GST Registration, Calculation & Lodgement: Tasks And Answers

December 21, 2023/

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Task 1: GST Registration Turnover Thresholds

(a)

Most of the businesses are affected by Goods and Services Tax (GST) and thus, should be registered for GST. Following is the threshold turnover limit for different business for GST in Australia:

Annual turnover of $75,000 or more for General businesses.
In case of non-profit organization the threshold annual turnover limit is $150,000.

Taxi drivers must register for GST irrespective of the annual GST turnover (Ramli al. 2015).

(b) Businesses with aggregate annual turnover less than $10 million are allowed to use wither cash or accrual basis of accounting.

(c) Business with annual aggregate turnover of in excess of $10 million must use accrual basis of accounting for GST purposes.

Supply Save Time On Research and Writing Hire a Pro to Write You a 100% Plagiarism-Free Paper. Get My Paper	Tax codes
	Taxable (10% rate)	GST-free	Input taxed	Exempt
Superannuation, wages paid / received				X
Supplies out for exported goods and services	X
Residential rent income or expenses			X
Money lent/ borrowed	X
Fresh food or medicines		X
Purchase or sale of an assets	X
Commercial rent income or expenses	X
Education and childcare		X
Depreciation	X
Council rates		X
Fruit sales		X
Received of interests			X
Rental income (Commercial)	X
Electricity expenses	X
Milk purchased		X
Purchase of office furniture	X
Bank charges			X
Oranges sold (bag of oranges)		X
Payment of interests	X
Payment of stamp duty		X
Payment of water rates		X

(a)

Part (i):

Sales:

The invoice dated 13^th May shall be reported in 4^th quarterly period applicable for the month of April, May and June and for other two invoices the 1^st quarterly period in respect July, August and September shall be used.

Part (ii):

Sales:

For all invoices of sales 4^th quarterly period applicable for the month of April, May and June (Ling et. al. 2016).

(b)

(i): GST payable under cash basis is $100.

(ii): GST payable under accrual basis is calculated as following.

GST payable	Amount ($)
Total sales inclusive GST	19,800.00
GST payable for sales (19800 x 1/11)	1,800.00

Total purchases	15,400.00
GST paid on purchases (15400x 1/11)	1,400.00

Net GST payable (1800 – 1400)	400.00

Task 4:

PAYG instalment income
Particulars	Amount ($)
Sales	55,000.00
Commercial rent received	22,000.00
Interest received	1,200.00
Dividend income	3,300.00
(a) PAYG Instalment income	81,500.00
Instalment rate	6.20%
(b) PAYG income tax instalment	5,053.00

(c)

PAYG instalment income
Particulars	Amount ($)
Sales	55,000.00
Commercial rent received	22,000.00
Residential rent received	8,800.00
Interest received	1,200.00
Dividend income	3,300.00
Sale of business printer	2,200.00
Sale of shares	4,400.00

Instalment income (22000+8800+1200)	81,500.00
Instalment rate	0.06

PAYG instalment income (32000 x 11%)	5,053.00

(d)

Amount to be reported in at G1 label of BAS is $96,900.

Quarterly GST report and pay
Particulars	Amount ($)
G1 (61231.25+990)	62,221.25
G2	770.00
G3	462.55
G10	2,200.00
G11	13,311.59

Amount you owe the ATO
Particulars	Amount ($)
1A	5,566.48
1C
1E
4.00	2,899.00
5A	2,918.18
6A	3,000.00
7C
8A	14,432.58
Amount the ATO owes you
Particulars	Amount ($)
1B	1,410.14
1D
1F
5B
6B
7D	48.93
8B	1,459.07

9. Payment	13,083.51

Reconciliation:

Since no information about PAYG instalment income is available about Balance sheet hence, no reconciliation is necessary.

Particulars	Amount ($)
GST Collected (62221.25/11)	5,656.48
GST paid (43325.19 +2200) /11	4,138.65
GST payable	1,517.82

GST control as per Balance sheet is not possible due to lack of information. Hence, reconciliation with Balance sheet is not required (Australia, 2016).

