Calculation process
Question:
Could you advise me on how to calculate GST using the margin scheme and the treatment in profit and loss account for tax purposes?
Example:
The margin scheme equals to selling price of the property deduct its purchase price, which excludes any development costs of the property. Having calculated the GST, the sale of the property is on a GST-exclusive basis. For example, if the property is sold for $1 million and the GST calculated using the margin scheme is $300,000, the amount in the profit and loss account would be $1 million in sales, and the expense is the cost of the property plus the development cost(excluding GST).