Goods and services tax (GST) is a broad-based tax of 10% on most goods, services and other items sold or consumed in Australia.
How GST works
Generally, businesses registered for GST will include GST in the price of sales to their customers, and claim credits for the GST included in the price of their business purchases.
Registering for GST
You only register once for GST, even if you operate more than one business. When you are registered for GST, you include GST in the price of the products you sell and claim credits for GST in the price of products you buy for your business. You will need to register if your current or projected GST turnover will reach the registration threshold.
When to charge GST (and when not to)
If you are registered for GST - or required to be - the goods and services you sell in Australia are generally taxable unless they are 'GST-free' or 'input taxed'.
Issuing tax invoices
When you make a taxable sale of more than $82.50 (including GST), your GST-registered customers need a tax invoice from you to be able to claim a credit. Tax invoices must include certain information. There are additional rules for sales of more than $1,000, and for invoices issued by agents or created by the recipient.
Claiming GST credits
When you can claim GST credits, when you can't; income tax deductions and GST; special rules for setting up a company and purchasing second-hand goods.
Accounting for GST in your business
As a GST-registered business, you need to issue tax invoices to your customers, collect GST and send it to us with your business activity statement (BAS). There are a few ways you can make this easier to manage:
- use business accounting software to produce tax invoices and automatically generate reports of your GST liabilities and credits at BAS time
- put the GST you collect in a separate bank account
- take advantage of the 'cash accounting' option to better align your GST liabilities with your business cash flow.
Lodging your BAS or annual GST return
You report and pay GST amounts, and claim GST credits, by lodging an activity statement or an annual GST return.
If your business changes or ceases
You must cancel your GST registration when selling or closing your business. You may also need to cancel your GST registration if you are restructuring your business. You must cancel your registration within 21 days of the sale or closure Cancellation is likely to affect your ABN and any registrations for fuel tax credits, luxury car tax and wine equalisation tax. It doesn't affect PAYG or fringe benefits tax.
Do you need to register?
You must register for GST if you run a business or enterprise and your GST turnover is $75,000 or more ($150,000 or more for non-profit organisations). You only register once for GST, even if you operate more than one business. You must register within 21 days of reaching the threshold. You may choose to register if your GST turnover is below the threshold.
If you provide taxi travel, you must register for GST regardless of your turnover.