GST: Difference between ‘Create Bad Debt Relief’ & ‘Create Bad Debt with Bad Debt Relief’

Question: What is the difference between ‘Create Bad Debt Relief’ & ‘Create Bad Debt with Bad Debt Relief’?

Version: 1.8 / 1.9 / 2.0

Answer:

‘Create Bad Debt Relief’ is used when you want to claim AR bad debt relief but insolvency of debtor is not confirmed yet. In simple words, the debt is not written off as bad debt in the book and you are expecting to receive the payment in future. When you choose Create Bad Debt Relief, the system will generate journal to debit Input Tax Account for claiming AR bad debt relief. There is no effect on the balance of the debtor.

‘Create Bad Debt with Bad Debt Relief’ is used when you want to claim AR bad debt relief and insolvency of debtor is confirmed. When you choose Create Bad Debt With Bad Debt Relief, the system will generate journal to debit Input Tax Account for claiming AR bad debt relief and credit Debtor for bad debt written off. The balance of the debtor is reduced accordingly.

For more information about bad debt relief, you may refer to custom web site [1].

By:Boon Soon 170701; KM 170724; P170731

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