Re: Rail & the GST.

[chris@icos.net.nz ("chris 'fufas' grace")]

Maurie Daly wrote in message ...

>I must confess that I am somewhat confused as to how this tax works.
>In reality though for the case of rail , who is the final consumer who pays
>the tax?
>For example , a large component of FVs tonnage is wheat and grain which is
>exported to Japan and other countries , finally made into bread and cereals
>and sold to "the final consumer".
>How does the Tax man collect the tax from the final consumer .
>Same goes for all coal exports and iron ore .
>In every case , the final consumer isnt in this country and cant be
compelled
>to pay an Australia Tax.


There is, obviously, no GST on anyone where exports are concerned
The exporter pays the railway to move the grain to the port.
The railway charges the exporter GST on the freight and  duly remits the
GST to the tax man, less any GST they have paid on fuel, etc [1].
The exporter returns his GST for the month. Since he has not charged GST to
the overseas client his output tax is nil. But he has paid GST to the
railway, so he claims this GST back. I don't know what is proposed in Aust,
but in this country they are supposed to refund GST to you within 14 days
of submission of the return, so if the exporter is on monthly terms with the
railway
it's quite possible he will have received the refund before he has even paid
the invoice. In any case the net effect is zero.

As a side issue, here you can run GST on an invoice basis, which means that
you account for the GST as soon as you receive or issue an invoice, or on
a payment basis, which means you claim the GST on purchases when you pay for
them, and you pay GST on sales when you get paid by your customer.

[1] This is of course a simplification. At the end of the period the railway
makes a return like this: (using 10%)

                 Nett             Tax
Sales           10,000,000        1,000,000 (Including freight from
exporter)
Purchases        8,000,000          800,000
                                  ---------
Nett to pay:                        200,000


On the other hand the Exporter's return looks like this

Sales            1,000,000           NIL        (No GST on Export Invoices)
Purchases          100,000         10,000       (The freight)
                                  -------
Nett refund:                       10,000

If you are an importer, you pay GST on importation, so your
return looks like this:

Sales            1,000,000        100,000
Purchases          500,000         50,000
                                 --------
Nett to pay:                       50,000

In Europe GST is called a Value Added Tax (VAT or TVA). This is because
as goods pass through the distribution chain, each person who deals with
them
reclaims the tax they paid on purchase and pays tax on the sale. The Nett
effect is that tax is paid by each person on the difference between the
selling
price and the buying price, or the 'added value'

So when you go and buy a loaf of bread, the 10% you pay on the selling
price includes tax on the raw materials, the packaging, the advertising
and a even a miniscule amount of the GST on the machine used to make it
and the office staff's adding machine... Unfortunately, as the end consumer,
you have n chance to reclaim any of it!