Generally Wholesalers have cheaper product price compared to retailers. The reason for the Cheaper prices is because wholesale sellers buy products directly from the Manufacturers.
Businesses like to purchase from wholesalers because they benefit from the powe price of products. More so, they benefit from the Wholesaler Tax status.
For example if you are a Business who have made a purchase from a Wholesaler in Australia and have paid GST (product tax), if the Wholesaler is legitimate and GST registered, you can claim credits for the GST included in the price of purchases you needed to make your taxable sales.
To further illustrate this, if you are a consumer who goes to a store to buy a product for your consumption, you pay tax on the product and you do not get repaid the amount of that tax.
The store Owner charges you the tax and remits that to the Government and the Government in principle utilizes the tax for public good and development.
When you are a Business purchasing products from another Business, in this case a Wholesaler, the tax situation works differently.
If you buy products from a legitimate Australian Wholesaler, you are charged a GST of 1,000 AUD, for example. let’s assume the products you bought were used during the course of your Business operations and you sold product ma to your customers with your Customers paying a GST of 1,300 (for example) m
In the example above you are supposed to pay the 1,300 AUD GST collected from your customers to the Government, however since you have paid 1,000 AUD on the goods you bought in the Course of your Business operation.
You can claim 1,000 AUD credits for the GST included in the price of purchases you needed to make your taxable sales. Therefore, when you deduct 1000 AUD input GST from the 1,300 output GST taxable sales, you only get to pay 300 AUD GST to the Government.
Therefore to verify an Australian Supplier, it’s important to know in what context GST applies i.e when you are exporting a product out of Australia, when you are selling a product in Australia.
It’s also important to verify the GST registration status of the Wholesale, so that you are able to claim tax credits for purchases made from the Wholesaler where Applicable.
GST when purchasing products from Australian Wholesalers for delivery in other Countries
Exports of goods and services are generally GST-free.
This means that a legitimate Austrailian Supplier will not charge you GST on products which you order for delivery outside of Austrailia.
A legitimate GST registered Austrailian Suppliet will not include GST in the price of exported products. The Wholseller will still be able claim credits from the Government for the GST included in the price of purchases which they used to make the exported goods and services.
However, there are some exceptional circumstances where an Austrialian Wholesaller may charge you GST for exported, such as if the goods remain in Australia for more than 60 days after they are sold.
Also keep in mind that while you may pay 0% GST on products exported out of Austrailia, you may be charged the sales Tax of your destination Country.
For example if you are buying products in Austrailia for delivey in the US, whille Austrailia has a 0% export GST rate, your Supplier may charge you US sales tax.
GST when purchasing products from Australian Wholesalers for delivery within Australia
Australian Wholesalers who are GST registered and deliver products within Canada are required to charge GST on taxable sales.
If you are a Business in Australia which has made purchases from an Australian Supplier , you can claim credits for the GST included in the price of purchases needed to make your taxable sales.
Therefore it’s important to verify that your Australian Wholesaler is GST registered, so that when they charge you GST on products, you know that you are eligible to claim credits on it.
How to verify an Australian Wholesaler GST registration status
Verifying your Australian Wholesaler GST registration status and business details, it’s a quick, simple and free process which can be done online, I have detailed the steps in this Article.
