Inventory and GST

[Bret Busby]

On Tue, 24 Jun 2003, George Osvald wrote:

> Date: Tue, 24 Jun 2003 00:44:28 +1000
> From: George Osvald <mail at okstudio.com.au>
> To: gnucash-user at lists.gnucash.org
> Subject: Re: Inventory and GST
> 
> Mate you really love writing long emails don't you. Any way I know you are 
> trying to help so thank's.
> 
> 
> >It is my understanding of the GST in Australia, that the GST applies to 
> >all customers
> 
> Not to exports and that is a part of my business.
> 

Alright, then, all customers in Australia. Ho hum. So, that is easily 
overcome, in calculating GST, by using the country field of the 
customer's address. Whoop-de-do!

> 
>  >The only differentiation as to whether parties (people, businesses, 
> >organisations) are subject to GST, applies to whether they are to charge 
> >GST (whether the vendor is to charge GST), and, not whether they are to 
> >be charged GST (whether the customer gets charged GST). If the party is 
> >registered for GST, then the party is entitled, and, required, to charge 
> >GST, otherwise the party is not entitled or required to charge GST.
> 
> Again not entirely true. If the receipt/invoice is less then $50 then you can 
> take away 1/11 of it and claim that money back from government as GST refund 
> even if you do not have a tax invoice and/or the supplier is not registered 
> for GST.
> 

That is irrelevant to the point. Try reading that to which you were 
trying to respond.

> >1) include a field for the organization using the application, to flag 
> >whether the organization is registered for the GST; if yes, then all 
> >services have a GST component, and, the calculations for invoices and 
> >reports would then check for 2);
> 
> Irrelevant. All of my suppliers are registered for GST.
> 

That is irrelevant. It is a question of whether the party using the 
software is registered for the GST, not whether the suppliers are 
registered for the GST. Unless, that is, you expect them to go in and do 
all your work for you as well...

However, since YOU raised the issue of suppliers being registered for 
the GST... then, the software, for GST compliance, necessarily requires 
the GST registration numbers of the suppliers, for reporting.... you do 
like playing with your can of worms, don't you...

> 
> >2) include a field for the (yet to be created module) inventory 
> >component, where each inventory item has a flag field; something like 
> >"Subject to GST?"; and
> 
> Extremely bad idea. I use cash GST system. GST is only calculated at the time 
> of transaction. If I add GST to every item in my inventory, then every item 
> would be taxed twice. Also what would happened if you sold the item flagged 
> as "Subject to GST?" overseas? GST does not apply for exports.
> 

It is not a matter of "adding GST to every item". You must like to 
misconstrue things. It is a matter of whether an item is subject to GST.

Oh, and, the items DO get taxed numerously. GST is applied, at EACH step 
on the way. GST on the raw resources, GST on the wholesaling, GST on the 
manufacturing, GSt on the retailing, GST on the delivery at each stage, 
and so-on. GST is not levied on GST, but keeps getting incremented as it 
goes through each GST-registered business.

> 
> >3) include a field, dependent on 1), that is the GST rate (depending on 
> >the particular state/country, assuming that the GST rate is constant 
> >for the country, and not variable, depending on the item).
> 
> Irrelevant. GST only applies for Australian businesses. Exports are GST free.
> 

Again, more twisting of what I said. It is NOT a matter of foreign GST 
being applicable to exports! It IS a matter of, since you want GnuCash 
to do all YOUR GST accounting, GnuCash would need variables that allow 
for INTERNATIONAL use.

GST DOES apply to goods manufactured and sold in each country for use in 
that country, where GST is applicable. I am sure that the NZ and Cnadian 
governments would like to know that you say that GST does not apply in 
those countries, and Blair would really be happy to know that you 
similarly claim that the VAT does not apply in the UK!

GnuCash IS NOT devoted to australian use!

Sheesh!

