Your SlideShare is downloading. ×
GST as it Affects SMEs
GST as it Affects SMEs
GST as it Affects SMEs
GST as it Affects SMEs
GST as it Affects SMEs
GST as it Affects SMEs
GST as it Affects SMEs
GST as it Affects SMEs
GST as it Affects SMEs
GST as it Affects SMEs
GST as it Affects SMEs
GST as it Affects SMEs
GST as it Affects SMEs
GST as it Affects SMEs
GST as it Affects SMEs
GST as it Affects SMEs
GST as it Affects SMEs
GST as it Affects SMEs
GST as it Affects SMEs
GST as it Affects SMEs
GST as it Affects SMEs
GST as it Affects SMEs
GST as it Affects SMEs
GST as it Affects SMEs
GST as it Affects SMEs
GST as it Affects SMEs
GST as it Affects SMEs
GST as it Affects SMEs
GST as it Affects SMEs
GST as it Affects SMEs
GST as it Affects SMEs
GST as it Affects SMEs
GST as it Affects SMEs
GST as it Affects SMEs
GST as it Affects SMEs
GST as it Affects SMEs
GST as it Affects SMEs
GST as it Affects SMEs
GST as it Affects SMEs
GST as it Affects SMEs
GST as it Affects SMEs
GST as it Affects SMEs
GST as it Affects SMEs
GST as it Affects SMEs
GST as it Affects SMEs
GST as it Affects SMEs
GST as it Affects SMEs
GST as it Affects SMEs
GST as it Affects SMEs
GST as it Affects SMEs
GST as it Affects SMEs
GST as it Affects SMEs
GST as it Affects SMEs
GST as it Affects SMEs
GST as it Affects SMEs
GST as it Affects SMEs
GST as it Affects SMEs
GST as it Affects SMEs
GST as it Affects SMEs
GST as it Affects SMEs
GST as it Affects SMEs
GST as it Affects SMEs
Upcoming SlideShare
Loading in...5
×

Thanks for flagging this SlideShare!

Oops! An error has occurred.

×
Saving this for later? Get the SlideShare app to save on your phone or tablet. Read anywhere, anytime – even offline.
Text the download link to your phone
Standard text messaging rates apply

GST as it Affects SMEs

1,049

Published on

Introduction to GST series: GST as it affects SMEs. Paper 20.02

Introduction to GST series: GST as it affects SMEs. Paper 20.02

Published in: Business, Technology
0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total Views
1,049
On Slideshare
0
From Embeds
0
Number of Embeds
1
Actions
Shares
0
Downloads
60
Comments
0
Likes
0
Embeds 0
No embeds

Report content
Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
No notes for slide

