GST

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GST Overview

ATO GST Page

"Goods and services tax (GST) is a broad-based tax of 10% on most goods, services and other items sold or consumed in Australia."

The "most" in this statement is the most misleading word there is.

There are so many variations, exemptions and interpretations.

Examples of non straight forward or no GST:

  • Most insurances
  • Phone bills that still include the white/yellow pages listing
  • Food
  • Imported goods
  • Digital goods
  • Fees and charges
  • Australian v non Australian companies
  • Second hand goods
  • Trading of going concerns
  • Business to Business v Business to Consumer
  • Precious metal trading

The best and only way to be sure about the GST treatment is having a copy of the source document available, or know the relevant part of the tax act for the required treatment (yes/no or part GST)

This knowledge is another difference between a data entry Bookkeeper and a great Bookkeeper (and why only registered BAS agents are allowed to provide fee for service where GST is coded)

GST Basics

  • Register for GST
  • Work out whether your goods and or services are taxable (you can have a mixture)
  • Issue tax invoices for your all of your sales
  • Keep all of your bills for your purchases - if you can't provide the source document you cannot claim the GST deduction
  • Account for your GST - difference between GST collected from your sales and GST paid on your purchases (don't spend it, its not yours)
  • Complete your activity statment (BAS) and either pay your GST liability or be refunded.



Associated Accounts

Chart of Accounts

Xero
Liabilities

  • GST

MYOB
Liabilies

  • GST Collected
  • GST Paid