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  • When to charge GST

    If your organisation is registered for GST, or required to be, you will generally be liable to pay GST to us on the sales of your goods and services. These are called taxable sales.

    There are other types of sales where your organisation is not liable to pay GST to us. These are:

    • GST-free sales
    • input-taxed sales.

    Taxable sales

    You are liable to pay GST to us when your organisation makes a taxable sale. Your organisation makes a taxable sale if it is registered or required to be registered for GST and:

    • you make the sale for payment (whether monetary or non-monetary)
    • you make the sale as part of the organisation's activities
    • the sale is connected with the indirect tax zone
    • the sale is not GST-free or input taxed.

    The GST you are liable to pay is equal to 1/11th of the sale price.

    Your organisation can claim GST credits for the GST included in the price of purchases it uses to make a taxable sale.

    GST-free sales

    Your organisation is not liable to pay GST on a GST-free sale. GST-free sales include:

    • basic food items – such as fruit and vegetables, meat, bread and plain milk
    • some education, child care and health services
    • some exports.

    Your organisation can claim GST credits for the GST included in the price of purchases it uses to make a GST-free sale.

    Input-taxed sales

    Your organisation is not required to pay GST when it makes an input taxed sale. Input taxed sales include:

    • the sale of residential property (unless it is new)
    • leasing of residential property
    • financial transactions, such as providing a loan.

    Your organisation cannot claim GST credits for the GST included in the price of purchases it uses to make an input taxed sale.

    Collecting and claiming GST on different types of sales

    It is important to understand which type of sales your organisation makes because this affects whether your organisation is liable to pay GST on the sale and whether it can claim GST credits on the purchase – see the table below.

    Collecting and claiming GST on different types of sales

    Type of sale

    Do you collect GST on your sales?

    Can you claim GST credits on your purchases?

    Taxable

    Yes

    Yes

    GST-free

    No

    Yes

    Input taxed

    No

    No

    See also:

    Last modified: 13 Apr 2018QC 55093