Goods and services tax (commonly referred to as GST) is a value-added tax adding on most goods and services sales in Australia. It is currently set at 10% on top of the final value. It is levied on transactions mostly in the production process; however, can be refunded to parties other than the final consumer.
Businesses and GST
Australian businesses with an annual turnover $75,000 per annum are required to register for GST. If a non-profit organisations has a GST turnover of $150,000 per year or more, it is required to register for GST. It is optional for businesses below the $75,000 threshold to register for GST. Businesses that collect GST are entitled to a credit for any GST it has paid for in its expenditures on goods and services. This is redeemed through a Business Activity Statement (commonly referred to as BAS), which is lodged monthly, quarterly or annually. Businesses are required to lodge their BAS with the Australian Tax Office within twenty working days of the end of each quarter.
If your business is registered for GST, any invoice you issue must be a tax invoice (not just an invoice). Tax invoices are different to regular invoices as they include the GST amount for each item along with some extra details.
If your business’ GST turnover is under $75000 annually and you do not register for GST, you cannot claim GST credits for your business purchases.
Registering for GST
An individual or business can register for GST so long as they have an Australian Business Number (ABN). Registration can take place online via the ATO Business Portal, by phone or through a registered tax agent or BAS agent. Registration can also be done by mail (ABN registration for individuals (sole traders) or BN registration for companies, partnerships, trust and other organisations)
Pending verification and threshold requirements are met, the ATO will notify you of your application by mail. Successful applicants will receive GST registration details including date of registration.
Calculating GST Turnover
Your business’ GST turnover is the business’ gross business income, excluding GST the business included in sales to your customers, sales that are not for payment and are not taxable, sales not connected with an enterprise you run, input-taxed sales you make, and sales not connected with Australia.
Tourist Refund Scheme
If a good is over AUD$300, it is eligible for a refund. This is paid upon exiting the country with refunds claimed at a TRS (Tourist Refund Scheme) counter at an exit point, such as an airport. It is permissible to buy goods 60 days before departure and use it freely so long as it shown to customs officials before being checked in as baggage.
LegalVision can assist you with any questions you may have about GST and taxation obligations. LegalVision has a team of great tax lawyers who can assist you in registering your business with an ABN and for GST. Please call our office on 1300 544 755 and our Client Care team will happily provide you with an obligation-free consultation and a fixed-fee quote.