Task 6:

Quarterly GST report and pay
Particulars	Amount ($)
G1	170,430.00
G2	–
G3	36,700.00
G10	15,400.00
G11	42,684.00

PAYG tax withheld
Particulars	Amount ($)
W1	5117
W2	1236
W4	0
W3	0
W5	1236

PAYG income tax instalment
Particulars	Amount ($)
T7	2322

Amount you owe the ATO
Particulars	Amount ($)
1A	12,157.27
4.00	1,236.00
5A	2,322.00
7.00	–
8A	15,715.27

Amount the ATO owes you
Particulars	Amount ($)
1B	3,880.36
5B	–

8B	3,880.36

Payment
Amount payable to ATO (15715.27-3880.36)	11,834.91

Task 7:

Part (a)

Classification of worksheet (output)
Accounts	Output	Taxable	Exports	GST free	Input taxed	Excluded
Commercial rent	6,600.00	6,600.00
Residential rent	7,700.00			7,700.00
Sale of goods and services	51,100.00	51,100.00
Interest	480.00	480.00
Dividends	18,000.00	18,000.00
Export sales	660.00		660.00
Sale of old photocopier	4,619.00					4,619.00
Total	89,159.00	76,180.00	660.00	7,700.00	–	4,619.00
GST classification for worksheet	G1	G6	G2	G3	G4

Classification of worksheet (input)
Accounts	Amount	Capital purchases	Non-capital	Taxable supply	Input taxed	GST free	Excluded
Wages & salaries	60,000.00			60,000.00
Stationery	4,400.00		4,400.00
Depreciation	5,000.00			5,000.00
Accounting fees	3,300.00			3,300.00
Electrical repair	550.00			550.00
Premiums for business insurance	220.00			220.00
General expenses	990.00			990.00
Bank charges	70.00				70.00
Operating cost of motor vehicle	990.00			990.00
Telephone	550.00			550.00
Council and water rates	330.00					330.00
Residential rent expenses	450.00						450.00
Fees for membership	66.00						66.00
Contributions to superannuation fund	1,970.00			1,970.00
Purchase of inventory	7,700.00		7,700.00
Commercial rent expenses	460.00			460.00
Up-date of computer system	12,147.00	12,147.00
Purchasing new printer	3,300.00	3,300.00
PAYG withholding	14,000.00						14,000.00
Totals	116,493.00	15,447.00	12,100.00	74,030.00	70.00	330.00	14,516.00
GST classification	G10	G11	G17	G13	G14

Part b:

Items	Amount ($)	Items	Amount ($)
G1	89,159.00	G10	17,417.00
G2	660.00	G11	83,700.00
G3	7,700.00	G12	101,117.00
G4	–	G13	70.00
G5	8,360.00	G14	330.00
G6	80,799.00	G15	–
G7	–	G16	400.00
G8	80,799.00	G17	100,717.00
G9	7,345.36	G18	–
		G19	101,177.00
		G20	9,197.91
Net GST payable (G9 – G20)	(1,852.55)

Part c:

It is clear from the extract of forecasted cash flows that the closing balances in October and November would be in negative. Thus, the client should defer the payment of September quarter to ensure that the closing balances at the end of October and November are appropriate for the client to meet cash requirements of business.

Particulars	Amount
Luxury car threshold	75,526.00
Motor vehicle for sale GST	85,200.00
LCT rate	33%
Amount in excess of threshold (GST inclusive)	9,674.00
Amount in excess of threshold (GST exclusive)	1,928.55
Apply LCT to excluded amount	636.42
whole dollars only at LCT at 1E on BAS summary	636.00
New sale price	84,564.00

Wine Equalisation tax:

Part a:

The half retail price method
Particulars	Amount ($)
Taxable win supllies	70,404.00
WET rate	29%

Taxable value under half retail price method	35,202.00
WET (35202 x 29%)	10,208.58

Part b:

28^th of succeeding month of the end of the financial year.

