What is Goods and Services Tax (GST)?

In Australia, the Goods and Services Tax (GST) is a broad-based tax on the supply of most goods and services. 

1. Basic Overview

Rate: The standard GST rate in Australia is 10%.

Scope: GST is applied to most goods and services sold or consumed in Australia.

2. Registration

Threshold: Businesses with a turnover of $75,000 or more ($150,000 for non-profit organizations) are required to register for GST. Businesses below this threshold can choose to register voluntarily.

Registration: Once registered, businesses must charge GST on taxable supplies and can claim input tax credits for GST paid on their business purchases.

3. Taxable Supplies

GST Inclusive Pricing: Prices for goods and services typically include GST. For example, if a product costs $100 plus GST, the total cost to the consumer will be $110.

Taxable Supplies: Most goods and services are taxable, meaning GST must be added to the sale price.

Exempt Supplies: Some goods and services are exempt from GST, such as certain medical services, educational services, and some financial supplies. These items do not have GST added and businesses cannot claim input tax credits for GST on inputs related to exempt supplies.

Zero-Rated Supplies: Certain goods and services are zero-rated, meaning they are taxed at 0%. This typically applies to exports and certain international services. While these supplies don’t attract GST, businesses can still claim input tax credits for GST on related expenses.

4. Business Responsibilities

Issuing Tax Invoices: Businesses must issue tax invoices for transactions over $82.50 (including GST). Invoices must show the GST amount and include specific details such as the GST registration number.

Collecting GST: Businesses add GST to the price of their goods or services and collect it from customers.

Reporting and Paying GST: Businesses must file GST returns (either monthly, quarterly, or annually) with the Australian Taxation Office (ATO). They report the GST they have collected and the GST they have paid on business purchases.

Input Tax Credits: Businesses can claim input tax credits for GST paid on business-related purchases, effectively reducing their GST liability.

If your business is registered for GST, you are required to report through the Business Activity Statement (BAS). At YS Accounting, we specialize in helping businesses with their BAS reporting and ensuring compliance with GST requirements. Please feel free to schedule an appointment with us on our website at www.taxbne.com.au/. We look forward to providing you with the support you need.