GST refers to (Goods and Services Tax) and it is applicable to all the businesses that are registered for the tax. It is generally added to the price of the goods or services that are being offered to the customers. Businesses charge an extra amount from the customers, so that they can then pay it to the government as GST.
GST In Australia
The Howard Liberal government introduced GST in Australia on July 1, 2000. Australian businesses which have registered for the GST need to pay the tax to the Australian Taxation Office (ATO). The current GST rate applicable in Australia is 10%.
Why Paying GST Is Important?
- GST is considered as an important factor as it is expected to improve the overall financial growth of the nation.
- There are several indirect taxes imposed on goods and services, so by paying GST, businesses can avoid all the indirect taxes which will eventually reduce their overall cost for the goods and services being offered.
- It contains no unseen taxes and the cost of doing business will be lesser.
- It would help producer and consumer both as prices would fall and the consumption would be increased.
- There are different tax layers so by paying GST; you just need to pay the tax once instead of paying it multiple times.
When it comes to adding GST in amount, it is very easy as we have to multiply the amount by gst percentage and divide by 100.
Total Amount is $1000, Gst will be $1000 * (GST percentage/100) = $100.
GST (inclusive) Amount will be $1000 + $100 = $1100.
However, subtracting GST from any Amount is bit tricky.
For Example: If GST(inclusive) Amount is $1000,
GST(exclusive) Amount will be $1000/ (1 + (gstPercent/100)) = $909.09
You need to register yourself for GST if:
- Your business has a GST turnover of $75,000.
- The imported digital goods (downloading apps, movies, e-books and games) or services are being sold.
- The legal or architectural services are being provided.
- You wish to claim for fuel tax credits for your dealings.