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Edited version of your written advice
Authorisation Number: 1051450758876
Date of advice: 8 November 2018
Ruling
Subject: GST and registration
Question
Is client (you) required to remit GST on sales prior to the date of GST registration?
Answer
No, you make taxable sales from the date you are registered for GST or required to be registered.
Relevant facts and circumstances
● Your turnover was below $75,000 in the previous financial year.
● Your turnover was not expected to exceed the threshold.
● You self-assessed that your turnover would exceed the $75,000 threshold and you registered for GST.
● You have not calculated GST for sales you made prior to registration.
● You commenced charging GST to clients from your effective date of GST registration.
Reasons for decision
Division 23 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) provides for when an entity is required to be registered, or may register, for GST. Section 23-5 provides that you are required to be registered for GST if you are carrying on an enterprise and your GST turnover meets the registration turnover threshold.
Regulation 23-15.01 of the A New Tax System (Goods and Services Tax) Regulations 1999 (the GST Regulations) states:
For paragraph 23-15(1)(b) of the Act, the amount of $75,000 is specified.
In your case, you have stated you are carrying on an enterprise and your GST turnover is more than $75,000, which meets the registration turnover threshold amount of $75,000. Therefore, you are required to be registered for GST under section 23-5.
Accordingly you registered for GST on effective date.
Section 9-5 of the GST Act provides that you make a taxable supply when:
● you make a supply for consideration; and
● the supply is made in the course or furtherance of an enterprise that you carry on; and
● the supply is connected with the indirect tax zone (Australia}); and
● you are registered, or required to be registered; and
● the supply is neither GST-free nor input taxed.
You meet all the positive arms of section 9-5 of the GST from the effective date of registration unless you were required to be registered at an earlier date as the supplies you make are for consideration and are made in the course or furtherance of the enterprise and connected with Australia and you are registered.
In your case unless you were required to register at an earlier date, you commenced making taxable supplies with effect from the effective date of registration.
Similarly you are entitled to input tax credits on creditable acquisitions from the date you are registered for GST – or required to be registered. Unless you are required to be registered at an earlier date, you are entitled to claim GST credits on tax invoices issued to you from 01 January 2018.
Therefore for the periods when you were not registered for GST – or not required to be registered - the goods and services you supplied in Australia were not taxable.
Relevant legislative provisions
A New Tax System (Goods and Services Tax) Act 1999 - section 9-5
A New Tax System (Goods and Services Tax) Act 1999 - section 23-5
A New Tax System (Goods and Services Tax) Regulations 1999 - Regulation 23-15.01