GST Prac TEST -2

When must a business register for GST?

When annual sales are $75,000 or more.

What must a business apply for when registering for GST?

Australian Business Number (ABN).

What is the GST rate in Australia?

10%.

What is a taxable supply?

A good/service where GST applies.

What are the three conditions of a taxable supply?

Further an enterprise (business activity).

Connected to Australia (sold/imported in Australia).

Made for consideration (money must change hands).

Name one type of GST-free supply.

Fresh food, medical services, education, exports.

What is an input taxed supply?

A supply where GST is not charged, and GST credits cannot be claimed.

Give an example of an input taxed supply.

Renting a private house

How do you calculate GST from a GST-inclusive price?

Price ÷ 11 = GST amount.

How do you calculate GST-exclusive price from a GST-inclusive price?

Price ÷ 1.1= Price before GST.

What is GST Payable?

GST collected from customers (current liability). That you have to pay back to the ATO

How do you calculate GST payable to the ATO?

GST collected - GST paid.

When is GST recorded under the accrual method?

When a sale or purchase occurs.

When is GST recorded under the cash method?

When cash is received or paid.

What year was the GST Act passed?

1999

When must businesses pay GST to the ATO?

Every 3 months.

What are GST Credits?

GST credits are the GST paid on business expenses that can be claimed back from the ATO.