GST seems to be one area that causes the most confusion and often, the most problems for small business owners.
GST has been with us in Australia since 1 July 2000. To register for GST, an enterprise must also apply for, or already have, an Australian Business Number.
GST registration: When it’s Compulsory
You must register for GST if you are carrying on a business, and:
• your current or projected GST turnover is $75,000 or more ($150,000 or more for non-profit organisations)
• you provide taxi travel, or
• you wish to claim fuel tax credits.
GST registration: When it’s Optional
If your turnover is below $75,000, GST registration is optional and something you should consider carefully.
Each situation is different and it is well worth the time to speak with your accountant about the possible pros and cons of GST registration in your situation.
It’s important to remember that if you are not registered for GST, you cannot charge GST on the goods and services provided to customers or claim a credit for GST paid on business purchases.
If you are not currently registered and realise that your current or projected GST turnover is $75,000 or more, you have 21 days to register.
Registering for GST
You can elect to register for GST when you first apply for an ABN, or you can register for GST at a later date. If you are doing this yourself, you can update your registrations online via the Australian Business Register website.
If the business has an annual turnover of less than $2M, then you can choose to account for GST on a cash or non-cash basis. Make sure that you understand these terms (and the impact of each) before you register.