Question

Matt’s Landscaping Pty Ltd is registered for GST purposes. It accounts for GST on the accruals basis and submits its Business Activity Statements monthly. Assume that all amounts in the question include GST when applicable.

The business operates from Brisbane’s north-side and its main business is to design and establish new gardens at shopping centres and office parks, and to provide ongoing garden maintenance services to clients.

During October 2018, Matt’s Landscaping Pty Ltd was involved in the following transactions:

* Designing and establishing a new garden at the refurbished Westfield shopping centre at North Lakes. The invoice issued on 25 October 2018 totalled $27,600.

* Ongoing garden maintenance services for clients. Invoices issued in October 2018 totalled $55,200.

* Matt’s Landscaping Pty Ltd prepared plans for the elaborate gardens of a new hotel being built in Dubai in the United Arab Emirates. The plans were sent to Dubai by airfreight on 1 October 2018. Matt’s Landscaping Pty Ltd issued an invoice for $17,500 on 15 October 2018.

* Purchases of plants, fertiliser and decorative stones from Brunnings Warehouse, one of Australia’s largest household hardware chains, totalled $9,900.

* The company purchased 100 square meters of Buffalo lawn from a retired school teacher who decided to dig up the lawn of his acreage in Caboolture to put down asphalt so that he no longer had to mow his lawn. The school teacher charged Matt’s Landscaping Pty Ltd $660 on 19 October 2018.

*The company purchased a second-hand lawnmower from a large supplier in Perth for $990 on 1 October 2018. The lawnmower was delivered a day later by a nationwide courier company that charged $110 for this service.

* Salaries and wages paid to staff in October 2018 totalled $12,000.

* Fuel costs for the company’s vehicles, lawnmowers and hedge trimmers totalled $1,980 during October 2018.

* The business operated from rented offices in North Lakes owned by a listed property group. Rent for October 2018 totalled $1,000.

* The October invoice that Matt’s Landscaping Pty Ltd received from the electricity and gas supplier for the rental property totalled $275.

* Purchases of milk, sugar, tea bags and coffee powder from a grocery store totalled $100 in October 2018. These were placed in a tea room in the rented offices for the exclusive use of staff.

* On 1 October 2018, Matt’s Landscaping Pty Ltd purchased a new one and a half tonne utility vehicle for $82,500.

* The company purchased specialised pruning shears from a company in France during October 2018. The shears cost $1,500 and international freight and insurance cost $100.

* Interest paid to the Commonwealth Bank of Australia in October 2018 on an overdraft facility totalled $660.

You are required to:

Calculate the GST payable or GST refundable for October 2018. Show all your calculations and provide reasons for your answers

Answer 1

Transaction	GST Payable / Receivable	Transaction Amount	GST Rate	GST Amount	Reasons
Designing and establishing a new garden at the refurbished Westfield shopping centre at North Lakes. The invoice issued on 25 October 2018 totalled $27,600.	Payable	27600	10%	2,509	Taxable Supplies
* Ongoing garden maintenance services for clients. Invoices issued in October 2018 totalled $55,200.	Payable	55200	10%	5,018	Taxable Supplies
* Matt’s Landscaping Pty Ltd prepared plans for the elaborate gardens of a new hotel being built in Dubai in the United Arab Emirates. The plans were sent to Dubai by airfreight on 1 October 2018. Matt’s Landscaping Pty Ltd issued an invoice for $17,500 on 15 October 2018.	Payable	17500	10%	1,591	Taxable Supplies
* Purchases of plants, fertiliser and decorative stones from Brunnings Warehouse, one of Australia’s largest household hardware chains, totalled $9,900.	Receivable	9900	10%	900	Raw Material for Business
* The company purchased 100 square meters of Buffalo lawn from a retired school teacher who decided to dig up the lawn of his acreage in Caboolture to put down asphalt so that he no longer had to mow his lawn. The school teacher charged Matt’s Landscaping Pty Ltd $660 on 19 October 2018.	Receivable	660	10%	60	Raw Material for Business
*The company purchased a second-hand lawnmower from a large supplier in Perth for $990 on 1 October 2018. The lawnmower was delivered a day later by a nationwide courier company that charged $110 for this service.	Receivable	1100	10%	100	Asssets for Business
* Salaries and wages paid to staff in October 2018 totalled $12,000.	Receivable	12000		-	Salaries , Exempt from GST
* Fuel costs for the company’s vehicles, lawnmowers and hedge trimmers totalled $1,980 during October 2018.	Receivable	1980	10%	180	Business Expenditure
* The business operated from rented offices in North Lakes owned by a listed property group. Rent for October 2018 totalled $1,000.	Receivable	1000		-	Input Taxxed - not eligible for Credit
* The October invoice that Matt’s Landscaping Pty Ltd received from the electricity and gas supplier for the rental property totalled $275.	Receivable	275	10%	25	Business Expenditure
* Purchases of milk, sugar, tea bags and coffee powder from a grocery store totalled $100 in October 2018. These were placed in a tea room in the rented offices for the exclusive use of staff.	Receivable	100		-	Not eligible To be used by employees, not for end business customers
* On 1 October 2018, Matt’s Landscaping Pty Ltd purchased a new one and a half tonne utility vehicle for $82,500.	Receivable	82500	10%	7,500	Asssets for Business
* The company purchased specialised pruning shears from a company in France during October 2018. The shears cost $1,500 and international freight and insurance cost $100.	Receivable	1600	10%	145	Business Expenditure
* Interest paid to the Commonwealth Bank of Australia in October 2018 on an overdraft facility totalled $660.	Receivable	660		-	Input Taxxed - not eligible for Credit
Total Payable	Payable			9,118
Total Receivable	Receivable			8,910
	Net Payable			208