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Simpler BAS GST bookkeeping guide

This is a general ATO Simpler BAS GST bookkeeping guide for assistance with classifying sales and purchases for GST.

Last updated 26 June 2019

The information provided here is for use as a general Simpler BAS GST bookkeeping guide only. We developed this guide in conjunction with the Institute of Certified Bookkeepers (ICB) and the BAS Agent Association Group (BASAAG).

The guide will help you:

  • classify sales and purchases for GST
  • clarify the most GST transactions.

If you are unsure about any of this content you should seek advice from a tax professional.

Find out about:

Taxable sales

Taxable sales are sales where GST is payable.

When completing your BAS you must report taxable sales and the GST in their price at:

  • G1 Total sales
  • 1A GST on sales.

On your BAS you disclose either the GST-inclusive or the GST-exclusive total sales figure at G1. You must indicate your choice.

Table 1 below contains a list of taxable sales and their descriptions. You can use this information to assist in identifying your taxable sales.

Table 1: Taxable sales

Transaction

Transaction description

GST tax code

Completing your BAS

Goods and services

Sales of goods and services in the course of your business or enterprise (ie trading stock).

GST

G1 Total sales

1A GST on sales

Assets

Sale of business assets such as office equipment, machinery and motor vehicles, including trade-ins and transfers of ownership.

GST

G1 Total sales

1A GST on sales

Property (see note)

If you are dealing with property (eg you sell, lease or develop) you may have to pay GST on the sale or lease of the property.

The GST amount on property sales may be calculated on the full value of the sale or on the margin for the sale. You should seek advice from a tax professional, or for more information, see GST and property.

GST

G1 Total sales

1A GST on sales

Note: Transactions with common GST mistakes

GST-free sales

GST-free sales are sales where GST is not payable, but you may claim GST credits for purchases relating to these sales.

When completing your BAS you must report GST-free sales at G1 Total sales.

Table 2 below contains a list of GST-free sales and their descriptions. You can use this information to assist in identifying your GST-free sales.

Table 2: GST-free sales

Transaction

Transaction description

GST tax code

Completing your BAS

Fresh food

Most basic foods and beverages, subject to certain exceptions. For more information, see Detailed food list.

No GST

G1 Total sales

Medical and health

Most medical, health and care services, medicine and eligible medical aids and appliances. For more information, see GST and health.

No GST

G1 Total sales

Education

Most education courses, course materials and related excursions or field trips. For more information, see GST-free sales.

No GST

G1 Total sales

Childcare

Eligible childcare services. For more information, see GST-free sales.

No GST

G1 Total sales

Exported goods and services

Export sales of goods (must be physically exported from Australia within certain timeframes) and services and other things provided to customers outside Australia. Specific rules apply to exports. For more information, see Exports and GST.

No GST

G1 Total sales

Sale of business

Sale of a business as a going concern where certain conditions are met. For more information, see GST-free sales.

No GST

G1 Total sales

Input-taxed sales

Input-taxed sales are sales where GST is not payable, and you generally can't claim GST credits for purchases relating to these sales.

When completing your BAS you must report input-taxed sales at G1 Total sales.

Table 3 below contains a list of input-taxed sales and their descriptions. You can use this information to assist in identifying your input-taxed sales.

Table 3: Input-taxed sales

Transaction

Transaction description

GST tax code

Completing your BAS

Property (see note)

Supplies of residential rental premises and sales of existing residential premises (excluding new homes or commercial premises). For more information, see GST and property.

No GST

G1 Total sales

Financial Sales (see note)

Financial sales which include most transactions relating to money such as lending money, selling shares or other securities. For more information, see Financial supplies.

No GST

G1 Total sales

Fund-raising (see note)

Certain fund-raising activities of charities, gift-deductible entities and government schools.

For more information, see Fundraising events.

No GST

G1 Total sales

Note: Transactions with common GST mistakes

Purchases with GST in the price

You can only claim GST credits for GST included in the price of purchases that you buy or import for your GST-registered business, and that relate to taxable sales or GST-free sales.

To claim GST credits, when completing your BAS you must report the GST included in the price of your purchases at 1B GST on purchases.

You do not report your total purchases.

Table 4 below contains a list of purchases with GST in the price and their descriptions. You can use this information to assist in identifying your purchases with GST in the price.

Table 4: Purchases with GST in the price

Transaction

Transaction description

GST tax code

Completing your BAS

Goods and services

You can generally claim a credit for GST included in the price of any goods and services you buy or import for your GST registered business. Examples include:

  • capital purchases such as motor vehicles, plant and equipment -– check to ensure capital purchases are allocated to the appropriate capital account
  • inventory purchases (ie trading stock)
  • normal running expenses such as leases, equipment rentals, stationery and repairs.

For more information, see Claiming GST credits.

GST

1B GST on purchases

Imported goods (>$1,000)

Imports of most goods where customs value is greater than $1,000 and GST was paid. For more information, see GST and imported goods.

