GST is one of the key concerns for businesses in Australia. Every month, thousands of people ask Google for GST, and here is the complete guide and explanation to upgrade your knowledge. The professionals from individual tax return services in Perth City can guide you on your business, especially in Applecross, Brentwood, Mosman Park, Ardross, Nedlands, Murdoch, Bullcreek, Winthrop, Booragoon, Bicton, Shelley, Rossmoyne, Willetton, Melville, Myaree, Canning Vale, Fremantle, West Perth, Subiaco.
What is GST?
The Goods and Services Tax (GST) is a type of value-added tax applied to the sale of goods and services. A 10% GST is payable to the Australian government. Basic foods, healthcare services, specific educational courses, and entertainment are also subject to GST regulations. Any professional from individual tax return services in Perth City can guide you about the applicable GST in your business.
When do you need to register for GST?
You need to register for GST when your business turnover is more than $75,000. For non-profit organisations, the amount is $150,000. There are some extraordinary mathematical gymnastics for hovering the actual threshold. There are many businesses that calculate their monthly turnovers manually using their old invoices. However, the professionals from individual tax return services in Perth City recommend using actual accounting software.
GST Registration before reaching the threshold
Obtaining GST registration before reaching the predetermined revenue threshold for a business can be a voluntary action. It often provides long-term benefits, but it can create a hurdle for the admin panel. As per the vision and strategy of a business, the professionals providing individual tax return services in Perth City can guide you in detail.
Advantages of Early Registration
● Immediately, GST credits can be claimed on any kind of purchases in business.
● Clients often prefer vendors and suppliers who have GST registration.
● It could create an impression of a strong business position in the entire industry.
● In the event of business expansion or growth exceeding the threshold, there will be no immediate need for GST registration.
Drawbacks of Early Registration
● You have to update Business Activity Statements (BAS) regularly, even in a quiet period.
● The prices of your service or goods will be higher compared to non-registered competitors.
● Business owners must maintain detailed accounting records.
● The business’s cash flow may be impacted due to GST funds.
● Careful management of the whole accounts is mandatory to save costs.
Early registrations are worthwhile when you can reach the threshold soon or have a strong vision for expansion. Though it creates an impression of trustworthiness among clients, it can be hectic for small businesses.
How to calculate GST from a total amount?
There is a simple mathematical formula to calculate your GST amount by dividing the total amount by 11. For instance, if your sale is $220, the GST will be $220 / 11 = $20. The rule might seem like an old-school type, but a strong reason lies behind it. If you add 10% to your sales amounts, it becomes 1/11. However, these are the simple formulas; there are way more calculations. Professional service providers offering individual tax return services in Perth City are the most suitable to calculate your GST and make you the most profitable.
GST on overseas purchases
Imported goods are also under GST regulation in Australia. Goods that are above the value of $1,000 come under this regulation. Even GST applies to digital services or products sourced from overseas suppliers or vendors. If your business is exporting goods, the sales can be GST-free as it is applicable only on domestic consumption. However, this is not that black and white for GST payments. If you are in the grey area, only professionals from individual tax return services in Perth City can help you out.
GST credits
GST credits are also familiar with input tax credits. You can claim back the GST amounts that you paid for business purchases.
● The first criterion is that your business should be under GST registration.
● You need a tax invoice for any purchase more than $82.50.
● You must ensure that the purchase is used only for business purposes, not personal ones.
● GST credits must be claimed for four consecutive years, not more than that.
Final Thoughts
GST registration is a mandatory concern for business growth and development. If you have a long vision and a long-term strategy, you can consider professionals for individual tax return services in Perth City for better growth and development.
