GST

Goods & Services Tax

GST is a tax of 10% in Australia on most goods, services, and consumables. If you are a registered business, you need to pay GST on most goods and services you sell or supply. Entities running an enterprise must register for GST if their annual turnover is at or above the registration turnover threshold of $75,000. This threshold is $150,000 for non profit organisations. Entities below this threshold can choose to register for GST. If they do, the registration must continue for 12 months. If you are not registered for GST, you cannot charge GST on anything you sell or provide. You also cannot claim back any GST included in the price you pay for goods or services used in your business.

GST is reported to the ATO either annually, quarterly or monthly using a Business Activity Statement (BAS). Quarterly tax periods are three months long, ending 30 September, 31 December, 31 March, and 30 June. Monthly tax periods end on the last day of each calendar month. Penalties exist for failure to lodge your BAS on time with the ATO.

The rules for attributing GST payable and input tax credits to tax periods differ according to whether GST is accounted for on a cash or accrual basis. You can account for GST on a cash basis if you meet one of these requirements:

• Are a small business with an annual turnover of less than $2 million. This includes the turnover of your related entities.
• Are not running a business, but carrying on an enterprise with a GST turnover of $2 million or less.
• Account for income tax on a cash basis.
• Carry on an enterprise that the commissioner has determined can account for GST on a cash basis regardless of your GST turnover.
• Are an endorsed charitable institution regardless of your GST turnover.
• Are a trustee of an endorsed charitable fund, gift-deductible entity, or government school, regardless of your GST turnover.

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