Boatlocater and Gst

[troy]

They are offering boats for sale with 10 % gst.
Does this mean if you buy a boat from them for $60000 you have to pay $6000 in Gst.
Troy

[Luc]

Troy,

If the price is stated as $60,000 + 10% gst then you'd have to pay $6000 gst

The way you've written it, that could be taken either $60,000 with gst included or $60,000 + gst.

You'd really need to ask that 'They' make it clear.

I assume 'They' is a boating business!!

Luc

[Dicko]

Legislation requires that all advertised prices are inclusive of GST

[troy]

Boatlocater sells second hand boats and they advertise boats for sale with a price and they have a make an offer.
Once you do this a contract comes up and say The purchaser must pay the gst at 10.%
Bloody key board is playing up.
Have a look type in Boatlocator i might be reading it wrong.
Troy

[Noelm]

the can advertise as such, because they sell SOME Boats that do not attract GST, so that makes it all Legal and above Board!

[captain rednut]

all boats sold thru dealers are gst inclusive the same as cars or anything, even cash converters stuff is gst applicable

[Getout]

the can advertise as such, because they sell SOME Boats that do not attract GST, so that makes it all Legal and above Board!

Must be a GST loophole I don't know about!

As I understand it, all items sold by a GST registered entity include 10%GST.
That does not mean 10% on top of used boats. It just means that the seller claims 10% of purchase price and remits 10% of selling price.

It is illegal for anyone to quote an ex-GST price but then add it on later.

[Noelm]

I asked them about it once when I was looking for a Boat they had, and they told me SOME Commercial Boats (depends on the type) do not attract GST unless it is sold for Private use, so I took that as being the reason, because as mentioned it is not Lawful practice to advertise without GST (except in this case)

[seatime]

If it's a boat for commercial use (a business) and the buyer is GST registered they can claim the GST component of the purchase.

[Noelm]

hhhmm it all seems a tad confusing doesn't it?

[Scott nthQld]

OK a private sale ie. a sale between 2 people not where the seller holds an ABN is not subject to GST. A sale where an ABN holder is selling off assets for 'disposal' also does not attract GST. GST is only applicable when the transaction is a regular business transaction, ie. the seller is a boat dealer, the buyer is a boat dealer (GST not applicable when purchaseing form a non ABN holder) or the whole business is being sold, this includes, the name, customer information, contracts, all business assets and liabilities.

This means unless, your are purchasing from either a dealer (where their normal business is selling boat to make a profit), or are buying a business, you will not be subject to GST. If a business is 'disposing' of one of its assets (eg a charter operator selling his boat to upgrade) the sale will go through as a normal private sale and will not be subject to GST. Obviously, buying private from a non ABN holder will also be free from GST. Also in any situation where the seller does not hold an ABN, the price will be not be subject to GST, regardless of who buys.

By law, all prices must be displayed with GST included, unless specified. This means that if a price is shown (eg $50000) that will be the final price you pay, however if the price is shown $50000 ex GST or something to that effect, whereby a notation indicates that this price is subject to GST, than the true price will be $55000.

[Scott nthQld]

I should also add, that a seller cannot put the onus on the buyer to pay the GST to the Govt. This must be done by the merchant, as it is included as part of their income statements, and staement of financial postion, ie any GST collected becomes a liability to the Govt and any paid becomes and asset, where the Govt owes you money. Usually, (how i was taught at uni anyway) the business will balance these accounts and will either pay money to the Govt (usually the case in a profitable business) or claim it back. IE if a business has paid $300 dollars is GST, but has received $500 in GSt from sales, then they must pay the Govt the difference, in this case $200. This has been simplified of course, as there is much more involved than people think, and not all GST paid will be claimable.

[Noelm]

OK then so, an ex charter Boat being sold to upgrade then, will not attract GST? which I guess exlains why they advertise so?

