What is GST in Australia?
Goods and Services Tax (GST) is a broad-based tax of 10% on most goods, services, and other items sold or consumed in Australia. Introduced on 1 July 2000, GST replaced a range of existing state and federal taxes with a single, unified consumption tax. It applies to most retail sales and transactions, although some goods and services — known as GST-free supplies — are exempt.
Who needs to register for GST?
Not all businesses are required to register for GST. You must register if:
– Your business has a GST turnover of $75,000 or more per year
– Your non-profit organisation has a GST turnover of $150,000 or more
– You provide taxi or limousine services (including ride-sourcing such as Uber or DiDi), regardless of turnover
– You want to claim fuel tax credits for your business
If you expect your turnover to reach $75,000 in your first year of business, you should register within 21 days of becoming aware that your turnover will exceed the threshold.
How GST works
Once registered for GST, businesses collect an extra 10% from customers on top of the sale price. This GST amount is then remitted to the Australian Taxation Office (ATO) through a Business Activity Statement (BAS), usually lodged monthly, quarterly, or annually.
Registered businesses can also claim GST credits (also known as input tax credits) for any GST they paid on business purchases. This means GST is effectively only paid on the “value added” at each stage of the supply chain.
GST and invoicing
If your business is registered for GST, you are required to issue tax invoices for sales over $82.50 (including GST). These invoices must clearly show your ABN, the GST amount charged, and be labelled as a “Tax Invoice.” Maintaining accurate GST records is essential for compliance with ATO obligations.