Do I need to pay GST and if so, can I avoid it?

[marjak15]

Hi, I've got a business on ebay where I can turnover over more than $75,000 (gst threshold), but my income from $75000 turnover is probably only around $20,000. The bulk of my turnover is in what I originally paid for the items I resell, and postage. 

I would like to make around $40,000 a year from my business, but paying gst might make my business not worthwhile. I would have to turnover $150,000 to make $40,000 a year and from what I've heard, the GST on that would be around $15,000 making it not worthwhile. 

Can I take postage off plus what I originally paid for the items when calculating my turnover? If I can't, are there any ways around paying GST ie. setting up multiple businesses etc? Are there possibly exceptions for my situation where I don't earn much compared to the turnover I make?

Thanks for any help

[jfmgray]

No.  The $75.000k  GST threshold trigger is on your total income including overseas sales, however you only have to pay GST on your domestic sales as overseas sales are exempt.

[jensmanchester-australia]

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@jdredz wrote:

If any sales are overseas, as they are gst free, do they come off your total sales?  Could you possibly sell 50,000$ in Australia and 50,000$ overseas in a 12 month period and avoid paying any gst?

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If it is an Australian based business International Sales are also included as part of the turnover for GST purposes. In this case the turnover would be $100,000

[clarry100]

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@jdredz wrote:

If any sales are overseas, as they are gst free, do they come off your total sales?  Could you possibly sell 50,000$ in Australia and 50,000$ overseas in a 12 month period and avoid paying any gst?

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We do not sell overseas and have not yet registerd for GST.

But from my understanding GST is not applicable to exported items and GST is not payable on postage to overseas destinations.

But the GST would still be applicable to any sales inside AU.

I don't think the overseas sales would negate the AU sales, just that no GST would be applicable.

Somebody with more knowledge than I may correct me if I'm wrong here.

[lyndal1838]

Clarry, when you fill in the BAS you are asked for your total sales.....in the example we are dicussing it would be $100,000.

Then you are asked the total GST collected...in this case it would be based on the $50,000 of Australian sales.

There is another section to declare GST exempt sales....I am assuming this is where you would put the overseas sales figures.

This is a bit of a guess as I have never had to deal with that section of the BAS but it is common sense.  Perhaps Jen would be able to give more information here.

[jensmanchester-australia]

Lyndal -  The $50,000 of International sales would go on the BAS under Export Sales

[lyndal1838]

Thanks Jen....as I said it was a guess as I have never had to deal with that section.

Being a Service business is a bit different to being a business selling actual items.