To maintain competitiveness and customer goodwill, you may choose to absorb the GST payable by your customer. In doing so, you have to treat the sum of money received from your customer as inclusive of GST.
On this page:
Invoicing requirements
The tax invoice should still show the GST as a separate amount. If you issue receipts or simplified tax invoices, you can state the GST-inclusive prices and indicate with the words "Price payable is inclusive of GST".
Example of how to calculate the GST Payable:
You sold a good at $10,000 on 5 Jan 2024. The $10,000 is treated as inclusive of GST since you have decided to absorb the GST. The GST payable also known as the output tax would be $825.69 (i.e. $10,000 x 9/109).
The value of standard-rated supply to declare in your GST return would be $ 9,174.31 (i.e. $10,000 - $825.69).
Reporting the sale in your GST returns:
- Box 1 (Total value of standard-rated supplies): $9,174.31
- Box 6 (Output tax due): $825.69