Private ruling: GST registration
Date of advice: 15 September 2022
Published: December 2022
Ruling period: Year ending 30 June 20XX
Date scheme commenced: The date this ruling is issued.

Ruling: Q1: Are you required to be registered for GST under section 23-5 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)? | A1: No, you are not required to be registered for GST if you current or projected GST turnover does not exceed the $75,000 threshold. | Q2: If a separate Trust is set up, are they required to be registered for GST under section 23-5 GST Act? | A2: No, once the Trust is set up, they will not be required to be registered for GST if the Trust's current or projected GST turnover does not exceed the $75,000 threshold.

Relevant facts and circumstances: You are an individual but are not registered for the goods and services tax (GST). • You carry on an enterprise of beauty service/retail business. • You have an expected turnover of $XX • You have a shopfront where you make general offers to the public. • You advertise your services through Facebook/Instagram. • You have purchased a hair removal machine. You want to set up a separate Trust • The Trust will operate the laser hair removal part of the business. • You expect the Trust to have an expected turnover of $XX.

Relevant legislative provisions: A New Tax System (Goods and Services Tax) Act 1999 section 9-20. | A New Tax System (Goods and Services Tax) Act 1999 section 23-5. | A New Tax System (Goods and Services Tax) Act 1999 section 188-5. | A New Tax System (Goods and Services Tax) Act 1999 section 188-10. | A New Tax System (Goods and Services Tax) Act 1999 section 188-15. | A New Tax System (Goods and Services Tax) Act 1999 section 188-20.

Reasons for decision: Summary: Section 23-5 of the GST Act states that you are required to be registered for GST if: (a) you are carrying on an enterprise; and (b) your GST turnover meets the registration turnover threshold. The term 'enterprise' is defined in section 9-20 of the GST Act and includes an activity, or series of activities, done on a regular or continuous basis, in the form of a lease, licence or other grant of an interest in property. The Trust is purporting to operate a laser hair removal business. This activity falls within the scope of an 'enterprise' for GST purposes and as such paragraph 23-5(a) of the GST Act is satisfied. The next issue to consider is whether your GST turnover meets the registration turnover threshold (currently $75,000, or $150,000 for non-profit bodies). The meaning of GST turnover is contained in Division 188 of the GST Act. Subsection 188-10(1) of the GST Act provides that your GST turnover will meet the registration turnover threshold if: (a) your current GST turnover is at or above $75,000 and the Commissioner is not satisfied that your projected GST turnover is less than $75,000; or (b) your projected GST turnover is at or above $75,000. Your 'current GST turnover' is defined in section 188-15 of the GST Act as the sum of the values of all of your supplies made in a particular month and the preceding 11 months. Your 'projected GST turnover' is defined in section 188-20 of the GST Act as the sum of the values of all of your supplies made in a particular month and the following 11 months. Therefore, if the Trust's 'current GST turnover' or 'projected turnover' does not exceed $75,000, they will not be required to be registered for GST. However, if the Trust's GST turnover is less than the registration turnover threshold of $75,000, they can choose to register for GST if they are carrying on an enterprise under section 23-10 of the GST Act.

In your case, you are operating a beauty service/retail business. This activity falls within the scope of an 'enterprise' for GST purposes and as such paragraph 23-5(a) of the GST Act is satisfied. | Therefore, if the sole trader's 'current GST turnover' or 'projected turnover' does not exceed $75,000, they will not be required to be registered for GST. | However, if the sole traders GST turnover is less than the registration turnover threshold of $75,000, they can choose to register for GST if the taxpayer is carrying on an enterprise under section 23-10 of the GST Act.