How to register for GST in Australia?

Goods and Services Tax (GST) is a broad-based tax of 10% on most goods, services and other items sold or consumed in Australia. For businesses operating in the country, understanding how and when to register for GST is essential for compliance and effective cash flow management. This article provides a detailed overview of the GST registration process and the benefits available.

By Ro Elvinia

What is GST and when must you register
GST is a tax applied to the sale of goods and services, with businesses collecting and remitting it to the Australian Taxation Office (ATO), the principal revenue collection agency of the Australian government. The requirement to register for GST depends on your annual sales turnover:

If your business earns more than A$75,000 a year, whether expected or actual, you must register for GST to comply with the ATO rules. If your earnings are less than A$75,000, registration is optional. Some businesses may decide to register voluntarily to claim GST credits, or if they think their earnings will exceed the threshold in the future.

It is possible to register for GST at a later date as your business grows or when you begin to incur significant GST credits. There is no set quarter or period that is best for registration, so you have flexibility in choosing the right time based on your business needs.

When does your GST registration become effective
When registering for GST, you can select an effective date for the registration. This date can be any date after your Australian Business Number (ABN) registration, but it cannot be earlier than the ABN registration date. Once registered, you have options for reporting GST, including monthly, quarterly or annual reporting periods. The choice depends on your business’s turnover, cash flow and administrative capabilities.

The deferred GST scheme – a valuable option for importers
For businesses importing goods into Australia, the ATO has a deferred GST scheme to help with cash flow. This scheme lets freight forwarders defer the GST payment on imported goods when they arrive in Australia. Instead, the ATO adds the GST amount to your next monthly Business Activity Statement (BAS). You can then claim this amount as a credit, which means you do not have to pay GST at the time of import.

How does the deferred GST Scheme work

  1. You enroll in the deferred GST system through the ATO.
  2. Once enrolled, your freight forwarder is notified and any invoice you receive for goods landed in Australia will not include GST.
  3. The deferred GST amount appears on your next BAS, listed as both a payable and a receivable item, which offsets each other.

This scheme significantly helps businesses manage their cash flow more efficiently, especially those involved in regular import activities.

Eligibility criteria for the deferred GST scheme
To be eligible for the deferred GST scheme, businesses must lodge their BAS monthly. This requirement from the ATO ensures that importers report and manage their GST duties on time, helping them keep track of their cash flow.

Why choose ABN Australia as your local service provider
With over 45 years of experience since our establishment in 1976, ABN Australia is a trusted partner in international corporate services and compliance. Our extensive local knowledge of the Australian business landscape enables us to provide tailored support for GST registration and compliance.

We understand that every business is unique, which is why our dedicated team of professionals offers personalised advice to help you navigate the complexities of GST registration. Whether you need assistance with selecting the appropriate reporting period, managing your BAS or enrolling in the deferred GST scheme, we are here to help.

With our local expertise, you can focus on growing your business while we handle the complexities. Contact us today for personalised assistance.

Published: 23rd Oct 2024 | Last updated: 23rd Oct 2024