Deduct already-reversed prepayment GST on AU sales prepayment credit memos

src/Layers/APAC/BaseApp/Sales/Posting/SalesPost.Codeunit.al

@@ -7771,8 +7771,8 @@ codeunit 80 "Sales-Post"
         if SalesLine.Type <> SalesLine.Type::" " then
             if SalesLine."Prepayment Line" then begin
                 TempPrepmtVATAmtBuf.Get(0, '', SalesLine."Line No.");
-                TempPrepmtVATAmtBuf.Amount := SalesLine."Amount Including VAT" - SalesLine.Amount;
-                TempPrepmtVATAmtBuf."VAT Base Amount" := SalesLine."VAT Base Amount";
+                TempPrepmtVATAmtBuf.Amount := -SalesLine."Amount Including VAT" + SalesLine.Amount;
+                TempPrepmtVATAmtBuf."VAT Base Amount" := -SalesLine."VAT Base Amount";
                 TempPrepmtVATAmtBuf.Modify();
             end else
                 if not SalesLine."System-Created Entry" then
@@ -7788,6 +7788,44 @@ codeunit 80 "Sales-Post"
                         end;
     end;
 
+    local procedure DividePrepmtVATDeducted(var SalesLine: Record "Sales Line")
+    var
+        PrepmtVATReminder: Decimal;
+        PrepmtVATBaseReminder: Decimal;
+        Ratio: Decimal;
+    begin
+        if TempPrepmtVATAmtBuf.FindSet() then
+            repeat
+                TempPrepmtLineNoBuf.SetRange("New Line Number", TempPrepmtVATAmtBuf."Line No.");
+                if TempPrepmtLineNoBuf.FindSet() then
+                    repeat
+                        SalesLine.Get(SalesLine."Document Type", SalesLine."Document No.", TempPrepmtLineNoBuf."Old Line Number");
+                        Ratio := SalesLine."Prepmt Amt to Deduct" / TempPrepmtVATAmtBuf."Prepmt Amt to Deduct";
+                        DistributeAmount(
+                          TempPrepmtVATAmtBuf.Amount, Ratio,
+                          SalesLine."Prepmt. VAT Amount Deducted", PrepmtVATReminder);
+                        DistributeAmount(
+                          TempPrepmtVATAmtBuf."VAT Base Amount", Ratio,
+                          SalesLine."Prepmt. VAT Base Deducted", PrepmtVATBaseReminder);
+                        SalesLine.Modify();
+                    until TempPrepmtLineNoBuf.Next() = 0;
+            until TempPrepmtVATAmtBuf.Next() = 0;
+        TempPrepmtVATAmtBuf.DeleteAll();
+        TempPrepmtLineNoBuf.Reset();
+        TempPrepmtLineNoBuf.DeleteAll();
+    end;
+
+    local procedure DistributeAmount(AmountToDistibute: Decimal; Ratio: Decimal; var Amount: Decimal; var Reminder: Decimal)
+    var
+        DistibutedAmount: Decimal;
+        DistibutedAmountRnded: Decimal;
+    begin
+        DistibutedAmount := Reminder + AmountToDistibute * Ratio;
+        DistibutedAmountRnded := Round(DistibutedAmount, Currency."Amount Rounding Precision");
+        Reminder := DistibutedAmount - DistibutedAmountRnded;
+        Amount := Amount + DistibutedAmountRnded;
+    end;
+
     local procedure UpdateTaxForPostedDoc(var SalesHeader: Record "Sales Header")
     var
         SalesInvHeader: Record "Sales Invoice Header";
@@ -8608,6 +8646,7 @@ codeunit 80 "Sales-Post"
         OnBeforePostUpdateOrderLine(SalesHeader, TempSalesLineGlobal, SuppressCommit, SalesSetup);
 
         ResetTempLines(TempSalesLine);
+        DividePrepmtVATDeducted(TempSalesLine);
         TempSalesLine.SetRange("Prepayment Line", false);
         TempSalesLine.SetFilter(Quantity, '<>0');
         OnPostUpdateOrderLineOnAfterSetFilters(TempSalesLine);

src/Layers/APAC/BaseApp/Sales/Posting/SalesPostPrepayments.Codeunit.al

@@ -1172,6 +1172,7 @@ codeunit 442 "Sales-Post Prepayments"
         PrepmtAmtToInvTotal := SalesLine."Prepmt. Line Amount" - SalesLine."Prepmt. Amt. Inv.";
         if SalesLine.FindSet() then
             repeat
+                DeductedVATBaseAmount := 0;
                 PrepmtAmt := PrepmtAmount(SalesLine, DocumentType);
                 if PrepmtAmt <> 0 then begin
                     if IsFullGST(SalesLine) then
@@ -2001,6 +2002,8 @@ codeunit 442 "Sales-Post Prepayments"
                     SalesLine."Prepmt Amt to Deduct" := 0;
                     SalesLine."Prepmt VAT Diff. to Deduct" := 0;
                     SalesLine."Prepayment VAT Difference" := 0;
+                    SalesLine."Prepmt. VAT Amount Deducted" := 0;
+                    SalesLine."Prepmt. VAT Base Deducted" := 0;
                     OnUpdateSalesDocumentOnBeforeModifyCreditMemoSalesLine(SalesLine);
                     SalesLine.Modify();
                 until SalesLine.Next() = 0;

src/Layers/APAC/Tests/Local/ERMGSTOnPrepaymentsII.Codeunit.al

@@ -1021,6 +1021,60 @@ codeunit 141027 "ERM GST On Prepayments II"
           GeneralLedgerSetup."Enable GST (Australia)", GeneralLedgerSetup."GST Report", GeneralLedgerSetup."Full GST on Prepayment");
     end;
 
