GST questions

[dont_waste_dollars]

hi there,

Lets say hypothetically i sell an item for $250 and bought it for $220

$20 gst hast already been paid by the supplier. plus i have to pay an additional $2.73 for a total of $22.73gst on the $250 sale

But i was wondering ( hoping.. wishing.. knowing its not true lol ) if i can deduct my ebay and papal fees from my sale price (21.25+5)

giving me a revised sale price of $223.75 which means instead of paying $2.73 in gst i only pay $0.35



Oh and lets say in another situation taking the ebay and paypal fees away from my sold price means i fall below what i paid for it ( made a loss ). lets say i bought for $220 and my revised sale price after fees deducted was $210. Would i have that sale as my gst contribution ruduced to zero or would i actually deduct $0.89 from my overal gst contribution from that sale and for my quarterly BAS?


Thanks so much in advance for any help with this. I've just recently exeeded the 75k turnover mark and thus have to start paying gst and i thought i was all over it but then i found myself wondering a few things about this little tax. 

[maranock]

I am not good at explaining things like this but:

Assuming you have now registered for GST, the tax your supplier has charged you is of no importance as it will be claimed back by you. You need to charge your customers gst on top of your price,  just as your supplier has done to you. 

Your price for your item is $250 so you sell it for $275. You claim back the amount of GST you paid your supplier on your quarterly form - and the government gets the extra which your customer has paid as they can't claim back any as the end user.

I think I know what exactly you are asking but I can't seem to find the words to explain it. It is easier to talk to your accountant, or look it up on the ATO website.

[clarry100]

You pay GST on your sale prices.
You can claim back any GST you paid on anything yo do with the business.
Unfortunately since neither EBay nor PayPal pay GST in this country your fees paid to them do not contains s GST component and therefore cannot be claimed back.
Also if you buy your stock from overseas there is no GST component in your suppliers charge. Unless GST was charged during the import process.
Hope that makes sense.

[jensmanchester-australia · Accepted solution]

No you cannot deduct your ebay and paypal fees from the sale price to reduce the sales price for GST purposes.

GST is paid on the total sales price. (including any postage costs) ie It is charged on what the buyer pays you in total.

You claim your ebay and paypal fees separately as a GST free expense.

If your sales price is lower than your purchase price then you receive a GST credit for that particular sale.

[gec2002]

Basically on items that you buy and sell the amount of GST to be paid is equal to the GST on your profit (Loss) so bought for $220 (GST Paid $20 ) sold for $330 (GST received $30) you owe the ATO $30 - $20 = $10 or in other words profit = $330 -$220 = $110 divide by 11 (to calculate 10% GST) = $10 GST you owe.  No GST on eBay and Paypal fees or bank interest or charges so nothing to claim.  But all business costs the contain GST eg Postage, ISP costs, etc are claimable.

[dont_waste_dollars]

Thanks for all the replies guys

So basicaly gst works just as id feared haha. 

When you say i can claim gst credits im a little confused. i havent actually paid my first BAS yet.... this was how i thought it worked...

BAS is due lets say i bought everything for 22000 and sold for 33000. ( every item i buy already has a GST component paid as its all within australia) meaning the gst total is 3000. gst paid by supplier 2000. when i submit my BAS do i pay the differentce of 1000 OR do i pay the full 3000 and claim back 2000 at tax time? seems silly if its the latter. that means the goverment will have surpless gst money from every link in the chain so to speak and will have to pay most of it back. 

Thanks again. 

[lyndal1838 · Accepted solution]

You work out the amount of GST you need to pay and write that in the box.

Then you work out the amount of GST that has already been paid.

If you are submitting on line the ATO site will tell you what amount you need to pay but basically it is the difference between what is owed by you on your sales and what has already been paid by your suppliers.

[cherry*135]

If you pay $2000 GST on purchases of goods, office expenses .... (GST collected)

and have collected $3000 GST  ( from the sale of goods) (GST paid)

On your BAS - you would owe  ATO $1000. Which would be paid to ATO quarterly (?).

Simplified version above - as PAYG w/h is also entered on BAS, and other things (e.g. capital purchases) if they apply.

[misterforgetfulsbooks]

ebay pays the Govt. no GST on the fees they charge us?

What a rort.

And now the Govt. wants to stuff around with people's pensions.

[joethenuts]

mmmm if they had to pay gst who do you think will have to pay for it ,mmmmmmmmmm