Transcript

  • 1. GOODS AND SERVICES TAX
    GST As It Affects SMEs
  • 2. www.lewistaxation.com.au
    1. GST Defined
  • 3. 1st July 2000
    www.lewistaxation.com.au
    2. Commencement Date
  • 4. 10%
    www.lewistaxation.com.au
    3. GST Rate
  • 5. Imposed on goods and services supplied
    Tax of 10% on the consumption of most goods and services in Australia will not apply to the export of goods or services
    www.lewistaxation.com.au
    4. GST Scheme
  • 6. Two registrations
    Australian Business Number
    GST
    Businesses should register for ABN
    If turnover under $50k might be good reasons not to register for GST
    Group Registration?
    Branch Registration?
    www.lewistaxation.com.au
    5. Registration Packages – The New Tax System
  • 7. All enterprises engaged in a taxable activity
    Must register if turnover exceed $75,000 per annum
    All taxi drivers must register
    Includes:
    Business Trade Profession
    www.lewistaxation.com.au
    6. Registration For GST – The New Tax System
  • 8. Can include some activities of:
    government
    Government Corporations
    Charities
    Gift Deductible Funds, Authorities or Institutions
    Religious Organisations
    A lease or license to an interest in property
    www.lewistaxation.com.au
    6. Registration For GST – The New Tax System cont'd....
  • 9. Enterprise does not include:
    Hobbies
    Recreational activities – not for commercial reasons
    Activities where there is no expectation of profits
    Employee activities
    Non profit organisations have to register if turnover and membership fees, excluding donations, exceed $150,000
    Must register within 21 days of become liable to do so
    www.lewistaxation.com.au
    6. Registration For GST – The New Tax System cont'd....
  • 10. Group Registration
    Companies, Trusts or Partnerships with common ownership or membership often operate as a group
    Companies can form a GST group if each company:
    is a member of the same (at least 90% owned) group as all other members of the GST group or proposed GST group;
    www.lewistaxation.com.au
    7. Groups And Branches
  • 11. Companies can form a GST group if each company (cont’d):
    is registered for GST;
    has the same tax periods as all the other members;
    accounts for GST on the same basis (i.e. cash or non cash) as all the other members;
    does not belong to another GST group; and
    has not “branched” for GST purposes
    www.lewistaxation.com.au
    7. Groups And Branches cont'd....
  • 12. The 90% ownership requirement does not apply to non profit bodies, however non profit bodies may only form a group where:
    all members of the GST group or proposed GST group are non profit bodies; and
    all members are members of the same non profit association
    www.lewistaxation.com.au
    7. Groups And Branches cont'd....
  • 13. Trusts and Partnerships may also become members of a GST group if they satisfy the regularity requirements
    A Partnership and a Trust can form a group
    Two Partnerships and a Trust can form a group
    GST groups are effectively treated as a single entity
    www.lewistaxation.com.au
    7. Groups And Branches cont'd....
  • 14. Joint application to ATO to nominate members
    An entity may also register its branches as GST branches if it wishes to have them as separate entities for GST purposes
    GST is payable on transactions between GST branches
    www.lewistaxation.com.au
    7. Groups And Branches cont'd....
  • 15. If turnover under $75,000 per annum
    Cannot charge GST
    Cannot claim GST on inputs
    www.lewistaxation.com.au
    8. Option Of Not Registering For GST
  • 16. Supply of goods or services
    For payment – either cash or kind
    Not including private nature activities
    Not on salaries or wages
    Not on sale of the family home
    www.lewistaxation.com.au
    9. Taxable Activity
  • 17. Food (special provisions)
    Exports
    International Air and Sea Travel
    Health (virtually all)
    Education (virtually all)
    Child Care Services (virtually all)
    Religious Activity (virtually all)
    Charitable Activities (virtually all)
    www.lewistaxation.com.au
    10. “GST Free Supplies” Goods And Services
  • 18. Water and Sewerage Rates
    Cars for disabled persons
    Health Insurance Premiums
    Precious metals
    Sale of a business (as a going concern)
    Supplies through inwards Duty Free Shops
    Grants of freehold land
    Subdivided farm land
    www.lewistaxation.com.au
    10. “GST Free Supplies” Goods And Services cont'd....
  • 19. Sales of farm land
    Private Sales (garage sales)
    Hobbies
    Private Recreational Pursuits
    Wages
    www.lewistaxation.com.au
    10. “GST Free Supplies” Goods And Services cont'd....
  • 20. GST free unless specifically included
    Food defined as:
    food marketed for human consumption
    beverages
    mixtures with food
    fats and oils
    Food that is GST free will be GST free throughout the food chain – so long as it is marketed – “Fit for Human Consumption”
    www.lewistaxation.com.au
