How to process Provincial Sales Tax on a cost component that is deducted from sales before depositing the net proceeds into the bank account
We are a seafood retail store registered for GST but not PST in BC, GST is claimed and recovered while PST is absorbed as an expense.
We have engaged a food delivery service through which product is sold and for which fees and expenses are levied some of which may be subject to GST and/or PST. Once an order is received and prepared, the product is picked up and delivered with the net proceeds deposited into our bank sometime thereafter.
We are using the Customer functions:
- Invoice to record the sales/delivery
- Credit memo to record the associated service fees and expenses
- Receive payment to record the net proceeds received
However, we discovered that, using the Credit memo, the PST component is not absorbed as an expense, rather it has been set up as a recoverable PST.
Any suggestions where we may be going wrong?
If there is no viable alternative, we are willing to right off and expense manually each "recoverable" PST - we just need to know how.
Thank you in advance for any suggestions.