GST and How It Works
Goods and services tax (GST) is a broad-based tax of 10% on most goods, services and other items sold or consumed in Australia. Unlike many other countries where Tax is added on additionally to a price listed for a product or service, retail prices in Australia are required to have GST included in their pricing.
Some things don’t have GST included, these are called GST-free sales.
You can: use the GST calculatorExternal Link on ASIC’s MoneySmart website to calculate GST and work out how much GST is included in a sale.
What registered businesses do
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.
What you need to do for GST
If you run a business or other enterprise and have a GST turnover of $75,000 or more ($150,000 or more for non-profit organisations), or you provide taxi travel (including ride-sourcing) – you need to:
- register for GST
- work out whether your sales are taxable (that is, subject to GST, and not exempted because they are GST-free or input-taxed) and include GST in the price of your taxable sales
- issue tax invoices for your taxable sales and obtain tax invoices for your business purchases
- claim GST credits for GST included in the price of your business purchases
- account for GST on either a cash or non-cash basis and put aside the GST you collected so you can pay it to the ATO when due
- lodge activity statements or annual returns to report your sales and purchases, and pay GST to the ATO or receive a GST refund.
If you need any help with GST or understanding GST don’t hesitate to get in touch with us at STS Accounting.
