GST and the ATO

[dylan11235813]

There is a $75,000 limit for when a seller needs to register for GST with the ATO. Is this $75,000 figure based on the total of the sale price (item + postage + packaging + handling). or can the total sales price by adjusted to only include the item price?

[peak-fitness-supplements-2011]

hey i read your post and am interested in looking at the forum to you have a link where i can find this.

[character_parties_aus]

My two penneth for what its worth: if you are starting a business on ebay and are serious about it 75k is not a lot of sales and it won't take long to get there ( just over 6k a month in sales). Why not make it easy on yourself and just register for GST from day one. If you are a casual seller just clearing out the wardrobe going on free listings its probably not worth it unless you are selling high value items. Of course there will be exceptions to the rule as always.

Benefits of GST registration:

- No nasty unexpected invoices from the ATO if you go over the 75K in income ( not net profit as wrongly state elsewhere on this thread).

- You can claim a tax input credit on most domestic purchases that incur GST as a legitimate business expense.

- Most data required can easily be retreived from eBays systems if you have sales reports set up.

So if you are worried about being uncompetitive due to having to charge GST bear in mind if you are buying product in Australia to sell if you register for GST you can claim 10% tax input credit on the purchase from the supplier and essentially it's a bit like a 10% discount.  So you list 10% cheaper ergo you are at the same price as all the sellers not charging GST. Also if you register for GST and are importing you can claim back the GST on imports over $1,000 if you register for GST. Of course under $1,000 is GST free (there is still the 5% import duty to pay over $1000).

I didn't register for GST when I started and it did catch up with me ( now all legal) . I wish I had now. So I am a good example of what not to do as non registration probably left me about $500-$1000 out of pocket with ATO fines, extra accountants advice needed etc.

[Anonymous]

I have an abn all legit, my account told me that you did not have to register for gst until you hit the 75 then it is gst on everything after that but you don't have to pay back the 10 percent on income earned prior to that, just on everything after that.  Just curious selling manager pro, your total sales is that the total invoice amount or just the actual price of the item without postage? 

[character_parties_aus]

my undertstanding is its total sales. as gst would be payable on postage charged

Your accountants advice seems sound enough but it's not how I would recommend it. Each to their own! at the end of the day that's life!

[blackeyedsusan2002]

eBay and PayPal fees have no GST, so are not claimable until tax time, against your final taxable income for the year.

However if you are registered for GST you need to charge your customers GST and pay it to the ATO every 3 months.

Any expenses that have GST attached that you have paid out within that 3 months is claimable against whatever GST you are due to pay.

This includes any receipts collected for postage paid out by you for that 3 months.

That is how I have been working since 2000 and have had a tax record keeping check (not an audit).

Seemed to be OK with the ATO.

[Anonymous]

No I meant to say gst on sales as you have already paid gst on the postage, so gst on product after 75k.

[blackeyedsusan2002]

Did you know that you can phone the ATO and ask the question?

You don`t have to give them any identification at all when you speak to them.

I have had some really complicated conversations with them, and come off the phone much the wiser.

[tournamenttackleaustralia]

Hi hi,

My 2c would be to see your accountant talk to them about this (or get a good accountant if you dont have one) and and they should help you out and set you before you go wrong. There has been some horrible advice in this thread regarding 75k profit before you pay gst etc so again its always best to listen to the professionals. But in response to your question I asked the very same question of my accountant a while back and my account advised me that  everything was included postage ,packing etc etc again though I would stress talking to your accountant though.

Cheers Chris

[Anonymous]

Just got off the phone to the ATO, it is the total income received which would therefore include postage. So 75 000 is all money paid to you, total income received. cheers

[Anonymous]

Just to absolutely confirm that the $75k threshhold includes ALL income.

ie All money received no matter what it's for.

If anyone is thinking of splitting income to keep under the threshold then

each income earner must prove 2 individual business enterprises.

ie separate bank accounts and web sites otherwise.

If you form a partnership then the threshold is $75k for both ( not each ).