Home – New Forums Money matters gst on items already paid gst on?

  • This topic is empty.
Viewing 6 posts - 1 through 6 (of 6 total)
  • Author
    Posts
  • #967986
    0ldfart
    Member
    • Total posts: 1
    Up
    0
    ::

    I am a mobile computer technician, and started my business last year. Im in the process now of trying to get my books in order ready for tax time. I buy computer parts retail and on sell them to customers at a small mark-up. Can anyone tell me, am I supposed to be charging my customers gst on parts I have already paid gst on when I bought them?

    #1030145
    SewSpunky
    Member
    • Total posts: 49
    Up
    0
    ::

    It depends on whether you are registered for GST or not.

    If you aren’t registered for GST, you can’t charge customers GST.

    If you are registered for GST then you charge GST on your products you sell, and claim back GST credits on the products and services you purchase. Both amounts are reflected on your BAS, and the difference is either what you send to the ATO as your GST payment, or what you receive back as a refund.

    That’s a pretty simplistic explanation though and I’m not an accountant so your best bet if you’re not sure about whether or not you should be (or are) registered for GST, and if you are what you should be reflecting on your BAS, you really should have a chat with an accountant.

    #1030146
    TheBusinessAccountant
    Member
    • Total posts: 43
    Up
    0
    ::

    Hi

    SewSpunky has it spot on! If you are registered for GST, you must charge GST on any sales to customers and then claim back any GST you have paid on your purchases/expenses for the period.

    GST registration is voluntary until your turnover reaches $75k and then it is compulsory to be registered.

    Feel free to email me if you need any further info.

    #1030147
    Rhys
    Member
    • Total posts: 325
    Up
    0
    ::

    Hi, agree with earlier comments, but also interseted in how have you been handling you GST to date?

    If as you say you started your business last year you should – if you are registered for GST – have lodged a BAS by now. And on those BAS returns you should have identified how much GST you had charged (and paid). Conversely if you are not GST registered not only do you not charge your customers GST but you cannot claim back the GST you have paid on goods (or services) you purchase.

    One of the most efficient ways of handling all of this is through a suitable bookkeeping software package – it will handle the GST for you autmotically and will prepare the information to go to your tax agent / accountant. Depending on the size of your business you may find that you can reduce your tax preparation bill by more than the cost of the software. If you think this may be of interest please take a look at my website, there is lots of information there about small business bookkeeping solutions.

    Cheers, Rhys

    #1030148
    Dardee
    Member
    • Total posts: 430
    Up
    0
    ::

    To further expand on what has already been said I am interested to know how you have determined your pricing for these parts? On what figure have you calculated your markup etc?

    #1030149
    James Millar
    Participant
    • Total posts: 1,739
    Up
    0
    ::

    And one variation to that. It is not uncommon for businesses to bundle / provide products as part of their core service – however in some cases these items are not actually taxable supplies. The concept of agency applies to GST law and the agent is not always required to charge GST as part of the transaction. It’s certainly possible to avoid administering gst provided an agency relationship exists. The presence of a markup will normally knock this down however.

    Helping build better businesses and better lives with expert financial and taxation advice. [email protected] www.360partners.com.au 03 9005 4900
Viewing 6 posts - 1 through 6 (of 6 total)
  • You must be logged in to reply to this topic.