Goods and services Tax (GST) is a tax of 10% on most goods, services and other items sold or consumed in Australia.
You must register for GST if you operate a business and your GST turnover is $75,000 or more (for non-profit organisations this is over $150,000). Taxi drivers must register for GST regardless of their turnover. You can register for GST when you register for an Australian Business Number (ABN) or at a later time as required.
If you are registered for GST, you must apply GST to the goods and services you sell within Australia, unless they are GST-free or input-taxed. GST-free sales may include basic foods, certain education courses and various medical and health products and services.
Issuing Tax Invoices
You must issue a tax invoice for any sales you make of more than $82.50 (including GST), where the purchaser requests it. If you are asked for a tax invoice, one must be provided within 28 days. Tax invoices must include certain information such as the seller’s identity, ABN, date of issue and the GST amount. Sales of more than $1,000, and invoices issued by agents or recipient created tax invoices require extra information on the invoice.
Claiming GST Credits
You can usually claim a GST credit for business related purchases that have GST included. To claim GST for amounts over $82.50 (including GST) a valid tax invoice is required.
Lodging a BAS
GST collected and GST credits can be paid or claimed with the ATO by lodging a Business Activity Statement (BAS) or an annual GST return. These can be lodged via mail, electronically or in person. You must ensure your BAS is lodged and paid on time as penalties and interest may apply.
BAS’s can be easily prepared with up to date accounting software.
Small Business GST Concessions
Concessions for small business with an annual turnover of less than $2 million include:
- accounting for GST on a cash basis
- paying GST by instalments
- annual apportionment of GST input tax credits (i.e. a private use adjustment at end of income year)
GST Audits & Reviews
The ATO will from time to time conduct GST audits. You may be notified by phone or letter. They may request transactional data, bank statements and tax invoices to verify GST claims.
Please contact Altitude Advisory for more information.