Goods & Service Tax (GST)

    Doing Business in Australia

    Since July 1st, 2000, a goods and services tax (GST) has been in effect in Australia. In Australia, this tax, which is similar to a value added tax (VAT) used in many other nations, is normally imposed at a rate of 10% on the majority of products, services, rights, and property. GST is usually not applied to exports of products or services used outside of Australia. With the introduction of the self-assessment system for GST in Australia in July 2012, taxpayers are now only required to report and pay their GST liabilities and credits when they submit a GST return or import declaration.

    Some important points to note about GST in Australia are  :

    • A business must register for GST if it is operating an enterprise and its annual GST registration threshold, which is currently set at AUD 75,000 (AUD 150,000 for non-profit organizations), is met or exceeded.If a business operates anywhere in the world, it may still decide to register for GST even if its GST revenue falls short of this cutoff.
    • The majority of goods, services, and intangibles that are provided by a firm registered for GST are subject to the GST, or Goods and Services Tax. The GST rate is 10%, and any unpaid GST must be paid by the supplier. The GST is often paid by the client and is included in the cost of the goods or services. Certain circumstances, such as when the supply is “input taxed,” “GST-free,” or “beyond the scope” of GST, constitute exceptions to this rule.
    • With a few exceptions, the GST (Goods and Services Tax) is often applied to imported goods. 10% of the import’s taxable value is the GST rate for imported products. Unless the importer is registered for the deferred GST scheme, the Department of Home Affairs must collect GST from importers at the time of import.  In that case, the GST amount will be reported in the importer’s next monthly GST return to the Australian Taxation Office.
    • Importations of some services may be subject to GST under the “reverse charge” rule.
    • Generally, businesses that are registered for GST are entitled to claim an input tax credit for GST paid on items acquired for their business. However, there is a four-year time limit for making these claims, and input tax credits are not available for items acquired or imported for private use or for making “input-taxed” supplies.
    • If they don’t want to file monthly, businesses with a GST turnover of less than AUD 20 million are required to submit quarterly GST returns. GST returns must be filed on a monthly basis by businesses having a GST turnover of AUD 20 million or higher. Taxpayers who are exempt from the GST registration requirement may choose to submit annual GST returns.