The final consumer of the product pays GST. Consider the following: A fabric merchant sells fabric at $66 (including the
10% GST) to a dressmaker. The merchant makes $60
on the sale and passes the $6 GST onto the Australian
Tax Office (ATO)
A dressmaker uses the fabric and sells the product
onto a retail store for $143 (this includes the $13
GST). As the dressmaker has already paid $6 in GST
when they bought the fabric they have a GST tax credit
of $6 and they pass on the $7 to the ATO.
The retailer sells the dress for $220, including $20
GST. As the retailer has already paid $13 in GST to the
dressmaker, they are required to forward the extra $7 to the ATO.
The consumer who buys the dress bears the $20 GST included in the price.
16 Copy and complete the following.
Raw material S1 10 (includes the 10% GST)
GST on sale
GST credit $0
Net GST to pay
Production stage $440 (includes the 10% GST)
GST on sale
GST credit =
Net GST to pay =
Distribution stage $572 (includes the 10% GST)
GST on sale =
GST credit =
Net GST to pay
Retail stage $943.80 (includes the 10% GST)
GST on sale =
GST credit =
Net GST to pay =
GST paid by the final consumer =