Question

Briefly summarise GST regulations and obligations with reference to GST classifications and relevant materials and provide the correct BAS code for each of the tabled activities. (150–160 words) (Please type up your answer) (In Australian Accounting Environment)

Activity :-

1/. Bas Code for Total sales

2/. Bas Code for Export sales

3/. Bas Code for Other GST-free sales

4/. Bas Code for Capital purchases

5/. Bas Code for Non-capital purchases

6/. Bas Code for GST on sales

7/. Bas Code for GST on purchases

Answer 1

S.No	Type	Description	Report	Do not Report	BAS- Code
1	Bas Code for Total sales	Under Australian accounts method, report total sales at G1. Remove GST from the amount reported at G1 and have chosen to show amounts as GST-exclusive.	Total amounts for sales includes: goods or services sold/supplied sales of trading stock the sale of business assets the sale, lease or rental of land and buildings Memberships earnings from financial supplies goods and services provided in return for government grants and some private sector grants cancelled lay-by sales forfeited customer security deposits employee contributions for fringe benefits the sale of a debtor property that was made to satisfy the debt owed creating, granting, transferring, assigning or surrendering a right entry into, or release from, an obligation to – do anything – refrain from an act – tolerate an act or situation providing goods or services in return for sponsorship 2. Export sales If GST-free sale of exported goods and show the free on board value . 3. Other sales: hire purchase sales sales made through an agent sales made as agent for a non-resident coin-operated machine sales n sales for which part of the payment is received before the total payment is known sales made under a conditional contract or a contract subject to retention clause. 4. Sales of excisable goods in bond: Report at G1 the sale price plus 110% of the excise duty that would have applied if the goods had been entered for home consumption	dividends received donations and gifts received private sales that are not related to business, salary and wages you receive government pensions and allowances amounts received from hobby activities any trust and partnership distributions received tax refunds receipts for services provided under a pay (PAYG) voluntary agreement unless it is made to a business that cannot fully claim GST credits for the services business loans received the amount on the sale of a luxury car that is the luxury car tax (LCT) paid or payable taxes, fees and charges received that don’t include GST amounts received for sales not connected with Australia, unless a special rule makes the sales taxable, GST-free or input taxed. anything that is constituted by an insured settling a claim under an insurance policy or in settling a claim under a compulsory third-party scheme.	G1
2	Bas Code for Export sales	Under Australian accounts method, report total sales at G2. Remove GST from the amount reported at G2 and have chosen to show amounts as GST-exclusive. Remember that all amounts reported at G2 should also have been reported at G1.	The free on board value of export goods (that is, the value used for Customs purposes) if the export is GST?free because: you export the goods from Australia within 60 days after either – the day you receive any payment for the sale – you issue an invoice for the sale before you receive any payment (there are some circumstances in which the purchaser can export the goods instead of you) you sell goods and the payment was to be provided as instalments under a contract that requires the goods to be exported and you exported them before or within 60 days after – the day on which you received any of the final instalment, or – the day you issue an invoice for the final instalment before you receive any of the final instalment (there are some circumstances in which the purchaser can export the goods instead of you) n you sell an aircraft or ship that was paid for in instalments under a contract that requires the aircraft or ship to be exported, but only if the purchaser exports it from Australia within 60 days after the earliest day in which at least one of the following occurs – you receive any of the final instalment of payment for the sale – you issue an invoice for that final instalment– you deliver the aircraft or ship to the purchaser or (at the purchaser’s request) to another person n you sell an aircraft or ship, but only if the purchaser exports it from Australia under its own power within 60 days after taking physical possession of it n you sell a ship, but only if – the ship is a new recreational boat – you or the purchaser export the ship within 12 months, and – the ship is used only for recreational/non-commercial purposes while it is in Australia n you sell aircraft or ships stores or spare parts for use, consumption or sale on international flights or voyages, whether or not part of the flight or voyage involves a journey between places in Australia Amounts for the: n sale of goods used in the repair, renovation, modification or treatment of other goods from outside Australia and their destination is outside Australia. The goods must be attached to (or become part of) the other goods or become unusable or worthless as a direct result of being used to repair, renovate, modify or treat the other goods n repair, renovation, modification or treatment of goods from overseas whose destination is outside Australia after the repair, renovation, modification or treatment n sale of goods that satisfy certain criteria and are exported by travellers as accompanied baggage.	GST-free services unless they relate to the repair, renovation, modification or treatment of goods from overseas and their destination is outside Australia n freight and insurance to transport the goods outside Australia, or other charges imposed outside Australia in the free on board value n international transport of goods or international transport of passengers.	G2
