GST

[TrueTears]

There are two exceptions where consumers does not pay GST:

1. GST free supplies

2. Input taxed supplies.

I know what 1. is but what is "Input taxed supplies"? An example is "financial services" but what is that?

Thanks

[Aqualim]

maybe this may help:
http://www.gstaustralia.com.au/input-taxed-supplies.htm

Personally I'm not 100% what it is either so I'm sure the link will provide more examples

Umm Financial services sounds like Accounting services to me

[TrueTears]

Yeah it kinda explains it, but what exactly does "input tax" mean? Does it mean resources are taxed in the process of creating a good, so that good can not be charged with GST?

Also what are accounting services?

Thanks

[TrueTears]

Also I don't wanna start a new thread for this, but what kinda of element is "retained earnings" I know it is income retained for use in the company, but what element does it fall under?

Thanks

[Fyrefly]

Retained Earnings = Owner's Equity

My understanding of "Input taxed supplies" is that there are a small, select number of goods/services that the seller doesn't have to charge GST on (rent for residential property, for instance). This benefits the seller because the overall cost to the consumer is less, so consumers will be more willing to pay, demand increases and the supplier gets better business (you'll learn a bit bout the effect of tax in micro). However, while the supplier benefits from the increased demand, they forfeit their right to claim GST credit on their costs - this is the difference between GST free supply and input taxed supplies.

This website seems helpful: http://www.rurallaw.org.au/handbook/xml/ch06s32s02.php

[TrueTears]

Thanks for that Fyrefly, but for retained earnings is it an investment of revenue?

Thanks for the explanation of input taxed supplies, so what exactly are financial services?

[nbalakers24]

retained earnings is profit. how much revenue is left after all expenses have been deducted.

[ReVeL]

To be more specific, Retained Earnings is a cumulative total of the profits or losses made by the business over its lifetime.

For example, in the first month if the business records a loss of $1,000 and in the second month a profit of $1,200, at the end of those two months Retained Earnings will have a CR balance of 200. It is also the account that dividends are paid out of, and not the P&L summary account.

[Fyrefly]

A supply you make is a financial supply only if it is listed as a financial supply (or an incidental financial supply) in the GST regulations.

Examples of financial supplies include:
* lending or borrowing money
* providing your customers with goods on credit for a fee
* creating, maintaining and closing your customer’s bank account
* life insurance
* dealing in:
– debt
– equity
– unit trusts
– partnership interests
– futures contracts.

You can make financial supplies even if you are not a financial institution. For example, even though a department store is not a financial institution, it can provide customers with credit and charge interest on that credit. This is an input taxed financial supply.

http://www.ato.gov.au/content/downloads/bus42954nat10816012009.pdf