What is GST and do I need to worry about it in my startup?
In Australia, we have Goods & Services Tax (GST). At the time of writing this post, it was 10% and unfortunately isn’t on everything. I say unfortunately because life would be soon much easier if it was, and you know what, it might solve some of the governments deficit issues if it was, but this is not a post on government fiscal policy, its on GST!
We have said 1000 times that we are not advisors, we simply help build businesses. So if you need more information on this, PLEASE contact a qualified accountant.
So what is the GST and do you need to worry about it with your startup?
GST is a goods and services tax. It is applied to most things that people buy. There are some exemptions and they are
- most basic food
- some education courses, course materials and related excursions or field trips
- some medical, health and care services
- some medical aids and appliances
- some medicines
- some childcare services
- some religious services and charitable activities
- supplies of accommodation and meals to residents of retirement villages by certain operators
- cars for disabled people to use, as long as certain requirements are met
- water, sewerage and drainage
- international transport and related matters
- precious metals
- sales through duty-free shops
- grants of land by government
- international mail
- sales of businesses as going concerns
- some telecommunications supplies
- eligible emissions units.
So if your startup sells something that is not on that list, then you have to worry about GST.
Whats this about a threshold?
There is a threshold of $75,000 in sales revenue, that you have to reach before you need to start working about GST. So in the initial stages of your startup you may not need to worry about GST, however that also means you are paying 10% more for most of your purchases.
What is a BAS?
A BAS is a Business Activity Statement. It is a report that you give to the government every month or quarter. In simple terms it tells the government what your sales revenue was, how much GST was collected, what your expenses were and how much GST did you pay, and what is the balance. It is that balance that you have to provide to the government.
For more information on this topic please go to https://www.ato.gov.au/Business/GST/
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