Goods and services tax (GST) is a broad-based, indirect tax which has applied since 1 July 2000. It taxes the consumption of most goods and services in Australia, including imports. However, it generally does not apply to exports or consumption outside Australia.
GST applies to taxable supplies that are made by an entity that is registered, or required to be registered, under the GSTA. GST is included in the price paid for a supply, therefore, it is usually collected and remitted to the Australian Taxation Office (ATO) by the supplier.
GST-registered entities are generally able to claim back the GST included in the price paid for acquisitions made in carrying on an enterprise, by way of input tax credits. The end consumers, who are not registered for GST, will not be able to claim the GST charged as an input tax credit and will ultimately bear the cost of the GST. But as with all matters of tax, there are exceptions to these general rules.
If you are carrying on an ‘enterprise’ and you annual turnover exceeds $75,000, you are required to register for GST, although you can still register voluntarily provided you are carrying on an enterprise.
The GST itself is very simple in principle, however the GST Act has been complicated by the range of exemptions, concessions and special rules. If your business is registered for GST it is important you understand the GST treatment of supplies that you make to your customers. Each of the following supplies have their own special rules:
- Taxable Supply
- Input Taxed Supply
- Financial Supplies
- Residential rents
- Precious metals
- Sale of residential premises
- GST Free Supply
- Exports
- GST and travel
- Health goods and services
- Education and childcare
- Charitable activities
- Supply of a going concern
- Religious services
- GST on food
- Other GST-free supplies
Due to the complexity of the rules it is important that you ensure your business is complying with its GST obligations.
If you require assistance, please contact us on (02) 8264-0755
All representations and information on this site is general in nature and should not be relied upon as advice. If you require specific advice please contact us.