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How to Claim GST Refund

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Last editedMay 20222 min read

Australian businesses automatically pay sales tax, usually as a flat rate. However, like any other tax it’s sometimes possible to make mistakes or overpay, in which case you may be entitled to a refund. Companies can also claim back any GST that’s paid on products they’ve purchased for businesses use. What happens when you’re entitled to a GST credit or refund? Here’s how to claim GST refunds in Australia.

What does GST mean?

Australia’s Goods and Sales Tax, or GST, is the country’s standard sales tax levied on products sold within the country. It applies to both physical products as well asSaaS and other forms of digital products or services. While online purchases were exempt from GST until recently, this rule has changed. Most companies registered for GST will pay a flat rate of 10% for goods and services, purchased both online and in-person.

The GST must be included in a product or service’s sales price, with the cost passed on to the customer. This applies to products or services purchased by a business as well, meaning that companies can claim back credits for GST charges they’ve paid.

All GST collected is paid to the Australian Taxation Office (ATO) when a company lodges its regular business activity statement (BAS).

When can you claim GST back?

There are a few scenarios in which businesses can claim GST credits. The first is an input tax credit, which covers the cost of GST paid by a business. To qualify, the following conditions must apply:

The purchase was partially or solely for business use.
The purchase doesn’t relate to making input-taxed supplies.
The purchase price was inclusive of GST.
You can prove that you paid for the item.
The supplier provided a tax invoice over a threshold of $82.50.
The purchase was made within the past four years.

How to claim GST refund: Australia

The easiest way to claim your GST credit is to make a claim on your business activity statement (BAS). The ATO balances the GST credits against any GST your business owes, factoring these into your final bill or refund. The situation becomes slightly more complicated if you’ve purchased an item meant for both business and home use, such as electronics or a vehicle. In these cases, you will only be able to claim the GST credit for the percentage used for business purposes.

How to claim GST refund online with a tax invoice

If the value of your purchase is higher than $82.50, the supplier is required to issue a tax invoice. You can use this as the basis for your calculations, reporting any GST paid online when you file your BAS. When a supplier hasn’t provided you with a tax invoice, you have the right to request one. It can take up to 28 days for this to be issued, but you should wait until you’ve received it to claim your GST refund even if this falls in a later reporting period.

How to claim GST refund online without a tax invoice

Sometimes, a supplier fails to respond to your request for a tax invoice or sends you one without the information you need. If you’re unable to find the missing information from other documents received, you can request permission to use an alternative document – like a receipt – as a tax invoice instead. You can email the ATO at GSTmail@ato.gov.au. Another option is to submit a request in writing at:

Australian Tax Office

PO Box 3524

Albury NSW 2640

How to claim GST refund online for smaller purchases

What about purchases that fall below the $82.50 threshold? While you don’t need a tax invoice to claim your GST refund, you should have some form of documentation or proof of purchase. Examples include:

Cash register docket
Receipt
Invoice
Diary entry with supplier’s name and ABN

If you’ve been wrongly charged GST on imported services or products, you can seek a refund directly from the supplier rather than the ATO.

We can help

GoCardless helps you automate payment collection, cutting down on the amount of admin your team needs to deal with when chasing invoices. Find out how GoCardless can help you with ad hoc payments or recurring payments.