    11. Food – GST Free Unless …
  • 21. Beverages GST free include:
    milk products
    soy milk and rice milk
    tea
    coffee
    fruit and vegetable juices
    beverages for infants or invalids
    water
    Packaging necessary for supply of food is GST free
    www.lewistaxation.com.au
    11. Food – GST Free Unless cont'd....
  • 22. Live animals
    Any grain, cereal, sugar cane not processed
    Plants under cultivation
    Food unfit for human consumption
    Prepared foods
    Confectionery
    Savoury snacks
    Bakery products
    www.lewistaxation.com.au
    12. Food That Is Not GST Free
  • 23. Ice cream food
    Biscuit goods (except breakfast foods or rusks)
    Food for consumption on premises where it is supplied
    Hot take away food
    www.lewistaxation.com.au
    12. Food That Is Not GST Free cont'd....
  • 24. GP Medical Consultations
    Specialist
    Ambulance Services
    Aboriginal and Torres Strait Islander Health
    Diagnostic, Surgical and Therapeutic Procedures
    Audiology
    Chiropody
    Chiropractic
    www.lewistaxation.com.au
    13. Medical And Health Services That Are Free Of GST
  • 25. Dental
    Dietary
    Nursing
    Optical
    Occupational Therapy
    Pharmacy
    Psychology
    Physiotherapy
    www.lewistaxation.com.au
    13. Medical And Health Services That Are Free Of GST cont'd....
  • 26. Speech Pathology and Therapy
    Social Work
    Health Care provided at Hospitals and Nursing Homes
    Nursing Care Services provided to patients at home
    Wheel chairs, crutches, artificial limbs, modifications to motor vehicles for the disabled
    www.lewistaxation.com.au
    13. Medical And Health Services That Are Free Of GST cont'd....
  • 27. Pre School
    Primary School
    Secondary School
    College
    TAFE
    University
    Adult Education for employment related skills
    www.lewistaxation.com.au
    14. Education Services That Are Free Of GST
  • 28. GST not charged
    Entitled to Input Tax Credits
    www.lewistaxation.com.au
    15. GST Free Activities
  • 29. Exempting from charging GST:
    Financial Services
    Residential Rent
    Supplies of Residential Premises (other than sale of a new house)
    www.lewistaxation.com.au
    16. Input Taxed Supplies/Activities (Exempt Supplies And Goods)
  • 30. Applies to Input Taxed Supplies/Activities
    GST not charged – but
    Not entitled to Input Tax Credits
    www.lewistaxation.com.au
    17. Input Taxed
  • 31. Supplier entitled to a credit on GST paid
    Called “Input Tax Credit”
    Only available to enterprises registered for GST
    Only get full credit if acquisition 100% creditable purpose
    Not available for Input Taxed Supplies
    www.lewistaxation.com.au
    18. Input Tax Credit
  • 32. Must be acquired for carrying on business
    Not if an Input Taxed Supply
    Not if for private purposes
    www.lewistaxation.com.au
    19. Creditable Purpose
  • 33. Calculated:
    Gross value of turnover x 10%
    or
    1/11 of total price including GST
    www.lewistaxation.com.au
    20. GST On Taxable Supplies
  • 34. Output Tax
    less
    Input Tax Credit
    Adjustments
    equals
    GST Payable or Refundable
    www.lewistaxation.com.au
    21. GST Payable/Refundable
  • 35. Monthly
    Electronically
    Refunds can be offset against income tax owing
    www.lewistaxation.com.au
    22. Business Activity Statement For $20m Plus Sales
  • 36. Quarterly
    Can elect to lodge monthly
    Lodgement and payment dates:
    28th February
    28th April
    28th July
    28th October
    www.lewistaxation.com.au
    23. Business Activity Statement For Sales Under $20m – Standard Method of Lodgement
  • 37. Taxpayers who are required to lodge Business Activity Statements on a quarterly basis, have an option known as Option 2 "Streamlined Quarterly Remittance Form"
    www.lewistaxation.com.au
    24. Business Activity Statement For Sales Under $20m - Streamlined Quarterly Remittance Form
  • 38. Businesses with an annual turnover under $2m have the option (known as Option 3) of lodging their Business Activity Statements on a quarterly basis.
    www.lewistaxation.com.au
    25. Business Activity Statement For Sales Under $2m - Small Business Option
  • 39. If turnover under $2m – statement can be prepared on “Cash” basis:
    no debtors
    no creditors
    If turnover over $2m – statement must be prepared on an “Accruals” basis including:
    debtors
    creditors
    www.lewistaxation.com.au
    26. Turnover Level “Cash” Or “Accruals” Basis
  • 40. “Cash basis” means GST delayed until money received
    but
    cannot claim input tax credits until payment made
    “Accruals basis” means GST payable in period invoice prepared
    and
    can claim input tax credit
    www.lewistaxation.com.au
    26. Turnover Level “Cash” Or “Accruals” Basis cont'd....
  • 41. Subject to GST
    Does not apply to “Private” Sales:
    family car
    garage sale
    Dealer gets Input Tax Credit for purchases from an unregistered person
    www.lewistaxation.com.au
    27. Second Hand Goods
  • 42. Will pay GST on imports whether registered or not
