Simpler BAS GST bookkeeping guide

The information provided here is for use as a general GST bookkeeping guide only. If you are unsure about any of this content you should seek advice from a tax professional or refer to this guide’s links to more information.
Find out about:

  • Taxable sales
  • GST-free sales
  • Purchases with GST in the price
  • Purchases with no GST in the price or where no GST credits can be claimed
  • Mixed purchases (both GST and GST-free components)
  • Items not reported on the BAS for GST purposes

See also:

More GST bookkeeping and reporting information.

 

Taxable sales

Taxable sales are sales where GST is payable. When completing your BAS you must report taxable sales at:

G1 Total sales
1A GST on sales
Table 1 below contains a list of taxable sales and their descriptions. You can use this information to identify your taxable sales.

 

Table 1: Taxable sales

Transaction Transaction description GST tax code Completing your BAS
Goods and services Sales of goods and services in the course of your business or enterprise (ie trading stock) GST G1 Total sales
1A GST on sales
Assets Sale of business assets such as office equipment, machinery and motor vehicles, including trade-ins and transfers of ownership GST G1 Total sales
1A GST on sales
Property* If you are dealing with property (eg you sell, lease or develop) you may have to pay GST on the sale or lease of the property. GST G1 Total sales
The GST amount on property sales may be calculated on the full value of the sale or on the margin for the sale. You should seek advice , or for more information see GST and property 1A GST on sales

* Transactions with common GST mistakes

 

GST-free sales

GST-free sales are sales where GST is not payable but you may claim GST credits for business inputs.
When completing your BAS you must report GST-free sales at G1 Total sales.
Table 2 below contains a list of GST-free sales and their descriptions. You can use this information to identify your GST-free sales.

 

Table 2: GST-free sales

Transaction Transaction description GST tax code Completing your BAS
Fresh food Most basic foods and beverages, subject to certain exceptions. For more information see Detailed food list No GST G1 Total sales
Medical and health Most medical, health and care services, medicine and eligible medical aids and appliances. For more information see GST and medical services No GST G1 Total sales
Education Most education courses, course materials and related excursions or field trips. For more information see GST-free sales No GST G1 Total sales
Childcare Eligible childcare services. For more information see GST-free sales No GST G1 Total sales
Exported goods and services Export sales of goods (must be physically exported from Australia within certain timeframes) and services and other things provided to customers outside Australia. Specific rules apply to exports. For more information see Exports and GST No GST G1 Total sales
Sale of business Sale of a business as a going concern where certain conditions are met. For more information see GST-free sales No GST G1 Total sales
Input taxed sales (sales where GST is not payable and you generally can’t claim GST credits for business inputs)* Supplies of residential rental premises and sales of existing residential premises (excluding new homes or commercial premises). For more information see Common GST errors and property No GST G1 Total sales
Financial sales which include most transactions relating to money such as lending money, selling shares or other securities. For more information see Charging GST and claiming GST credits
Certain fund-raising activities of charities, gift-deductible entities and government schools. For more information see GST and fundraising

* Transactions with common GST mistakes

 

Purchases with GST in the price

When completing your BAS you must report purchases with GST in the price at 1B GST on purchases.
Table 3 below contains a list of purchases with GST in the price and their descriptions. You can use this information to identify
your purchases with GST in the price.

 

Table 3: Purchases with GST in the price

Transaction Transaction description GST tax code Completing your BAS
Goods and services You can generally claim a credit for GST included in the price of any goods and services you buy or import for your GST registered business. Examples include: GST 1B GST on purchases
capital purchases such as motor vehicles, plant and equipment. Check to ensure capital purchases are allocated to the appropriate capital account.
inventory purchases (ie trading stock)
normal running expenses such as leases, equipment rentals, stationery and repairs.
For more information see Claiming GST credits
Imported goods (>$1,000) Imports of most goods where customs value is greater than $1,000 and GST was paid. For more information see GST and imported goods GST 1B GST on purchases
Second-hand goods from GST registered business OR ≤$300 value* If you purchase a second-hand item from a GST-registered business (excluding charitable organisations), GST credits may be claimed. GST 1B GST on purchases
Where second-hand items $300 or less are purchased from a private seller or non-registered business for resale (ie trading stock), GST credits may be claimed even though the price did not include GST. For more information see Purchases for $300 or less
Business expenses for entertainment subject to fringe benefits tax (FBT)* You may claim GST credits for entertainment expenses you incur in providing entertainment that is subject to FBT. For more information see FBT and entertainment for small business GST 1B GST on purchases
If you have elected to use the 50/50 split method for FBT purposes, then GST may be claimed on 50% of the expenses only
Hire Purchase* GST may be claimed on all components (including associated fees and the credit component) for hire purchase agreements entered into on or after 1 July 2012. Treat a hire purchase agreement as a standalone purchase in a tax period. Do not treat it as a purchase you make on a progressive or periodic basis. For more information see GST – Hire purchase and leasing GST 1B GST on purchases
Lease agreements* Lease agreements are generally subject to GST. How you claim GST credits depends on whether you account for GST on a cash or non-cash (accruals) basis. For more information see GST – Hire purchase and leasing GST 1B GST on purchases
Domestic business-related travel* GST credits for business-related domestic travel may be claimed, but must be apportioned between your business and private use. Expenses include: GST 1B GST on purchases
airfares
taxi fares
fares for ride-sourcing services.
For more information see Business travel expenses

