Business Activity Statement (BAS)&

Goods & Services Tax (GST)

By,RAJEEV NEELAY

What is BAS?

The Business Activity Statement (BAS) is a form submitted to the Australian Taxation Office (ATO) by all Australian businesses to report their taxation obligations.

What Does it Include ?

Business Activity statement Include : -

• Goods & Services Tax (GST).• Pay As You Go Withholding (PAYGW).• Pay As You Go Installments (PAYGI). • Fringe Benefits Tax (FBT).• Wine Equalization Tax (WET).• Luxury Car Tax (LCT).

Who should use a Business Activity Statement?

• All entities with any of the tax obligations and entitlements (i.e. – GST, Wine equalization tax , Luxury car tax , PAYG , FBT ) must complete an activity statement at the end of each tax period or reporting period.

• If you do not have a GST , Wine equalization tax , Luxury car tax the ATO will send you an Installment Activity Statement.

Payment Period

Payment period will be one of the following.

• Monthly.

• Quarterly.

• Annual.

Lodging BAS• If your annual turnover is less than $20 million, you can

lodge your activity statement quarterly or monthly to report your GST

Quarterly tax periods are periods of three months ending on.

30 September. 31 December. 31 March. 30 June.

Monthly tax periods end on the last day of each calendar month.

Index

Goods & Services Tax (GST). Pay As You Go Withholding

(PAYGW). Pay As You Go Installments

(PAYGI). Fringe Benefits Tax (FBT). Wine Equalization Tax (WET). Luxury Car Tax (LCT).

Background of Goods & Services Tax

• The Goods and Services Tax (GST) is a Value Added Tax (VAT) on the supply of goods and services in Australia. The GST rate is 10% in Australia .

• It was introduced by the Federal Government From 1 July 2000.

• Prior to the GST, Australia operated a Wholesale Sales Tax (WST) which imposed a tax on wholesales of goods.

How it Applies

• GST will be charged on the supply of all goods and services where the supply is made by a business.

Registration for GST?

• You must register for GST if you are in business and your GST turnover is at or above the registration turnover threshold of $75,000 per year.

• You may choose to register if the turnover of your enterprise is below the registration turnover threshold.

GST-free supply

The following are examples of GST-free supplies.

• Most health and medical care services.

• Most educational services .

• Most food for human consumption (other than prepared foods, confectionary, snacks, ice-cream, biscuits, alcohol, soft-drinks and certain other drinks).

Cont….• International travel and transport.

• Certain dealings with land.

• Exports of goods or services or other things if certain requirements are met.

• Certain activities of charities and related bodies .

Calculation of GST

1. General Ledger2. BAS & IAS Statement3. Journal Entries

Index

Goods & Services Tax (GST). Pay As You Go Withholding

(PAYGW). Pay As You Go Installments (PAYGI). Fringe Benefits Tax (FBT). Wine Equalization Tax (WET). Luxury Car Tax (LCT).

PAYG

PAYG

Withholding

PAYG

Installments

Means paying tax you withhold from

payments to others (i.e.

Salaries & Wages)

Means paying tax on your own Income (i.e.

Investment & Business Income)Regular

reporting and

remitting of tax to ATO

PAYG System

Index

Goods & Services Tax (GST). Pay As You Go Withholding

(PAYGW). Pay As You Go Installments

(PAYGI). Fringe Benefits Tax (FBT). Wine Equalization Tax (WET). Luxury Car Tax (LCT).

What is FBT ?

• Fringe benefits tax (FBT) is a tax payable by employers who provide fringe benefits to their employees or to associates of their employees (typically family members).

• This is separate from Income Tax.

• Even if your organization is exempt from income tax, it may still have to pay FBT.

Tax Rate & Example FBT is paid by the employer at a rate of

46.5% • Marginal income tax rate (45%) • Plus the Medicare Levy (1.5%)

• Example –If the FBT is $50,000Rate of Tax 46.5% $50,000 x 46.5%

Total Tax = $23250

How to calculate the taxable value of a car fringe benefit ?

There are two methods for calculating Fringe Benefits Tax.

• Statutory formula method (Based on the car’s cost price).

• Operating cost method (Based on the costs of operating the

car).

Index

Goods & Services Tax (GST). Pay As You Go Withholding

(PAYGW). Pay As You Go Installments

(PAYGI). Fringe Benefits Tax (FBT). Wine Equalization Tax (WET). Luxury Car Tax (LCT).

What is wine equalization tax?

• Wine equalization tax (WET) is a value-based tax which is applied to wine consumed in Australia.

• It applies to assessable dealings with wine (unless an exemption applies) which include wholesale sales, untaxed retail sales and applications to own use.

• The WET rate is 29 per cent of the wholesale sale value.

Index

Goods & Services Tax (GST). Pay As You Go Withholding

(PAYGW). Pay As You Go Installments

(PAYGI). Fringe Benefits Tax (FBT). Wine Equalization Tax (WET). Luxury Car Tax (LCT).

Luxury Car Tax

• Luxury car tax (LCT) applies to certain vehicles over the luxury car tax threshold ($57,180 for the 2008–09 year).

• The Government announced in the 2008–09 Budget that it would increase the LCT rate from 25% to 33% from 1 July 2008.

Concessions on LCT: • In certain circumstances primary producers and

tourism operators will be able to claim a refund of the additional 8% LCT (to a maximum of $3,000) on certain 4 wheel drive or all wheel drive vehicles.

• LCT will not apply to certain fuel efficient cars under the fuel efficient car limit ($75,000 for the 2008–09 year) from 3 October 2008. LCT at the rate of 33% will apply to vehicles above this threshold.

Cont….

• 25% LCT will apply to contracts entered into for purchases or imports of a luxury car before 7.30pm Australian Eastern Standard Time (AEST) on 13 May 2008 (the date of the Federal Budget announcement to increase the LCT rate).