What is the GST?
The Goods and Services Tax (GST) is a broad-based consumption tax that aims to tax ‘private final consumption expenditure’. It is added to the price of goods and services and paid by their final consumers (i.e. the individuals who buy the final good or Formal delivery of legal documents to a person to tell them there are court proceedings against them which they must defend, or to make sure a witness in a case knows when they have to go to court to give evidence.). Businesses are responsible for administering the tax and remitting amounts to the ATO.
The principal Statutory rules made by parliament or by bodies the parliament delegates power to, for example a local council or a registration authority. See delegated legislation; statute. in relation to the GST is the A New Tax System (Goods and Services Tax) A written law made by parliament. Also called an ‘Act of parliament’, ‘statute’ or legislation. 1999 (Cth). For more information about GST-related legislation, see the ATO’s website.
Mechanics of the GST
The GST is imposed on taxable supplies. You A document that sets out what a person wants to happen to their money and other property after they die. have made a taxable supply where:
- you supplied goods, services, advice or information, including dealings with Land, and any permanent buildings on the land. Also called real estate or real property. Compare personal property. or rights;
- you made the supply in return for some payment or other form of Something of value, such as money, given by one person to another person as part of a contract.;
- you made the supply in the course of an enterprise you are carrying on;
- the supply has some connection with Australia;
- you are registered, or are required to be registered, for GST purposes.
The current rate of GST is 10 per cent.
As the GST taxes the final Under the Australian Consumer Law, a person who buys goods or services for less than $40 000 or for personal or home use. of a good or service (not intermediate businesses), if you are carrying on an enterprise, you are entitled to be reimbursed for the GST you pay on your business inputs (e.g. trading stock). This reimbursement comes in the form of input tax credits. You must (1) A statement giving the details of a crime an accused person is claimed to have committed. (2) A personal property security. (3) A judge’s directions to a jury at the end of a case. GST on the goods and services you supply to your customers. You are liable to remit the amount of GST you charged to the ATO. Effectively, you are the collecting tax on behalf of the ATO.
If your GST Legal responsibility, enforced by civil or criminal courts. exceeds your input tax A debt that does not have to be paid until some future time. Being allowed to pay later, in the future, for something you are getting now. entitlements, you need only pay the difference of these amounts to the ATO. On the other hand, you are entitled to a refund from the ATO where your GST liability is less than your input tax credit entitlements.
Australian Business Number
The Australian Business Number (ABN) is intended to be the single identifier for businesses when dealing with government departments and agencies. It is also necessary for businesses to have an ABN in order to participate in the GST system.
You are entitled to an ABN if you are a company registered under the Corporations Act 2001 (Cth) or an entity carrying on an enterprise in Australia. This includes individuals running businesses, charities and religious institutions. You will not be entitled to an ABN as an employee, or if you are a hobbyist or conduct activities without reasonable expectation of profit.
To apply for an ABN, fill in a form (available from the ATO, post offices and banks). Alternatively, you can register online at https://abr.gov.au.
Registration for the GST
To make a taxable supply, and to be reimbursed for GST, you have paid on your business inputs, you need to be registered for GST purposes. You must be registered if:
- you are carrying on an enterprise (that is, you are not merely engaged in a hobby or are an employee of the enterprise); and
- your annual turnover is, or is forecasted to be, $75 000 or more (or $150 000 if your organisation is not-for-profit).
If your annual turnover is less than these amounts but you are carrying on an enterprise, you can choose whether to register for GST or not. You need an ABN to register for GST. You can register for GST online via the business portal, by phoning 13 28 66, or through your registered tax A person who acts for someone else. They can make decisions, carry out tasks or make agreements for the other person. For example, if you ask someone to bid for you at an auction they will be acting as your agent. or BAS agent.
Where GST does not apply
Two types of supplies do not attract GST.
- GST-free supplies: Examples of GST-free supplies include the supply of food, medical services, education, child care and exports. GST is not payable on GST-free supplies. However, suppliers will be entitled to an input tax credit for acquisitions relating to those supplies.
- Input taxed supplies: The two broad categories of input taxed supplies are financial services and supplies of residential premises. Where a supply is input taxed, no GST is payable on it. This means that landlords do not charge GST on rent of private houses or apartments (although rent may increase because of the GST imposed on other The amount charged by a lawyer for legal work. Lawyers can only charge the amount agreed with the client in a costs agreement or the amount stated by a court in its rules. The party who loses a case usually has to pay all their own costs plus most of the costs reasonably incurred by the other side. See also indemnity costs. relating to the premises). Where you acquire goods or services that relate to the provision of input taxed supplies, you are generally not entitled to input tax credits on those acquisitions.