Are You Planning To Register Your Business For GST Collection?

 Overview of Australian GST

GST refers to GENERAL SALES TAX, As I said earlier, this is a broad-based consumption tax levied on most goods and services in Australia. The businesses collect this tax from customers and remit it to the Australian government. To stay compliant with Australian taxation laws, companies that meet certain criteria must register for GST collection. This provides a comprehensive overview of the GST registration process, eligibility criteria, and obligations. 

The Eligibility

Turnover Threshold

Not all businesses in Australia are obliged to register for GST, instead, there is a specific threshold to meet, so it means not all businesses meet the turnover threshold. Only those companies are required to register for the GST that meets the yearly turnover threshold.

Current Threshold

The current threshold for GST registration is AUD 75000 per year, this means that business that exceeds this turnover are required to apply for GST registration. It should be noted that this is the most latest GST TUNROVER THRESHOLD, so it is always subject to change over time.  

In a nutshell, you need to register for GST if:

• Your business has a turnover of AUD 75000 or more per year.
• Your non-profit organization has a turnover of AUD150,000 or more
• You provide taxi or limousine travel services, regardless of meeting GST turnover.
• You want to claim fuel tax credits for your business.

That said, if your business turnover is below these thresholds, GST registration is optional, but if you register for GST even if your turnover does not meet the criteria, you can avail of some benefits like claiming GST credits on purchases.

Exceptions 

There are some exceptions to the yearly turnover threshold, They are given below 

Non-Profit Organizations:

Non-profit organizations may be exempted from this turnover threshold, which means even if their turnover exceeds, they are not required to register for GST, it largely depends on the nature of their activities. In addition, non-profit organizations have a different threshold of AUD150,000.

Primary Producers:

Primary producers like Formers or fishermen may have different threshold criteria or even maybe exempted depending on the type of product they produce.

Import/Export Activities:

Businesses involved in import or export activities may have different GST registration processes, criteria, and obligations. 

The GST Registration Process

The widely used method of registering for GST in Australia is through the Australian Business Registration (ABR) online portal. To register for GST on the online portal businesses generally need to provide their ABN (Australian Business Number), contact details, type of business (partnership or company), and some other information.

Once the registration process is completed, The ATO will take some time to review and after review, the ATO will notify the business owner of the status, if the business is found eligible, the ATO will provide a registration number.

Additionally, businesses can also hire a registered tax agent, the tax agent will take care of all these tasks on behalf of the company, the tax agent is a typical expert in this field and can ensure a business is always GST compliant and provides ongoing GST-related support. So here I am going to give you a detailed overview of the GST registration process.

Online Application

As I said earlier, you have to head to the Australian Business Registration online portal to submit your application online, The ABR, which provides an easy-to-follow way to submit your application.

The Required Information

For filling out the online form, you will need the following information as part of your online application process 

1. Your Business Abn (Australian Business Number).
2. Your Business Details.
3. Type Of The Business, Like Company Or Partnership.
4. Names Of The Owners Or Directors.
5. Your Business Estimated Annual Turnover.

The Supporting Documents

Sometimes, they may ask for additional supporting documents to support your cause, I am giving a list of some supporting documents that may be helpful while applying for GST registration.

1. Proof Of Identity Owners or Directors)
2. Evidence Of Your Business Existence (Business Registration Certificate)
3. Any Supporting Documents (If Any)

Expected Processing Time

Once you complete the registration process, they may take some time to review the documents and business details, generally, it does not take too much time, often business gets their registration within 4 hours. So depending on the completeness of your documents, you can expect to wait from a few hours to a few days. 

The Registration Number

After applying, if your application is approved, then your business will be assigned a registration number, which is typically an 11-digit number. Please note that this number is very crucial for your business to be compliant with GST obligations.

The Australian GST Obligations

In Australia, there are several ongoing GST obligations, here I am giving you a list of GST obligations.

Maintaining The Record.

All registered businesses are required to maintain an accurate record of all GS-related transactions, such as sales, purchases, input tax credits, and GST collected/paid, this record needs to be maintained for at least five years.

GST Collection & Remittance.

The registered businesses for GST are required to start collecting GST on all eligible goods and services sold out and remit this amount collected in terms of GST to the Australian Taxation Office (ATO) regularly. They can remit the GST collected on a quarterly or monthly basis.

The GST Returns.

All registered businesses are required to file GST returns consistently, with ATO. They need to declare their GST turnover, input tax credits, and net GST liability. The frequency of GST returns can vary, depending on the turnover and other factors.

Compliance With Australian Taxation Laws.

As a registered business in Australia, your business needs to strictly follow Australian taxation laws. Non-compliance with these laws can result in penalties and interest charges for your business. Compliance related to record keeping, reporting, and payment of GST laws is paramount. 

Avoid These Common Mistakes

Although Australia provides a very straightforward process for GST registration, there are still some very common mistakes or challenges businesses can encounter. Let’s have a look at them!

Incorrect Threshold.

This is a very common mistake, as sometimes businesses fail to calculate their annual turnover incorrectly, and this results in failure to register for GST on time.

Incomplete Records.

This is another common mistake, where businesses fail to do proper record-keeping, hence it leads to difficulties in calculating the GST liability and non-compliance with ATO audits. So you should keep this in mind.

Mistakes In GST Rates.

Businesses sometimes may apply incorrect GST rates to their sales or purchases, finally this results in overpayment or underpayment of GST. For accurate GST calculations, use our Smart GST Calc, which provides the most accurate and authentic GST calculations for your business.

Late Payment Issues.

As per the law, a business that is registered for GST collection needs to remit this GST to ATO. So if the same business fails to remit the GST on time, it can cause penalties and interest charges. 

Conclusion

In Australia, registering your business for GST collection is a very crucial step. So you need to understand the eligibility criteria, registration process, and ongoing GST obligation. This way you can ensure your business is compliant with Australian taxation laws and can avoid potential penalties and charges. Still, if you have any questions, it is recommended to consult with a registered tax agent, he/she can ensure all the stated points on behalf of your business.