The tax invoice should still show the GST as a separate amount. If you issue receipts or simplified tax invoices, you can state the GST-inclusive prices and indicate with the words "Price payable is inclusive of GST".
Example: Calculating GST Payable
Assume that you wish to sell a good at $10,000. If you choose to absorb GST, the GST payable also known as the output tax is $654.21 ($10,000 x 7/107).
The value of standard-rated supplies to declare in your GST return is $9,345.79 ($10,000 - $654.21).
If you do not absorb the GST, you will charge your customer $10,700 ($10,000 + GST $700).
If you choose to absorb the GST, $10,000 is treated as inclusive of GST. You need to derive the GST amount by multiplying the selling price with the tax fraction 7/107.
GST = $10,000 x 7/107 = $654.21
Amount payable excluding GST = $10,000 - $654.21 = $9,345.79
Reporting the sale in your GST returns:
- Box 1 (Total value of standard-rated supplies): $9,345.79
- Box 6 (Output tax due): $654.21