What Being Registered for GST Means for You

If your business, company, trust, partnership or self-managed superannuation fund is registered for GST, that means that your annual turnover is $75 000 or more.

Or if you are a. taxi driver or a ride-share driver you will also be registered for GST.

 

You may be asking yourself, what does being registered for GST mean and what is the point?

It essentially means that your organisation will be collecting GST for the government on products you sell and/or services that you perform.

 

How it works

Currently, the rate of GST in 10%. When you are registered for GST, you will need to increase your sales by 10%. This 10% will be what you will owe the tax office.

For instance, before you are registered for GST you would have invoiced your client $600. When you are registered for GST, you will need to charge your clients $660. The additional $60 will be what you owe the tax office.

 

Additionally, when you purchase materials or supplies for your organisation you will be charged 10% from the supplier. This 10% is what you’ll be able to claim back as a credit.

If you purchased timber for $220, $20 of this amount will be a credit against your GST on sale.

 

The amount you will need to pay at the end of the month, quarter or year will be the difference between GST on sales and GST on expenses.

If your sales were $11 000 for the quarter and your expenses were $880, you amount payable will be $920.

This is made up of a debit of $1000 and a credit of $80.

 

How to report it

At the end of a period, whether it is the end of the month, quarter or year you will need complete a business activity statement (BAS). This is where you will record you sales, GST on sales and GST on expenses. The end result of the BAS will be the amount you owe the tax office or how much the tax office owes you.

 

Items that are exempt from GST

Not every good and service is applicable to GST. There are items such as food, education and medical and care products that are exempt from GST.

Some common items that are GST free are

  • Coffee beans and tea, unless ready to drink
  • Fruit and veg
  • Unflavoured milk and water
  • Eggs
  • fish
  • All meats for human consumption

If you are unsure about an item and whether or not it is GST exempt or not, feel free to get in contact with us.

 

When your BAS is due

The date your BAS is due will be displayed on your BAS statement issued by the tax office. If you report your BAS monthly the report is due on the 21st of the following month. If you BAS is reported monthly, due dates are as follows

  • September quarter: 28th of October
  • December Quarter: 28th of February
  • March quarter: 28th of April
  • June quarter: 28th of April

However, if you are lodging your BAS through a registered tax or BAS agent like ourselves for the September, March and June quarter you will have an additional 4 weeks to gather your receipts and invoices for your agent to prepare and lodge your BAS.

 

Now that you are registered

It is critical that you increase your invoices by 10% so that you are not out of pocket. Be sure to include the GST amount of the sale on the invoice.

Also, be sure to keep records of all invoices and receipts in case of an audit.

 

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