A Guide to GST Registration

  • A lot of small business owners ask themselves the same question: "Do I need to register for GST?"
  • In order to spare you the trouble of looking for answers all over the Internet, we present you an article that covers GST registration.
  • Keep reading to find out the legal requirements of GST, what you need to do before you register and how to register for GST.

Editor's Update 07/07/20:

One of the first things you may be wondering when you register your small business is, "Do I have to pay GST?"

Who has to pay GST in Australia?

All businesses are required to pay GST if they have an annual turnover of $75,000, or $150,000 if you are a non-profit organisation. GST is a 10% tax paid on most goods and services either consumed or sold in Australia.

Are there any GST-free goods and services?

There are various GST-free goods and services. Some examples of GST-free items include basic food items, education, medical care and services and childcare services. 

register for gst

"Do I need to register for GST?"

This is a question I am often asked by potential clients. So what is the answer?

Well, it depends.

Do I need to register for GST?

To determine whether you need to register for GST, the first thing you need to ascertain is whether you are operating a business or is it just a hobby.

I’ve written about this in previous blogs shared so I will not revisit this. Let’s just assume that you are running a business and you have applied and received an Australian Business Number (ABN).

To register for GST, you must make a supply of goods and service called taxable supplies in the course of carrying on an enterprise. That supply is for consideration and is connected with Australia.

How much turnover before I need to register for GST?

However, you do not need to be registered if the annual consideration received from supplies is $75,000 or less. This trigger point increases to $150,000 if you are a Not-For-Profit entity.

Only entities that are registered or required to be registered can charge GST.

What if my revenue is less than $75K?

Whilst it is optional to register for GST, it is worthwhile to consider GST registration as you will be entitled to claim input tax credits on any GST paid on taxable supplies purchased for use in the business.

Here is an example of why:  

Company XYZ  Ltd purchases stationary for $100 plus GST registration for use in the business. So the gross amount paid at purchase is $110.

If registered, then XYZ  Ltd firstly claims the $10 GST as an input credit. As a result, they pay only $100 for the stationary. As it is also a deductible expense, and the company tax rate is 30%, they will receive a tax benefit of $30 ($100 x 30%).  After taking this into consideration, a GST registered company’s after tax cost for $100 of stationary is $70 ($110 - $10- $30).

If the company does not have GST registration, then they are not entitled to claim the $10 input tax credit so, the after tax cost of the stationary becomes $77 ($110 – ($110 x 30%))

If you operate as a sole trader or through a partnership or trust entity, then the quantum of any benefit will depend on your marginal tax rate.

What are taxable supplies you need to know about before you register for GST?

Taxable supplies are supplies of goods and services that are NOT

  • GST free supplies (such as fresh food), or
  • Input taxed supplies (such as bank interest).

The full list of these types of supplies is defined within the GST ACT.

What obligations do I have if I register for GST?

In the ordinary course of your business, you can only charge GST if you are registered or required to be registered. You must issue an invoice with the words “Tax Invoice” showing your entity's name and ABN, date of the invoice and the amount of GST. Note that this is required. Today’s Accounting systems have pro-forma tax invoices.

Your other obligation is to render a BAS return and remit to the ATO along with the net amount of GST collected.

Large GST payers are required to do this monthly; however, most small businesses will render this quarterly. Again, today's accounting systems assist greatly in the preparation of this information before you register for GST.

Do you have any tips and things to know before a company needs to register for GST?

Michael Prior

Principal at PB Advisory Group

I am the principal of PB Advisory Group Certified Practising Accountants. We are cloud based accounting & tax specialist for small businesses, their owners and self managed super funds. I am also currently a director of Private Health Insurer RT Health Fund Ltd where I chair the Audit & Risk Committee and are a member of the Business Development Committee.