    Input Credits only allowed to registered enterprises
    www.lewistaxation.com.au
    28. Importers
  • 43. Must include GST
    GST should not be shown separately
    www.lewistaxation.com.au
    29. Displayed Prices
  • 44. Paid direct to business’ bank, building society or credit union account
    May be offset against other tax debts
    www.lewistaxation.com.au
    30. Refunds Of GST
  • 45. Must have to claim Input Tax Credit
    Must supply within 28 days of request for all invoices over $75
    Must include:
    Name of supplier
    Words “Tax Invoice”
    Australian Business Number of supplier
    Date
    www.lewistaxation.com.au
    31. Tax Invoices
  • 46. Brief description of what supplied
    GST inclusive price
    When GST payable is exactly 1/11 of the total price “the total price includes GST for this supply”
    or
    the supply value and the GST amount must be listed separately
    www.lewistaxation.com.au
    31. Tax Invoices cont'd....
  • 47. Suppliers of $1,000 or more
    Additional information required:
    Recipient name
    Recipient’s address or Australian Business Number
    Quantity or volume of goods provided
    www.lewistaxation.com.au
    31. Tax Invoices cont'd....
  • 48. Taxable and Non Taxable Supplies
    Additional information required:
    Each taxable supply
    The amount excluding GST for the supply
    The amount of GST payable
    Total amount payable for the supply
    www.lewistaxation.com.au
    31. Tax Invoices cont'd....
  • 49. “Non Tax Invoice”
    Must deduct Withholding Tax
    www.lewistaxation.com.au
    32. Invoice Without An Australian Business Number
  • 50. Automatically approved to issue:
    Agricultural Industries
    Registered Government Entities
    Recipients with a turnover over $20m
    Other types of businesses must obtain ATO approval to issue
    www.lewistaxation.com.au
    33. Recipient Created Tax Invoice
  • 51. Key requirements:
    “Recipient Created Tax Invoice”
    ABN of supplier and recipient
    “GST shown is payable by the supplier”
    www.lewistaxation.com.au
    33. Recipient Created Tax Invoice cont'd....
  • 52. Cannot charge GST
    Cannot claim Input Tax Credits
    Withholding Tax will be deducted by Payers
    www.lewistaxation.com.au
    34. Unregistered Businesses (Without Australian Business Number Or GST Registration)
  • 53. Prepared and presented by a supplier to an enterprise as the reason for not quoting an Australian Business Number to the enterprise
    If you receive a "Statement By A Supplier" you do not have to withhold any tax from the payment
    You must retain the supplier's statement for five years
    www.lewistaxation.com.au
    35. Statement By A Supplier
  • 54. Issue an invoice quoting ABN
    Not a “Tax Invoice”
    Payers do not deduct Withholding Tax
    www.lewistaxation.com.au
    36. Business With An Australian Business Number – But Not Registered For GST
  • 55. Discount allowed
    Return of faulty goods
    Bad Debts
    www.lewistaxation.com.au
    37. Adjustments
  • 56. An Adjustment Note may have to be issued where an “adjustment event” occurs in a later tax period
    An “adjustment event” is any event in relation to a supply which effectively:
    cancels the supply i.e. for return of goods
    changes the consideration e.g. prompt payment discounts, volume rebate
    adjustment to prices
    www.lewistaxation.com.au
    38. Adjustment Notes
  • 57. Certain information must be known on Adjustment Notes, including:
    the name or trading name of the supplier;
    the words “Adjustment Note” stated predominantly;
    the Australian Business Number of the supplier;
    the date of issue of the original Tax Invoice;
    www.lewistaxation.com.au
    38. Adjustment Notes cont'd....
  • 58. Certain information must be shown on Adjustment Notes, including (cont’d):
    the number of the original Tax Invoice;
    a brief description of the items for which there is an adjustment; and
    the GST inclusive price of the adjustment
    www.lewistaxation.com.au
    38. Adjustment Notes cont'd....
  • 59. GST on premiums
    Registered enterprises can claim Input Tax Credit
    No GST payable on claims
    Must notify Insurer of GST status
    If renewal is after 1st July 2000 – notify Insurer of status before 30th June 2000
    www.lewistaxation.com.au
    39. Insurance
  • 60. Accurate and current
    Correct calculation of GST
    Payment for the GST has to be made three weeks after the end of a month and 28 days after the end of a quarter, except the December quarter, when payment is to be made by 28th February
    www.lewistaxation.com.au
    40. Accounting Records For GST
  • 61. The financial records of an enterprise need to produce sufficient information for the completion of the Business Activity Statement
    www.lewistaxation.com.au
    41. GST Control Accounts
  • 62. Your professional advisor has invested in:
    training material
    seminars
    check lists
    procedural matters
    Your professional advisor can assist
    www.lewistaxation.com.au
    42. Professional Assistance

×