A GST branch is formed when a business entity separately registers its branch to suit the structural, management and accounting arrangements of the organisation. When an entity registers a branch for GST purposes, the entity is called the 'parent entity'.
A GST branch accounts for GST separately from their parent entity.
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Generally, a registered entity is able to register its branch as a GST branch if:
- the branch has an independent system of accounting
- the branch can be separately identified (either because of its distinctive activities or location)
- the entity carries on (or intends to carry on) an enterprise through the branch, and
- the entity is not a member of a GST group.
An 'independent system of accounting' is one that can produce the results of each branch without relying on the accounts of the parent entity, another branch or any other entity. It is not simply a cost centre in the parent entity's accounts.
Entities can register as many of their branches as they wish, provided they satisfy these requirements.
How to register a GST branch
To register a GST branch, the parent entity applies using this form:
We'll notify the parent entity of the branch's unique GST branch registration number.
How to operate a GST branch
The branch effectively operates as a distinct entity for reporting purposes. This means:
- GST is payable on taxable sales between GST branches and the parent entity
- GST is payable on taxable sales between GST branches
- GST credits can be claimed on both of these transaction types.
When a branch makes a sale, purchase or importation, it accounts for any GST payable or GST credits claimable, and for any adjustments relating to the transaction.
An activity statement for each GST branch must be lodged for each tax period that applies to the parent entity. The parent entity is responsible for lodgment of the activity statement, but it can be prepared and lodged by either the parent entity or the GST branch.
The parent entity must lodge a separate activity statement for any transactions not included in the activity statements of the GST branches.
The parent entity is liable for any GST amounts that the branches owe to the ATO.
When a GST branch makes a taxable sale, it issues a tax invoice that must show the registration number of the GST branch (which incorporates the ABN of the parent entity).
The branch must also show its registration number on any adjustment notes it issues.
How to cancel a GST branch registration
The parent entity must apply to us to cancel the GST registration of a branch within 21 days if it ceases to carry on an enterprise through the branch.
In other circumstances, the parent entity can ask us to cancel the GST branch provided the branch has been registered for 12 months or more.
However, we can still cancel the branch's registration if we're satisfied that the parent entity:
- is not carrying on an enterprise through the branch
- will not carry on an enterprise through the branch in the following 12 months.
In these circumstances we may cancel the registration even without a request being lodged.
A branch registration ceases to have effect if the parent entity's GST registration is cancelled.
Effect on GST turnover
An entity must register for GST when its GST turnover exceeds certain thresholds. When an entity operates with a branch structure, these thresholds apply to the entity as a whole, including the turnover of any branches.
A GST branch is formed when a business entity separately registers its branch to suit the structural, management and accounting arrangements of the organisation.