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GST Calculation

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Hi,

 

We are a start up providing courier, delivery and shopping services. We connect merchants and customers with service providers (independent contractors). Some merchants and independent contractors are not registered for GST (turnover less than $75000) while others are.

 

Scenario

 

Customer requests delivery of an item from a store using our website or app.

A contractor accepts the request and purchases the product on behalf of the customer and delivers.

Customer pays for the cost of product and the delivery fee via an online payment processing service called STRIPE.

Contractor receives the reimbursement for the product plus the delivery fee (minus our commission).

 

Transaction

 

Item cost $70

Delivery Fee $25

 

Customer pays $95         (via Stripe)

 

Stripe fee    $1.96 (0.18 cents GST included)

 

NET     $93.04

 

Stripe transfers $70 (item reimbursement) + $20 (delivery fee) to the contractor / service provider.

 

Stripe transfers $3.04 to us.

 

Notes:

 

We actually do not collect or hold money from these transactions and only receive our commission in our bank accounts.

Payments are collected and distributed to parties by Stripe for a fee.

Stripe fee is covered by us so our commission is actually $5 minus $1.96 stripe fee.

 

Issue

 

How do we calculate GST on this transaction and how do we record it in our book keeping software?

 

1) Income $4.55

   GST collected  $0.45

   Expense $1.78

   GST paid $0.18

 

Therefore, GST to pay $0.27

 

OR

 

do we have to calculate gst on the entire delivery fee of $25 even though we are a faciliator?

 

Income $ 22.73

GST collected $2.27

 

Expense $20

Expense $1.78

GST paid $0.18

 

Therefore, GST to pay $2.09

 

OR

 

entirely different and we have got this whole transaction wrong.

 

I look forward to community's assistance Smiley Happy Thanks.

 

 

 

 

 

 

 

1 ACCEPTED SOLUTION

Accepted Solutions

Best answer

Community Support

Replies 0

Hi @EliasG

 

Welcome to our Community!

 

As we provided general infomraiton here on our Community about tax and super topics, your query is more complex and we may need to know more information to be able to proivde a definite answer. 

 

If you'd like a detailed answer relating to your specific GST query, we recommond sending a detailed email to GSTmail@aot.gov.au.

 

Thanks, JodieH. 

1 REPLY 1

Best answer

Community Support

Replies 0

Hi @EliasG

 

Welcome to our Community!

 

As we provided general infomraiton here on our Community about tax and super topics, your query is more complex and we may need to know more information to be able to proivde a definite answer. 

 

If you'd like a detailed answer relating to your specific GST query, we recommond sending a detailed email to GSTmail@aot.gov.au.

 

Thanks, JodieH. 

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