Goods and services tax is the tax on some of the goods sold or services delivered in Australia. The GST rate is 10% of the sales value of goods and services.
The following is the mechanism of GST processes in Australia:
As illustrated above, all parties involved in GST collection must subtract the amount of GST paid to their suppliers from the amount of GST collected from their customers. If the result is positive, this amount is payable to ATO whereas for negative results, taxpayer is entitled to a refund from ATO with the same amount.
To clarify, please read the example below:
For Who GST Registration is a Must?
Entities with annual GST turnover of not less than $75,000
Not-for-profit entities with annual GST turnover of not less than $150,000
Entities who provide taxi travel, like Uber.
GST registration is obligatory for:
Businesses with gross income less GST* of $75,000 or more per annum (GST registration threshold)
GST registration threshold for non-profit organizations is $150,000
Taxi and limousine drivers must register for GST no matter how much they earn
If fuel tax credits are about to be claimed.
*Gross income less GST is called GST Turnover.
When and How to Register for GST:
If you have reached the GST registration threshold, it is necessary to register for GST within the next 21 calendar days in order to prevent any penalties and interest payable to ATO due to your default.
You need your ABN to register for GST and you can contact us for a fast, reliable, and easy experience of GST registration and supervision.
GST Registration Obligations:
Upon registering for GST, the following measures are compulsory:
Check whether the goods and/or services you supply are subject to GST or not, which are called taxable supplies (See Below)
If you supply taxable supplies, you have to issue tax invoices to your customers showing the GST amount and total amount including GST. This tax is called your Output Tax for GST purposes.
Have you paid for any taxable supplies to your suppliers, you have to collect tax invoices for your purchases. This tax is called Input Tax for GST purposes which must be subtracted from your output tax to come up with the GST payable or refund figure.
Lodge your Business Activity Statement (BAS).
Majority of the sales which are either paid or bartered and also sales item belong to your business such as goods or services produced or delivered in Australia, capital assets, property, machinery and equipment used in the business are subject to GST.
The examples of services which GST is not levied on them are some or all of the medical services, training courses, religious and charitable services, childcare services, disabled services and international mails.
The GST-exempted goods can be named as some or all of the basic food, medicine, medical appliances, precious metals, duty free sales, farmlands, telecommunication devices, and government grants.