slide1
Download
Skip this Video
Download Presentation
EDUCATIONAL BODIES COURSE 1: GST Introduction & Registration

Loading in 2 Seconds...

play fullscreen
1 / 46

EDUCATIONAL BODIES COURSE 1: GST Introduction & Registration - PowerPoint PPT Presentation


  • 93 Views
  • Uploaded on

SMALL BUSINESS, EDUCATIONAL AND COMMUNITY ADVISER EDUCATION PROGRAMME. 1. EDUCATIONAL BODIES COURSE 1: GST Introduction & Registration. TAX REFORM. A Better Tax System. Abolition of hidden indirect taxes Substantial personal income tax reductions The introduction of GST. TAX REFORM.

loader
I am the owner, or an agent authorized to act on behalf of the owner, of the copyrighted work described.
capcha
Download Presentation

PowerPoint Slideshow about ' EDUCATIONAL BODIES COURSE 1: GST Introduction & Registration' - urbano


An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.


- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -
Presentation Transcript
slide1

SMALL BUSINESS, EDUCATIONAL AND COMMUNITY ADVISER EDUCATION PROGRAMME

1

EDUCATIONAL BODIES

COURSE 1: GST Introduction & Registration

a better tax system

TAXREFORM

A Better Tax System
  • Abolition of hidden indirect taxes
  • Substantial personal income tax reductions
  • The introduction of GST
the introduction of gst

TAXREFORM

The introduction of GST
  • A very visible tax - enables hidden taxes to be abolished
  • GST does not increase costs for a GST registered educational body
  • Not all goods and services are subject to GST - many education services will be GST free
impact of gst

TAXREFORM

Impact of GST
  • GST impacts on many facets of the operations of an educational body
  • Incorrect handling of GST can cause financial loss
  • Staff need to be informed and trained
government assistance initiatives

TAXREFORM

Government Assistance Initiatives
  • The New Tax System Advisory Board
  • The role of the Australian Taxation Office
  • The role of the GST Start-Up Assistance Office
role of the gst start up assistance office

TAXREFORM

Role of the GST Start-Up Assistance Office
  • GST and Business Skills - an Action Guide
  • Organisation delivered assistance
  • Adviser education programme
  • Direct assistance programme
the role of the accc

TAXREFORM

The Role of the ACCC
  • Ensuring there is no price exploitation as a result of the tax changes
  • Ensuring that savings from the abolition of hidden taxes are passed on
  • Will oversee pricing changes from 9 July 1999 until July 2002
overview of gst

GSTTERMS

Overview of GST
  • It is important to become familiar with the key GST concepts and correct GST terms
  • Understanding these terms and concepts is the easiest way to start implementing GST in your business
  • This section is an overview of these terms and concepts
  • Remember: GST is a tax on domestic consumption of goods and services
overview of gst1

GSTTERMS

Overview of GST

Four kinds of GST supply

  • Taxable supply
  • GST-free supply
  • Input taxed supply
  • Supply by no-registered persons

All the GST details flowfrom these concepts.

These are the keys to understanding GST

enterprise

GSTTERMS

Enterprise
  • Getting things done
  • Providing the things we need
  • Delivering the goods and providing the services
  • Some enterprises are required to register for GST
  • Other enterprises have the option to register
entity

GSTTERMS

Entity
  • An entity is a person, or an organisation, or any other ‘body’ that has a separate legal identity
  • Single entities may be made up of several enterprises
  • When registering for GST care needs to be taken to register all entities that comprise a single enterprise
  • Group registration may be an option
australian business number abn

GSTTERMS

Australian Business Number (ABN)
  • When an educational body registers for GST it will receive an ABN
  • An ABN can be obtained without registering for GST
  • All educational bodies should obtain an ABN
business activity statement bas

GSTTERMS

Business Activity Statement (BAS)
  • Using this form, the educational body will advise the ATO of its GST liability or refund claim
  • This form will also be used for all tax payments in addition to GST
  • The GST section of this form will be completed every month, or every three months, depending on the basis of GST registration
goods and services

