
- May 31, 2024
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- Posted by: user
The Goods and Services Tax (GST) is a fundamental component of Australia’s tax system, impacting businesses of all sizes. Understanding GST compliance is essential for ensuring your business operates smoothly and avoids penalties. This guide will provide an overview of GST, compliance requirements, and practical steps on how to complete your Business Activity Statement (BAS). Remember that GST can be money the you pay out but also could be money that you are paid back.
What is GST?
GST is a broad-based tax of 10% on most goods, services, and other items sold or consumed in Australia. Businesses registered for GST must collect this tax from their customers and remit it to the Australian Taxation Office (ATO). Similarly, businesses can claim credits for the GST included in the price of goods and services they purchase for their operations.
A key point to keep in mind is that GST is actually levied on the end user. So if you are charged GST but are not the end user then you get that money back. This is why your Business Activity Statement (BAS) is so important. It’s how what you owe is worked out but also what you are owed.

Who Needs to Register for GST?
You must register for GST if:
- Your business has a GST turnover of $75,000 or more ($150,000 or more for non-profit organisations).
- You provide taxi or ride-sourcing services, regardless of your turnover.
- You want to claim fuel tax credits for your business.
Businesses below the threshold can choose to register voluntarily, which allows them to claim GST credits but also requires them to comply with GST obligations.
GST Compliance Requirements
- Registering for GST: Register online through the ATO’s Business Portal, by phone, or through a registered tax agent.
- Issuing Tax Invoices: For sales of $82.50 or more (including GST), you must provide a tax invoice to customers. It should include:
- Your business name and ABN.
- The invoice date.
- A description of the goods or services.
- The GST amount or a statement that the total price includes GST.
- Collecting GST: Charge 10% GST on most sales and issue compliant tax invoices.
- Claiming GST Credits: You can claim credits for the GST included in the price of goods and services you purchase for business use. Ensure you have valid tax invoices for these purchases.
- Lodging BAS: Most businesses lodge their BAS quarterly. Some may lodge monthly or annually, depending on their GST turnover and other factors. You can read more about this on the ATO website HERE.

How to Complete Your BAS
Your BAS is a report to the ATO on your business’s tax obligations, including GST. Here are the steps to complete it:
- Collect Necessary Information: Gather all your sales and purchase records, tax invoices, and receipts for the period.
- Calculate GST on Sales (G1 and 1A):
- G1: Total sales (excluding any sales not subject to GST).
- 1A: GST on sales. This is 10% of your total sales (G1).
- Calculate GST on Purchases (G10 and 1B):
- G10: Total purchases (excluding purchases not subject to GST credits).
- 1B: GST on purchases. This is the GST included in the price of your business purchases.
- Report Other Taxes: Depending on your business activities, you may need to report PAYG withholding, PAYG instalments, fringe benefits tax (FBT) instalments, and other obligations.
- Calculate the Net GST Amount:
- Subtract 1B from 1A to determine your net GST amount. If 1A is greater, you owe GST to the ATO. If 1B is greater, you can claim a refund.
- Complete and Lodge the BAS:
- Log in to the ATO Business Portal, your accounting software, or a registered tax/BAS agent service to fill out and lodge your BAS.
- Ensure all information is accurate and matches your records.
- Payment or Refund:
- Pay any GST owed by the due date to avoid penalties.
- If you’re entitled to a refund, the ATO will process it after verifying your BAS.
You can read more about completing your Business Activity Statement on the ATO website HERE.

Key Tips for Smooth GST Compliance
- Stay Organised: Keep detailed records of all sales and purchases. Use accounting software to streamline this process.
- Regularly Review Your Accounts: Regular reviews can help catch any discrepancies early.
- Seek Professional Advice: Consult with a registered tax agent or accountant for complex GST matters or if you’re unsure about any aspect of GST compliance.
Modern accounting software takes a lot of the work out of preparing your BAS but always consult with your accountant. By understanding and adhering to GST compliance requirements, and accurately completing your BAS, you can ensure your business meets its obligations and avoids any potential issues with the ATO. Regularly review your GST processes and seek professional advice when necessary to maintain compliance and focus on growing your business.