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Richo71(Initiate)Initiate
4 May 2024

For context, I assumed GST turnover was f/y based but have since realised it is current month plus previous 11 (my error).

I first realised that it was over the threshold in April 24 (based on May23-April24) and was going to register from 1 May but have now worked backwards and realised there were other months where it went over (and some under). My questions:

1) the first month it went over was end of July 2023. I assume I need to backdate till 1Aug 2023 given that Aug22-July23 was over the threshold. Is this correct?

2) if this is correct and I submit backdated registration to ATO, how long until they confirm start date? I have invoices for May that I would want to add GST to (as I obviously haven’t collected it this F/y) so can I apply for registration then start adding to client invoices from now?

i realise this is going to be costly so as a sole trader, I need to minimise this as much as I can.

thank you!!

3,772 views
9 replies
3,772 views
9 replies

Most helpful response

Most helpful reply

TonyATO(Community Support)Community Support
6 May 2024

Hi there @Richo71


The important thing is that you now know you need to register.


As you mentioned, it depends on your current and projected turnover. That will be the month you first hit the threshold (current turnover) and projected to be at or above the threshold (projected turnover).


It sounds like you've already worked out that July 2023 was that month for you, so you will need to backdate to then and include GST on future invoices.


The downside is that for you may have to pay that GST out of your own pocket for past sales going back to July 2023.

All replies

YEP(Devotee)Devotee
5 May 2024

@Richo71


The GST legislation makes you as the supplier responsible for paying GST to the government as soon as you make a GST taxable supply, and not from when you were actually registered for GST.

 

The GST registration is so you can submit activity statements and make the payment to the ATO.

 

As soon as you are required to be registered for GST because you hit that threshold you must pay GST to the government regardless of whether you were registered GST or whether you charged GST.   

 

The legislation was enacted like this for very specific reasons.

 

The relevant legislation is as follows:

 

1/ A NEW TAX SYSTEM (GOODS AND SERVICES TAX) ACT 1999 - SECT 9.5

Taxable supplies  You make a taxable supply if:

 (a)  you make the supply for consideration; and

 (b)  the supply is made in the course or furtherance of an enterprisethat you 

* carry on; and

 (c)  the supply is connected with the indirect tax zone and

 (d)  you are registered for or required to be registered.

 

2/ A NEW TAX SYSTEM (GOODS AND SERVICES TAX) ACT 1999 - SECT 9.40

Liability for GST on taxable supplies

 

  You must pay the GST payable on any taxable supply that you make.

 


You are not the only one that is getting this wrong and exposing yourself to paying GST when you have not charged it, because the ATO website is not clear on this issue.

 

The following is from the ATO website and it really needs to be clarified by the ATO. 

 

About taxable sales

If you are registered for GST, or required to be, the goods and services you sell in Australia are taxable, unless they are GST-free or input-taxed.

  • for payment of some kind
  • made in the course of operating your business
  • connected with Australia.

 

Paying GST on taxable sales

You pay GST on the taxable sales you make when you lodge your activity statement. For these taxable sales, you:

  • include GST in the price
  • issue a tax invoice to the buyer
  • pay the GST you've collected when you lodge your activity statement.


Most helpful reply

TonyATO(Community Support)Community Support
6 May 2024

Hi there @Richo71


The important thing is that you now know you need to register.


As you mentioned, it depends on your current and projected turnover. That will be the month you first hit the threshold (current turnover) and projected to be at or above the threshold (projected turnover).


It sounds like you've already worked out that July 2023 was that month for you, so you will need to backdate to then and include GST on future invoices.


The downside is that for you may have to pay that GST out of your own pocket for past sales going back to July 2023.

YEP(Devotee)Devotee
13 May 2024

@TonyATO @KylieATO @Deb_ATO @AriATO


I have found something that clears the whole situation up, and the ATO needs to update their website to include this information because its currently confusing for a lot of taxpayers.


Under Section 25-10 of the GST Act, the date of effect of GST registration (the registration day) is the date nominated by a business in their registration application, which is usually the date they were required to be registered.


Therefor when a business registers for GST and they backdate their registration to the date they were required to be registered for GST, they can charge GST whilst their GST registration is processing because the effective GST registration date is going to be the date they nominated in their GST registration. This means that they can charge GST from the date they were required to be registered for GST.

 

If this was not possible then a lot of businesses would be out of pocket for GST that they are required to pay to the ATO but did not charge or collect because their GST application was processing, and this sort of senario is not in line with the GST legislation or what was intended.

Liked by Nathanjarrod
Nathanjarrod(Newbie)Newbie
11 Nov 2025

Thank you for this.

So very helpful.

I'm currently waiting on gst registration to be activated but torn between claiming gst or not as I'm over the 75k but don't want to do the wrong thing while waiting but can't stop working.


YEP(Devotee)Devotee
7 May 2024

@Richo71


You need to back date registration to when you were first required to be registered for GST.


If you don't register

If you're not registered for GST, check each month to see if you've reached the threshold, or are likely to exceed it. You need to register within 21 days of your GST turnover exceeding the relevant threshold.

If you don't register for GST and are required to, you may have to pay GST on sales made since the date you were required to register. This could happen even if you didn't include GST in the price of those sales.

You may also have to pay penalties and interest.


Backdating your GST registration

You can apply to backdate your GST registration. For tax periods commencing on or after 1 July 2012, backdating a GST registration is limited to 4 years. This means, unless there is fraud or evasion:

  • we can't backdate your GST registration by more than 4 years
  • you are not required to be registered before that date.

https://www.ato.gov.au/businesses-and-organisations/gst-excise-and-indirect-taxes/gst/registering-for-gst#WorkingoutyourGSTturnover1



Just remember nowhere does it say either on the ATO website or in the GST Legislation that when you are required to be registered for GST you must be registered for GST in order to charge GST.



@KylieATO @Deb_ATO @AriATO


Hi ATO,


if there is somewhere on the ATO website or ATO guidelines or in the GST Legislation that states anything like...


"when you are required to be registered for GST you must be registered for GST in order to / or before you charge GST".....


then can you please provide the references as I will gladly be corrected, as I do not want to pass on incorrect information to anyone.

CaroATO(Community Support)Community Support
13 May 2024

Hi @YEP,


We've it covered when we talk about taxable sales.


If you miss this page, there's more info on our government business website.


Love your work!

YEP(Devotee)Devotee
16 May 2024

@KylieATO @CaroATO


Yes, I have seen that about taxable supplies, however its not clear and its confusing to the ordinary taxpayer.

ATO officers may be able to make sense out of what is on the ATO website because of the training your receive, but from the number of posts that keep coming up in regards to this matter it should be obvious that its confusing to a lot of taxpayers, including registered tax agents, because the relevant GST information is spread over a number of different ATO web pages, and its far from clear.


Furthermore, some of the non-ATO responders are also giving incorrect information because of how the information is portrayed on your website, and some of them are even registered tax practioners.

 

Someone from the ATO needs to convey all that unclear info into a much more clear and concise format, so that any ordinary taxpayer can easily understand how it all works, instead of having to ask elsewhere like come to this forum with questions that they really never should have had to ask.


Thanks Kylie for referring this matter on.

Liked by Nathanjarrod and Muso101_

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