Tuesday, January 01, 2008
Components of GST:
Registered entity (person or company) must obtain
ABN (Australian Business Number) for organization and Independent companyfrom ATO (Australian Taxation Office) and Based on the entity major business activities and select following status when registered with ATO:
o GST status or
o GST – Free status or
o GST – input tax status
Exemption:
if the entity yearly turnover or estimated turnover is less then $75.000, the entity does not need to GST be registered with ATO, that mean the entity can not charge GST on the supply and claim GST back from ATO which the entity has spend on purchase. The entity may always face 46.5% of supply amount (see page 5 - withhold supplier who has NO ABN)
Therefore in order to avoid 46.5% withhold and lower down purchases costs most of entity has volunteer to be a registered.
