By Matthew Butler

Taxable Input Taxed And GST Free Sales

Businesses

 

Welcome to week 3 of our continuing series “The Illustrated Guide to GST for Australian Small Business where we’re going to be turning small businesses everywhere into GST gurus week-by-week with our visual learning series.

Click on the links below if you want to visit previous weeks first for a refresher or to catch up to speed:

Week 1: Visual guide to GST for Australian small business
Week 2: Do you need to register your business for GST?

To become a black belt in the types of GST sales that you can make please read on! We’re going to be looking at the three types of sales you can make for GST purposes:

  • Taxable sales
  • GST-free sales
  • Input taxed sales

Taxable sales

You must pay GST on any taxable sales that you make. However you can claim GST credits for purchases you used to make these taxable sales.

See below for a cheat sheet on working out whether a sale is a taxable one:

Taxable-sales-cheat-sheet

 

If you need more clarification on what the definitions are of the above cheat sheet please refer to the Australian Government’s GST for small business guide.

GST also applies to business assets that you might trade in or otherwise dispose of by transferring ownership. This is deemed to be a sale made for payment.

Sales of goods are connected to Australia if they are:

– Delivered or made available in Australia to the purchaser

– Removed from Australia

– Brought to Australia, provided the seller either imports the goods into Australia or installs or assembles the goods in Australia.

Sales of property are connected to Australia if they are in the country and for GST purposes property includes:

– Land

– Land and buildings

– Interest in land

– Rights over land

Sales of something other than goods or property are connected to Australia if:

– The thing is done in Australia

– The seller makes the sale through a business they carry on in Australia

– The sale is of a right to purchase something that would be connected with Australia.

For more detail on any of the concepts discussed above, and for the most detailed information, please refer to the  Australian Government’s GST for small business guide.

GST free sales

You cannot include GST on GST free sales (but you can still claim credits for the GST included in the price of taxable purchases you use to make these types of sales).

Things that are GST free include:

GST-Free-sales-cheat-sheet

For more detail on GST free sales refer to the Australian Government’s GST for small business guide.

See you next week where we’ll cover the in’s and out’s of issuing and obtaining tax invoices.

To help your business manage GST try our small business online accounting software from only $5 per month.

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This guide does not constitute professional advice in any way, please speak to your accountant or advisor for specific GST and financial enquires.

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