When your business is registered to lodge a BAS statement, you will be required to add a GST amount to your tax invoices, collect the GST from your customers and make the payment to the Australian Taxation Office (ATO) when your BAS is due.

When you invoice your customers, you’ll need to supply them with a tax invoice which shows the GST component of your invoice. But first, you’ll need to work out what your ‘taxable sales’ are.

Taxable sales are defined as sales where GST is payable. Not all goods and services are required to collect GST and you should be aware if this applies to you.

When completing your BAS you must report taxable sales and the GST in their price at:

  • G1 Total sales
  • 1A GST on sales.

On your BAS you disclose either the GST-inclusive or the GST-exclusive total sales figure at G1. You must indicate your choice.

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GST-free sales

GST-free sales are sales where GST is not payable, but you may claim GST credits for purchases relating to these sales.

When completing your BAS you must report GST-free sales at G1 Total sales.

Input-taxed sales

Input-taxed sales are sales where GST is not payable, and you generally can’t claim GST credits for purchases relating to these sales.

When completing your BAS you must report input-taxed sales at G1 Total sales.

Purchases with GST in the price

You can only claim GST credits for GST included in the price of purchases that you buy or import for your GST-registered business, and that relate to taxable sales or GST-free sales.

To claim GST credits, when completing your BAS you must report the GST included in the price of your purchases at 1B GST on purchases.

You do not report your total purchases.

A valid tax invoice for purchases over $82.50 is required to claim a GST credit.

Purchases with no GST in the price or where no GST credits can be claimed

Mixed purchases (both taxable and GST-free and/or input-taxed components)

Mixed purchases contain both a taxable component and a GST-free and/or input-taxed component. On your BAS, you report the GST in the price of only the taxable component at 1B GST on purchases.

Items not reported on the BAS for GST purposes

Pro Tax Tip: It pays to know what GST credits you can claim when you need to lodge your BAS. This will offset and minimise the amount of GST you will need to pay to the ATO. It’s best to stay on top of your bookkeeping so you know your current businesses financial state.

It doesn’t have to be confusing. If figures aren’t your strong suit, or if you don’t have the time to reconcile your books, it might pay to hire a bookkeeper or accountant for your business.

Taking care of business

ITP The Income Tax Professionals help businesses around Australia with their tax and accounting requirements. With over 210 locations, there’s sure to be a branch near you. If one isn’t close by, ITP have a remote service and can help you wherever you are in Australia. Call a professional today and see how they can help you.

Call 1800 367 487, or book online at www.itp.com.au and your tax agent will be in touch to help.