Fuel tax credit:

Litres of diesel used (392000/1.42)	276,056.34
Litres of unleaded used (120800/1.29)	93,643.41
Total litres used	369,699.75

Fuel tax credit in $ (369699.75 x 40.10/100)	148,249.60

Task 9:

Helps in maintaining the books of accounts of an organization by proper classification of accounts. The financial statements preparation and presentation can also be improved by using the services of bookkeeping business.
By verifying whether all the guidelines of Australian Taxation Office have been followed in preparation of LAS.
To record payment the specific tax account is debited by crediting equivalent amount of cash. And for refund the cash is debited by crediting equivalent amount in tax refund (Grey, 2017).
SAGE, SAP and MYOB.
Section 14 of the Privacy Act 1988 prohibits.
Professional ethics and integrity.
A person must be awarded with Certificate IV Financial Services from a Registered Training Organization (RTO).
Division 17 of Income Tax Assessment Act 1997 discusses the effects of GST.

Error item no.	Appropriate course of action
1	Lodgement of revised activity due to error
2	Decreasing adjustments.
3	Lodgement of revised activity due to error
4	Increasing adjustments.
5	Increasing adjustments.

Australian Business Number (ABN):

Issued by Australian Business Registrar, ABN is a unique identifier for businesses in Australia referred in taxation matters and documents filed with Australian Taxation Office.

TFN declaration:

A unique identification number issued by the Tax auditory of Australia to the tax payer. It is needed to be mentioned in tax filing and other tax related matters.

HELP:
A network of accredited volunteers for tax related matters provide help to the people in relation to tax related matters in the country.

Medicare Levy:

To give all Australians access to health services Medicare Levy is charged on the taxable income of tax payers in the country. Current 2% of taxable income subjected to maximum amount is charged in taxable income of individuals in the country.

ATO PAYG withholding tax laws:

Employers required to withhold PAYG from the gross salary and wages payable to the employees and deposit the same to the credit of the Government on or before the due date.

Australian Bureau of Statistics (ABS):

ABS is a Government agency of Australia responsible to collect and process data to provide important information to various branches of Australian governments.

Task 2: Tax Codes

ATO fringe benefits tax laws:

Often employers provide non-monetary benefits to employees. Such benefits are liable to be taxed in the hands of the employer under Fringe Benefits Tax. The law governing tax on fringe benefits are FBT tax laws.

ATO superannuation laws:

Employers and employees required to contribute to superannuation funds to fund the retirement pension of employees in the future. Employers must contribute 9.5% of gross salary whereas employees are inspired to contribute equal amount in the fund as per the superannuation law.

Tax Agent Services Act 2009:

The act contains the provisions to be followed by the tax agents while providing services to the tax payers in the country.

Industry awards:

Industry awards are given to the business organization that have excelled in various aspects of business including complying with tax provisions and rules.

Leave act:

The employees in Australia are allowed to take annual, sick and long service leave. The employers are obliged to pay for these leaves if taken by the employees as per the provisions of leave act.

Payroll tax laws:

The enactment guiding the provisions in respect of payrolls of employees and workers in Australia is collectively called Payroll tax laws.

Privacy Act 1988:

Privacy Act 1988 governs the privacy protection law in relation to confidential information of individuals and businesses.

Workers compensation and occupational health and safety:

The environment at the workplace must be suitable for the health of workers and employees. The occupational health and safety of the workers must be given due importance in business.

OHS acts and regulations:

Work Health and Safety Act governs the provisions in relation to the health and safety of workers and employees at the work place.

An individual must register with Tax Practitioners Board of Australia in order to be a tax agent in the country. following are the requirements to become a tax agent in the country:
1. The individual must be 18 years or above.
2. The individual must be mentally fit and healthy person.

The qualification and experience requirements must be satisfied by the individual.

Must maintain professional indemnity insurance.
Must complete an online application.
Must submit all necessary documents.

A person must obtain Certificate IV Financial Services from a Registered Training Organization (RTO).
BAS agent can provide payroll services by accepting fees without requiring to register with Tax Practitioners Board.
Apart from BAS agent, qualified accountant and experts on payroll services are allowed to provide payroll services.

