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Goods and Services Tax (GST)

Goods and Services Tax (GST) is a tax of 10% in Australia on most goods, services, and other consumables. If you are a registered business, you need to charge GST on most goods and services you sell or supply.

Likewise registered suppliers will include GST in the price of items you purchase from them for your business. You may be entitled to claim input tax credits from the ATO if you are registered for GST and the acquisitions are acquired for the purpose of carrying on your enterprise. Although the liability for paying GST rests with GST-registered entities, the end consumer bears the economic cost. 

You must register for GST if your business turnover exceeds $75,000 per annum or $150,000 and more for a not-for-profit organization.  If you provide taxi travel, you must register for GST regardless of your turnover.

If you registered for GST - or required to be - the goods and services you sell are generally taxable unless they are GST-free or input taxed.

GST-free sales include most basic foods, some education courses and some medical, health and care products and services.  

Input-taxed sales include lending money and renting residential premises.  You do not include GST in the price of input-taxed sales, and you cannot cliam GST credits for purchasers that you use to make input-taxed sales.  For an input-taxed sale such as residential premises for residential accommodation, you do not include GST in the price of the rent and cannot claim credits for the GST relating to the rental, such as agent's commission or repairs and maintenance.   In contrast, renting out  commercial premises, such as a factory is taxable.

The reporting periods for GST are called tax periods and can be quarterly or monthly. 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. Entities with an annual turnover of less than $20 million generally have quarterly tax periods, but can choose to have monthly tax periods. Entities with an annual turnover greater than $20 million are required to have monthly tax periods. 

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 are 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 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.

If you are not registered for GST, you cannot include 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.

For further information, see GST for small businesses

Guide on Common GST Mistakes

Do you think your making mistakes when it comes to your GST? Have a look at our guide on common GST mistakes.