GST

1B GST on purchases

Second-hand goods from a GST registered business OR ≤$300 value (see note)

If you purchase a second-hand item from a GST-registered business (excluding charitable organisations), GST credits may be claimed.

Where second-hand items $300 or less are purchased from a private seller or a non GST-registered business for resale (ie trading stock), GST credits may be claimed even though the price did not include GST. For more information, see Purchases for $300 or less.

GST

1B GST on purchases

Business expenses for entertainment subject to fringe benefits tax (FBT) (see note)

You may claim GST credits for entertainment expenses you incur in providing entertainment that is subject to FBT. For more information, see FBT and entertainment for small business.

If you have elected to use the 50/50 split method for FBT purposes, then GST may be claimed on 50% of the expenses only.

GST

1B GST on purchases

Hire purchase (see note)

GST may be claimed on all components (including associated fees and the credit component) for hire purchase agreements entered into on or after 1 July 2012. Treat a hire purchase agreement as a standalone purchase in a tax period. Do not treat it as a purchase you make on a progressive or periodic basis. For more information, see GST – Hire purchase and leasing.

GST

1B GST on purchases

Lease agreements (see note)

Lease agreements are generally subject to GST. How you claim GST credits depends on whether you account for GST on a cash or non-cash (accruals) basis. For more information, see GST – Hire purchase and leasing.

GST

1B GST on purchases

Domestic business-related travel (see note)

GST credits for business-related domestic travel may be claimed, but must be apportioned between your business and private use. Expenses include:

  • airfares
  • taxi fares
  • fares for ride-sourcing services.

For more information, see Business travel expenses.

GST

1B GST on purchases

Fuel (eg petrol, diesel and fuel blends)

You can generally claim a credit for GST included in the price of fuel you purchase for use in your business.

You may also be eligible to claim fuel tax credits. For more information, see Fuel tax credits – business.

GST

1B GST on purchases

7D Fuel tax credit

Note: Transactions with common GST mistakes

A valid tax invoice for purchases over $82.50 is required to claim a GST credit.

Purchases with no GST in the price or where no GST credits can be claimed

Table 5 below contains a list of purchases with no GST in the price or where no GST credits can be claimed. You do not need to report these purchases.

You can use this information to assist in identifying your purchases with no GST in the price or where no GST credits can be claimed

Table 5: Purchases with no GST in the price or where no GST credits can be claimed

Transaction

Transaction description

GST tax code

Completing your BAS

GST-free goods and services

Purchases of GST-free goods and services. These include:

  • most basic foods and beverages subject to certain exceptions. For more information and a detailed food list see Detailed food list
  • most medical, health and care services, medicine and eligible medical aids and appliances. For more information, see GST and health.

Check your invoice if in doubt. For more information, see GST-free sales.

No GST

Not reported on BAS for GST

Purchases from a business not registered for GST

Goods and services purchased from a business that is not GST-registered. Generally a business is only required to register for GST if their GST turnover is over $75,000 ($150,000 for not-for-profit organisations), although they may voluntarily register.

No GST

Not reported on BAS for GST

Life and health insurance

Insurance premiums for life insurance (input-taxed) and health insurance (GST-free).

No GST

Not reported on BAS for GST

Motor vehicle private sale

Purchase of a motor vehicle from a private seller not registered for GST.

No GST

Not reported on BAS for GST

Imports – $1,000 or < (see note)

Imports of goods where the customs value is $1,000 or less and no GST was paid. For more information, see GST and imported goods.

No GST

Not reported on BAS for GST

Business expenses for FBT-exempt employee benefits (see note)

Some employee benefits are exempt from FBT and, even though the price of related business expenses may include GST, GST credits cannot be claimed. Exempt benefits include:

  • minor benefits <$300 that satisfy five factors
  • food or drink provided to current employees on a working day on business premises
  • taxi travel to or from an employee’s place of work to an external venue (eg home or restaurant).

For more information, see Minor benefits exemption.

No GST

Not reported on BAS for GST

Second-hand goods from charity OR >$300 value (see note)

Purchase of a second-hand item from a charitable organisation is GST-free.

No GST

Not reported on BAS for GST

Second-hand goods from charity OR >$300 value (see note)

Where second-hand items over $300 are purchased from a private seller or non GST-registered business for resale (ie trading stock), GST credits may be claimed even though the price did not include GST. However, you must wait until you sell the item you have purchased to claim the GST credit.

 

If you are eligible to use the global accounting method, GST credits may be accumulated but you cannot claim these GST credits directly at 1B. Instead, use them to cancel out the GST you would otherwise pay to us on the items you sell. For more information, see Global accounting method.

GST

1B GST on purchases (claimed at the time you sell the item you have purchased).

International travel (see note)

International travel, including domestic leg of an overseas trip, is GST-free.

No GST

Not reported on BAS for GST

Purchases for input-taxed sales (see note)

Even if GST is included in the price, you cannot claim GST credits for purchases you intend to use to make input-taxed supplies (eg those related to providing residential accommodation). You should seek advice from a tax professional, or for more information, see When you cannot claim a GST credit.

