A developer in SA sells a new residential apartment. How does the GST margin scheme work in this context?
Correct Answer
B) GST is calculated only on the margin (difference between the sale price and the original acquisition cost), reducing the GST liability
Under the GST margin scheme, GST is calculated on the margin (sale price minus original purchase cost) rather than the full sale price. This can significantly reduce the GST payable. Both parties must agree in writing to use the margin scheme.
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