GSTTERMS

Goods and Services
  • Goods are the tangible things we consume
  • Services are things people do for others
  • Goods and services have a cost and, generally, a price
  • Goods and services are what an enterprise produces
taxable supplies

GSTTERMS

Taxable Supplies
  • Supplies of goods and services, connected with Australia, made by registered persons or entities, for consideration
input tax credits

GSTTERMS

Input Tax Credits
  • GST is included in the price of ‘taxable supplies’ an educational body acquires
  • This GST can be claimed as an input tax credit if those supplies were acquired for creditable purposes
  • An educational body must have a Tax invoice to claim the input tax credits
  • The aggregate of input tax credits is deducted from GST collected from customers
  • The net GST is payable to the ATO, or a refund is due
gst free supplies

GSTTERMS

GST-free Supplies
  • GST is not included in the price of GST-free supplies
  • Therefore, no input tax credits are available when you purchase GST-free supplies
  • GST input tax credits can be claimed on taxable supplies acquired by a registered person to make GST-free supplies
gst free supplies1

GSTTERMS

GST-free Supplies
  • Note the categories of supplies that include GST-free supplies
  • Many education supplies are GST, but this has a very specific meaning - CHECK before you decide not to charge GST
input taxed supplies

GSTTERMS

Input Taxed Supplies
  • GST is not charged on input taxed supplies
  • Therefore, no input tax credits are available to the purchaser for input taxed supplies
  • GST input tax credits cannot be claimed on taxable supplies acquired to make input taxed supplies
  • Note the categories of input taxed supplies
consideration

GSTTERMS

Consideration
  • Consideration is what is given in return for supplies made
  • Consideration can be in money
  • Consideration can be in goods or services that have worth in money terms
value

GSTTERMS

Value
  • When used in a GST context, value means the GST exclusive price of the goods or services supplied
  • The price of goods or services consists of the value plus applicable GST
attribution rules

GSTTERMS

Attribution Rules
  • Determine time of GST supplies
  • Cash basis rules
  • Accrual basis rules
the basics of gst
The basics of GST

GST affects almost all transactions

  • GST will apply to transactions that are not GST-free or input taxed
  • If a transaction is a taxable supply, GST is included in the price
  • The rate of GST is 10%
the basics of gst1
The basics of GST

GST affects almost all transactions

  • GST collected by ‘educational bodies’ from its customers periodically gets paid to the ATO
  • In principle a registered educational body is able to get back the GST it has to pay on its purchases
  • GST this is not a tax on the educational body; it is not a cost to the educational body
the tax fraction
The tax fraction

The GST is 1/11th of the price charged or paid

  • The GST inclusive price includes both a GST element and the cost / income element
gst transactions
GST transactions

Many transactions may involve a supply for GST purposes

  • For GST purposes transactions are called supplies
  • If a transaction is not treated as a taxable supply, there must be valid reasons why not
gst transactions1
GST transactions

Many transactions may involve a supply for GST purposes

  • If the transaction is a supply, it has GST implications
  • The attribution rules determine in which GST period:
    • GST output tax has to be accounted for
    • GST input tax credits may first be claimed
contracts
Contracts

All contracts should address GST issues

  • If the contract doesn’t pass the GST on to the customer, the educational body will wear the cost
  • Special rules provide relief from GST for some contracts entered into pre 1 July 2000 but completed after 1 July 2000
  • The ATO has released a fact sheet / charts which summarise these rules
limits on input tax credits
Limits on Input Tax Credits

There are some transactions for which you cannot claim input tax credits

  • An educational body cannot claim input tax credits on things bought to make input taxed supplies
  • Input tax credits are not allowed in some cases where income tax deductions are limited
  • Input tax credits are not available for private expenses
gst inclusive
GST inclusive

GST taxable supplies should always be priced GST inclusive

  • Setting prices / quoting
  • Signs, advertisements, price tags, catalogues
  • Alternative of GST inclusive pricing or the ‘value’ of the supply plus the amount of GST stated in dollars
who can register for gst
Who can register for GST?

