GST Question

Discussion in 'Wealth Creation & Management' started by miniroo, Mar 7, 2014.

  1. miniroo

    miniroo Well-Known Member Silver Stacker

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    I have a biz' but i'm not registered for the GST at this stage as I don't take in 75k p/a from it ;)
    Problem is some places I sell product to pay me for GST.

    I understand that if registered for the GST i'd need to send this money in every 3 months.
    but not being registered, and I don't want to be a tax collector for the tax office so I'm trying to avoid it.
    what do I do with this money? do I put it in the end of year tax?

    it doesn't happen often, most scrap buyers treat is as a cash sale, why do some scrap yards pay me GST?
    I just got payment for a delivery I made, the GST is substantial, but it's not my money, if the tax man knew how bad I was at keeping money
    he wouldn't be so keen on me holding it, already tempted to put it into silver :)

    anyone know how I can avoid receiving GST money in the future?
    are the scrap yards treating the purchase as me selling to them? instead of them buying from me?
    I know it sounds like the same thing but there's obviously a difference.

    Thanks
     
  2. spannermonkey

    spannermonkey Well-Known Member Silver Stacker

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    here there everywhere
    from what about scrapyards , yes they purchase it from you
     
  3. XB

    XB Active Member Silver Stacker

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    If you are not registered for GST why are you taking/collecting GST? Are you issuing Tax Invoices including GST?

    An ABN does not mean you are required to take/collect GST. Conversely, if another party says I have to pay you the GST you should be saying "NO - just pay me what I have asked for, the amount excluding GST, as I am not registered for GST and therefore you cannot claim an input tax credit from your purchase off me".
     
  4. goldpelican

    goldpelican Administrator Staff Member

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    Hmm are they adding GST, or just issuing a recipient created tax invoice that includes GST as part of the total they owe you? Better speak to an accountant - you might find that you are liable to pass the GST along to the govt if you have inadvertently being collecting it because of RCTIs.
     
  5. miniroo

    miniroo Well-Known Member Silver Stacker

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    The're paying me the value for the scrap, $X per tonne, same price as everywhere.
    but when I get the money, there's 10% more than the value of my scrap.

    They have automatically put me on a GST thing, I only found out when I saw the invoice they sent me today and the money's in the bank.
    not the first place to do so, they just assume if you have an ABN, you must be registered for GST.

    I don't issue invoices for scrap :) you take it in, they weigh it and pay you, this place takes 4 weeks to pay,
    I got it today plus GST, the invoice they sent says GST account, I certainly never asked for that.

    Yeah I will pass it on but was thinking maybe there was something I needed to do with it instead of giving it to the accountant end of year.
    I'm not going to use that place again but will make sure I make it clear to the next buyer.

    cheers.
     
  6. boyracer

    boyracer Member

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    It's late and I can't really remember the specifics (it's been a while) but do some more research on the ATO website.

    What I can remember is a bunch of years ago the ATO got quite ticked off at all the, shall we say, cashy money transactions going on in the scrap industry and they now have quite strict rules around transactions and recording of etc. My hazy recollection is that they have to pay GST on all purchases or withhiold 46.5% tax (some small exemptions I think) and create a recipient created tax invoice - which would explain why you are getting one.

    As I said do more research as I've probably got some of the details wrong. Summary is the scrap industry has some extra rules in place in relation to GST etc.

    helpful link maybe

    http://www.ato.gov.au/Business/Bus/The-purpose-of-the-scrap-metal-industry-Code-of-Compliance/
     
  7. Elemental

    Elemental Active Member Silver Stacker

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    It's a bit of a problem really. You have received an RCTI which is effectively stating you are registered for GST (which you aren't). I'm sure there's a ruling somewhere about GST on RCTIs but I can't find it on my phone. Long story short is you can't remit it to the ATO because you aren't registered, I think the easiest thing to do is going to be to give the 10% back to the scrap dealer and get them to reissue a correct RCTI which correctly shows you are not registered for GST.

    Good luck.
     

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