GST Registration

Q&A Tax

Question :

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?  

 

Answer :

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).  

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