As I understand, in the existing system, like any registered business, the supermarket can claim back from the IRD any GST they pay for goods https://www.ird.govt.nz/gst/claiming-gst
So under the existing system, if they buy a bag of carrots for $5 and were charged GST of $0.65, under the existing system they can claim all $0.65 of that GST back. Then they can sell those carrots, GST-free, for the amount the market will bear, keeping in mind that presumably their competitors are also buying bags of carrots for $5 and claiming back the $0.65 of GST included in the $5 they pay.
I don't know the details but I imagine in the new system, probably the supplier wouldn't charge GST for carrots they sell to the supermarkets. So the supermarket wouldn't have to pay it in the first place. But it doesn't matter, for the purposes of the new policy, because if they did pay it, then they can claim it back.
As I understand, in the existing system, like any registered business, the supermarket can claim back from the IRD any GST they pay for goods https://www.ird.govt.nz/gst/claiming-gst
So under the existing system, if they buy a bag of carrots for $5 and were charged GST of $0.65, under the existing system they can claim all $0.65 of that GST back. Then they can sell those carrots, GST-free, for the amount the market will bear, keeping in mind that presumably their competitors are also buying bags of carrots for $5 and claiming back the $0.65 of GST included in the $5 they pay.
I don't know the details but I imagine in the new system, probably the supplier wouldn't charge GST for carrots they sell to the supermarkets. So the supermarket wouldn't have to pay it in the first place. But it doesn't matter, for the purposes of the new policy, because if they did pay it, then they can claim it back.