Interest paid on loans, credit cards, or bank fees is generally BAS excluded (not reported) for GST purposes in Australia, as they are considered financial supplies and not subject to GST. However, interest income received (e.g., from a business savings account) is technically classified as a GST-free supply and may need to be reported at G1 (Total Sales) on the BAS.
Borrowing costs
This includes interest payments on loans or fees paid to secure financing. For instance, if your business incurs AUD 200 in interest charges for a loan during the reporting period, this expense is not subject to GST, which means you don't need to include it on your BAS.
Examples of GST exempt services are bank fees, insurance, wages and interest on loans. See this list of the most common goods and services that are exempt from GST/HST.
BAS-excluded items, or BAS exclusions, are exactly what they sound like: transactions (income or expenses) that don't need to be reported in your business activity statement. Unlike GST-free items, which we'll dive into next, BAS exclusions don't appear on your BAS at all.
fees you pay that are associated with your bank like ATM fees, monthly account fees, or interest on your loans and credit cards do not include GST.
Interest income is GST-free. It is explicitly exempt, meaning no GST is charged on the supply. Interest on loans, deposits, or advances, whether to third parties or related entities, bank interest on term deposits or savings accounts and interest income on inter-company loans are exempt from GST.
There are six supplies which are not subject to GST : Financial services such as bank charges and interest. This also includes life insurance.
Excluding GST from GST-free sales
Most basic foods. Some education courses, course materials and related excursions or field trips. Some medical, health and care services. Some medicines.
A BAS is a form issued by the Australian Tax Office (ATO) to businesses that are registered for Goods and Services Tax (GST). It reports the GST a business needs to remit to the ATO, other business tax obligations, and pay as you go instalments on a periodic basis.
“BAS Excluded” is an accounting label used for transactions that do not belong anywhere on your BAS. In other words, they're not part of your GST calculation and they don't go into any BAS boxes for sales or purchases.
Yes. However, as per sub-rule (3) of Rule 164, the taxpayer shall be required to pay the full amount of tax demanded in the notice/ statement / order, as the case may be, including on account of demand of erroneous refund, to avail the benefit of waiver of interest or penalty or both under Section 128A.
Interest received by or accrued to an individual is taxable. However, an exemption applies to the first ZAR 23,800 of local interest income (ZAR 34,500 for taxpayers who are 65 years of age or older).
However, some interest you receive may be tax-exempt. If you received payments of interest and/or tax-exempt interest of $10 or more, you should receive Copy B of Form 1099-INT or Form 1099-OID reporting those payments. You may receive these forms as part of a composite statement from a broker.
Taxpayers were previously able to claim an income tax deduction for GIC and SIC. Because of this law change, these ATO interest charges are no longer deductible. The amendments to deny claims for deductions will apply in relation to assessments for income years starting on or after 1 July 2025.
In your BAS you will need to know the sales for the period, the GST collected, the GST you paid on expenses, wages paid to staff and the tax withheld from wages (PAYG Withholding). If you're in the PAYG Instalment system, this field will already be completed.
Interest on GST is allowable business expenditure. Interest on TDS is not allowable as business expenditure since akin to income tax liabilities.
Here are the most common BAS mistakes and what you can do to avoid them. 1️⃣ Mixing Business & Personal Expenses – Only claim GST on genuine business expenses, not personal purchases. 2️⃣ Claiming GST on GST-Free Items – Check invoices to ensure GST is actually charged before claiming.
General bank fees are GST Free and merchant bank fees include GST. Donations: Donations are GST Free. Insurance Policies: Most insurance policies include a stamp duty component. This is GST Free but the rest of the policy includes GST.
List of exempted goods under GST in India:
Bank Interest received or paid recorded as GST inclusive.
Bank interest is a financial supply and therefore input taxed.
When excluding GST, it means that the Goods and Services Tax (GST) is not factored into the final value or calculation. This allows for a focus on the price or value before the tax is applied.
Main GST-free products and services
Interest: Interest paid on loan or chattel mortgage repayments or credit card payments does not incur GST, and cannot be claimed.
Interest received from a local entity (e.g. local bank and local company) is payment for an exempt supply of financial service is under the 4th Schedule of GST Act. You do not need to account for GST on the interest received.
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.