Employee	TFN quoted	Taxfree threshold	Weekly wages	PAYG tax	HELP	Net wages
A Matador	N	N	431.00	202.00	–	229.00
L Liverstrong	Y	Y	687.00	77.00	–	610.00
Robbie McEven	Y	N	775.00	226.00	–	549.00
Cadel Stevens	Y	Y	690.00	78.00	–	612.00
Stuart McGrady	N	N	520.00	244.00	–	276.00

Task 13:

Annual income	Resident status	TFN	Pay frequency	Pay Frequency Gross	Withholding tax	Yearly withholding tax
18,200.00	NR	NQ	Weekly	350	157.00	8,164.00
182,000.00	R	Q	Forth Nightly	7,000	2,258.00	58,708.00
76,000.00	R	NQ	Forth Nightly	2,923	1,373.00	35,698.00
92,000.00	R	Q	Weekly	1,769	450.00	23,400.00
90,000.00	NR	Q	Forth Nightly	3,462	1,126.00	29,276.00
45,000.00	R	Q	Weekly	865	136.00	7,072.00
36,000.00	NR	Q	Weekly	692	225.00	11,700.00
25,000.00	R	Q	Weekly	481	30.00	1,560.00
32,000.00	R	Q	Weekly	615	62.00	3,224.00

Task 14:

Annual income	Resident status	Medicare Levy	Medicare Surcharge
18,200.00	NR	–	–
182,000.00	R	1,840.00	1,380.00
76,000.00	R	–	–
92,000.00	R	40.00	30.00
90,000.00	NR	–	–
45,000.00	R	–	–
36,000.00	NR	–	–
25,000.00	R	–	–
32,000.00	R	–	–

Part 1:

Superannuation payable for the two weeks $9,755.54.
$18,087 is the amount of PAYG withheld.

Part 2:

Only the details of the employee can be provided to him and not that of his wife.

Part 3:

3 days of leave with pay shall be allowed in case sickness.

Part 4:

To enquire about the matter with payroll department.

PAYG tax withheld
Salary, wages and other payments	W1	70,104.15
Amount withheld	W2	18,087.00
Amount withheld where NO ABN was provided.	W3	5,243.00
Other amounts withheld	W4	3,100.00
Total amount withheld	W5	18,430.00

Superannuation guarantee is calculated by using the rate of contribution made the employees and employees on the superannuation fund.

At-least for three years.
Permanent hourly rate plus 25% to 25% of hourly rate.

Answer 1:

Business organization must prepare FBT return and pay FBT tax to the Government as per the provisions of FBT on or before the due date. .

Answer 2:

GST free sales is for items in which there is no GST whereas input taxed is supply where sellers have no right to charge GST.

Answer 3:

No superannuation guarantee amounts are not subjected to GST.

Answer 4:

Yes, superannuation guarantee amount is reported in BAS.

No an unauthorized person cannot sign off BAS.
Immediate person next in the hierarchy after the manager.

Taxable 10% rate.

Supply	Taxable (10%)	GST free	Input taxed	Exempt
Wages or superannuation	X
All supplies out of exported goods or services	X
Residential rent income or expenses		X
Money lent or borrowed	X
Domestic water sales	X
Purchase or sale of assets	X
Commercial rent income or expense	X
Childcare and education	X
Depreciation	X
Council rates	X

BAS case study:

(a) Classification of worksheet (output)
Accounts	Output	Taxable	Exports	GST free	Input taxed	Excluded
Sale of goods and services	440,000.00	440,000.00
Export sales	7,700.00		7,700.00
Other GST free sales	6600			6600
Commercial rent	99,000.00	99,000.00
Residential rent	22,000.00			22,000.00
Sale of assets	5,500.00	5,500.00
	580,800.00	544,500.00	7,700.00	28,600.00	–	–
GST classification for worksheet	G1	G6	G2	G3	G4


Classification of worksheet (input)
Accounts	Amount	Capital purchases	Non-capital	Taxable supply	Input taxed	GST free	Excluded
General business expenses	220,000.00			220,000.00
Business council Water rates	2,200.00					2,200.00
Depreciation	4,400.00			4,400.00
Commercial rent expenses	9,900.00			9,900.00
Residential rent expenses	4,400.00					4,400.00
Purchase of fax machine	2,200.00	2,200.00
Wages and salaries	88,000.00					88,000.00
Superannuation	7,920.00					7,920.00
PAYG tax withheld	25,000.00					25,000.00

