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 (in Australian Accounting Environment) (Please type your answer). (150–160 words)

Answer 1

The goods and services tax (GST) in Australia is an Indirect tax levied at 10% on most of the goods and services. It is levied on most transactions in the production process, however the same is refunded to parties in the value addition chain of production other than the final consumer, who bears the final brunt

The tax was introduced by the Howard Government on 1 July 2000 by replacing the federal wholesale sales tax. It was designed to phase out a number of State and Territory Government taxes, duties and levies such as banking taxes and stamp duty.

All businesses whose turnover exceeds minimum threshold are required to register under GST. However businesses whose turnover is below the threshold may voluntarily register. A registered business must collect from its customers GST on taxable goods and services, and is entitled to credit of any GST it has paid on its expenditures on such goods and services and capital purchases, as well commonly reffered to as input tax credits. A business must periodically submit Business Activity Statements i.e. monthly, quarterly or annually statements and at the same time pay the GST owed to the government. In case more GST is paid than collected than a refund is issued by the tax office.