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Building materials reimbursement and "paying GST twice"

Observer

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Replies 1

Here's my situation:

 

My builder purchased materials for (hypothetically) 500 + 50 gst = $550.

 

The builder has put labour and materials in the invoice to me, and charged GST at the bottom of the invoice to apply to all items. In this way, the materials cost me 550 + 55 gst = $605 (and labour costs as well, but this is not the focus of my query). 

 

Is this process correct? The reason for my confusion is that if someone buys a thing on your behalf, usually I'd expect to pay back what they were out of pocket (ie, 550). 

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Taxicorn

Replies 0

It is correct, it is how GST works.

 

See this Business Example

1 REPLY 1
Highlighted

Best answer

Taxicorn

Replies 0

It is correct, it is how GST works.

 

See this Business Example