Whether you use the accounts method or calculations worksheet method to complete your BAS, you must complete the following items:
- G1 (total sales)
- G10 (capital purchases) and/or G11 (non-capital purchases)
- 1A (GST on sales)
- 1B (GST on purchases).
The nature of financial supplies means that there are certain difficulties when completing a BAS.
We expect labels 1A and 1B to be accurate, but a number of different methods are available for completing labels G1, G2, G3, G10 and G11.
G1 (total sales)
Generally, you should report amounts that you earn from making financial supplies including any interest, related fees and margins. Fees and commissions should normally be reported as gross income and income derived on an interest or margin basis should be reported on a net basis.
As the margins or gains reported at G1 are net of the purchase and sale amounts, the purchase amount is not required to be reported again at G11.
The basis of reporting figures at G1 should be consistent and ‘fair and reasonable’.
Examples of items to report at G1 include:
- interest earned on a bank account or term deposit (but not repayments of the principal)
- fee income
- commission income
- amounts which are earned from the issue and repurchase of government bonds
- the margins derived from the sale of equity instruments including:
- shares
- units in unit trusts
- futures
- options
- warrants
- forwards
- premiums received for life insurance policies
- interest earned under a hire purchase agreement.
Examples of items not to report at G1 are:
- dividend income received from share investments
- money invested into or withdrawn out of bank accounts or term deposits
- purchase of bank accepted bills
- principal repayment made to the holder of a government bond at maturity
- principal repayment made to the depositor in respect of a term deposit at maturity
- principal repayment made to the holder of a bank accepted bill at maturity
- interest paid to the holder of a government bond
- interest received by the holder of a bank accepted bill
- consideration received for the issue of units.
- distributions received from unit trust investment or partnership investments.
These items are not reported at G1 because they are not payments or consideration for making financial supplies
Hire purchase agreements
The way to report on interest earned under a hire purchase agreement differs depending on whether the agreement was entered into before or after 1 July 2012:
Before 1 July 2012
Include the interest earned under a hire purchase agreement entered into before 1 July 2012 in relation to goods if the credit for the goods is provided for a separate charge and the charge is disclosed to the recipient of the goods. Otherwise, include the full amount.
On or after 1 July 2012
Interest earned under a hire purchase agreement entered into on or after 1 July 2012 is consideration for a taxable supply (as opposed to an input-taxed financial supply) and should be included at G1.
For more detailed information, see: GSTR 2002/2 Goods and services tax: GST treatment of financial supplies and related supplies and acquisitions.
G10 (Capital purchases)
Include capital purchases you used to make financial supplies in G10. Report the total amount you paid, or were liable to pay, on all purchases relevant to the reporting period.
G11 (Non-capital purchases)
Non-capital purchases may include trading stock and normal running expenses, such as stationary, brokerage fees and repairs. Report the total amount you paid, or were liable to pay, on all purchases relevant to the reporting period.
G11 also includes reduced credit acquisitions at the full value of those acquisitions.
As with G1, the basis for reporting figures at G11 should be consistent and ‘fair and reasonable’.
Therefore, if you have reported the proceeds of a disposal of equity instruments at G1 (that is, the full benefit you have obtained), then you should report the purchase of equity instruments at G11. However, if you have only reported the margin at G1 (that is, the earnings net of the purchase and sale amounts), then you should not report the purchase of the particular equity instrument at G11.
1A (GST on sales)
At 1A, do not include any GST amounts relating to financial supplies you made (a financial supply is input-taxed so you do not report a GST amount).
1B (GST on purchases)
At 1B, do not include any GST on financial acquisitions you have made unless one of the exceptions applies to you, because you generally cannot claim GST credits on purchases you use for making financial supplies.
A financial acquisition is an acquisition that relates to the making of a financial supply (other than a borrowing).