* Transactions with common GST mistakes
A valid tax invoice for purchases over $82.50 is required to claim a GST credit.

 

Purchases with no GST in the price or where no GST credits can be claimed

Table 4 below contains a list of purchases with no GST in the price or where no GST credits can be claimed. You can use
this information to identify your purchases with no GST in the price or where no GST credits can be claimed.

 

Table 4: Purchases with no GST in the price or where no GST credits can be claimed

Transaction Transaction description GST tax code Completing your BAS
GST-free goods and services Purchases of GST-free goods and services. These include:
most basic foods and beverages subject to certain exceptions. For more information and a detailed food list see Detailed food list
most medical, health and care services, medicine and eligible medical aids and appliances, For more information see GST and medical services. No GST Not reported on BAS for GST
Check your invoice if in doubt. For more information see GST-free sales
Purchases from business not registered for GST Goods and services purchased from a business that is not GST-registered. Generally a business is only required to register for GST if their GST turnover is over $75,000 ($150,000 for not-for-profit organisations), although they may voluntarily register No GST Not reported on BAS for GST
Life and health insurance Insurance premiums for life insurance (input taxed) and health insurance (GST-free) No GST Not reported on BAS for GST
Motor vehicle private sale Purchase of a motor vehicle from a private seller not registered for GST No GST Not reported on BAS for GST
Imports ($1,000 or <)* Imports of goods where the customs value is $1,000 or less and no GST was paid. For more information see GST and imported goods No GST Not reported on BAS for GST
Business expenses for FBT-exempt employee benefits* Some employee benefits are exempt from FBT and, even though the price of related business expenses may include GST, GST credits cannot be claimed. Exempt benefits include: No GST Not reported on BAS for GST
minor benefits <$300 that satisfy five factors
food or drink provided to current employees on a working day on business premises
taxi travel to or from an employee’s place of work to an external venue (eg home or restaurant).
For more information see Minor benefits exemption
Second-hand goods from charity OR >$300 value* Purchase of a second-hand item from a charitable organisation is GST-free. No GST Not reported on BAS for GST
Where second-hand items over $300 are purchased from a private seller or non-registered business for resale (ie trading stock), GST credits may be claimed even though the price did not include GST. However, you must wait until you sell the item you have purchased to claim the GST credit.
If you are eligible to use the global accounting method, GST credits may be accumulated but you cannot claim these GST credits directly at 1B. Instead, use them to cancel out the GST you would otherwise pay to us on the items you sell. For more information see The global accounting method
International travel* International travel, including domestic leg of an overseas trip, is GST-free No GST Not reported on BAS for GST
Purchases for input- taxed sales * Even if GST is included in the price, you cannot claim GST credits for purchases you intend to use to make input-taxed supplies (eg those related to providing residential accommodation). You should seek advice from a tax professional, or for more information see When you cannot claim a GST credit No GST Not reported on BAS for GST
Property* Where you buy: No GST Not reported on BAS for GST
an existing residence
property as a private sale (see ‘Items not reported on the BAS for GST purposes’ for appropriate GST tax code.
new residential property for rental purposes
GST-free farmland, property or land under the margin scheme (even if GST is included in the price)
residential premises such as a room, unit or an apartment to lease to a business that supplies it as hotel accommodation with other facilities.
You should seek advice from a tax professional, or for more information see Common GST errors and property

* Transactions with common GST mistakes

 

Mixed purchases (both GST and GST-free components)

Mixed purchases contain both GST and GST-free components. When completing your BAS you need to report the GST component
in these transactions at 1B GST on purchases. You do not need to report the GST-free component.
Table 5 below contains a list of mixed purchases and their descriptions. You can use this information to identify and correctly
report your mixed purchases for GST purposes.
With mixed purchases there is an option to enter the total amount of an invoice and manually override the GST amount if
it is not 1/11th. This option is subject to accounting software having the functionality to override the GST amount.

