Interestingly, GST is collected at all stages of the chain from
manufacturer to retail, but is refunded to the middlemen at the
intermediate steps.
for example:
Manufacturer makes widgets & sells for, say, $100 ex tax. he collects an
extra $10 each at sale time & pays that to the tax office. (net GST paid by
manufacturer = $0 - ignoring parts/materials)
Distributor pays $110 each & sells at (say) $150 ex each. he collects
$15 for the tax office at sale time & they refund the original $10 he
paid (he passes on the net $5 tax on the $50 profit- net GST paid by
distributor after goods sold = $0).
Retailer pays $165 each & retails at say $300ex (or rather 330 inc.) The
$30 tax he collects is sent to the tax office & he can claim a credit
for the $15 he paid the distributor, thus passing on a net $15- net GST
paid by retailer = $0)
the customer buys the widget at 330inc (=300 ex) & has paid the 10% GST.
It sounds complicated, but that is why <insert name of deity of choice>
invented accountants & accounting software. basically one pushes the
right button & a statement of trade including GST collected & paid out
pops out (a 'business activity statement'.
Simplistically the end user is the only one who pays the GST. Where it
DOES get REALLY complicated are the exceptions, like basic food or where
a business doesn't turn over enough $$.
davidt
On Wed, Apr 30, 2008 at 05:10:52PM +1000, Andrew Fildes wrote:
>
> You missed the big difference - VAT is a Goods AND Services tax. Tax
> is levied on all services, such as the guy mowing your lawn for your
> and the one who cuts your hair. 10% round here where we actually call
> it a GST but it gets buried in the bill so that people are hardly
> aware of it.
> Andrew Fildes
> afildes@xxxxxxxxxxxxx
>
>
>
> On 30/04/2008, at 4:35 AM, Moose wrote:
>
> > Although they may appear at first glance similar, US sales taxes
> > are not
> > VAT in concept or practice.
>
>
>
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