What is GST?
You must have heard of or paid GST on your everyday purchases. Ever wonder what it is? Well GST stands for Goods and Services Tax. It is a broad-based 10% tax on the purchase price for most of the goods. As a consumer, you do not need worry or calculate the % of GST for your everyday purchases it is already added to the price.
But as a business owner not only pay GST but also collect it from your customers or clients. But every transaction in your account is subject to GST. We’ll talk about it later on. For now, you need to know how the whole system of collecting and paying GST works.
First thing first to be able to collect GST you need to register for GST with ATO (Australian Tax Office). It is a simple process. Step one is to know whether or not your business is making more than $75,000 per year. If you just started your business and you expect to earn $75,000 or more. If it is a not for profit organization the limit is $150,000 or more per year.
If you drive a taxi, rent a taxi to earn or use your own car as a taxi (Uber and Taxify etc). If you meet any of the above conditions you’ll have to register for GST. Just to clarify the figure $75,000 reflects your sales figure rather than the profit your business made.
So to register for GST, the 1st thing you will need is an ABN (Australian Business Number). For tax purposes, the ATO gives your business a number, which is unique to your business and it identifies your business in the system. You can register for your business ABN at https://register.business.gov.au.
For the registrations you’ve selected above, you’ll need to provide:
• name and contact details of the applicant
• address and contact details of the business or organisation
• details of each person or organisation associated with the business (e.g. partner, director, secretary or shareholder)
• tax agent number (if you wish to use an agent)
• ABN reference number (if you have an unfinished application)
• details of business activities
• tax file number (optional for ABN)
• proof of identity information such as name, address and birth details
• business structure
Once you are registered for ABN you can then hop on to https://bp.ato.gov.au/ and register for GST through the business portal. You’ll need your bank details along with your Australian Business Number (ABN).