Institute of Certified Bookkeepers
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Scrap Metal Sales - Advice from the Cashier

  • Member in Practice
  • Practice Certificate
  • 8 posts
  • # 117568

HI Team,

We have a client who recently received tax advice from a scrap metal cashier, how amusing!

Does anyone understand how the updates to the GST and Scrap Metal Code of Conduct introduced in 2017 impact clients selling small amounts of scrap metal to a scrap metal recycler? There is a great ATO guide for the scrap metal business itself that includes the different scenarios that apply to them - but I am looking for how it applies to the our clients getting rid of rubbish.

The client is a registered company, they collect their scrap metal and sell it at the end of the year for somewhere between $500-$1000. In between the 2017 and 2018 year there were legislative changes in that scrap metal industry, they all make sense. This year when the client took the scrap metal, the cashier advised that by giving them (the scrap metal supplier) an ABN - then the funds they receive in payment for the scrap metal do not attract GST. The client asked further questions and the cashier advised them to tell their bookkeeper not to make it GST inclusive as they wrote an invoice without GST on it.

All very convincing. 

 

I believe it is related to this link https://www.ato.gov.au/Business/GST/In-detail/Your-industry/Scrap-metal/Scrap-metal--claiming-GST-credits/?anchor=H7#H7 where it is talking about 'Purchases costing more than $300' not being remittable in the hands of the scrap metal dealer until the product is sold. That's find on their side - it is not helpful on the side we are coming from. 

A further search of ATO sites, papers and legislation is getting me nowhere. 

Anyone got any ideas - or is it just plain straight wrong interpretation on behalf of the scrap metal company in regard to the small business client?

Thanks all!

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