[Scott nthQld]

Thats right, if a charter boat was being sold, the only way you would have to pay GST was if your were buying the whole business, including name, customer info, as well as any debt, bank accounts (usually the previous owner withdrawals all cash though), gear (gps, sunder, tackle) etc. Boat only, in the eyes of the GST legislation, its a private sale and attracts no GST.

[Noelm]

OK, that sort of makes it a tiny bit clearer, and explains why SOME of their Boats are listed with GST "if applicable"

[Scott nthQld]

yeah, just about anything you read on GST only makes things a 'tiny' bit clearer, the legslation is very hard to interpret and unless you do it all the time, you'll be left clueless on most things. What i described before was about the simplest I could get without leaving too much important stuff out.

[PinHead]

Thats right, if a charter boat was being sold, the only way you would have to pay GST was if your were buying the whole business, including name, customer info, as well as any debt, bank accounts (usually the previous owner withdrawals all cash though), gear (gps, sunder, tackle) etc. Boat only, in the eyes of the GST legislation, its a private sale and attracts no GST.

If the boat is owned by a registered business or company then GST is applicable on the sale price. Watch very soon that a lot of people on ebay will be getting some tax bills.

[Scott nthQld]

You don't pay GST if you are buying the boat only, as it is accounted for as "disposal of assets" and the ATO does not apply GST to the sale. This is because it is not an income generating sale, a business selling plant/machinery is not doing so to turn a profit as they claim back depreciation while the asset is in their possession to devalue the asset which inturn reduces their profits (depreciation is written off as an expense) and therefor they pay less tax, obviously this doesn't apply when the vendor is a dealer, where they sell boats to make a profit. If however the entire business was for sale, then you would pay GST, whether or not you will be carrying on with the business, but then, once you 'deregister' the business, you can claim it back (maybe not the full amount) come tax time.

Even if the boat does attract GST at some point, it is the vendor's responsibility to collect and pay the GST to the Govt, not the purchaser. Anyone who tries to tell you that you must pay the GST to the Govt when you are the purchaser is wrong.

GST is a sales tax that is applied to items (or services) bought and sold to make a profit (ie normal business transactions), which is why you will always get mechanics, painters, plumbers, anyone who provides a service, that will take a reduced payment if you pay with folding stuff (eftpos, credit card, cheques not included) because if they don't issue an invoice, there is no way to trace the transaction and therefore they don't pay any sort of tax on it. The reason eftpos, creditcards, and cheques aren't included is because the money must go into the businesses bank accounts and their is hard evidence to support that the money received was during normal business operations.

[PinHead]

You don't pay GST if you are buying the boat only, as it is accounted for as "disposal of assets" and the ATO does not apply GST to the sale. This is because it is not an income generating sale, a business selling plant/machinery is not doing so to turn a profit as they claim back depreciation while the asset is in their possession to devalue the asset which inturn reduces their profits (depreciation is written off as an expense) and therefor they pay less tax, obviously this doesn't apply when the vendor is a dealer, where they sell boats to make a profit. If however the entire business was for sale, then you would pay GST, whether or not you will be carrying on with the business, but then, once you 'deregister' the business, you can claim it back (maybe not the full amount) come tax time.

Even if the boat does attract GST at some point, it is the vendor's responsibility to collect and pay the GST to the Govt, not the purchaser. Anyone who tries to tell you that you must pay the GST to the Govt when you are the purchaser is wrong.

GST is a sales tax that is applied to items (or services) bought and sold to make a profit (ie normal business transactions), which is why you will always get mechanics, painters, plumbers, anyone who provides a service, that will take a reduced payment if you pay with folding stuff (eftpos, credit card, cheques not included) because if they don't issue an invoice, there is no way to trace the transaction and therefore they don't pay any sort of tax on it. The reason eftpos, creditcards, and cheques aren't included is because the money must go into the businesses bank accounts and their is hard evidence to support that the money received was during normal business operations.

that is an offensive comment..casting aspersions on tradespeople that they would perform illegal activities..it is illegal to carry out any work without issuing the necessary paperwork and also collecting GST.

