GST: What it is and when you should register

Richwood Accountants
13 minutes ago
2 min read

GST doesn’t need to be complicated. Once you understand how it works, it becomes just another part of running a business in Australia.

What is GST?

Goods and Services Tax (GST) is a 10% tax added to most goods, services, and other items sold or consumed in Australia. Introduced to simplify the tax system, GST replaced several indirect taxes and is administered by the Australian Taxation Office (ATO).

Not everything attracts GST. Some items are GST-free, including:

fresh food
education
most health services

A full list of GST-free items is available on the ATO website.

How GST Works in Practice

When you sell GST-taxable items, you collect GST from your customers and pass it to the ATO. It’s important to remember—this isn’t your money. You’re acting as the middleman between the customer and the government.

The good news? If you’re registered for GST, you can claim back the GST included in the price of goods and services you buy for your business. That makes running your business a little less expensive.

Who Needs to Register for GST?

Mandatory registration is required if:

Your turnover is $75,000 or more per year ($150,000 for non-profit organisations).
You provide taxi or ride-sharing services (e.g., Uber or Didi).

Optional registration:

Even if your turnover is below the threshold, you can register to claim GST credits. Just remember, if you claim credits, you must collect GST from your customers and remit it to the ATO.

When Should You Register?

Within 28 days of the end of the month in which your turnover hits $75,000
Before you start supplying taxable goods or services, especially if you’re in the ride-sharing business.

Registering late can result in backdated GST liabilities and penalties.

How to Register

You can register for GST in a few ways:

Through the ATO’s online business portal
With a registered tax agent or BAS agent
When applying for an Australian Business Number (ABN)—you can register for GST at the same time

Once You’re Registered

If you’re registered for GST, you’ll need to lodge a Business Activity Statement (BAS). You can do this quarterly, monthly, or annually, depending on your business size and preferences.

In your BAS, you’ll report:

GST on Sales – the GST you collected from customers
GST on Purchases – the GST you paid on business expenses

The difference is either paid to the ATO or, if your GST on Purchases is higher, you may receive a refund.

The Bottom Line

GST in Australia is straightforward once you understand it. Mandatory registration applies if your turnover exceeds $75,000 or if you’re in taxi or ride-sharing services. Even if you’re below the threshold, voluntary registration can bring benefits like claiming GST credits.