 

Table 5: Mixed purchases (both GST and GST-free components)

Transaction Transaction description GST tax code (GST/No GST OR manual override option) Completing your BAS
Utility bills: GST credits may be claimed on: GST GST – option to manually override GST amount for entire transaction 1B GST on purchases
electricity connection fees
telephone supply and usage charges
internet domestic mobile and landline call usage
Utility bills: GST credits cannot be claimed on: No GST GST – option to manually override GST amount Not reported on BAS for GST
electricity interest charged on late payments
telephone international and roaming calls
internet
Government rates and water In some localities a commercial rubbish collection fee may be applied. GST credits may be claimed on this component only GST GST – option to manually override GST amount 1B GST on purchases
Government rates and water Government (council) rates and water supply charges are BAS- exempt. GST credits cannot be claimed on: No GST GST – option to manually override GST amount Not reported on BAS for GST
interest charged on late payments
ambulance levy (some states and territories only)
Mixed private and business use* For the proportion of business expense related to your business, GST credits may be claimable. GST 1B GST on purchases
You must accurately apportion your expenses between private and business use. You need to be able to substantiate your claims – keeping a logbook and accurate records are important
Mixed private and business use* For the proportion of private expense not related to your business, GST credits are not claimable Out of scope/GST exempt. No option to manually override GST amount. Not reported on BAS for GST
Purchase motor vehicle from GST- registered dealer or other business* GST credits may be claimed on the price of the vehicle and insurance components (eg compulsory third party, motor injury or transport accident charge). GST GST – option to manually override GST amount 1B GST on purchases
Purchase motor vehicle from GST- registered dealer or other business* GST credits are not claimable on the following components not subject to GST: No GST GST – option to manually override GST amount Not reported on BAS for GST
stamp duty on car
stamp duty on motor vehicle insurance
government registration fee
Motor vehicle registration* GST credits may be claimed on the insurance component of the registration (eg compulsory third party, motor injury and transport accident charge). GST GST – option to manually override GST amount 1B GST on purchases
Motor vehicle registration* GST credits are not claimable on the following components not subject to GST: No GST GST – option to manually override GST amount Not reported on BAS for GST
stamp duty on motor vehicle insurance
government registration fee
Insurance for business use* GST credit is claimable on the insurance premium component only. GST GST – option to manually override GST amount 1B GST on purchases
Insurance for business use* GST credits are not claimable on the following components of insurance for business use: No GST GST – option to manually override GST amount Not reported on BAS for GST
stamp duty component
any settlement payouts as they are not to be reported on your BAS
private use portion

* Transactions with common GST mistakes

 

Items not reported on the BAS for GST purposes

 

Table 6: Items not reported on the BAS for GST purposes

Transaction Transaction description GST tax code Completing your BAS
BAS-exempt transactions for GST Private expenses unrelated to your business* Out of scope/GST exempt Not reported on BAS for GST
Depreciation
Dividends received
Interest paid
Fines
Most Australian government taxes
Bank fees and charges
Principal payments on finance and loan interest
Stamp duty
Sale of your home (main residence)
Superannuation
Salary and wages
Non-deductible entertainment expenses
Donations

* Transactions with common GST mistakes

 

More GST bookkeeping and reporting information

Simpler BAS – Find out about Simpler BAS eligibility and where to find support for your transition to Simpler BAS
Issuing tax invoices – Outlines what tax invoices must include
Cash vs non-cash accounting – Your GST accounting method is important when completing a BAS as it affects when different amounts should be reported
Due dates for lodging and paying your BAS
Correcting GST errors – Explains how to correct GST errors you made on an activity statement
Time limits on GST refunds – Time limits apply for claiming outstanding indirect tax refunds and GST credits for purchases
Adjustments – Explains how to increase or decrease the net amount of GST a client pays or is refunded in a reporting period (ie they change labels 1A and 1B)

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