GST free goods and services
What is Goods and Service Tax?
Goods and Service Tax is an indirect broad based consumption tax which was introduced by the Australian Taxation Office and stands for Goods and Service Tax, it is a tax of 10% on most goods and services sold or purchased in Australia.
Who needs to register for GST?
Businesses or other enterprise whose GST turnover is $75,000 or more, or an entity which is a non-for profit organisation with a GST turnover of $150,000 or more are required to register for GST and are obliged to include an additional 10% charge for their goods and services. However specific business activities such as ride sourcing through taxi or Uber are required to register for GST regardless of what the turnover is.
GST free goods and services
There are specific goods and services where businesses do not have to include GST into their price. In other words, they are selling GST-free sales; some of these include most basic foods, some education courses, sales through duty-free shops and some child care services.
Goods and services being exported
Exports of goods from Australia are also generally GST free if they are exported from Australia within 60 days of either the supplier receiving payment for the goods, or the supplier issuing an invoice for the goods (whichever occurs first). The 60 day rule allows suppliers to have adequate time to arrange and export the goods and can be extended if applied for through the ATO. In the event that the goods are not exported within 60 days, nor had an extension being applied for, the supplier will be liable for GST
Exports of services are also generally GST free if the recipient of the service is outside of Australia.
GST free sale of a business as a going concern
If a business is being sold as a going concern, then it may be considered as a GST free transaction as long as the following apply:
- Everything that is necessary for the continuation of the business’s operation is supplied to the buyer of the business
- The business is carried on by the seller until the day of settlement which is when it will be considered sold
- The buyer is required to be registered or is already registered for GST
- The buyer has already made the payment for the purchase of the business
- That both buyer and seller have agreed before the sale, that the sale of the business will be as a going concern
When goods and services do not include GST in the prices, these are considered input-taxed sales and are GST free. These are supplies that the seller cannot charge GST on and cannot claim GST on in relation to the purchase of that supply. Some examples of input-taxed sales are interest/dividend income, residential property income and money lending.
Preparing and lodging your BAS or annual GST return
A registered business must lodge a business activity statement (BAS) or an annual GST return in order to report and pay the GST amount or to receive a GST credit. These BAS and annual GST returns must include all the income and expenses during that period and the GST included in their income and purchases. These records must be maintained accurately and meet the internal reporting requirements.
Understanding everything about GST and what may fall under the GST free category can be quite complex and confusing, that is why our team at A One Accountants have extensive knowledge of GST and can help you from registering an ABN, bookkeeping and lodging your BAS/annual GST return and lodging your tax return. Give one of our friendly tax consultant a call today if you are unsure about GST or would like any help and we shall do our very best to assist you.