BAS and reporting
Label 1A
Label 1A on the BAS is the field where you report the total GST you collected, or are liable to pay, on your sales and other taxable supplies for the period.
Label 1A is a field in the GST section of the Business Activity Statement. It records the GST payable on your sales, which is the GST you charged customers on taxable supplies plus any GST amounts from adjustments that increase what you owe. It is the starting point of your net GST calculation, matched against label 1B.
For most businesses, the number at 1A is simply one-eleventh of GST-inclusive taxable sales. If you sold goods for $11,000 including GST, the GST is $1,000. Your accounting software adds up the GST from each sale based on the tax code assigned, such as GST on income, and produces the total for the period. GST-free and input-taxed sales do not contribute to label 1A.
Label 1A can also include other items. Increasing adjustments, such as when you stop using an asset for business purposes after claiming a credit, or when a credit note reduces a previous deduction, may be added. GST on certain imported services or other special items can also affect the figure. Check how your software reports these, and ask your adviser if you are unsure.
Accuracy at 1A depends on correct coding. The usual errors are charging GST on GST-free sales, failing to charge it on taxable sales, and leaving out cash sales. If total sales at label G1 do not reconcile reasonably with the GST at 1A, the ATO may notice. A quick check is to divide the GST-inclusive taxable sales by 11 and see whether it matches 1A.
Label 1A is based on your accounting method. If you use cash accounting, the GST is reported in the period you receive payment. If you use accrual accounting, it is reported in the period you issue the invoice, even if the customer has not paid. This choice affects timing, which matters for your cash flow, and is something to review with your adviser.
After lodging, keep the supporting reports, such as the GST summary from your software, for five years. Do not confuse 1A with 1B, which is the credits you claim. This is general information only, so confirm anything specific with the ATO or a registered tax professional.
Worked example
Over a quarter, Hugo's firm invoices $110,000 in taxable sales including GST, plus $20,000 of GST-free exports. The GST on sales is $110,000 divided by 11, or $10,000. The exports do not add GST. He reports $10,000 at label 1A. The $20,000 of exports is included in total sales at G1 but not in the GST at 1A.
Practical tips
- Check your figure by dividing GST-inclusive taxable sales by 11 and comparing it with the number at 1A.
- Make sure GST-free and input-taxed sales are coded correctly so they are not counted at 1A.
- Remember that your accounting method, cash or accrual, decides which period each sale falls into.