Australian GST

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GST stands for Goods and Services Tax, and when used in the context of Australia, it is a broad-based tax usually calculated at 10 percent on most of the goods and services that are sold in the country. This tax applies to businesses in Australia that are registered for the valued added sales tax or for Goods and Services Tax. Any business having a turnover of $75,000 and more should be registered for GST.

How to Register for GST 

When registering for GST, a business or other organization will need to have what is called Australian Business Number or ABN. In the event that you are not a resident of Australia, there are rules that apply. For example, as of July 2017, registration for GST in Australia would apply to imported services as well as digital products that are connected with Australia.

For instance, in Australia, a product or service may be deemed connected with Australia if the purchaser is regarded as an Australian consumer; if that service or thing is done within Australia; or if you make sales through an enterprise or business that is set up or run in Australia.

Non-resident entities also may need to register for GST, but if you involve yourself in selling low value imported goods in Australia, you might not be required to register for this tax until a later date. The federal parliament passed a law that seeks to extend GST to low value importation of physical goods from July 2018.

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It is important that if you are a non-resident and running a business in Australia, you understand what the rules and laws say regarding GST.

To register for GST, you will need to visit an Australian Tax Office to do the registration there. You may also use the online business portal to register. Other ways you can register are through a registered tax agent or on phone to the ATO or Australian Tax Office.

There are various types of GST registration and they include:

  • Simplified GST registration: This is designed for non-residents that are classed as eligible and wanting to register through electronic ways and wanting to report and pay their tax easily and quickly.
  • Standard GST registration: This is for entities or organizations that have an ABN. It is the form of registration designed for entities making supplies connected with Australia and those that issue tax invoices and would want to claim their GST credits.
  • Standard claim only: This GST registration is made for entities that do not have an ABN or for non-residents that have an enterprise outside of Australian and which are not entitled to have an ABN or do not make supplies that are connected with Australia, or those that want to claim their GST credits.
  • Voluntary registration: For entities that are not required by law to register for GST, they may still register if they so wish, but when they do this, they will need to remain registered for not less than 12 months.

If you have not yet registered for GST, it is paramount that you constantly check each month to see if you have hit the threshold taxable amount that is $75,000 or you can estimate if you may exceed that amount come the end of the financial year. If that is case, you should register within 21 days of reaching the threshold. Even if you have multiple businesses, you need just register once.

Australian GST Rates

The Goods and Services Tax in Australia, popularly referred to as GST is simply a value added tax that is capped at 10 percent of most of the sales on goods and services. It is levied on many of the transactions involved in the production process, but is usually refunded to almost all parties involved in the chain of production apart from the final consumer. GST was introduced in mid 2000 by Howard Government and it replaced the previous sales tax system or federal wholesale sales tax that was phased out. For a business or enterprise to register for GST, it needs to meet or exceed the turnover threshold of $75,000 Australian dollars or $150,000 Australian dollars in case of non-profit organizations.

Calculating Australian GST

If you want to find out the amount of GST that has been added in the price, then you will want to divide the price you have by 11. For example, if you have a price of $220, then the added GST amount on that price will be $220/11 and that is $20.

One thing to mention here is that calculating reverse GST amounts is pretty tricky. For example, $200 + 10% gives you $ 220, but if you take $220 – 10%, you find that it’s not $200. It is actually $198.

If you want to find the price of a product without GST, then you will need to divide the price by 1.1. For example, $220/1.1 and this will give you $200.

Because working out numbers can be so difficult, you can eliminate the manual work by using the Australian GST calculators.

Formula to Calculate GST in Australia

Amount before Sales Tax*GST rate/100)= GST Amount

 GST Refund

If you are entitled to a GST credit claim or indirect tax refund claims, you need to do so within a period of four years. This is four years after the earliest due date based on the earliest activity statement you should have made that claim. In order for the claim to be approved, you should revise your activity statement in which you made an error and then request a correction to be made. The request should be done in writing. You then need to correct the error you made in a later activity statement.

GST on Imports and Exemptions

The federal government of Australia levies sales tax on multi-stages where a 10 percent rate of tax is applied on the supply of most products or goods and services that are sold or consumed in Australia. The Australian GST system was first introduced on 1st July 2000 by the government, which was in office then – the Howard Liberal government. However, it is important to note that there are some supplies or goods and services that may be exempted from this tax and are considered to be GST-free.

For example, a majority of the basic foodstuffs and educational services may not be levied the tax. Similarly, medical services and exports are said to be GST-free. Other products or good and services are considered input-taxed for example financial services and residential accommodation.

Government charges are exempted from the tax and on top of that, there are some services or goods that may not be levied the tax, especially those that are classed as outside the scope of Australian Goods and Services Tax. The revenue that is raised from this form of tax is usually distributed to the different states of the country. Businesses or institutions and organizations that are registered for GST and would want to know the amount they are required to submit or pay, may want to use an Australian GST calculator.

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