Hi,
I have a question in regard to payroll tax. So I outsource my employees from an employment agency. In return, every fortnight the employment agency will invoice me for the wages, super, payroll tax payable, and management fee. Recently, they charge GST on the Payroll Tax (previously they did not).
I asked them about it, they mentioned that due to changes in new FY, GST is now payable on top of the Payroll Tax payable to them since "[u]nder S9-5 of the GST Act, the provision of labour hire services is a taxable supply. In addition, on-charging a cost you incur becomes its own supply under the Act. "
I have been looking for the specific terms in that ruling that mentioned that GST is payable on Payroll Tax if it is payable through third party or employment agency, but unfortunately can't find one.
Are they correct in charging GST on Payroll Tax?
Thank you in advance.
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