To post an entry that has a GST and a GST-free component, you will need to split the entry as outlined below. The reason behind this is that the BAS entries are generated from the tax codes applied to the entry.
For example, goods are purchased from ABC Pty Ltd for $13,500 of which $2,500 relates to GST-free goods. The entry is posted as follows:
Debit account number 1798 with $11,000 ($12,100 including GST) using the INP code for the portion with the GST component.
Debit account number 1798 with $2,500 using the FRE code for the GST-free component.
Note: The Cash Payments input window automatically credits the bank account, if you are using a journal entry remember to credit the bank account and annotate the entry as a cash item.
Note: It is important to split the entry because the GST calculation worksheet for BAS will add the total amount for GST items to G11 ($14,600) and at G14 deduct the Free Portion ($2,500) to arrive at G19 ($12,100), which is then divided by 11 to get G20 ($1,100).
Note: If you enter the entry as a one line item by altering the tax amount and keeping the INP tax code, the program will post the tax figure to the applicable GST account, however, your BAS calculation worksheet will be incorrect because your GST free component will not filter through to G14 and not be deducted in the calculation of G20.