How about the current investigations into the offshore "tax havens" by the wealthy..plus the barristers that do not pay tax and get away with it...the professionals are the biggest tax evaders..not the poor old tradies.

[troy]

Pin Head/Dick, your a ####wit, All tradies do it and it may be illegal but their would be no proof that it was from a job, Your such a tosser
Grow up son and if you think you got away with the offensive way you carried on in my other thread i suggest you think again.
Troy

[disorderly]

that is an offensive comment..casting aspersions on tradespeople that they would perform illegal activities..it is illegal to carry out any work without issuing the necessary paperwork and also collecting GST.

professionals are the biggest tax evaders..not the poor old tradies.

It's an admirable quality on display there, pinhead.
However around my area your attitude seems very much in the the minority.
In my game (landscaping) cash work is rife...everything from dingo/bobcat/backhoe/excavator/truck operators to the more traditional tradies ie sparkies/plumbers.
This has become far more pronounced over the last couple of years in my neck of the woods as the building boom has increased.
One downside i have found is that sometimes when i need a small job done in a hurry sometimes the operators tell me they cant even fit me in UNLESS it will be a cash job.
I and others around here are starting to feel that when sparkies are charging out unqualified/marginally skilled offsiders at $65 an hour (and paying them $18-20)then some are taking advantage of the situation.
BTW I certainly am not inferring anything about you personally.

Scott

[Getout]

Scott I beg to differ with your comments on disposal of assets, not attracting GST.
When the business, (say Charter operation) originally purchases the boat, it will claim an input tax credit for the GST component of the sale (if they are switched on). Upon sale of the asset, they must remit 10%GSt of the sale price.
All businesses registered for GST, must include GST in all sales, including asset disposal.
The GST factor does NOT make any difference to the sale price.

Timmy, pull your head in!

[Scott nthQld]

Pinhead, not meant to be offensive to any honest tradies practises, but no matter where you go, a mate will almost always have another mate or rellie that will do a job for peanuts if you pay cash, illegal but all the same it happens. However, if something is done for warranty etc and cash is paid, there is no way to physically prove that a licenced electrician, carpenter, plumber, etc performed the work and therefore many people who use the cash system get burned.

Timmy its a wonder you're not banned, its young cocky keyboard warriors like you that hide behind a computer screen who make a site less desirable, grow up and post something constuctive if you post anything useful at all.

Getout, like I posted ealier, the GST legislation is very complex, and like every other piece of legislation, everyone interprets it differently, including magistrates, justices and lawyers. What I've posted is my interpretation, and what I learnt from lecturers and tutors at uni. Not saying you are wrong, but thats the way I see it, and the way i've been taught. You may very well be right, after all as far as I know, you or anyone else here maybe a practising accountant and know the ins and outs of the tax laws, if thats the case, then I'm sure you'll know more than me about it and kudo's to you.

[PinHead]

Scott..do you honestly think I would admit to any such practice in a public forum..absolutely no chance of that happening. I will say that I own a company..I am the sole shareholder in that company..I am also employed by it. I own nothing..I do not have a house nor a car nor a boat..all I own is my clothes and tools...just a poor struggling tradie but the missus owns a house..her car..just bought a new boat..damn..I should be her. The company issues invoices for every job it does and collects the relevant GST amd remits same to the ATO.
What I do as an individual is my business.

Timmy..not worthy of any intelligent response.

[Morlers]

Thats right, if a charter boat was being sold, the only way you would have to pay GST was if your were buying the whole business, including name, customer info, as well as any debt, bank accounts (usually the previous owner withdrawals all cash though), gear (gps, sunder, tackle) etc. Boat only, in the eyes of the GST legislation, its a private sale and attracts no GST.

Sorry Scott, but you are mistaken. Disposal of business assets (ie assets used in the business where input tax Credits and Income Tax deductions on the asset purchased and running costs etc have been claimed) by a GST registered entity is a taxable supply and thus GST is payable on the transaction (s9-5 of A New Tax System (Goods and Services Tax) 1999 covers this).

