Private ruling: GST and registration
Published: September 2012

Ruling: Q1: Can I delay accounting for GST until I have met the GST registration turnover threshold despite being already registered? | A1: No.

Relevant facts and circumstances: You recently registered for GST less than 12 months ago as you met the $75,000 GST registration turnover limit in the last month of the previous financial year. As you now have to adjust your prices to account for GST, you're not sure if you will continue the business. You wonder if you could delay accounting for GST until you reach the GST registration turnover threshold later this financial year.

Relevant legislative provisions: A New Tax System (Goods and Services Tax) Act 1999 section 23-5 | A New Tax System (Goods and Services Tax) Act 1999 section 23-10 | A New Tax System (Goods and Services Tax) Act 1999 section 25-10 | A New Tax System (Goods and Services Tax) Act 1999 section 25-50 | A New Tax System (Goods and Services Tax) Act 1999 section 25-57 | 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: Once registered, you are liable for GST on any taxable supplies and taxable importations you make. | Detailed Reasoning - Detailed reasoning: If you carry on an enterprise with a GST turnover of $75,000 (or $150,000 for non-profit bodies) or more you are required to register for GST. Note that GST turnover is measured at both its current state and in its projected or future state, there is more discussion on this below. If you carry on an enterprise with a turnover of less than $75,000 you may register voluntarily. Once you are registered or required to be registered you must pay GST on any taxable supplies and taxable importations that you make from that point onwards. You are also entitled to input tax credits which arise on creditable acquisitions and creditable importations. | Detailed Reasoning - Measuring your GST turnover: As stated above, GST turnover is measured both currently and into the future, therefore its possible to meet the GST registration turnover threshold before your current turnover reaches $75,000. Your current GST turnover at a time in a particular month is the sum of the GST exclusive value of all the supplies that you have made or are likely to make during the 12 months ending at the end of that month. Your projected GST turnover at a time in a particular month is the sum of all the GST exclusive values of all supplies that you have made or are likely to make during that month and the next 11 months. If you reach either of the current or projected thresholds you are required to register. You do not include the following in your calculations: · input taxed supplies; · supplies that aren't made for consideration apart from some dealing with associates); and · supplies you make that are not connected with your enterprise. If you think that you have registered wrongly, you can apply to cancel your registration. Normally you have to be registered for a full 12 months before you can cancel your registration. We can, however, agree to cancel your registration before the 12 months are up if we are satisfied that you are not required to be registered. In your case we would need to be satisfied that you hadn't met either of the GST registration turnover thresholds. You can choose the date you would like your GST registration to be cancelled. We will generally cancel your GST registration from the date that you choose. However you cannot: · choose a cancellation date and then continue to operate on a GST registered basis after that date; · cancel your registration retrospectively if you still operated on a GST registered basis after that date. You operate on a GST registered basis if you: · tell other businesses you are registered for GST · issue tax invoices or adjustment notes · claim GST credits, special transitional credits or indirect transitional credits. We may decide to cancel your registration on an earlier or later date than the one you request, or we may refuse to cancel your registration if you are still required to be registered under GST law.

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