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| GST Example 3 |
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GST where ownership
changes and a Rebate is applied on the (GST Inclusive) Retail
Price
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If
you sell your product to your distributor at the (GST inclusive)
final retail price less a rebate (commission) then you must calculate
the GST on the rebated price for your own return and your distributor
will return the final retail price less their rebated price for
their own sales in their return. |
| Example
including Rebate |
Amounts |
GST |
| Final Retail
Price (GST Inclusive) |
$100.00 |
$13.04 |
| Rebate or Commission
@ 20% |
$
20.00 |
$ 2.61 |
| Rebated Price |
$
80.00 |
$ 10.44 |
| The Company
Returns |
|
$10.44 |
| The Distributor
returns |
|
$2.61 |
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This example excludes
the claimable expenses (Imputs)
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| This formula is
the most difficult to both explain and operate under the GST
system. |
| An alternative to
this structure is to separate the GST and treat the transactions
as if they are under GST where ownership changes (the simplistic
equation) |
| Whether you use
this example or the simplistic equation, the crucial aspect is
to ensure that the IRD gets the same amount of GST net paid to
them. |
| You may choose to
show much of this information in a statement form to your distributor
as a series of debit and credit items (showing the GST) but make
sure that it is clear how much GST is liable by your distributor
and where possible show the actual value of the GST inclusive
sales the distributor will have to return. |
| When your
Distributor is not GST registered
the examples above still
apply but the distributor can not claim back any of the GST inputs
and you would not allow a rebate with GST added ie the figure
of only $17.39 would be paid as you could not claim
this back against your own return. |
| Therefore any payments
made to Distributors who are unregistered must not include GST
as it will not be claimable against your GST returns as an imput
claim. |
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Example |
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