In July 2017, ABC Pty Ltd commenced a business of selling protective covers for mobile phones. The company purchases the covers in bulk from a local supplier and sells the covers to end consumers both in Australia and overseas.
At the time the business commenced, it estimated that the first year’s gross turnover will be $60,000 from local sales and $16,000 from exports. In June 2018, the actual figure was $65,000 from local sales and $13,000 from exports.
Note: all sales figures are GST-exclusive.
Should ABC Pty Ltd register for GST? And When?
ABC Pty Ltd was required to register for GST in July 2017 when its GST turnover met the registration turnover threshold of $75,000 (GST ACT s23 -15).
The registration turnover threshold requires consideration of both the current GST turnover and the projected GST turnover. In July 2017, the projected GST turnover was $76,000 ($60,000 + $16,000) which exceeds the threshold.
Note: the export sales are likely to be GST-free (GST Act s 38-185) but GST-free supplies are not excluded from the registration turnover calculation (GST Act s 188-15).