GST and Your Business
The GST is a 10% tax on most goods and services consumed in Australia, and was introduced in 2000. Whilst calculating GST liability seems simple and straightforward, it is not easy to manage a business’ liabilities without the proper software like Xero accounting. For small buisneses who have to report their GST liabilities every quarter, using intuitive tools like Xero Touch to maintain invoices and accounts will make BAS time easy instead of the headache it can be.
GST Cashbook from Xero
Xero GST Cashbook is an online accounting tool that makes keeping track of your business and GST obligations a piece of cake. Starting from just $33 per month, Xero GST Cashbook will help you keep track of income, expenses and your tax obligations.
The GST Legal Framework
The Goods and Services Tax (GST) in Australia is a Value Added Tax (VAT) on the supply of goods and services in Australia. It was introduced by the Federal Government with the A New Tax System (Goods and Services Tax) Act 1999, taking effect from July 1 2000. The basic premise of the new tax was to broaden the tax base, which was heavily biased toward the provision of services.
Prior to the GST, Australia operated a Wholesale Sales Tax (WST) which imposed a tax on wholesale of goods. The WST was implemented in the 30′s when Australia had an economy dominated by goods. Over the years however, Australia’s economy evolved to be more services based, and the GST served to strip the unfair tax advantage that service providing businesses had over suppliers of goods.
The GST is levied at a flat rate of 10% on most goods and services, apart from GST exempt items, and input taxed goods and services.
GST and Micro Businesses
It is important for new businesses to understand when they are required to register for GST, and the circumstances in which registration is unnecessary. Being part of the GST system adds another layer of compliance for small business operators, and some businesses would be better off to defer registration until their business has matured.