GST and BAS

If you are a business operating in Australia and your annual turnover exceeds $75,000, you will generally be required to register for GST, charge GST to your customers and lodge a BAS with the ATO.

How GST works

  • GST is a tax applied on most goods and services provided in Australia, the current rate is 10%.
  • You must register for GST if your annual turnover (gross income) exceeds, or is expected to exceed, $75,000. (Optional if your turnover is less than $75,000. You can claim back GST on your business purchases).
  • If you are registered for GST you are required to charge GST on the price of your goods and services (except for GST free supplies) and send this to the ATO when it’s due.
  • Some products and services are GST free supplies. This can include most basic foods, some education courses and some medical, health and care products and services.
  • You are required to issue tax invoices to your customers which show the GST amount or state that the total price includes GST.
  • You are also required to account for GST on the sale of your business assets such as plant and vehicles.

Claiming GST credits

  • If you are registered for GST you can generally claim GST credits on purchases you make which are incurred in earning your business income.
  • Some purchases are GST free eg bank fees, most food, donations, Government fees, overseas purchases, purchases from businesses not registered for GST.
  • If the expense is for a mix of business and private use, you can only claim the portion that relates to your business use.
  • You cannot claim GST credits for purchases that you cannot claim as a tax deduction eg entertainment or private expenses.
  • You can only claim a GST credit if you have a tax invoice from your supplier (unless the purchase is less than $82.50).
  • A tax invoice is required to include at least: seller’s identity, seller’s ABN, invoice date, description of items and price, GST amount (or statement that the total price includes GST).
  • A tax invoice can be in digital format as long as it is not able to be edited (eg pdf format).
  • Your entitlement to a GST credit ends four years after the due date of the earliest BAS in which you could have claimed the credit.

Business Activity Statement (BAS)

  • You are required to lodge your business activity statement (BAS) with ATO to report and pay your GST and other taxes (eg PAYG withholding, PAYG instalments).
  • The amount of GST you pay is the GST charged to your customers less the GST paid on your business purchases.
  • If your business turnover is less than $10 million, you can account for your GST on a cash basis ie when you receive payment from your customer or when you pay a supplier.
  • BAS reporting periods are quarterly ie Jul to Sep, Oct to Dec, Jan to Mar, Apr to Jun.
  • For BAS’s lodged by a BAS agent, due dates for lodgment and payment are 25 Nov, 28 Feb, 25 May, 25 Aug.

Tax invoices

  • You are required to issue tax invoices to your customers which show the GST amount or state that the total price includes GST.
  • You can claim a GST credit for your business expenses if the expense is tax deductible, the price includes GST and you have a tax invoice from your supplier.

GST limit on motor vehicles

  • There is a limit on the amount of GST you can claim on the purchase of a passenger vehicle (includes utes) which is designed to carry a load of less than 1 tonne and fewer than 9 passengers (car limit).
  • The maximum GST credit you can claim for the 2025 year is $6,334 ($69,674 x 1/11th).
  • The carrying capacity is the maximum loaded vehicle weight (gross vehicle weight) less the unladen vehicle weight (basic kerb weight).

Do you worry about getting your GST, BAS and payroll right?

Would you like to:
  • Save time on your record keeping so you have more time to focus on other aspects of your business.
  • Reduce the stress around meeting your GST and payroll reporting obligations.
  • Have reliable data and reports to help you to understand how your business is performing, manage your cash flow, make more informed decisions and improve your business.
I’m Sharon, a registered BAS agent (tax practitioner) and QuickBooks Certified Advanced with more than 20 years' experience in the industry. Get in touch to find out how I can support you and your business to stay on top of your numbers to run a successful business.
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