Goods and Services Tax (GST)
Goods and Services Tax (GST) is a key part of Australia’s tax system, applying to most goods and services sold or consumed across the country. Understanding how GST works is essential for businesses, whether they are just starting out or already operating. This includes knowing what GST is, when and how to register, how to calculate and include GST in your prices, and when to cancel your registration if circumstances change. It also covers the process for deregistering and your obligations after cancellation. From registration through to reporting and compliance, being informed about GST helps businesses meet their tax responsibilities and support the wider community through the revenue collected.
What is the Goods and Services Tax (GST)?
Goods and Services Tax (GST) is a broad-based tax of 10 percent on most goods, services and other items sold or consumed in Australia. It is collected by businesses on behalf of the Australian Government and is then paid to the Australian Taxation Office (ATO).
GST was introduced on 1 July 2000 and is a key part of Australia’s taxation system. It applies to most transactions involving goods and services, including retail sales, professional services, digital products and some imports.
How Does GST Work?
Goods and Services Tax (GST) is a 10 percent tax that applies to most goods and services sold or consumed in Australia. Businesses that are registered for GST include it in the price of the products or services they sell. When a customer makes a purchase, the business collects GST on behalf of the Australian Government.
The GST collected by businesses is then paid to the Australian Taxation Office (ATO through regular Business Activity Statement (BAS) lodgements. This system ensures that GST is collected at each stage of the supply chain, but only the final consumer bears the cost.
The revenue collected through GST is distributed by the federal government to states and territories. These funds are used to support essential public services and infrastructure including hospitals, public schools, roads, and transport systems.
In summary, GST is collected by businesses, paid to the ATO, and then used by governments to fund services that benefit the community.
When to Register for GST?
Understanding when to register for Goods and Services Tax (GST) is important because GST revenue helps fund essential public services across Australia. You must register for GST if:
- Your business or enterprise has an annual turnover of $75,000 or more
- You run a non-profit organisation with an annual turnover of $150,000 or more
- You drive a taxi or provide ride-sourcing services, regardless of your turnover
If any of these conditions apply, you are required to register within 21 days.
Before registering, you will need an Australian Business Number (ABN).
Once your registration is complete, you must include GST in your sale prices. You also need to issue tax invoices for all sales over $82.50 and keep records of all tax invoices. As a registered business, you will need to lodge a Business Activity Statement (BAS) to report the GST you collect and claim.
How to Register for GST?
Registering for Goods and Services Tax (GST) is an important step for businesses that meet the GST threshold or provide ride-sourcing or taxi services. To begin, you must have an Australian Business Number (ABN). If you do not already have one, you will need to apply for an ABN before registering for GST.
You can register for GST in any of the following ways:
- Online through the Australian Taxation Office’s Online Services for Business
- By phoning the ATO on 13 28 66
- Through a registered tax agent or BAS agent
You only need to register for GST once, even if you operate more than one business under the same ABN. Once registered, you must include GST in your pricing, issue tax invoices where required, and report your GST through a Business Activity Statement (BAS).
Keeping accurate records is essential, as you may be eligible to claim GST credits on business-related purchases.
How Long Does It Take to Register for GST?
The time it takes to register for Goods and Services Tax (GST) in Australia depends on how you apply and whether you already have an Australian Business Number (ABN).
If you apply for GST registration online using the Australian Taxation Office’s Online Services for Business and already have an ABN, the process is usually quick. In most cases, your GST registration is processed immediately or within one to two business days.
If you apply by phone or through a registered tax or BAS agent, the registration may take slightly longer depending on how quickly your information is verified.
If you are applying for an ABN and GST at the same time, it may take up to 28 days for the ATO to process your application, especially if additional checks are required.
Once registered, you will receive confirmation from the ATO, and you can begin charging GST and lodging Business Activity Statements (BAS) as required.
How to Calculate Goods and Services Tax?
Goods and Services Tax (GST) in Australia is a flat 10% tax added to most goods and services sold or consumed within the country. If your business is registered for GST, you must include this amount in your sale prices and issue tax invoices where required.
Calculating GST from a Tax-Exclusive Price
To calculate GST from a price that does not include GST, multiply the original amount by 10% (or 0.10).
Formula:
GST = Original Price × 0.10
Total Price Including GST = Original Price + GST
Example:
If you sell a product for $200 (excluding GST):
- GST = $200 × 0.10 = $20
- Total price including GST = $200 + $20 = $220
Calculating GST from a Tax-Inclusive Price
To find the GST component in a price that includes GST, divide the total amount by 11.
Formula:
GST = Total Price ÷ 11
Base Price = Total Price − GST
Example:
If you charged $220 (including GST):
- GST = $220 ÷ 11 = $20
- Base price = $220 − $20 = $200
These simple calculations help you correctly include GST in your pricing and ensure you report the correct amount to the ATO in your Business Activity Statement (BAS).
When to Cancel Your GST Registration?
You must cancel your GST registration if:
- Your business or enterprise has ceased operations
- Your GST turnover falls below the threshold of $75,000 (or $150,000 for non-profit organisations) and you are not intending to continue your business
- You are no longer operating as a sole trader, partnership, company or trust
- You sell or restructure your business
- You are no longer required to be registered, such as if you stop driving for a rideshare or taxi service
You must cancel your registration within 21 days of becoming ineligible. Failing to do so may result in interest or penalties from the ATO.
How to Deregister for GST?
If your business is no longer required to be registered for Goods and Services Tax (GST), you can apply to cancel your registration with the Australian Taxation Office (ATO).
Before you begin the deregistration process, ensure that:
- Your business has stopped trading or no longer meets the GST turnover threshold
- You have lodged all outstanding Business Activity Statements (BAS)
- You have paid any GST liabilities owing to the ATO
You can deregister for GST using any of the following methods:
- Through ATO’s Online Services for Business
- By calling the ATO on 13 28 66
- By asking your registered tax or BAS agent to submit the cancellation on your behalf
After your GST registration is cancelled:
- You will no longer be required to collect GST on your sales
- You must still lodge a final BAS and pay any remaining GST
- You should update your business records to reflect the change
The ATO will notify you once your deregistration is confirmed. It is important to keep all related records for at least five years, even after your registration ends.