Goods and Services Tax (GST) Essay Example | Topics and Well Written Essays - 3750 words

Goods and Services Tax (GST) - Essay ExampleThe present interrogation has identified that goods and services tax (GST) is said to be indirect and broad-based because it is charged depending on the supply or activities of good and services instead of being charged directly on income. Also, these charges are applied by and large to all taxpayers with a few limitations. Taxation downstairs GST is applied to the goods and services that are used by consumers, meaning that, this system is a consumption taxation system. A step process is used in the collection of taxes to a lower place GST, to make sure that tax is levied at every stage of the production chain, and overly to allow suppliers of goods and services who are registered to claim the reference point on tax paid to their inputs. Although the tax is charged at every stage, the tax is paid finally by the consumer at the end spot. For a debauched to be able to take credit on GST, they must be registered. Thus, if they do not exercise to be registered under GST, they are treated as the end consumers and can only enjoy the GST credit they incur. GST is classified into three types of supplies namely taxable supplies, input tax supplies, and GST free supplies. GST liability is created out of supply, however it is not created by the GST registered entity. The rules of GST do not check if the supplies of either goods or services came to force out front 1st July 2000, and in accordance to set special rules, gifts, when supply is made by entities not registered, or which are not required to register and when the transactions involved are not connected to Australia. In order to register Tiles Pty Ltd under GST system, the management needs to ensure that the firm satisfies the following requirements as stipulated under chapter 2, part 2-5 division 23 of the act. The main importance of registration is due to the following - GST is only account payable on any supplies for registered entities only Credits for inp ut tax cannot be claimed unless the entity is registered GST returns are only lodged for registered entities chthonic the goods and services act, an entity structure may include an individual, a sole corporate, a corporation body, a political body, a partnership, a trust and an unincorporated association or body of persons. Tiles Galore Pty Ltd is a petty sized corporation, meaning that, it falls under an entity structure required to be registered. Thus, the firm can apply to be registered by ATO for GST. Registration requirements are in sec 23-5 it states that an entity is registered It is an enterprise Annual turnover meets the brink for registration turnover The term entity is broad in definition and includes different legal persons as describe here below The trustee is that entity that should register for GST and ABN The partnerships are those entities that should register for GST but not for individual partners It and then entails that under section 23-10, an entity cannot be registered if it does not carry or intend to carry on with an enterprise. It is nonmandatory for that entity to register if it carries on an enterprise but does not meet the threshold for registration. Supplies fall under various sections namely taxable supplies, GST free supplies, and input taxed supplies. Other kinds are importations and those that fall outside the scope of the GST. dutiable supplies are determinant factors in ruling whether a certain transaction is worth falling under GST.