Is GST Credit Taxable as Income?

cheatGPT on 05/04/2020 - 12:23

Hi guys,

Let say a company mainly do Oversea Export which means no GST to be charged on Sales.

So there is no GST applicable to customers most of the time.

The expense paid like inventory is GST Included and claimable.

So, When I spend $1100($100 GST Included) and Selling oversea for $1020

I loss $80 in each sales.

But there is $100 GST claimable from expense

So, in fact I earned $100 -$80 = $20

In this case, do I need to pay Tax for GST claimed back as profit?

Otherwise, every sales is losing money which means the company never pay tax?

Which logic is right?

Financial

Comments

  • jimbobaus on 05/04/2020 - 12:40
    -1

    Hold on…lets look at your maths.

    So You spend $1100 inc GST
    Sell that for $1020 Ex GST

    So you make $20 from the GST claim only.

    I do not think that is how things should work.

    I mean $1020 sale should be on maybe $800 Inc GST or something

    You are making -$20 on every sale
    That is pretty bad biz imho

    • cheatGPT on 05/04/2020 - 12:43

      Yes, I take this as example just want to get the logic

      of losing in the book but earning after GST refund

      How should the tax works.

      • jimbobaus on 05/04/2020 - 12:45

        Oh ok yeah fair enough.

        I think ATO is going to be your best help in this situation.

        But i think the way its looked at is on the entire deal you "made $20" regardless of how you made it
        The $20 would therefore be income and taxable as such

  • MT2010 on 05/04/2020 - 12:47
    +6

    You paid $1100.00
    Therefore your GST $100.
    You get back $100 = so you nett cost is $1000
    You sold $1020.00
    $20.00 is your returned from your costof $1000 which will need to be declared as profit.

    • cheatGPT on 05/04/2020 - 13:23

      Thx, so the input for expense should be based on net cost and GST should mark separately

      • MrHyde on 05/04/2020 - 13:34
        +1

        Correct. Profit is calculated on exGST prices for both income and expense side. In your scenario, you are making $20 profit on which you would be paying tax.

  • JimmyF on 05/04/2020 - 15:18
    -1

    So, When I spend $1100($100 GST Included) and Selling oversea for $1020

    Well thats just bad business…

    Let me guess, selling baby formula?

    • cheatGPT on 05/04/2020 - 20:57
      -1

      lol

      There is no gst need to paid on baby formula

  • whooah1979 on 05/04/2020 - 16:04
    -1

    Op, your tax liability is zero after you factor in fuel, electricity, water, comms, breakfast, lunch and dinner.

    • Baysew on 05/04/2020 - 16:24

      Seek Government handout assistance.

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