Also, sale of a business is a taxable supply unless certain criteria are met (ie both vendor and purchaser are registered for GST, both parties agree in writing that it is a sale of a going concern and the business trades right up to settlement) then it becomes a GST-free supply.


I trust the above helps.

:)

Morlers

[Fitzy]

Or What? What u gonna do? xxxxxx im still not banned
You are now Sunshine......................

[Noelm]

geees this all went Pear shaped quick huh! BUt back to the original topic, I have called Boatlocator about a Boat (as mentioned) as was told something along Scott's comments, SOME Boats are GST "if applicable" some are exempt (for whatever reason) and some are just advertised with no mention of GST, so it would seem that it is just a "normal" transaction and it is included in the asking price! how about if they are just acting as a Broker and passing on contacts for a fee (to the seller) then it would be (sort of) a Private sale and perhaps GST exempt, but maybe their fee should attract GST as it was a service?

[Getout]

I believe the ATO this year, is going to be all over businesses which dispose of assets privately and do not pay the GST.
If Boatlocator arrange the sale between two parties, then there will be no GST component. However, GST will apply to their commission. If Boatlocator are actually selling the boat, then GST will be part of the selling price (NOT ADDED ON TOP OF THE SELLING PRICE) .
If you are a private buyer, it will make no difference whether the broker is selling the boat inclof GST or he is arranging a sale on commission. If you are a commercial buyer, wanting a boat for your charter business, you will want to buy a boat that from a GST registered entity, so that you can claim your input tax credit in your next BAS statement.
It all sounds complex, but its simple really.

I miss Timmy.

[Scott nthQld]

Thanks for clearing that up Morlers, like I said, I posted on how I interpreted the information, lucky I'm not a practising accountant, otherwise my clients would be in a spot of bother wouldn't they?

Pinhead, I'm not trying to draw you into any admissions, so stop trying to imply that I am. What I posted is a general understanding many (includeing me) have. All I'm saying that most people will have a mate, a mate of a mate, etc that will do cash work and charge less because the income won't be taxed. Where do you think the term 'mates rates' comes from? I mean hell, even I've gotten someone to do work for me and paid them cash, just because I'm a tight arse and wanted to save a buck or hundred. Its not for me to say whether or not they reported the income on their statements, but I received no invoice, so there's nothing to say they actually did the work for a fee. I will also say that I have never done any cash work to avoid tax, so I am in the same boat as you.

[artesian]

Sigh.......... just like I'm back in the office :-)

[oldboot]

There could be a variety of reasons why boat locator have this tack on GST arrangement.....
sales not within the country
acting as an intermediary & not the vendor
the vessel being input taxed and not GST ( why I dont know) house boat perhaps therefor a residence.
vessel may have some weirdo tax protectd status...
the vessel my be in the australian waters but hasnt passed the customs barrier ie under a crusing permit and may be sold to another overseas owner.

And thats just stuff a grubby tradesman can think off.......when past coppies of the tax act can be used as a handy step ladder I'm sure they have their reasons.

........ probly best to say that the matter should be better expressed.

Something like......." GST may be applicable to this sale depending on circumstances"

on the charter boat example
If the boat was owned by an unregistered for GST individual and not purchased by the business which was a seperate entity there will be no mechanism for remitting GST on its sale. It is a private sale..... GST is deemed to be imputed into the value of the item......the GST was not claimed back at original purchase and therfore remains as part of the value of the boat....... a GST registered purchaser may (under certain circumstances) claim back that GST component still remaining in that item.

Mate.........I recon they must have paid a heap of monks to meditae under a tree half naked for months the figure this stuff out........

If I choped a tree down in the forest and no one told me to do it and no body was there to hear it fall.......... is tax payable on the work done?

cheers

cheers

[Sea-Dog]

Things may not go through any books, but come an audit one may need to show how one can support a certain lifestyle and assets on one's declared income.

The ATO has teeth and will use them on easy targets that don't have teams of lawyers advising every move.

Easier to collect $100,000 from 100 players than $10M from one well-connected player.

:-X