GST Qualification Explained - Who Must Register & Pay GST

If you’ve started a new venture or taken over an existing business, the first question you’ll face is whether you need to register for GST qualification. The rules can feel fuzzy, but they boil down to a few clear criteria set by the Australian Taxation Office (ATO). This guide walks you through every situation that triggers a GST obligation, how to tell the difference between taxable and non‑taxable supplies, and what you need to do to stay compliant.

What is Goods and Services Tax (GST)?

Goods and Services Tax (GST) is a 10% federal tax applied to most goods, services and other items sold or consumed in Australia. It’s collected by businesses on behalf of the government and reported on the Business Activity Statement (BAS).GST is designed to be a broad‑based consumption tax, meaning the end consumer ultimately bears the cost, while businesses act as tax collectors.

When Must an Entity Register for GST?

The ATO uses two main tests to decide if you need to register:

• Turnover Threshold Test: If your GST turnover (gross income from all taxable and GST‑free supplies, excluding input‑taxed supplies) exceeds $75,000 in a 12‑month period, registration is mandatory.
• Compulsory Registration Situations:
  • You run a taxi or rideshare service.
  • You’re a non‑resident who supplies goods or services in Australia.
  • Your organization is a charity with an annual turnover over $150,000 and you’re not a registered charity for GST purposes.

Even if you’re under the $75,000 threshold, you can choose to register voluntarily. Doing so lets you claim input tax credits on purchases, which can improve cash flow.

Understanding Your Supplies: Taxable, GST‑Free, and Input‑Taxed

Not every sale you make attracts GST. The ATO sorts supplies into three buckets. The table below summarises each category.

Typical GST‑free items include most health services, education, and certain food items. Input‑taxed supplies cover financial services, residential rent and some precious‑metal transactions.

How to Calculate Your GST Liability

Once you know which supplies fall into each bucket, calculate your net GST payable each reporting period:

1. Add up GST on all taxable supplies (sale price × 10%).
2. Sum up all input tax credits you’re entitled to claim on business purchases related to taxable or GST‑free supplies.
3. Subtract the total input tax credits from the GST collected. If the result is positive, you owe that amount to the ATO. If it’s negative, you receive a GST refund.

Remember: you cannot claim credits for expenses that relate solely to input‑taxed supplies.

Step‑by‑Step: Registering for GST

Getting registered is straightforward. Follow these steps:

1. Log in to the Australian Taxation Office (ATO) - the government agency that administers GST, income tax and other taxes. myGov portal.
2. Navigate to ‘Business services’ → ‘Register for GST’. You’ll need your ABN (Australian Business Number) handy.
3. Answer the questionnaire about your turnover, business type and supply categories.
4. Submit the application. You’ll receive confirmation within a few days, along with your GST registration date.
5. Update your invoicing software to add 10% GST on taxable supplies and display your ABN and GST registration number on each invoice.

After registration, you’ll be required to lodge a BAS either monthly, quarterly or annually, depending on your GST turnover and the ATO’s assessment.

Filing Your Business Activity Statement (BAS)

The BAS is the single form where you report:

• GST collected on sales.
• GST you’re entitled to claim as input tax credits.
• Other taxes like PAYG withholding, fringe benefits tax etc., if applicable.

Key dates:

• Quarterly filers: 28 days after the end of each financial quarter (e.g., 28 July for Q2).
• Monthly filers: 21 days after month‑end.
• Annual filers: due by 31 October for the previous financial year.

Late filing incurs a 10% penalty on the amount due, plus interest. The ATO offers a “pay‑as‑you‑go” option where you can make instalments throughout the year to avoid a large lump‑sum payment.

Common Mistakes and How to Avoid Them

Even seasoned entrepreneurs slip up. Here are the most frequent errors and quick fixes:

• Missing the $75,000 threshold: Use a simple spreadsheet to track monthly gross income. Once you’re within 10% of the threshold, start the registration process.
• Misclassifying supplies: Double‑check if a product is GST‑free (e.g., basic food) or input‑taxed (e.g., rent). The ATO’s online guide provides a searchable list.
• Claiming input credits on input‑taxed purchases: Keep separate records for expenses tied to financial services or residential rent.
• Not issuing tax‑invoice numbers: Every taxable supply must have a unique, sequential invoice number. Use accounting software that auto‑generates them.
• Delaying BAS lodgement: Set calendar reminders a week before the due date. Automate data pulls from your accounting system to reduce manual entry.

Quick Compliance Checklist

• Check annual GST turnover - register if > $75,000.
• Identify each supply type: taxable, GST‑free, input‑taxed.
• Set up accounting software to add 10% GST on taxable invoices.
• Maintain records of all purchases for input tax credit claims.
• File BAS on time - quarterly is most common for small‑to‑medium businesses.
• Review ATO correspondence quarterly for any updates to thresholds or rules.

Frequently Asked Questions