Goods and Services Tax (GST)

GST is a tax of 10 per cent on most goods, services or anything else for consumption in Australia. For practically all businesses in Australia who are registered for GST, they must charge GST on the sale of any goods, services or anything else they supply or sell as part of their business.

Family day care or child care is what is known as a GST-Free supply, and therefore family day care carers do not charge or collect GST.

While GST Free supplies are not subject to GST, providers of these services are entitled to input tax credits on the purchases they make. In order to claim any GST on purchases made for your business you need to be registered for GST.

Registration for GST is only required where your turnover is greater than $75,000, however if your turnover is less than this you may volunteer to register for GST. If you decide to register for GST you will need to apply for an ABN and lodge Activity Statements. General guidance on when you need to register for GST is found in the GST for Small Business Guide.

The different types of other GST supplies are outlined below:

GST Taxable Supplies

Unless a sale or supply of goods or services is defined in the legislation as an input taxed or GST free supply, a supply of goods or services by a business registered for GST will generally be a taxable supply. A provider of a taxable supply must charge GST on the sale of any goods they provide as part of their business. However, business that must charge GST may be entitled to claim input tax credits from the ATO on purchases or acquisitions made for their business that include GST.

GST Free Supplies

As well as family day care there are a number of other sectors that provide GST supplies. GST-free supplies occur when you do not charge GST for sales but you are entitled to claim input tax credits for GST included in the price you paid for supplies.

Input Taxed Supply

If a sale is input taxed, you donít charge GST on the sale of the goods or services to your customers or clients, and you cannot claim input tax credits for the GST portion of your business expenses relating to the things acquired to make the supply.

Registration for GST

Registration for GST is required if your annual turnover is greater than $75,000. However if your annual turnover is less than $75,000, you may choose to register for GST. If you decide to register for GST you must apply for an ABN and lodge Business Activity Statements (BAS) on either an annual, monthly or quarterly basis.

For more information on Activity Statements or GST refer to other sections of our website, or view or download the Guide to the Goods and Services Tax for Small Business from the ATO website.