Understanding goods and services tax


When registering a business in Australia, you would need to think about the types of taxes that would apply to your business. Many business owners are confused about which taxes they should pay and when they should pay them. Goods and Services Tax (GST) is one of those taxes that can be confusing for some business owners — especially for first-time business owners.

What is Good and Services Tax

Goods and Services Tax (GST) is a 10% value-added tax placed on most services and goods sold within the country. We say most, as there are some exceptions, such as select housing and health items, and particular food. Some long-term accommodation may also be exempted and may only be taxed at 5.5%.

If you’ve registered your business for GST, you should include it in the price you charge for your goods or services. You can also claim GST credits for applicable goods and services you purchase for your business.

Why Is It Important to Know

Understanding GST helps you decide whether it’s time for your business to register for it or not. Additionally, it will help you determine when to charge for GST and when you shouldn’t.

Some GST-free products and services are:

  • Basic food
  • Select medicines
  • Select childcare services
  • Select health care and medical services
  • Select medical appliances and aids
  • Select charitable and religious activities
  • Accommodation, meals, and supplies of those living in retirement villages by select operators

Should Your Business Register for GST?

Not all businesses or organisations need to register for GST. Businesses with a GST turnover of at least $75,000 must register. For non-profit organisations, you would only need to register if your GST turnover is at least $150,000.

Businesses offering limousine or taxi travel like OLA, DiDi, and Uber must register for GST, regardless of their GST turnover.

Do you want to claim fuel tax credits? Consider registering your business for GST regardless of your GST turnover.

How to Register for GST

Do you already have an Australian Business Number (ABN)? If yes, we are able to register your business for GST.

If you do not have an ABN yet, you can register for ABN and GST simultaneously.

Once your business is registered for GST, you would need to provide tax invoices specifying the invoice total and GST component. Additionally, you must obtain tax invoices for purchases made for your business so you can claim GST credits. A robust accounting software should be maintained for this purpose.

Lodgement & Payment Requirements

On a monthly, quarterly or annual basis, your net GST payable or receivable figure would need to be calculated, reported and lodged via a Business Activity Statement. Lodgement and payment (if applicable) would be due within certain deadlines depending on the BAS (Business Activity Statement) cycle your business is on.

GST does not have to be complicated. Let us assist in managing your GST obligations. Call us at 03 9885 9793 or email enquiries@glanceconsultants.com.au to see how we can help you.

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