stockyard value of the GST-free purchase 
   • Select “Add GST” 
     
   • Verify the GST calculation on the right
     
   • Untick the Transfer box
     
     

     This is one of the very few times it is possible to untick this box.  Please contact Support in any other situation.
     
     
     
     
     When you save the batch the amount will update to reflect the total including GST.

2. Debit the GST Adjustment Account

   • Match the Stockyard value of the GST-free purchase.
     
     
     

3. Post the Additional GST to the Buyer (e.g., Woolworths)

   • This reflects the difference in GST from the RCTI ensuring accurate reporting.
     
     
     

Example Journal Entries

Banking for RCTIs in Stockyard

When processing Bank Deposits, select both the invoice and the adjustment journal.

BAS Reporting for RCTIs

• Total Sales on the BAS remain unchanged.
• GST on Sales will be increased by the additional GST from the RCTI.
• This ensures that the correct GST amount is reported and paid to the ATO.

End-of-Month Journal Batch

At the end of the month, the journal batch should include:
✅ GST from the livestock sale commission
✅ Additional GST from the RCTI

Key Takeaways

✅ RCTIs issued by buyers include GST, even for non-GST registered vendors (Hobby Farmers).
✅ Agents must remit this GST to the ATO.
✅ Stockyard requires one-sided journal adjustments to account for this discrepancy.
✅ Banking transactions should include both the invoice and GST adjustment.
✅ Ensure BAS statements correctly reflect the additional GST.

For further assistance, please contact Support.