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When your goods or services include GST (and when they don’t)

If you’re registered for GST the goods and services you sell in Australia generally include GST in the price unless they are GST-free or input taxed.

Taxable Sales

Taxable sales must be:

For taxable sales you need to:

  • account for the GST in the price of your goods and services
  • issue a tax invoice to the buyer
  • pay the GST you've collected less any credits you are owed when you lodge your activity statement.

Remember - You can claim credits for the GST included in the price of purchases you needed to make your taxable sales.

If you’re registered for GST and you’re dealing with an overseas supplier or business, you may have to account for GST on the transaction. For more information read Reverse charge of GST on things purchased from offshore on the ATO website. 

GST-free sales

Most basic foods, some education courses and some medical, health and care products and services are exempt from GST.

GST-free sales don’t include GST in the price, but you can still claim credits for the GST included in the price of purchases you use to make your GST-free sales.

Input taxed sales

The most common input taxed sales are financial supplies (such as lending money or the provision of credit for a fee) and selling or renting out existing residential premises.

Input-taxed sales  don't include GST in the price, and you can't claim GST credits for the GST included in the price of your purchases related to these sales ('inputs').

Do you need to register for GST?

GST is a tax of 10% on most goods, services and other items sold or consumed in Australia. You’ll need to register for GST if:

  • Your business or enterprise has a GST turnover of $75,000.
  • You provide taxi or limousine travel for passengers in exchange for a fare as part of your business, regardless of your GST turnover.
  • You want to claim fuel tax credits for your business or enterprise.

If you don’t fit into one of these categories, registering for GST is optional. However if you choose to register, you generally must stay registered for at least 12 months.

You can register for GST:

Find out more on the ATO website about:

International businesses selling to Australian consumers

You must register for GST if you're an overseas business importing services and digital products to Australian consumers and make over A$75,000.

You should consider registering for GST if you're:

  • a merchant who sells imported services or digital products
  • an electronic distribution platform operator facilitating these sales.

Examples of digital products and services include:

  • streaming or downloading movies, apps, games and e-books
  • services such as architectural or legal services.

From 1 July 2018, you'll need to register for GST if you're an overseas business with a turnover in Australia of more than A$75,000 and sell low value imported goods to Australian consumers. This will affect goods valued at A$1000 or less on items like:

  • clothing
  • cosmetics
  • books
  • electric appliances.

Summary of sales types and GST

The differences between the three types of sales for GST are summarised in the following table

Taxable Sales GST-free sales Input taxed sales
Types of goods Most goods and services Basic foods, some education courses, some medical, health and care products and services Financial supplies (e.g. lending money or provision of credit for a fee), selling or renting out existing residential premises
Do you account for GST in the price? Yes No No
Can you claim credits for goods/services used to make sales? Yes Yes No

Issuing tax invoices

When you make a taxable sale of more than $82.50 (including GST), your GST-registered customers need a tax invoice from you to be able to claim a credit for the GST in the purchase price.

If a customer asks you for a tax invoice, you must provide one within 28 days of their request.

The ATO has some examples of what information should be included in a tax invoice.

Did you know?

There are additional requirements for invoices for:

  • sales of $1,000 or more
  • sales that include both taxable and non-taxable items
  • sales carried out by agents.

For more information on creating and issuing tax invoices go to the ATO’s Issuing tax invoices.

Claiming GST credits

To be able to claim a GST credit you need to be registered for GST.

You can claim a credit for any GST included in the price of things that you have purchased for use in your business, as long as the following four conditions apply:

  • you intend to use your purchase solely or partly to run your business and the purchase does not relate to making input-taxed supplies
  • the purchase price of the good or service included GST
  • you paid, or will be liable to pay, for the item you purchased
  • you have a tax invoice from your supplier (for purchases more than $82.50).

If you’re registered for GST, you claim GST credits using a business activity statement (BAS) or an annual GST return. Your reporting and payment period will be shown on your BAS and will be monthly, quarterly or annually.

When you have worked out your total GST credits, you can offset them against the amount of GST you are liable to pay. If your GST credits are greater than the amount you are liable to pay, you're entitled to a refund.

You can’t claim a GST credit:

  • without a valid tax invoice (such as an invoice from a business not registered for GST)
  • for purchases that
    • do not have GST in the price such as basic food, or
    • are input-taxed supplies, or
    • are for private use
  • for wages you pay to staff (there is no GST on wages)
  • for motor vehicles priced above a certain limit.

For information regarding lodgment and payments dates, check out options for reporting and paying GST on the ATO website.

Find out more: