Goods and services tax (GST) is a broad-based tax of 10% on most goods, services and other items sold or consumed in Australia.
Generally, businesses and other organisations registered for GST will:
- include GST in the price of sales to their customers, and
- claim credits for the GST included in the price of their business purchases.
NHTAA provide service to lodge Business Activity Statement for our clients by providing appropriate guidance for tax compliance.
So while GST is paid at each step in the supply chain, businesses do not actually bear the economic cost of the tax. The cost of GST is borne by the final consumer, who can’t claim GST credits.
While businesses don’t bear the economic cost of GST, they collect it. As a GST registered business, you’ll need to put aside the GST you have collected so it can be paid when due.
In most cases GST is included in the price you pay. However, you will generally be able to work out the amount of GST on fully taxable goods and services by dividing the price by 11. Only registered business entities are entitled to a tax credit. The effect of this is that consumers are not reimbursed for the GST paid on purchased goods and services.
Most food, including meat, fruit and vegetables, is GST-free. However, some food and beverages have GST included —for example, prepared food, takeaway food, restaurant meals, confectionery, ice cream, snack foods, alcoholic beverages and soft drinks. Other GST-free items include most education and health services, eligible child care, and a range of other goods and services.