gst fun

[kullafullsnake]

hey accountants or the like, if you purchase a product at wholesale price which is already been included gst by the supplier that you get your stuff off, do u have to re charge your customers gst if you act as a reseller ? cheers anyone

 

[whatsup]

under the gst law you are'nt allowed to charge gst twice but if you have put time and cost (phone calls,delivery,labour time,etc )into getting these items you can put an additional charge on them.

 

[kullafullsnake]

ah awesome so what your saying is the wholesale supply has already taken care of gst and therefore there is no need to place a gst price on the resell of the product because we have already payed for gst by purchasing the product at a price which included gst, cheers

 

[whatsup]

no.you still have to charge gst because the government wants their cut of your services as well.if you buy an item for 2.20(gst inc) and you charge 2.20(gst inc) for your services then the total price is 4.40 with the government wanting the 40 cents worth.
we had a gst audit a few years ago and this is how they explained it.

 

[falconboy]

kullafullsnake, it depends if you are registered for GST. If you are not, you do not charge GST. If you are registered for GST, you must charge it. If you are not registered for GST and you resell an item without gst, the purchaser cannot claim the gst component back, whereas if you are gst registered and you have to charge GST, the buyer can then claim gst back if it was for business use of course.

Situation 1 - you are registered for GST: Your supplier charges you $11 inc gst for an item. You then resell an item for $22 which includes GST. If they buyer purchased it as a business expense, they can claim $2 back on their BAS, if it was sold to an end user not for business, they still have paid the $2 gst but can't claim it back.

Situation 2 - you are not registered for GST: Your supplier charges you $11 inc gst for an item, you resell for $22 with no gst added. If the buyer was a business, they cannot claim the $2 back as an expense as your price did not include GST.

I think the most important thing we need to know is if you are registered for GST and reselling the product.

 

[kullafullsnake]

ok now i get the picture thanks alot guys

 

[::MeLiSsA::]

hahaha kulla is that u in ure avatar??

 

[kullafullsnake]

melissa hell no ill post the real me