3	Bas Code for Other GST-free sales		You report at G3 all GST-free sales that you have made including: n basic food, including food for human consumption n most health and education services n beverages (including water) for human consumption listed in Schedule 2 of A New Tax System (Goods and Services Tax) Act 1999 n eligible childcare services n certain sales by eligible charities, gift deductible entities or government schools where specific conditions are satisfied, including sales for a token amount of payment and raffles and bingo n sales made to a resident of a retirement village by an eligible charity of accommodation in a retirement village or services relating to the supply of that accommodation and the provision of meals n religious services provided by religious institutions that are integral to practicing that religion n sales of going concerns - certain conditions must be satisfied including that you and the purchaser have agreed in writing that the sale is of a going concern and you supply all things necessary for the continued operation of the business n the first sale of precious metal after its refining by, or on behalf of, the seller, and – it was refined by a precious metal refiner, and – the sale was made to a dealer in precious metal n sales of water (except if it is provided in, or transferred into, containers with a capacity of less than 100 litres) n certain sewerage services including emptying of septic tanks and storm water draining n international transport and mail that meets certain criteria (phone 13 28 66 for more information) n certain services in arranging international travel.	You do not report the following at G3: n export amounts - these are shown at G2 n basic food, including food for human consumption that is – for consumption on the premises from which it is sold (for example, cafes and restaurants) – hot takeaway food – a food type listed in Schedule 1 of A New Tax System (Goods and Services Tax) Act 1999 (certain prepared food, confectionery, savoury snacks, bakery products, ice cream foods and biscuits) or foods that are a combination of foods where at least one food type in the combination is listed in Schedule 1 n sales of water that are provided in, or transferred into, containers with a capacity of less than 100 litres.	G3
4	Bas Code for Capital purchases	What are capital purchases? Capital purchases are capital items you purchase including: n business assets you purchase such as machinery, cash registers, computers and cars (these items are also referred to as plant and equipment) n land and buildings. These assets can be brand new or second-hand, and may be imported. Things that are not capital items include: n trading stock n normal running expenses such as stationery and repairs n equipment rentals or leases	You report the following at G10: n amounts for capital items such as – machinery and equipment – cash registers – office furniture – computers – cars n the GST-inclusive market value of any capital item you receive from your associate for no payment or for less than the GST-inclusive market value, if either – you have not received the thing wholly or partly for your business – the thing received is wholly or partly of a private or domestic nature – the thing received relates wholly or partly to making sales that would be input taxed. n the amount paid or payable for a purchase or importation of a car that exceeds the car limit for the relevant financial year, only if you are specifically entitled to quote an ABN for the purchase or importation.	You do not report the following at G10: n purchases and importations that are not related to your business n the stamp duty component of any capital purchases n the amount paid or payable for a purchase or importation of a car that exceeds the car limit for the relevant financial year n anything that is constituted by an insurer settling a claim under an insurance policy or by an operator of a compulsory third-party scheme settling a claim under a compulsory third-party scheme (if you are not an operator of such a scheme).	G10
5	Bas Code for Non-capital purchases	Non-capital purchases may include: n trading stock n normal running expenses such as stationery and repairs, or equipment rentals or leases.	You report the following at G11: n all amounts for your business purchases (other than those reported at G10) relevant to the reporting period such as – most business purchases, including services and stock bought for resale – the price of any insurance premiums related to your business (except for third-party motor insurance premiums relating to a period of cover starting before 1 July 2003) less the amount of stamp duty – purchases paid for by an employee, agent, officer or partner that you have reimbursed in specified circumstances – capital items costing $1,000 or less that have not been reported at G10 – intangible supplies purchased from off-shore that are of a non-capital nature n the GST-inclusive market value of any non-capital item you receive from your associate for no payment or for less than the GST-inclusive market value, if either n you have not received the thing wholly or partly for your business – the thing received is wholly or partly of a private or domestic nature – the thing received relates wholly or partly to making supplies that would be input taxed	You do not report the following at G11: n purchases and importations that are not related to your business n an amount for a purchase or importation of a car that exceeds the car limit for the relevant financial year, unless you are specifically entitled to quote an ABN in relation to the supply to which the purchase relates or in relation to the importation n the price of any third-party motor insurance premiums relating to a period of cover starting before 1 July 2003 n anything that is constituted by an insurer settling a claim under an insurance policy or by an operator of a compulsory third-party scheme settling a claim under a compulsory third-party scheme (if you are not an operator of such a scheme) n salary and wages you pay n superannuation contributions you pay for employees.	G11
6	Bas Code for GST on sales	GST ON SALES OR GST INSTALMENT You report at 1A the total amount of GST (including any relevant adjustments) you are liable to pay us for the reporting period. The amount you report and pay will depend on the reporting and paying option you use.	When completing the Annual GST return, if you use the accounts method, you can take this amount directly from your records.		1A
7	Bas Code for GST on purchases	1B GST ON PURCHASES report at 1B the total amount of GST credits (including any relevant adjustments) you are eligible to claim from us. The amount you report will depend on the reporting and paying option you use	When completing your Annual GST return, if you use the accounts method, you can take this amount directly from your records.		1B