GST on Expenses
Tax Rates
GST Free Expenses – used for GST free supplies (e.g.
food), suppliers not registered for GST and where a GST Tax Invoice not
provided.
GST on Expenses – as per valid GST Tax Invoices
Input Taxed – do not use
BAS Excluded – used for transactions not reported on the BAS for GST purposes.
Tax Invoices required
The application of GST on spending and bills is primarily
guided by the documentation provided. To be able to claim GST a valid tax
invoice which includes the following details must be provided:
1. Document is intended to be a tax invoice
2. Seller's identity
3. Seller's Australian business number (ABN)
4. Date the invoice was issued
5. Brief description of the items sold,
including the quantity (if applicable) and the price
6. GST amount (if any) payable – this can be
shown separately or, if the GST amount is exactly one-eleventh of the total
price, as a statement which says 'Total price includes GST'
7. Extent to which each sale on the invoice is a
taxable sale
8. For purchases of $1,000 or more the buyer’s identity
should also be on the invoice.
In most situations an eftpos receipt is not a Tax Invoice as it does not
include these details.
Check carefully to see if online purchases from places
like Temu, Ebay, Etsy and Amazon have provided a GST Tax Invoice, many of these
do not include a valid ABN (must be 11 digits).
Some suppliers may provide an ABN but do not identify a
GST amount on the invoice, this may be because it is a GST Free service or
supply, or they are not registered for GST. This can be easily checked at ABN
Lookup where it will clearly state “Not registered for GST”, “Registered
from dd mmm yyyy” or “Not currently registered for GST”.
When loading documents into Xero use pdf or jpg files.
Other
file types like zip, word, excel or emails require downloading and slow down
the verification processes for GST claim and audit.
Transactions where GST allocation may differ from documentation
Fundraising – If the income was allocated as GST on Income, you can claim the GST on
the fundraising expenses as per the tax invoices.
Grants – GST Free as these are co-ordinated
through State Office. See the
Fact Sheet on Accounting for Grants
Activities relying heavily
on third party providers (e.g. bowling, cinema) – GST on Expenses only
if you have charged attendees the
full rate of the activity and included GST on Income, or if you have charged
attendees less than 75% of the cost of activity.
How to
Process grocery and other invoices where GST is not 1/11th
of total cost
The required values to split the payment between GST on
Expenses and GST Free can be calculated in the Unit Price column of Xero, just
by typing the calculation in the space.
Make sure the copy of the grocery invoice you upload
includes the bottom of the docket, nearly all include a total GST value at the
bottom which can be used to calculate as above.
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