"....500 k sales to 525 sales...."
There would be No increase in sales, the customer base does not suddenly have an extra $25k of disposable income, (sales either stay the same ($500k) or the sales drop).
The wage bill doesn't increase with a rise in GST, the wage bill would be the same or less (depending on the business).
Yes, sales and purchases are offset, so in a small business the GST is paid either directly or indirectly (on goods and services sold (directly) or on goods and services purchased (indirectly)).
Example
$500k sales (no sales increase)
Wages unchanged
$24k extra due with the GST increasing to 15%. (Either paid directly or indirectly.)
A large part of the $24k would have previously been profit for the small business.
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