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GST Registration

 

Importance

The main reasons why GST registration is important are:

  • GST is normally only payable on a sale or supply if you are registered, except in the case of imports
  • Input tax credits can only be claimed if you are registered
  • GST returns must be lodged if you are registered

You are required to be registered if you are carrying on an enterprise, and your GST turnover is $75,000 or more. This is called the registration turnover threshold. For non-profit bodies, the corresponding threshold is generally $150,000. If you are required to register, but fail to do so, you become liable for penalties and even prosecution.

You cannot be registered unless you are carrying on an enterprise, or are intending to do so from a particular date.

To be registered you must be an “entity”. An entity means you must be either:

  • An individual or natural person
  • A “body corporate”. This includes a company, building society, credit union, trade union, statutory body, strata title body corporate, municipal council, incorporated association, and certain governing bodies of various religious institutions
  • A “corporation sole”. This is a corporation consisting of one person and that person’s successors to a particular position, e.g. a bishopric
  • A “body politic”, i.e. a government. Government departments are technically not entities but can be separately registered
  • A partnership
  • Any other unincorporated association or body, e.g. charities or clubs
  • A trust or the trustee of a trust at any given time
  • A superannuation fund, or the trustee of a fund at any given time

Registration Procedure

You have to apply for registration within 21 days of becoming required to do so. Normally, this means that you have to apply within 21 days after the time when the enterprise you are carrying on first meets the relevant turnover threshold test.

Australian Business Number (ABN)

The ABN is a business identifier which can be used for the GST and various other tax-related purposes.

For the GST system, your ABN is important because:

  • The ABN also acts as your GST registration number (unless you are a GST branch)
  • The supplier’s ABN must normally appear on a tax invoice, otherwise the recipient will not be able to claim input tax credits

In the wider context, the ABN will be crucial for identification under the PAYG system that has applied since 1 July 2000. Under PAYG, if you do not quote your ABN on invoices to other businesses, they may be required to withhold tax at the top marginal rate (plus Medicare levy) from their payment to you. For 2013/14, this normally requires a deduction of 46.5%.

Special Registration Rules

Taxi operators are required to be registered, regardless of turnover. A taxi operator is someone who carries on an enterprise that includes transporting fare-paying passengers by taxi or limousine.

Bankruptcy, receivership, liquidation – If a person who is registered (or required to be registered) goes into bankruptcy, the trustee in bankruptcy must be registered as such for GST purposes in relation to any enterprise carried on by that person. A corresponding rule applies where receivers, liquidators, administrators, controllers or interim managers are appointed.

Importations – Even if you are not registered, GST may still apply to taxable importations.

Resident agents for non-residents must be registered if the non-resident is registered or required to be registered.

Charities and non-profit bodies – The registration turnover threshold for charities and non-profit bodies is $150,000, not $75,000. In addition, independent sub-units of charities and non-profit bodies can be registered separately from the parent body.

Non-residents making taxable supplies may be exempt from registration where the supplies are covered by a reverse charge agreement.

Groups and branches – Special rules apply to registration of GST groups and GST branches.

Government departments can register separately, even if they are technically not “entities”, are not carrying on an enterprise or are intending to do so.

Partnerships can register, but individual partners cannot unless they are carrying on a separate enterprise in their own right.