> 
> >If the annual turnover of the Distributor's business, is greater than 
> >50,000AUD, then 
> >the Distributor is required to be registered for GST, from memory. If 
> >the Distributor's annual turnover is less than the threshold, then the 
> >Distributor may be registered for GST, but is not required to register. 
> 
> Like any sane businessman I am registered for GST. Otherwise I would loose a 
> lot of money every quarter.
> 

Whoop-de-do! That is irrelevant to the requirements. You probably have 
two feet, too. That has nothing to do with the variability of the GST 
requirements, AS MENTIONED by me. Your being registered for the GST, has 
nothing to dowith how GnuCash would need to be modified to deal with 
GST-registered and non-GST-registered businesses in this country or any 
othwer country.

> 
> >Apart from that differentiation between the two countries, some product 
> >lines in Australia, are subject to GST, and, some are not. So, in 
> >Australia, using GnuCash for an Amway Distributorship business, with a 
> >GST component in the accounting system, would require two components 
> >(apart from the addition of the yet to be created Inventory System); the 
> >first being whether the Amway Distributor is registered for the GST, 
> >and, the second, being which particular inventory items are subject to 
> >the GST. As an example, toilet cleaner is subject to GST, as is laundry 
> >detergent and dishwashing detergent and toothpaste, and, pasta sauce, 
> >salad dressing, canned tuna (exempt for human food, subject to GST 
> >for pet food) are not subject to GST. All lines are subject to GST, in 
> >NZ, from my understanding.
> 
> In this case (if you are registered for cash system) I would probably create a 
> separate inventory for GST and GST free items. Then if selling to a customer 
> overseas the item would not be taxed.
> All my services are subject to GST.
> 
> >And, as far as I am aware, the GST rate is different in NZ, so the field 
> >for the GST rate. would be required.
> 
> NZ is export for me ---> GST free.
> 

Do you even bother reading what you are replying to? Your ignorance and 
stupidity is getting tedious. READ WHAT YOU REPLIED TO!!! 

> >As all business are required to be registered for the GST in NZ, and, 
> >due to the reporting requirements, some small businesses 
> >(microbusinesses with small turnovers) closed down, and, that included 
> >some Amway Distributorships giving up in NZ.
> 
> 
> OK. I get it. You work for Amway ;-)
> 

Gawd! Forget it! You are obviously not interested in learning anything, 
or knowing anything other than your own stupidity!

> 
> >That is partly why accounting software in Australia, has become 
> >prohibitively expensive for microbusinesses; the software development 
> >people have an ongoing job, trying to keep up with the unstable GST 
> >requirements, and are required to continuously change the software.
> 
> As far as I know GST has not changed (in my industry) for two years. I have 
> survived with a bunch of queries (that I wrote myself), SQL database and 
> StarOffice. It creates BAS for me automatically without a problem. What I 
> need is a double entry + invoice + inventory system (and hopefully POS)
> 

Without knowing what is your industry (and, no, I DO NOT want to know), 
try speaking to a tax accountant, or, to someone who has tried to keep 
up with the GST. Yes, requirements HAVE changed, considerably, and, 
change on an ongoing basis. But, then, if you want to get done for 
non-compliance, by the tax department, that is your problem.

> 
> >I think, however, that an integrated Inventory System component (devoid 
> >of taxes, at this stage; start simple, get it up and running, THEN 
> >elaborate), as recently mentioned, would be a good step on the way to 
> >enhancement.
> 
> I created a simple test inventory as a basic asset account no problem. I would 
> like to break it down to parts and store those individually ( I also 
> manufacture) The finished product would be created as an assembly. If I sell 
> the assembly I want to see the negative result in my parts inventory.
> 
> 
> 

With all of the crap in the above response to my message, and, the 
failure  by the person above, to actually read what I had written, and 
consider it, before responding to it, I am just not going to bother with 
this topic on this list, any more. I have better things to do with my 
time, than to try to help some jerkoff, who sets out to twist people's 
attempts to help.

-- 
Bret Busby
Armadale
West Australia
..............

"So once you do know what the question actually is,
 you'll know what the answer means."
- Deep Thought,
  Chapter 28 of 
  "The Hitchhiker's Guide to the Galaxy:
  A Trilogy In Four Parts",
  written by Douglas Adams, 
  published by Pan Books, 1992 
....................................................