ABC Mobile Co Ltd is a mobile retailer. It purchases F16 mobile for $1100 per mobile from
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Question:
ABC Mobile Co Ltd is a mobile retailer. It purchases ‘F16 mobile’ for $1100 per mobile from A2Z Mobile and Accessories Ltd, a large importer of mobile phones. ABC Mobile Co Ltd (a GST-registered entity) plans to sell the mobiles at a 200% markup to its customers. In January last year, ABC Mobile purchased 100 ‘F16 Mobile’. However, in April, it was discovered that 10 mobiles are faulty. ABC Mobile Co Ltd returned them to A2Z Mobile and Accessories Ltd and obtained a full refund.
Required:
Explain the GST consequences of this arrangement for both parties.
(Maximum 400 words)
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