GST is a tax of 10% on most goods and services sold or consumed in Australia.
Generally, businesses and 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.
Registering for GST
Businesses liable for GST must register with the Australian Taxation Office (ATO). The ATO is responsible for GST audits. Failure to correctly manage or record GST may result in penalties.
You must to register for GST if you:
- run a business or enterprise that has a GST turnover (gross income minus GST) that exceeds the GST threshold of $75,000
- expect your new business to reach the GST threshold in the first year of operation
- have a non-profit organisation with a GST turnover of $150,000 per year or more
- are a taxi, limousine or ride-sourcing driver (regardless of turnover)
- want to claim fuel tax credits for your business.
If your business does not fit into any of the above categories, registering for GST is optional.
If you're not registered for GST, check each month to ensure you haven't reached or exceeded the threshold. If you have, you must register within 21 days of meeting the threshold.
If you do not register for GST and are required to do so, you may have to pay:
- GST on sales made from the date registration was needed
- penalties and interest.
How to register
To register for GST you'll need an Australian Business Number (ABN). You can apply for an ABN when you first register your business name or at a later time.
Once you have an ABN, you can register for GST:
- online via the Business Portal
- by calling the Australian Taxation Office (ATO) on 13 28 66
- through a registered tax or business activity statement (BAS) agent.
After registering for GST you'll need to ensure that you:
- include GST in your fees and sale prices (except for GST-free sales)
- issue tax invoices on sales over $82.50 (including GST) to your GST-registered customers
- choose your GST reporting method – simpler BAS, GST instalments or full reporting
- lodge your business activity statement (BAS) or annual GST return with the ATO.
Once you've registered for GST, you can claim a GST credit for any GST included in the purchases you make for your business. You claim your GST credits in your business activity statement (BAS). GST credits are sometimes called tax input credits.
The total amount of your GST credits can be offset against the GST you need to pay the ATO. If your credits are greater than the amount you're liable to pay, you're entitled to a refund.
You can claim GST credits if:
- your purchase is for business use
- If your purchase is for business and private purposes, you can only claim a GST credit for the portion used for business.
- you've purchased the item in the past 4 years
- you have a tax invoice from your supplier for purchases over $82.50 (including GST)
- your suppliers are registered for GST with the Australian Business Register’s ABN Lookup tool
- you keep a record of, or have some kind of receipt for, purchases below $82.50 (including GST).