You can download a printable version of Cash and non-cash accounting (NAT 3136, 84kB) here in portable document format (PDF).
You can order a printed copy by noting the full title of the publication and either:
You, we mean you as a business entity, which is registered or required to be registered for goods and services tax (GST)
GST credits, we are referring to the GST term input tax credits
Purchase, we are referring to the GST term acquisition
Sale, we are referring to the GST term supply, and payment received or made, we are referring to the GST term consideration.
Where you are registered or required to be registered for GST, you must pay GST on your taxable sales. You can generally claim GST credits for the GST included in the price of goods and services that you purchase. You would then go on to calculate the GST you are liable to pay and GST credits you are eligible to claim when you lodge your activity statement after the end of each tax period.
The tax period you account for GST will depend on whether you account for GST on a cash or non-cash (accruals) basis. You can only use one accounting basis.
You are eligible to account for GST on a cash basis if you meet any of the following criteria:
- you are a small business with an annual turnover (including the turnover of your related entities) of less than $2 million
- you are not operating a business, but are carrying on an enterprise with a GST turnover of $2 million or less
- you account for income tax on a cash basis
- you carry on a kind of enterprise the commissioner has determined is able to account for GST on a cash basis regardless of your GST turnover
- you are an endorsed charitable institution, trustee of an endorsed charitable fund, gift-deductible entity or government school, regardless of your GST turnover.
If you do not satisfy any of the above criteria, you can still contact us for more information on 13 28 66.
|
For more information on accessing GST, other small business concessions, and calculating your annual turnover, visit our website at www.ato.gov.au/SBconcessions
For more information on how to calculate your GST turnover for purposes such as registration, refer to GST for small business (NAT 3014).
|
If you are eligible and account for GST on a cash basis, you will:
- account for the GST payable on your sales in the tax period you receive payment for them. If you receive only part payment for a sale in a tax period, you account only for the part of the GST payment that relates to that part of the sale in that tax period.
- claim GST credits for your business purchases in the tax period you pay for them. If you pay only part of the cost of a business purchase in a tax period and have a valid tax invoice, you claim only the GST credit for that part of the cost in that tax period.
To claim a GST credit for a purchase that cost more than $82.50 (including GST) you must have a valid tax invoice at the time you lodge your activity statement. If you do not have a valid tax invoice, you should wait until you receive one from your supplier before you claim the GST credit, even if this is in a later reporting period.
|
For more information on choosing to account on a cash basis, refer to Goods and Services Tax Ruling GSTR 2000/13. This ruling outlines the factors we will consider in determining whether it is appropriate for you to account for GST on a cash basis.
For more information on what constitutes a valid tax invoice, refer to:
|
You can account for GST on a non-cash basis even if you are eligible to account for GST on a cash basis. If you are not eligible to account for GST on a cash basis, you must account on a non-cash basis unless we give you approval to use a cash basis.
If you account for GST on a non-cash (accruals) basis, you will account for all GST payable and all GST credits in the earlier of either:
- the first tax period in which an invoice is issued relating to that sale
- the first tax period in which any of the payment is received or made.
Philip is a GST registered architect who accounts for GST on a non-cash basis monthly. He supplies design plans for a new restaurant to a developer for $7,700 (including $700 GST) on 30 September. Philip gives the developer a valid tax invoice on the day of the sale but payment is not due for 30 days.
Philip’s tax period ends on 30 September. As Phillip does not account for GST on a cash basis and has already issued a tax invoice for the supply, the $700 GST payable is accounted in the tax period ending on 30 September, even though he has not received any payment from the developer.
The developer also accounts for GST on a non-cash basis monthly. The developer also claims the GST credit in the tax period ending 30 September because the tax invoice is dated 30 September.
However, if the tax invoice was not a valid tax invoice (that is, it did not contain the information required for a valid tax invoice), the developer would claim the GST credit in the tax period he receives a valid tax invoice.
For more information on cash and non-cash (accruals) accounting refer to:
To obtain a copy of one of our publications or for more information:
- visit our website at www.ato.gov.au
- phone 13 28 66, or
- write to us at PO Box 9935 in your capital city.
If you don’t speak English well and want to talk to a tax officer, phone the Translating and Interpreting Service on 13 14 50 for help with your call.
If you are deaf, or have a hearing or speech impairment, phone the Tax Office through the National Relay Service (NRS) on the numbers listed below:
- TTY users, phone 13 36 77 and ask for the Tax Office number you need
- Speak and Listen (speech-to-speech relay) users, phone 1300 555 727 and ask for the Tax Office number you need
- internet relay users, connect to the NRS on www.relayservice.com.au and ask for the Tax Office number you need.
Last Modified: Friday, 4 December 2009
Subscribe