To register for GST you must be an entity conducting an enterprise

  • Businesses, educational bodies and entities conduct enterprises
  • Generally the GST net extends only to supplies connected with Australia
gst registration
GST Registration

Most educational bodies should register for GST

  • Last registration date 31 May using ABN registration form
  • Consider cash or accrual basis
  • Consider monthly or quarterly returns
  • Choices exist for some organisations
cash basis of registration
Cash basis of registration

The ‘cash basis’ allows for simpler accounting systems

  • Only pay to the ATO the GST included in the payments received
  • Only claim from the ATO the GST in the payments made that are covered by tax invoices
accrual basis of registration
Accrual basis of registration

Use an accrual basis only if required to, or it provides substantial cash flow or other commercial advantages

  • To calculate GST on an accruals basis include accounts owed by and owed to the business
  • Identify GST on “outputs”
    • taxable supplies made by the business
accrual basis of registration1
Accrual basis of registration

Use an accrual basis only if required to, or it provides substantial cash flow or other commercial advantages

  • Identify receivable GST on “creditable inputs”
    • taxable supplies acquired to make taxable or GST-free supplies
  • Accrual basis available to all
quarterly or monthly gst returns
Quarterly or monthly GST returns

Many educational bodies may find monthly returns are best

  • Cash flow or other commercial advantages may prompt monthly GST reporting
tax invoice
Tax Invoice

Always make sure a Tax Invoice is obtained

  • A tax invoice is your evidence to get input tax credits
  • Needs to contain certain information
  • Different tax invoice levels exist
    • Up to $50 (before GST)
    • More than $50 and up to $1,000 (before GST)
    • Greater than $1,000 (before GST)
records
Records

Keep a record of all transactions to keep track of GST

  • Record all outflows
  • Record all inflows
  • File tax invoices received
  • Record debtors and creditors
systems
Systems

Make sure the GST Information needed to complete the BAS return is readily available

  • Keep GST records up to date on a regular basis
  • Ensure the GST information and records is accurate and readily available, when required
controls
Controls

Always have checks in place to make sure GST is calculated correctly

  • Make sure you get it right
  • Nothing missed - Nothing wrong
  • Automatic checks and balances
  • No tax invoice from a supplier - no payment!
risks
Risks

Always remember GST

  • Not identifying transactions which constitute taxable supplies
  • Misclassifying a taxable supply as a GST-free supply
  • Charging GST and not paying it to the ATO
  • Not including GST in prices
risks1
Risks

Always remember GST

  • Not collecting and holding valid tax invoices covering input tax credit claims
  • Not identifying GST input tax credits and not claiming refunds
  • Claiming a GST input tax credit for costs of making input taxed supplies
  • Spending GST owing to the ATO
transition
Transition

Contracts entered into before 1 July 2000 and which span that date can have tax implications

  • Special transition rules apply
  • Need to check existing contracts now
  • Refunds available for WST paid on certain stock on hand at 30 June 1999
planning items
Planning items

The planning for GST starts now

  • Register for GST
  • Printing invoices and price lists
  • Point of sale recording
gst registration flow chart
GST REGISTRATION FLOW CHART

BASIC REGISTRATION RULES

Does the Organisation only make Input Taxed Supplies

You are unable to register for GST

YES

NO

Is this an organisation with a current annual turnover greater than $100,000?

You must register for GST

YES

NO

YES

Do you expect your turnover to exceed $100,000 in the next 12 months

You may choose whether to register or not

NO

gst return period folw chart
GST RETURN PERIOD FOLW CHART

Does the business have a turnover of GST supplies and GST free supplies in excess of $20,000,000

NO

Does the business primarily make GST supplies

Does the business primarily make only GST free supplies

NO

YES

YES

YES

Registration on a quarterly basis may improve your cash position

Registration on a monthly basis may improve your cash position

You must register on a monthly basis

ad