Totals	364,020.00	2,200.00	–	234,300.00	–	127,520.00	–
		G10	G11	G17	G13	G14	Excluded

Items	Amount ($)	Items	Amount ($)
G1	580,800.00	G10	2,200.00
G2	7,700.00	G11	–
G3	28,600.00	G12	2,200.00
G4	–	G13	–
G5	36,300.00	G14	127,520.00
G6	544,500.00	G15	–
G7	–	G16	127,520.00
G8	544,500.00	G17	(125,320.00)
G9	49,500.00	G18	–
		G19	108,980.00
		G20	9,907.27
Net GST payable (G9 – G20)	39,592.73

Payment due date: Due date for different quarters are as following:

1^st Quarter: 28 October.

2^nd Quarter: 28 February.

3^rd Quarter: 28 April.

4^thQuarter: 28 July.

Journal entry:

Date	Account titles and explanations	Debit ($)	Credit ($)
28^th July	GST payable	39593.00
	Cash		39593.00
	(Being GST payable paid)

PAYG Withholding:

Correct amount of PAYG withholding in this case $192.00.
NO amount to be withheld in this case.
Correct amount of PAYG withholding in this case $98.00.
Correct amount of PAYG withholding in this case $11.00.
Correct amount of PAYG withholding in this case $132.00.

Part a:

The deteriorating cash position of the client shall be specifically asked to be considered while making the payment. Thus in case there is any opportunity to use tax credit to reduce the payment of GST the same shall be taken.

Part b:

The company should use cash basis accounting to avoid payment of GST at present.

Particulars	Amount ($)	Amount ($)
Total revenue		96,900.00
Less: Capital and non-applicable items
Sale of business printer	2,200.00
Bank loan	4,400.00
Residential rent received	7,700.00
		14,300.00
PAYG Instalment Income		82,600.00

Part b:

PAYG Income tax instalment (82600 x 6.20%)

5,121.20

Part c:

Particulars	Amount ($)	Amount ($)
Total revenue		96,900.00
Less: Capital and non-applicable items
Sale of business printer	2,200.00
Bank loan	4,400.00
Residential rent received	7,700.00
		14,300.00
PAYG Instalment Income		82,600.00
PAYG Income tax instalment (82600 x 6.20%)	5,121.20

Adjustments:

Error item no.	Appropriate course of action
1	Increasing adjustments.
2	Increasing adjustments.
3	Lodgement of revised activity due to error

Handle payroll queries:

Only the details of the employee can be provided to him and not that of his wife.
Superannuation guarantee is calculated by using the rate of contribution made the employees and employees on the superannuation fund.
5 days of leave with pay shall be allowed as compassionate leave.
At-least for three years.
Permanent hourly rate plus 25% to 25% of hourly rate.

Employer: Sam Waterford
ABN of Employer: 11 111 111 111 111
Employee: C Border
Week ending: 30 June
Date of pay: June 30
Earnings	Hour rate	Hours	Amount ($)
Normal	57.00	26.32	1,500.00
Overtime (1.5)
Overtime (2.0)
Personal leave	57.00	17.54	1,000.00
Annual leave
First aid allowance
Gross Pay			2,500.00
PAYG deduction		744.00
Deduction
Social club			2.00
Super
Union
Net pay			1,754.00
Super fund: Sun Super fund	Amount

References:

Australia, C.C.H., 2016. Australian Master Tax Guide: 2016. CCH Australia.

Grey, C., 2017. Corporate tax residency after Bywater Investments. Taxation in Australia, 51(10), p.547.

Ling, S.C., Osman, A., Muhammad, S., Yeng, S.K. and Jin, L.Y., 2016. Goods and Services Tax (GST) compliance among Malaysian consumers: The influence of price, government subsidies and income inequality. Procedia Economics and Finance, 35, pp.198-205.

Ramli, R., Palil, M.R., Hassan, N.S.A. and Mustapha, A.F., 2015. Compliance costs of Goods and Services Tax (GST) among small and medium enterprises. Jurnal Pengurusan (UKM Journal of Management), 45.

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