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ABN & GST Help on Store Details

ABN & GST Help on Store Details

svalkyrie23
Explorer
87 2 7

Under Store Details it says "GST will be applied to your Shopify invoices at a rate of 10%. If you’re registered for GST, add your Australian Business Number (ABN) so you don’t get charged."

 

I'm a little confused by this as i'm not GST registered so I don't want to charge customers GST.  If I don't add my ABN will Shopify add GST onto the cost?  What should I do here if I have an ABN but not GST registered?

Reply 1 (1)

GreenPotato
Visitor
1 0 0

You pay the GST they add. GST is a tax on the consumer and any businesses not registered for GST.

 

The line about if registered for GST to not be charged GST is because it's a waste of time for those registered for GST.

Here's a simple example, only focus on the transaction between customer that is registered for GST and Shopify and ignore any other activity. 

1. Customer wants to buy $100 of stuff. Shopify charges the customer $10 GST. Receives $110 from customer, sends the $10 GST to ATO. Left with $100 sales.

2. Customer pays $110 incluing $10 GST. When doing their GST or BAS, $10 refund from ATO. Left with $100 expense.

 

EDIT: Net result is Government didn't receive any GST. 

If customer not registered for GST or a consumer, there would be no refund in step 2 so Government receives $10 GST.