Robin Lamb | Published 16 January 2023 | Updated 15 September 2026
Your business may have used the same GST treatment for years. That does not necessarily mean it still reflects what you sell, who you trade with or the transactions you are considering.
A new revenue stream, overseas customer or property transaction can raise questions that routine BAS preparation alone will not resolve.
The useful starting point is whether the registration, pricing and recordkeeping arrangements still match the business.
A short foundation
Goods and services tax, or GST, is a broad consumption tax that generally applies at 10% to taxable supplies. It is administered by the Australian Taxation Office.
Businesses registered or required to register account for GST on taxable sales. Eligible GST credits on purchases are taken into account when determining the net GST amount, together with any relevant adjustments. Reporting is generally through a business activity statement, or BAS.
GST is separate from income tax. It is not a tax on accounting profit, and a business can have GST payable even during a period when it reports a loss.
Understanding that distinction helps keep the GST obligation separate from expectations about the annual income tax return.
Does registration still reflect the business?
Registration deserves attention when the business grows, expects a change in turnover or starts a different activity.
GST turnover is not the same as profit. Registration assessment considers current and projected turnover under the GST rules, rather than simply waiting for a completed financial year.
Some activities also have specific registration requirements. That is why neither “we are still a small business” nor “we did not register last year” settles the question.
Raise expected changes while they are taking shape. A new contract, additional business activity or changed operating structure may warrant a review before the annual accounts are prepared.
If you are already registered, discuss whether the registration and reporting arrangements remain appropriate. Do not assume that a quieter period automatically ends your obligations.
Are the different types of sales being distinguished?
Taxable, GST free and input taxed sales are different categories:
- Taxable sales: GST applies, with eligible credits potentially available for related purchases.
- GST free sales: No GST is charged on the sale, but eligible credits can still be available for purchases used to make it.
- Input taxed sales: No GST is charged on the sale, and credits for related purchases are generally restricted.
The distinction matters on both sides of the transaction. Treating every sale without GST as the same category can lead to incorrect treatment of purchases.
A business may make more than one type of sale. Ask whether shared expenses or a change in activities affects the credits available.
The correct treatment depends on the transaction and applicable rules, not simply the description selected in accounting software.
Is the GST treatment clear before a price is agreed?
Consider GST when preparing quotes and negotiating contracts, particularly for unusual or significant transactions.
Clarify whether the proposed price includes GST, whether an additional amount is contemplated and what treatment the parties are assuming.
A contractual description does not, by itself, establish that a transaction qualifies for GST free treatment. Your accountant should assess the tax position alongside your solicitor’s consideration of the agreement.
This is especially relevant when buying or selling a business or buying commercial premises. Different arrangements can produce different GST consequences.
The objective is to understand the price and funding commitment before signing, rather than discover that the parties had different expectations afterwards.
Are purchase credits supported by the facts and records?
Not every business expense generates a GST credit.
The assessment may depend on the business purpose, any private use, the supplier’s GST status, whether GST was properly included and the nature of the purchase. Purchases connected with input taxed activities may need separate consideration.
Supporting documentation matters too. A bank transaction shows that money moved, but may not establish what was purchased or how GST was treated. A valid tax invoice is generally needed to claim a credit, subject to exceptions.
Where a purchase serves both business and private purposes, raise that use with your accountant rather than assuming the full amount qualifies.
Clear business records help connect invoices, payments and the underlying transaction. Software tax codes can assist processing, but do not determine the legal treatment.
If a supplier’s document or a recorded credit looks inconsistent with the transaction, bring it forward for assessment.
Does the reporting basis fit the cash flow assumptions?
The timing of GST reporting is not always the same as the timing of cash movement.
Under cash accounting, GST reporting generally follows receipts and payments. Under the non cash basis, issuing or receiving an invoice can bring an amount into a reporting period before payment occurs.
The applicable rules and supporting documents still need consideration. Your income tax accounting treatment should not be assumed to answer the GST timing question.
Discuss the implications where customers pay slowly, purchases are substantial or trading is seasonal. An expected purchase credit is not the same as cash already available to meet a BAS obligation.
There is no universal amount to reserve. The business’s sales mix, eligible credits, reporting basis and other BAS obligations need to be considered together.
Bring changed or uncertain transactions into the discussion
Raise a new revenue stream, overseas dealings, a property transaction or a proposed business purchase or sale before relying on the existing treatment.
An overseas customer or supplier does not automatically settle the Australian GST position. Explain what is being supplied, by whom and under what arrangements.
For a useful discussion, bring:
- Recent BAS and current financial reports.
- Representative sales and purchase invoices.
- Details of new or changed activities.
- Draft contracts and relevant correspondence.
- Specific transactions whose GST treatment is uncertain.
- Any known differences between the records and what actually occurred.
Speak with Jaha about the particular GST concern and agree on the work needed to assess it. The aim is to understand the treatment and its practical implications, not simply repeat the coding used on the last BAS.