+    [Test]
+    [Scope('OnPrem')]
+    procedure GSTOnSalesPrepmtCrMemoAfterPartialFinalInvoice()
+    var
+        GeneralLedgerSetup: Record "General Ledger Setup";
+        SalesCrMemoHeader: Record "Sales Cr.Memo Header";
+        SalesHeader: Record "Sales Header";
+        SalesInvoiceHeader: Record "Sales Invoice Header";
+        SalesLine: Record "Sales Line";
+        DocumentNo: Code[20];
+        DeductedVATAmount: Decimal;
+        DeductedVATBase: Decimal;
+        PrepmtInvVATAmount: Decimal;
+    begin
+        // [SCENARIO 8896] GST on a Sales Prepayment Credit Memo posted after a partial final Invoice excludes the prepayment GST that the partial Invoice already deducted.
+
+        // [GIVEN] Full GST On Prepayment. Create Sales Order, post Sales Prepayment Invoice and make payment for the same.
+        Initialize();
+        GeneralLedgerSetup.Get();
+        UpdateLocalFunctionalitiesOnGeneralLedgerSetup(true, true, true);  // TRUE for Enable GST, GST Reports, Full GST On Prepayment.
+        CreateSalesOrderAndUpdateGeneralPostingSetup(SalesLine, '', LibraryRandom.RandDec(10, 2), false);  // Taking blank value for Currency Code, random value for Prepayment Pct., FALSE for Prices Including VAT.
+        PostPaymentForSalesPrepaymentInvoice(SalesHeader, SalesLine);
+        FindPrepaymentSalesInvoiceHeader(SalesInvoiceHeader, SalesHeader."Sell-to Customer No.");
+        SalesInvoiceHeader.CalcFields(Amount);
+        PrepmtInvVATAmount := SalesInvoiceHeader."Amount Including VAT" - SalesInvoiceHeader.Amount;
+
+        // [GIVEN] Post a partial final Invoice, deducting part of the prepayment and its GST.
+        UpdateQuantityToInvoiceOnSalesLine(SalesLine);
+        DocumentNo := LibrarySales.PostSalesDocument(SalesHeader, true, true);  // Post as Ship and Invoice.
+        GetPrepmtDeductedVATOnSalesInvoice(DocumentNo, DeductedVATAmount, DeductedVATBase);
+
+        // [THEN] The Sales Order line stores the prepayment GST deducted by the partial Invoice.
+        SalesLine.Get(SalesLine."Document Type", SalesLine."Document No.", SalesLine."Line No.");
+        Assert.AreNearlyEqual(
+          DeductedVATAmount, SalesLine."Prepmt. VAT Amount Deducted", LibraryERM.GetAmountRoundingPrecision(), AmountMustMatchMsg);
+        Assert.AreNearlyEqual(
+          DeductedVATBase, SalesLine."Prepmt. VAT Base Deducted", LibraryERM.GetAmountRoundingPrecision(), AmountMustMatchMsg);
+
+        // [WHEN] Post the Sales Prepayment Credit Memo.
+        LibrarySales.PostSalesPrepaymentCrMemo(SalesHeader);
+
+        // [THEN] The Credit Memo GST equals the prepaid GST minus the GST already deducted by the partial Invoice.
+        SalesHeader.Get(SalesHeader."Document Type", SalesHeader."No.");
+        SalesCrMemoHeader.Get(SalesHeader."Last Prepmt. Cr. Memo No.");
+        SalesCrMemoHeader.CalcFields(Amount, "Amount Including VAT");
+        Assert.AreNearlyEqual(
+          PrepmtInvVATAmount - DeductedVATAmount, SalesCrMemoHeader."Amount Including VAT" - SalesCrMemoHeader.Amount,
+          LibraryERM.GetAmountRoundingPrecision(), AmountMustMatchMsg);
+
+        // Tear Down.
+        UpdateLocalFunctionalitiesOnGeneralLedgerSetup(
+          GeneralLedgerSetup."Enable GST (Australia)", GeneralLedgerSetup."GST Report", GeneralLedgerSetup."Full GST on Prepayment");
+    end;
+
     [Test]
     [Scope('OnPrem')]
     procedure GLEntryAfterPostPartialPurchInvAndPrepaymentInv()
@@ -1509,6 +1563,21 @@ codeunit 141027 "ERM GST On Prepayments II"
         SalesInvoiceHeader.CalcFields("Amount Including VAT");
     end;
 
+    local procedure GetPrepmtDeductedVATOnSalesInvoice(DocumentNo: Code[20]; var DeductedVATAmount: Decimal; var DeductedVATBase: Decimal)
+    var
+        SalesInvoiceLine: Record "Sales Invoice Line";
+    begin
+        DeductedVATAmount := 0;
+        DeductedVATBase := 0;
+        SalesInvoiceLine.SetRange("Document No.", DocumentNo);
+        SalesInvoiceLine.SetRange("Prepayment Line", true);
+        SalesInvoiceLine.FindSet();
+        repeat
+            DeductedVATAmount += SalesInvoiceLine.Amount - SalesInvoiceLine."Amount Including VAT";  // Deduction lines are negative, so this yields the reversed GST as a positive amount.
+            DeductedVATBase -= SalesInvoiceLine."VAT Base Amount";
+        until SalesInvoiceLine.Next() = 0;
+    end;
+
     local procedure GetPayableAccount(No: Code[20]): Code[20]
     var
         Vendor: Record Vendor;