Goods and Services Tax – What is GST and How Does GST Work?

October 6, 2021    Taxagent Perth

GST, aka Goods and services tax, applies to numerous merchandise sold in Australia.
So, are you fretting over what it really implies to your business?
You shouldn’t worry as a gst tax agent in Perth takes care of all the formalities.

The GST is a tax of 10% imposed on majority of services, goods, and other items consumed in Australia. Every business should be registered for GST and never forget to levy 1/11th of the product’s price from the customers.
We have summed up a detailed explanation of GST and the process of gst tax return works in Australia. Let’s get straight to it!

What is The Goods and Services Tax (GST)?

Goods and services tax is usually termed GST, which levies 10% tax on maximum products and items sold. Australian Government imposes this % on every businessman who is selling specific products. It indicates those companies have to accumulate and reimburse GST to the Australian tax office.

How is GST Computed?

For example, you have purchased an electronic gadget for $3000, which includes GST. Therefore, the GST on this amount is calculated like this:

$3,000/11 = $272.72

This $272.72 amount will be refundable by the Australian Tax Office only if you are registered for GST. Hence, it will be reported in your BAS.

Read More:- Important Tax Tips For Your Small Business Tax Return 2021

How Does GST Work?

As per the aforementioned point, if you charge $100 for your services or goods, your customer will have to pay you $110 as the current GST rate of Australia is 10%. This extra $10 is that GST rate to be reimbursed to the ATO.

When you purchase products for your firm, you will be levied 10% in GST, which can easily be claimed as a credit. After the end of every GST period, you have to report the accumulated amount on your sales subtracted to any amount you have paid on your buying, mainly quarterly or monthly.

Who is Liable for Paying GST?

GST payment is obligatory for the suppliers of specific goods and services. Your Business must have to register for GST when:

  • If You have a business turnover rate of approx $75,000 or more
  • You provide ride-sourcing services or taxi travel
  • You are a non-profit company and possess a business turnover of approx $150,000 or more than that

Read More:- How Accounting Can Help Your Small Business Succeed?

How to Pay GST?

Step #1: GST Registration

When you are qualified for one aforementioned criterion, GST registration is necessary. In order to register for GST, ABN or Australian Business Number is required. Therefore, when you get this ABN, you can easily register for GST:

  • Through the business portal of ATO
  • By dialling the ATO on 13 28 66
  • Through your BAS or Business Activity Statement or the guidance from gst tax return agent

Whenever you have registered your company for GST, you don’t have to reimburse GST on every type of service or merchandise you offer to your customers.

Step #2: Calculate Whether Your Sales are Taxable

Unless they are input-taxed or free from GST, you need to pay for every service or goods. So Passing on the GST budget to your customer is possible by levying the flat 10% GST to the price tags for those items.

What are the GST-free Services or Goods?

  • Some educational courses
  • Health care services and products
  • Most fundamental food items
  • Medical services and products

Therefore, the agents can efficiently file your tax return perth, including GST returns, an essential document containing major sales, output tax, purchases, and tax paid on input tax. After filing GST, all you need is to pay the resulting tax liability, which you owe to the Australian Government.

Input-taxed Services and Goods

Likewise, you can’t impose a GST % on your customers for input-taxed services and merchandise. These items aren’t incorporated to levy GST, which are:

  • The sale and rental of residential properties
  • Money lending and borrowing process

In brief, you are unable to claim a GST refund on these input-taxed services and goods.

Step #3: Lodging BAS with the ATO

Once the business quarter ends, you have to finish your Business Activity Statement (BAS) and lodge it with the Australian Taxation Office.
The agents in Perth can lodge tax return without any hassles. So, in your BAS, all you need is to report the amount you have garnered from your customers as GST. After that, pay that equivalent amount to the ATO.


GST registration in Australia is pretty straightforward. An ABN number is required for online registration.
So, a tax agent in Perth takes over the burden from you and allow you to relax while conducting business activities. The money will be collected by an agent and paid back to ATO without any dilemma. Hopefully, this blog helps you understand all the nitty-gritty of GST and its working procedure. Get in touch with us today if any question persists about GST!

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