Almost correct. You have to report the GST as income on your P&L, otherwise there is no way to make A/R and cash balance bank to revenues earned. However, GST is immediately removed from gross revenues and added to a liability account of GST due (payable quarterly, with interesting rules).sundaymorningstaple wrote:Think about it this way.....
Let's assume I'm a small niche provider of French Truffles so my turnover is only 600K/pa. I'm not a GST registered trader so my sales to you do not have GST in them. My competitor is GST registered. I sell my Truffles to your (non-GST registered) restuarant for $1000. My competitor matches my sales price to you @ $1000. When you get my invoice you pay $1000 and deduct $1000 as an expense. When you get my competitor's invoice is $1070 to you due to 7% GST. As you are non-GST registered, you cannot claim back the GST from the Gov't. All you can do is expense it with the cost of the truffles. Which is better? Buying from me or my competitor?
If you are GST registered, you do not report the GST as income nor can you expense the GST you pay.
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