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The goods and services tax (GST) in Australia is federal value added tax of 10% on most goods and services sales. GST is levied on most transactions in the production process, but is refunded to all parties in the chain of production other than the final consumer. State governments do not levy any sales taxes though they do impose stamp duties on a range of transactions.
There are two types of sales which will be treated differently:
- Suppliers of GST-free goods and services will not have to pay GST when they make a sale but they will be entitled to GST credits.
- Suppliers of input taxed goods and services do not have to charge GST on sales but they will not be entitled to claim GST credits from their purchases of inputs.
The tax was introduced by the Howard Government and commenced on 1 July 2000, replacing the previous federal wholesale sales tax system and designed to phase out a number of various State and Territory Government taxes, duties and levies such as banking taxes and stamp duty.
Fast GST Calculations Cheat Sheet
- To calculate how much GST to add, just multiply the amount by 0.1
- To calculate a total price, that includes GST, just multiply the amount by 1.1
- To calculate how much GST is included in a price, just divide by 11
- To calculate how much the price was before GST, just divide by 1.1