GST-Purchases & GST-Sales Verification

[Caffeinate T. W. <moc...@ya...>]

Back in November there was a discussion about having two separate GST
accounts to track tax already paid and tax to be collected:

http://www.geocrawler.com/archives/3/7966/2001/11/0/7125075/
---cut---
> > Ned Lukies wrote:
> > >
> > > Is it possible to seperate the single GST account into to so that
I have
> > > an asset GST account for GST paid on purchases and a liability
GST account
> > > for GST collected on sales? If so, how?
> 
> > in Italy we use only the two accounts solution. We have to do this
way
> > because we have to write two different books, one for sales and the
> > other
> > for purchases. Just modify your accounts list and put the
> > flag AP_tax in the 'GST for purchases' account and the AR_tax in
the
> > 'GST for sales' account.
> >
> > What we do is to put this together once pro month in a third
account
> > called something like 'GST summary'. Then I go to pay just the
> > sum of this third account.
---/cut---

I'm trying to document this into an FAQ, but I'm not sure if I am
understanding the above correctly. The original post asked to make a
GST account for purchases (GST-Purchases) to track taxes that has been
paid (asset). In the reply to that post, Luca suggested to flag AP_tax.


That is where I'm lost. Isn't AP_tax a liability that we have to pay
later? Since we already paid for that tax, shouldn't that be AR_tax
flagged for GST-Purchases, and AP_tax flagged for GST-Sales?


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