What is GST?
The Goods and Services Tax (GST) is a broad-based tax of 10% on most goods, services, and other items sold or consumed in Australia. It is administered by the Australian Taxation Office (ATO).
GST Registration Threshold
You are required to register for GST if:
- Your business has a GST turnover (gross income minus GST) of **A$75,000 or more**.
- Your non-profit organisation has a GST turnover of A$150,000 or more.
- You provide taxi or limousine travel for passengers (including ride-sourcing) regardless of your GST turnover.
This turnover threshold is calculated on a rolling 12-month basis.
How GST Works
If you are registered for GST, you need to include GST in the price you charge for your goods and services. This is the **GST you collect** (output tax).
You can also claim credits for the GST included in the price of goods and services you buy for your business. This is the **GST you pay** (input tax).
You report and pay the net amount of GST to the ATO by lodging a Business Activity Statement (BAS) on a monthly or quarterly basis.
GST on Sales to Overseas Customers
Generally, sales of goods and services to customers outside of Australia are 'GST-free' exports. This means you don't charge GST on these sales, but you can still claim the GST credits on the business purchases related to them. This is a key advantage for export-oriented businesses.
Final Thoughts
Understanding GST is crucial for compliance and cash flow management in Australia. It's important to monitor your turnover to know when you need to register and to keep accurate records for your BAS lodgements.