E-commerce · 🇳🇿 New Zealand
Zero-rated and exempt, used interchangeably
An NZ exporter conflating zero-rated and exempt supplies had been claiming input credits incorrectly for two years.
New Zealand e-commerce exporter, two-monthly GST. Client identity withheld — we publish names only with written permission, so this engagement is described by its shape rather than by who it was.
12
GST periods reviewed
2
Categories correctly separated
Refund
Net position after correction
The situation
- The business exported a majority of its output and treated all non-domestic sales as one category.
- GST returns had been filed on time but with the wrong classification underneath.
What we found
- Zero-rated exports and exempt supplies were posted to the same account.
- Input credits were claimed on a blended basis rather than by reference to the actual supply type.
- One product category had been treated as exempt when it was actually zero-rated, understating recoverable input tax.
What we did
- Separated zero-rated and exempt at the transaction level with correct GST codes.
- Reviewed twelve GST periods and recalculated the input credit position.
- Filed corrections in both directions.
The outcome
- The corrected position produced a net refund, because input credits had been under-claimed on the misclassified category.
- GST coding now happens at the point of sale rather than being adjusted at return time.
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