Goods and services tax (GST) is a tax of 10% on most goods, services, and other items sold or consumed in Australia. The general principle is that only the end consumer bears the economic cost of GST. Registered entities bear the liability of collecting GST in the price of sales to their customers, but can offset credits for GST included in the price of business purchases.
Generally, businesses and other organisations registered for GST will:
- include GST in the price they charge for their goods and services
- claim credits for the GST included in the price of goods and services they buy for their business.
You can register for GST online or through your accountant.
You only have to register for GST if your business (including an individual) annual turnover is $75,000 or more ($150,000 for non-profit organisations). An entity may choose to register if the entity’s turnover is below the threshold. Related entities may form a GST group and be treated as a single entity for GST. A single entity may register separate branches for GST.
Goods and services sold in Australia by an entity must charge GST
Accounting for GST in your business
If you are registered for GST for business processes you must issue invoices to you clients and send the GST to the ATO with your BAS statement.
Lodging BAS and GST
Your GST reporting cycle will be monthly, quarterly or annually.
If your GST turnover is under $75,000 then you can report annually and the same for non-for-profit -bodies if the annual turnover is under $150,000.Entities with an annual turnover greater than $20 million are required to have monthly tax periods and lodge their activity statements electronically.
The material in this content is for the benefit and information of clients. The items are in the nature of general comments only, and are not to be used, relied or acted upon without seeking further professional advice. Falcon Advisory accepts no liability for any errors or omissions, or for any loss or damage suffered as a result of any person acting without such advice. Liability limited by a scheme approved under Professional Standards Legislation.