Markup on Materials, or markup on Input Tax Credit?

[#1]

supplier: gst registered tradie, small job, no written contract required by law

option for customer or tradie to supply materials

if tradie supplies materials, then 10% added to material cost

(Both parties got some materials)
situation: tradie trying to add 10% to total invoice that includes gst and that works out to 21% markup on material cost. Tradie doesn't seem to get that they make their 10% by adding 10% to material cost AND they still have the gst component as a credit.

i can't see how you can charge a markup on anything but an expense. adding a markup to a CREDIT seems wrong in accounting terms, ethically and perhaps legally?   Comments?

[#2 · Accepted solution]

Hi @SkyBlue

Thanks for your post.

This is a question that has come up a few times in our Community. Here are some threads that you can check out:

• GST on materials
• GST on materials reimbursement
• GST materials

Hope this helps.

Thanks, Chris