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RachelS(Newbie)Newbie
12 Feb 2025

Hi

I have a business customer who has informed me that they do not pay GST on any invoice from suppliers..

I had sent them a Quotation, incl.GST, and they have accepted the Quote, but on their Purchase Order, they have noted Excluding GST - when I asked them to please amend their PO, they tell me that they don't actually pay GST and apparently they have never paid GST to any of their suppliers - just seems strange to me??

So after chatting with my accountant, he said I will need to issue the invoice for the Excluding GST Amount and when I do my accounts, i make note that it was exempt from GST when paid.

I know schools don't pay GST, but they still pay the GST inclusive amount and then they do what they do to claim it back - so i am therefore a little confused as to this way with this customer...

Look forward to any insights... Thank you..

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886 views
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Glenn4802(Devotee)Devotee
12 Feb 2025

If your supply is subject to GST, then you will need to pay one-eleventh of the invoiced amount as GST. If for some reason the supply is not subject to GST, you don't need to pay any.


I would be asking the accountant on what grounds is the sale GST exempt. If they don't have a suitable answer, it might to time to change accountants. At the end of the day, if the ATO comes knocking and finds the amount subject to GST, it is your business and not he customer or the accountant who will have to pay the tax and penalties.

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Glenn4802(Devotee)Devotee
12 Feb 2025

Even the business customer is not registered for GST, they would still need to pay the GST inclusive amount, similar to the dealings you have with schools. The exception to this rule is when the goods or service being provided is GST-free e.g. fresh food, education etc.


You should ask you accountant why they consider your supply to the business would be exempt from GST.

RachelS(Newbie)Newbie
12 Feb 2025

Thank you - my accountant was also stumped as to why they do it the way they do..

Something is just not sitting right with me.. But my accountant told me that I can do the invoice for GST excluded and just make note of it on my accounts for him to deal with when it comes tax time.

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