Tax basics for small business

GST sales and purchases

What are the different types of GST sale?

There are three types of GST sale:

• taxable sale
• GST-free sale
• input taxed sale.

It is important to understand which type of sales you make because this affects whether you collect GST or can claim GST credits (see Collecting and claiming GST on different types of sales).

Taxable sales

Most goods and services sold in Australia are taxable sales. This can include the sale of business assets.

GST-free sales

Some sales are GST-free sales, including:

• basic food for human consumption, for example, fruit, vegetables, plain milk and bread
• exports
• some health services and education courses
• some activities of charitable institutions
• childcare
• religious services
• water and sewerage services
• the sale of a going concern - for example, a business.

Input taxed sales

Input taxed sales include:

• financial supplies, for example, loans by banks
• residential rent.

Collecting and claiming GST on different types of sales

Type of sale	Do you collect GST?	Can you claim GST credits?
Taxable	Yes	Yes
GST-free	No	Yes
Input taxed	No	No

Sections within How GST works

• GST credits
• GST sales and purchases
• Special GST rules
• Tax invoices
• Reporting GST
• GST summary