We are a building company charging a client labour and materials that were putchased on their behalf. My question is when we invoice for material reimbursement, do we use the price we paid to our supplier with Gst, and add snother 10% Gst, or the net price of the material, then gst which is the same amt as we paid?
Im hearing lots of opinions on this but need to know what the law actually is on this?
Thanks,
Rayna

Hi Rayna

if you do not wish to mark up the purchase of materials, then you should invoice YOUR NET cost, exclusive of GST:

eg
purchase $110
GST $10
NET COST $100

invoice to client: $100
GST on sale $10
total invoice to client $110

hope this helps
brendan

Hi Rayna

Brendan is correct here.

You see when you pay for the goods you pay $100 and the ATO gets $10

Then you get to claim that $10 back in your own BAS

Then you charge that $10 when invoicing the client.

So at the end of the Day, the ATO will only get $10. all up.

Hope that clears things up for you.

AJ