GST Series: Beginners guide to GST in Australia

Goods and services tax (GST) is a tax of 10% on most goods and services sold in Australia. If you run a business, you are likely to have some GST obligations.

If your business is registered for GST, you need to:

  • include GST in the price of sales to your customers
  • claims credits for the GST included in the price of your purchases for your business.

This means, if your business is registered for the GST, your customers pay the cost you charge plus 10% extra. This 10% is the GST. When GST applies, you should always include GST in the price of your sale. You then send these 10% GST amounts to the Australian Taxation Office (ATO), usually four times each year. To do this, you fill in and send the ATO a form called a business activity statement (BAS), which the ATO will send you. You can also claim GST credits on the BAS.

Example Sarah runs a small bakery selling sandwiches, cakes, hot foods, and drinks. She charges her customers an extra 10% to cover the GST. For example, she sells salad sandwiches for $5.50 including GST. She keeps $5 and sends the GST amount of 50 cents to the ATO when she fills in her next BAS.

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