No GST

Not reported on BAS for GST

Property (see note)

Where you buy:

  • an existing residence
  • property as a private sale (see 'Items not reported on the BAS for GST purposes' for appropriate GST tax code)
  • new residential property for rental purposes
  • GST-free farmland, property or land under the margin scheme (even if GST is included in the price)
  • residential premises such as a room, unit or an apartment to lease to a business that supplies it as hotel accommodation with other facilities.

You should seek advice from a tax professional, or for more information, see GST and property.

No GST

Not reported on BAS for GST

Note: Transactions with common GST mistakes

Mixed purchases (both taxable and GST-free and/or input-taxed components)

Mixed purchases contain both a taxable component and a GST-free and/or input-taxed component. On your BAS, you report the GST in the price of only the taxable component at 1B GST on purchases.

Table 6 below contains a list of mixed purchases and their descriptions. You can use this information to assist in identifying and correctly reporting your mixed purchases for GST purposes.

With mixed purchases there may be an option in your accounting software to enter the total amount of a tax invoice and manually override the GST amount if it is not 1/11th. This option is subject to accounting software having the functionality to override the GST amount.

Table 6: Mixed purchases (both taxable and GST-free and/or input-taxed components)

Transaction

Transaction description

GST tax code/Manual override

Completing your BAS

Utility bills:

  • electricity
  • telephone
  • internet

 

GST credits may be claimed on:

  • connection fees
  • supply and usage charges
  • domestic mobile and landline call usage.

GST credits cannot be claimed on:

  • interest charged on late payments
  • international and roaming calls.
 

GST – Code total amount of invoice as ‘GST’ and manually override GST dollar amount to reflect GST shown on the invoice.

1B GST on purchases

Note: only claim GST dollar amount on invoice.

Government rates and water

In some localities a commercial rubbish collection fee may be applied. GST credits may be claimed on this component only.

Government (council) rates and water supply charges are not subject to GST.

GST credits cannot be claimed on:

  • interest charged on late payments
  • ambulance levy (some states and territories only).
 

GST – Code total amount of invoice as ‘GST’ and manually override GST dollar amount to reflect GST shown on the invoice.

1B GST on purchases

Note: only claim GST dollar amount on invoice.

Mixed private and business use (see note)

For the proportion of business expense related to your business, GST credits may be claimable.

You must accurately apportion your expenses between private and business use. Private expenses are entered in your private account (eg drawings). Business expenses are entered in your business expenses account. You need to be able to substantiate your claims – keeping a logbook and accurate records are important.

For the proportion of private expense not related to your business, GST credits are not claimable.

GST –
Note: No manual override should be done because business and private expenses are entered in their respective separate accounts.

1B GST on purchases

Purchase motor vehicle from GST- registered dealer or other business (see note)

GST credits may be claimed for the GST in the price of the vehicle and insurance components (eg compulsory third party, motor injury or transport accident charge).

GST credits are not claimable on the following components which are not subject to GST:

  • stamp duty on car
  • stamp duty on motor vehicle insurance
  • government registration fee.
 

GST –
Note: No manual override should be done because motor vehicle and insurance expenses are entered in their respective separate accounts.

1B GST on purchases

Motor vehicle registration (see note)

GST credits may be claimed for the GST in the price of the insurance component of the registration (eg compulsory third party, motor injury and transport accident charge).

GST credits are not claimable on the following components which are not subject to GST:

  • stamp duty on motor vehicle insurance
  • government registration fee.
 

GST – Code total amount of invoice as ‘GST’ and manually override GST dollar amount to reflect GST shown on the invoice.

1B GST on purchases

Note: only claim GST dollar amount on invoice.

Insurance for business use (see note)

GST credits may be claimed for the GST in the price of the insurance premium component only.

GST credits are not claimable on the following components which are not subject to GST:

  • stamp duty component
  • any settlement payouts as they are not reported on your BAS
  • private use portion.
 

GST – Code total amount of invoice as ‘GST’ and manually override GST dollar amount to reflect GST shown on the invoice.

1B GST on purchases

Note: only claim GST dollar amount on invoice.

Note: Transactions with common GST mistakes

Items not reported on the BAS for GST purposes

Table 7: Items not reported on the BAS for GST purposes

Transaction

Transaction description

GST tax code

Completing your BAS

Transactions not subject to GST
  • Private expenses unrelated to your business (see note)
  • Depreciation
  • Dividends received
  • Interest paid
  • Fines
  • Most Australian government taxes
  • Bank fees and charges
  • Principal payments on finance and loan interest
  • Stamp duty
  • Sale of your home (main residence)
  • Superannuation
  • Salary and wages
  • Non-deductible entertainment expenses
  • Donations
 

Out of scope/No tax/Not reportable

Not reported on BAS for GST

Note: Transactions with common GST mistakes

More GST bookkeeping and reporting information

QC52122