Yes, GST-free purchases must be reported on your Business Activity Statement (BAS), specifically at Label G11 (Non-capital purchases) for most users. While no GST credits are claimed on these items, they are included in total purchases to ensure accurate reporting.
GST-free items don't have GST added to their price, but still have to be reported on your BAS. In other words, even though you're not charging the 10% tax to your customers, these sales are part of your BAS reporting, helping you avoid ATO penalties and ensure your GST credits are calculated correctly.
There are only minimal items which are not reportable for GST purposes. These include bank transfers between accounts, stamp duty, depreciation and salary/wages. These are purchases/sales that have a 0% GST rate.
Key point: GST-free items still get reported (just at 0% GST). BAS Excluded items do not get reported on the BAS at all.
GST Free Transactions also include any goods or services from those businesses whose Annual Turnover is less than $75,000 per annum and who have chosen not to register for GST. Non-reportable Transactions > These transactions do not include GST as they are not goods or services.
Not everything you can purchase is subject to 10% GST, however. The Australian government exempts certain goods and services from GST, including residential housing, some kinds of food, certain healthcare services, some medications, and (weirdly) precious metal. GST-free goods and services have a GST rate of 0%.
Common Examples of GST Exempt Transactions:
Financial services – Most banking services, interest payments, and insurance premiums. Residential rent – Rental income from residential properties. Donated goods and services – Items or services that are given away without payment.
Government fees: GST is not charged on government fees i.e. council rates, land tax, ASIC filing fees, motor vehicle registration and water rates, and therefore, GST credits cannot be claimed.
Your business may need to complete business activity statements (BAS) to report on taxes and make payments. Your BAS helps you to report on taxes like: goods and services tax (GST) pay as you go (PAYG) withholding.
You may be able to claim deductions for certain business expenses including:
Zero-rated supplies
Yes, genuine donations made to a registered charity are generally GST-free. According to the Australian Taxation Office (ATO), a donation is not subject to GST if: It's a gift, given voluntarily and without receiving anything in return.
Books, maps, newspapers, journals, non-judicial stamps, postal items, live animals (except horses), beehives, human blood, semen, bangles, chalk sticks, contraceptives, earthen pots, props used in pooja (including idols, bindi, kumkum), kites, organic manure, and vaccines.
Zero‑rated: taxable supplies charged at 0%—no GST charged to the customer, but input tax credits can be claimed. Exempt supplies: not taxable; GST not chargeable and input tax not claimable. Out‑of‑scope: not subject to GST reporting.
Main GST-free products and services
The formula for finding GST is P x 0.1 = G, where P is the original price, G is the GST amount, and 0.1 is the converted form of 10%. The GST reporting and payment periods are mentioned in the BAS and as discussed previously, your schedule can be monthly, quarterly, or annually.
Here are some common reasons for these exemptions: Social welfare and public interest: Essential goods and services vital for societal welfare, such as basic food items (e.g., rice, wheat, milk), healthcare services, and education, may be exempt from GST.
By zero rating it is meant that the entire value chain of the supply is exempt from tax. This means that in case of zero rating, not only is the output exempt from payment of tax, there is no bar on taking/availing credit of taxes paid on the input side for making/providing the output supply.
Office supplies, equipment, rental costs, and professional services are examples of expenses on which input tax can be claimed. Further, input tax cannot be claimed on the following expenses: private use, non-business entertainment, and motor vehicle expenses.
For a “zero-rated good,” the government doesn't tax its sale but allows credits for the value-added tax paid on inputs. If a good or business is “exempt,” the government doesn't tax the sale of the good, but producers cannot claim a credit for the VAT they pay on inputs to produce it.
Exempt supplies under GST include nil-rated supplies, supplies wholly or partially exempted by government notification, and non-taxable supplies like alcoholic liquor for human consumption. Exempt goods and services do not attract GST, and input tax credit (ITC) for such supplies cannot be claimed or utilized.
The GST/HST break includes certain qualifying goods, such as: