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James Millar
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FastLaner, post: 204705 wrote:
Hi,

My accountant is hopeless and impossible to get a hold of so I’m wondering if anyone here can help me with a question I have.

For Example…

If I buy $10,000 worth of stock for my business but only sell $5,000 of it. Do I claim GST credits on the $10,000 purchase or on the $5,000 COGS?

Any help greatly appreciated.

Easy

If you are registered for GST on cash basis then you claim the GST on stock purchases when you pay for the stock. It does not matter how much was sold during that period (in fact you don’t actually need to have sold any).

If you are registered for GST on the accruals basis you can claim all the GST credits when you receive the tax invoice from the supplier. It does not matter when you pay for the goods or when you sell the goods.

There are some variations on this for second hand goods sellers, GST margin scheme for real estate etc.

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