I have a question about GST in relation to customer reimbursements.
For explanation purpose say my Business is ABC Pty Ltd & my supplier is X & my customer is Y.
X is not registered for GST,When they invoice they simply pass the cost(inc gst) to ABC , ex. taxi fare $8 inc 0.63 GST
ABC - registered for GST
When ABC is invoicing Y they include 7.27 + GST (bringing total to 8)
- Has X invoiced ABC correctly ?
2.Has ABC invoiced it’s customer Y correctly ?
- Shouldn’t ABC invoice Y as GST Free? Because with GST on they need to pay & $0.63 to ATO
4.If X is registered for GST would any of above change ?
I read about the principal agent theory in the ATO website and i’m pretty confused. Appreciate if someone can help.