SearchGST query
Chris asks:
(updated on Monday, January 20th 2020)
I have a fairly straight forward question, but want t make sure i get it right. I have elected to pay GST on a six monthly basis and am wondering whether my GST refund should be the net of GST received in the six months minus any GST paid on expenses / bills. If the answer is no I'm guessing that's because the full expense bill(base expenses & GST component is deductible at the end of the year? What has made me second guess myself here is the fact that when businesses buy cars they purchase at the GST free rate and claim the net expenses over several years. I'd appreciate your help, thanks,
Our Experts Answer:
If you are conducting a taxable activity from a GST perspective, then you are entitled to claim back GST incurred on business costs. This means that the GST that you pay in each six-monthly return is the difference between the GST that you have collected from your customers and the GST you have incurred on your costs. The amount of cost that is deductible for income tax purposes is therefore the cost net of GST.
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