Entities cannot register for GST if they are not carrying on an enterprise. Some entities are required by law to register, while others may choose to voluntarily register for GST.
You should read GST for small business (NAT 3014) if you are unfamiliar with GST.
See Useful products and services for more information on how to obtain a copy of this publication.
Question 19 - Is the entity required by law to register for GST?
An entity is required to register if it is:
- carrying on an enterprise and its GST turnover is $75,000 or more ($150,000 or more if the entity is a non-profit organisation)
- a representative of an incapacitated entity (where the incapacitated entity is registered or required to be registered)
- a resident agent acting for a non-resident (where the non-resident is registered or required to be registered).
Question 20 - If the entity is not required to register for GST, is the entity volunteering to register?
If choosing to register for GST, the entity will be expected to stay registered for 12 months.
If an entity applies for cancellation of registration within 12 months of being registered, the registration may not be cancelled. Cancellation will depend upon the entity's circumstances.
Question 21 - What is the entity's date of registration for GST?
If the entity backdates its registration more than 21 days it may be liable for:
- failure to register on time penalties
- failure to lodge on time penalties
- general interest charge (GIC) on GST owed.
Question 22 - What is the entity's GST turnover?
The entity's GST turnover is the greater of its current and projected GST turnovers.
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Definitions
Current GST turnover is the value of all supplies made or likely to be made in the current month plus the previous 11 months.
Projected GST turnover is the value of all supplies made or likely to be made in the current month plus the next 11 months.
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When working out current or projected GST turnover, exclude the following supplies:
- input taxed supplies
- supplies for no consideration (and that are not taxable supplies to associates)
- supplies not in connection with the enterprise, for example, private sales
- supplies not connected with Australia.
The value of supplies in both calculations excludes GST. Projected GST turnover does not include supplies made or likely to be made:
- by transfer of capital assets
- as a result of ceasing an enterprise or substantially and permanently reducing the size of the enterprise.
We use GST turnover to determine a number of threshold events. Turnover thresholds are GST exclusive.
An entity's GST turnover meets the registration turnover threshold if its:
- current GST turnover is at or above the threshold (unless you satisfy us that the projected GST turnover is below the threshold)
- projected GST turnover is at or above the threshold.
The GST registration turnover threshold is $75,000 (or $150,000 for non-profit entities).
Question 23 - How often will the entity lodge its activity statements?
If the entity's GST turnover is:
- $20 million or more, it must lodge electronically each month (provide an email address at question 10)
- less than $20 million, it can choose to lodge monthly or quarterly
- expected to be less than $75,000 (or less than $150,000 for non-profit entities), it can choose to lodge monthly, quarterly or annually.
A representative member of a GST group can elect to report GST annually only if each member of the group is eligible. Once an election is made, annual tax periods will apply to all group members.
An entity that elects to report GST annually and has other obligations, such as pay as you go (PAYG) withholding for employees, will still need to report those obligations either monthly or quarterly.
Question 24 - Does the entity intend to account for GST on a cash or non-cash (accruals) basis?
Cash accounting
If an entity issues or receives an invoice but does not account for the sale or purchase until the payment is received or paid, it is using a cash accounting method.
Entities can choose to use a cash basis of accounting for GST purposes, regardless of their turnover, if they are properly accounting on a cash basis for income tax purposes or are:
- an endorsed charitable institution
- a trustee of an endorsed charitable fund
- a gift deductible entity
- a government school.
Entities can also use a cash basis of accounting for GST if:
- they are a small business entity with an annual turnover (including the turnover of their related entities) of $2 million or less
- they are not operating a business but are carrying on an enterprise with a GST turnover of $2 million or less.
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Refer to our website to determine if you are a small business entity.
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If you do not meet any of the criteria mentioned above and want to account for GST on a cash basis, this may be possible. You will need to seek permission from us to do so. See More information.
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Non-cash accounting (accruals)
The entity is accounting for GST on a non-cash (accruals) basis if it accounts for GST on its sales when it issues an invoice or receives any part of the payment, whichever occurs first.
Question 25 - Does the entity import goods or services into Australia?
You may be eligible for the Deferred GST on imports scheme, which allows you to defer payment of GST on imports. To be in the scheme, you must be prepared to lodge your activity statements monthly over the internet.
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There are also other requirements to qualify for the Deferred GST on imports scheme.
For further information or to apply to join the scheme phone 1300 130 915 between 8.00am and 6.00pm, Monday to Friday.
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Last Modified: Tuesday, 30 April 2013