What happens to the GST when a vehicle goes on floorplan?

Stock on Floorplan

When a vehicle is purchased from an ABN holder and put on floorplan it will post the GST paid and GST collected of the same amount, resulting in $0 of GST owed overall. We can see this in the below example where a vehicle has been brought in for $22,000, $2000 has posted to GST paid and $2000 has posted to GST collected. (Please note, how GST is collected may vary for markets outside of Australia).

Example 1

In the Vehicle franchises within system options there is also a setting which will change how certain floorplan purchases will appear on your BAS report. If the highlighted setting is: 

• Ticked will post the same as Example 1 above
• Un-ticked will post the same as Example 2 below

Franchise settings

Example 2

BAS report example

In the BAS report we can then see how these will show through. With the $22,000 from the first example (highlighted yellow) it shows as a sale in G1 and a purchase in G11. While for the second example (highlighted blue) where the franchise tickbox was unticked it shows as a $27,500, and ($27,500) purchase in G11. Overall, all both of these have a $0 net effect on GST as they increase and decrease by the same amount.