Registration
Registered for GST
Being registered for GST means the ATO has recorded your business as a GST entity, so you must charge GST on taxable sales, lodge BAS and can claim input tax credits on business purchases.
When a business is registered for GST, it has applied to the ATO and been recorded on the Australian Business Register as a participant in the GST system. From the effective date of registration it must charge GST on its taxable sales, report GST on its Business Activity Statement and pay the net amount to the ATO. In return it can claim input tax credits for GST included in the price of business purchases.
Registration is linked to your ABN. You need an ABN first, and your GST status is shown on the public ABN Lookup service, where customers and suppliers can see whether you are registered. This is often how a business confirms that a supplier is entitled to charge GST. If a supplier is not registered, it cannot charge GST, and you will not be able to claim any credit on what you pay them.
Some businesses must register and others choose to. You must register if your GST turnover is $75,000 or more, or $150,000 or more for non-profit organisations, and taxi and ride-sourcing drivers must register at any turnover. Others may register voluntarily to claim credits. Either way, once you are registered, the same rules apply, and you cannot pick and choose which sales carry GST.
Registered businesses must meet a number of practical obligations. They issue tax invoices for taxable sales when the buyer asks, and for purchases over $82.50 including GST they should hold valid tax invoices from suppliers to claim credits. They keep records for five years. They lodge BAS for their reporting period, which is often quarterly, and pay on time to avoid penalties and the general interest charge.
Registration status also affects how you price and show prices. A registered business should show prices including GST in most consumer settings, and quotes to business customers often show GST separately. If you are not registered, you must not include GST in your prices or on invoices, because you are not entitled to collect it, and doing so can create problems with the ATO.
A common misunderstanding is that registration is automatic once you get an ABN. It is not, since the two are separate registrations. Another is thinking registration can be backdated at will to claim credits. The effective date is generally the date you apply or the date you were required to register, and the details depend on the circumstances.
If you are not sure whether you should be registered, or what your registration means for your invoices and BAS, check with the ATO or a registered tax professional, as this page offers general information only.
Worked example
Ben runs a registered bike repair shop. He charges $200 for a service plus 10% GST, so the customer pays $220. In the same quarter he buys $1,100 of parts including GST from a registered supplier. On his BAS he reports $20 of GST collected on the service and claims $100 as a credit on the parts, since he is registered and holds a tax invoice. His net GST is a refund of $80 for those items.
Practical tips
- Check a supplier's ABN and GST status on ABN Lookup before assuming you can claim credits on what you pay them.
- Do not charge GST until your registration is effective, and charge it on all taxable sales once it is.
- Remember that an ABN and GST registration are separate. Having one does not mean you have the other.