Goods and Service Tax: GST Accounting in Australia

Goods and Service Tax (also referred to as GST) is a kind of Value Added Tax prevalent in Australia and is applicable on supply of taxable goods and services.

Goods And Service Tax Get Accounting In Australia

If you are running an Australian business and the annual turnover of your enterprise is above the minimum threshold (as fixed by the AU tax laws from time to time), you may be required to get registered for GST and pay the tax.

Depending upon the actual turnover (or likely turnover for the year) and other prescribed laws – you either would be required to pay GST on cash basis or non-cash basis (accrual basis).

Currently, GST is charged in Australia at a rate of 10% of the value of the supply.

As written earlier, accounting for GST could either be on cash or accrual basis as per the prescribed guidelines and the situation of your business from which a taxable good / service is being provided.

Simply put, if the GST accounting is done on cash basis, the enterprise need to account for the GST payable and the GST credit in the tax period in which the payments regarding the taxable supply (supply / sales on which GST is applicable) and the creditable acquisitions (business acquisitions / expenses on which GST credit is available) are made. The tax period for which GST is required to be paid could vary from monthly, quarterly to annual depending upon your entitlement for the same.

On the contrary, GST accounting on non-cash basis calls for accounting for GST payable and GST credit claim in the tax period in which the invoices are issued for the taxable supply or the creditable acquisitions or payments in respect of the same is done, whichever is earlier.

Further, there are specific requirements in respect of maintaining proper records for tax invoices for taxable supplies done and creditable acquisitions made over a minimum threshold limit (which currently is AUD 82.5 including GST). The enterprise is also required to maintain proper GST records in regard to sale and purchases done to ensure the enterprise can claim the credits as they are entitled to.

GST registered enterprises are required to report the GST payable and the credit claim through an Activity Statement (also referred to as BAS). BAS can either be lodged electronically or by mail / in person. A BAS need to be filed depending upon your reporting obligation being – monthly, quarterly or annually.

As outsourced accountants and bookkeepers, we can assist you with maintaining your enterprise’s books to ensure timely reporting to the ATO in regard to GST returns i.e. BAS. We have been assisting Australia based enterprises to lodge BAS and have an accurate accounting system in place.