Goods and Services Tax (GST) was introduced more than
17 years ago.
Most people understand the basics, but there are still some
areas that prove tricky to understand.
Imported Services and Digital Products
From 1 July 2017, Australian GST applies to imported services and digital products.
Some common examples of imported services and digital products include:
• online supplies of software
• digital trade journal/magazine subscriptions
• website design or publishing services
• legal, accounting or similar consultancy services.
GST will not generally apply to sales to businesses of these imports if:
• you are registered for GST
• they are purchased for use in your business in Australia, and
• you supply your ABN and a statement that you are registered for GST at the time of purchase
Overseas businesses registered under the new simplified GST system for non-residents do not have an ABN and cannot issue a tax invoice. If you believe that GST has been incorrectly included in the price of the service or product, you should seek a refund from the supplier.
If, however, you or your business are not registered for GST or your purchases are not for business purposes, you will need to pay the GST and will not be able to claim it back.
Basics of GST Registration Must Be In Place to Claim Credits
Did you know you can only claim a GST credit for a purchase if the seller is registered for GST?
This is one of the basic building blocks of the GST system, but one often overlooked as people just assume that GST applies to everything they purchase.
This is especially important to remember when purchasing goods or services through online trading or auction sites. Some of these sellers may not be registered for GST.
You can check your suppliers’ GST registration on the ABN Lookup tool or the ATO app.
If you are entitled to claim a GST credit and your supplier is registered for GST, you need to keep a tax invoice for items more than $82.50 (including GST).
For purchases under $1000 the invoice should include enough information to clearly determine the:
• seller’s identity
• seller’s ABN
• date of invoice
• description of the items sold, including the quantity and the price
• GST amount payable (if any) – it can be shown separately or as a ‘total price includes GST’ if the GST is exactly one-eleventh of the total price
• GST-free sales
• document is clearly labelled as a tax invoice (not a delivery receipt or purchase order).
There are additional tax invoice requirements for purchases over $1000.
For any questions on claiming credits or any other GST issue, contact us on 07 3359 5244 or