What Are Taxable Supplies
A “taxable supply” is not limited to a sale, and covers a very wide range of transactions.
For there to be a taxable supply, the following requirements must be satisfied:
- There must be a supply;
- The supply must be for consideration;
- The supply must be made in connection with an enterprise carried on by the supplier, who must be registered;
- The supply must be connected with Australia;
- The supply must not be “GST-free” or “input taxed”;
- The supply must be registered or be required to be registered; and
- GST is also payable where you make a taxable importation.
Requirement 1: there must be a “supply”
The first requirement for a taxable supply is that there be a “supply”. This includes:
- Supplying goods;
- Supplying services;
- Providing advice or information;
- Granting, assigning or surrendering real property;
- Creating, granting, transferring, assigning or surrendering any right;
- Making financial supplies;
- Entering into an obligation to do anything, refrain from doing something, or tolerate something (or releasing someone from such an obligation); and
- Any combination of these.
Requirement 2: supply must be “for consideration”
The second requirement for a taxable supply is that the supply is made “for consideration”. Consideration means, in effect, just about anything of value. In the straightforward example of a sale of goods for money, the consideration is simply the payment. As well as payment, consideration also covers situations where you do something or refrain from doing something. Any of these things are treated as consideration for a supply if they are:
- “In connection with” the supply;
- Made in response to the supply; and
- Made to induce the supply.
It is not necessary that the consideration is provided by the recipient of the goods or services – it may be provided by a third party. Nor is it necessary that there was any legal obligation to make the payment.
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