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Micky8's avatar
Micky8
User
3 months ago

GST refund but not paying invoice

Hello, 

I'm on accrual basis on which I have submitted some invoices in my last BAS. Those invoices were not paid and I presume the subcontractors are on cash basis. 

 

I do not think we will be able to go through the whole contract and I will only partially pay these invoices, maybe 20/30% maximum of the required value. 

 

However my GST has been credited to our account. 

 

How would it be treated ? Is the ATO going to ask me back the GST they refunded me or are they going to ask the full amount from the subcontractors despite the fact that I won't pay them in full but this is not the ATO's business to look into our business dealings. 

Also, if they ask from the subcontractors, as they are on cash basis, wouldn't they need to pay only the GST back on the amount I pay them ? 

Example invoice is $100+GST, got $10 GST back, I pay the subcontractor $30 and $3 for GST. They will pay back the $3 and I want to know who is responsible for the $7 missing... 

Thanks

1 Reply

  • Hi Micky8,

    In your next reporting period, if it we me, I would generate a negative Purchase invoice for the $7 I do not intend to pay the contractor, and apply that to close the original invoice.  The negative GST will flow through to my next BAS and I will effectively pay the GST back in my next BAS. 

     

    Regards

    Gavin

    gavinw222@gmail.com