What is the ledger nature of GST Receivable?

Question

In accounting, what is the nature(asset, liabilite, revenue, expense or owners equity) of GST Receivable, my text book says two differing things in two different locations, in the chart of accounts its a liabilitie, which i agree with, then in some questions it says its a current asset.

What are your opinions?

Nb(Gst is the australian goods and services tax)

Answer 1

GST Receivable to your business is an asset as it represents a cash amount due to you but not yet paid. GST receivable by the ATO is a liability as it represents an as yet unpaid amount due to the ATO. I think you may be mixing up your dedits and credits (like on your bank statement when you have cash in the bank it is stated as a credit which is from the banks point of view as it is their liability for amounts payable by them to you) Remember too that most computer programs will automatically report the amount as an asset or a liability depending on if it has a debit or credit balance, so this can be confusing as well.

Answer 2

In most businesses, even in other countries, whenever you buy goods or items for business or personal use, there is a tax incorporated in it. In Australia it is GST or goods and services tax which form part of the GST Receivable (a Current Asset) because it is being refunded by the government in the form of a deduction from GST Payable therefore paying net amount only.

Hope it could help you.