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| GST Example 2 |
| GST where ownership
changes (the simplistic equation) |
In this example
you must add GST to the price you sell your product to the distributor
and return that value in your next return. Your distributor can
claim back this GST amount if they are registered and must return
the GST on the final sale price to the consumer |
| Example
of Ownership Changing |
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Amounts |
GST |
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Exclusive GST Price
to Distributor |
$ 69.56 |
$10.44 |
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Exclusive GST Distributor
Margin |
$ 17.39 |
$2.61 |
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Your Return shows
sales of |
$ 80.00 |
$10.44 |
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Your Distributor
shows sales of |
$100.00 |
$13.04 |
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Your Distributor
shows Inputs of |
$ 80.00 |
$10.44 |
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Net GST your
distributor pays IRD |
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$2.61 |
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| From this example
your distributor may also claim the input costs for their other
expenses like vehicle costs, telephone, hosting costs etc. Some
of these costs must be substantiated or claimed to a maximum
level. |
| When your Distributor
is not GST registered then they could be disadvantaged because
they can not claim back the inputs that the registered Distributor
can. Conversely they will not be paid bonuses or overide payments
that include GST as will commission payments not contain GST. |
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