A Guide to GST & BAS

What is GST?

Goods and Services Tax (GST) in Australia is a tax of 10% levied on most goods and services sold or consumed in Australia. The GST system is complex, and requires a clear understanding to ensure your business remains compliant.

While GST applies to most goods and services transactions, there are some general exemptions such as fresh food, healthcare, education, and financial services. Even then, there are nuances, with some items in these sectors being GST free, and some being subject to GST.

It's crucial to know what is subject to GST and what is not, to avoid miscalculations and incorrect reporting. The ATO provides a list of the main GST-free products and services.

Who needs to register for GST & what are the implications?

If your business has a GST turnover of $75,000 or more, you must register for GST. The threshold for non-profit organisations is $150,000. Taxi and ride-sourcing drivers must register for GST regardless of their turnover.

Once registered, you'll need to include GST in your prices, issue tax invoices to customers, and lodge Business Activity Statements (BAS) - usually on a quarterly or monthly basis, depending on your business size.

Lodging your Business Activity Statement (BAS)

In your BAS, you will need to report to the ATO the GST you have collected on your sales and the GST you have paid to your suppliers. The difference between these two amounts will determine the net GST payable to or refundable from the ATO.

It’s important to keep accurate and detailed records of your sales and expenses to ensure you are reporting correct figures on your BAS. Utilising accounting software such as Xero, Quickbooks or MYOB can streamline and simplify this process. Accounting software can ease the GST reporting process by automatically categorising transactions and generating reports needed for BAS lodgement.

Online accounting software also has the function where they can be linked directly to the ATO, so BAS’ can be lodged seamlessly and instantaneously.

Summary

It’s important to stay informed about GST updates and changes. The ATO website is a good starting point, but does not cover every scenario - complex situations such as property transactions or medical services often require specialised advice. A trusted adviser can assist you in understanding your GST obligations and keeping your administrative and reporting processes as efficient as possible, while ensuring that your business remains compliant.

If you need some assistance BLG Business Advisers has got your back! We’re based in Wollongong but help clients all over Australia. So, don’t hesitate to reach out to one of our team members!

Wishing you and your business every success!