Goods and services tax (GST) is a broad-based tax of 10%
on most goods, services and other items sold or consumed
in Australia.

EXAMPLE: Collecting and paying GST on the sale of goods
A timber merchant sells timber to a furniture manufacturer for $110 (including $10 GST). The manufacturer uses the timber to
make a table, which he sells to a furniture retailer for $220 (including $20 GST). The retailer then sells the table to a consumer
for $330 (including $30 GST).
Raw materials Net GST to pay
A The timber merchant needs to make
$100 on the sale of the timber. So he
sells the timber to a manufacturer for
$110, keeps $100 and pays $10 GST
to us.
A Timber merchant
sells timber for $110,
including $10 GST
GST on sale $10
Assume no GST credit $0
Net GST to pay $10 Timber merchant
pays $10 GST to us
Production Net GST to pay
B The furniture manufacturer can claim
a credit for the $10 GST included in the
price he paid to the timber merchant.
The manufacturer offsets that $10
against the $20 collected on the sale
of the table to the retailer, and pays
$10 GST to us.
B Furniture
manufacturer sells
table for $220,
including $20 GST
GST on sale $20
Less GST credit $10
Net GST to pay $10 Manufacturer pays
$10 GST to us
Distribution Net GST to pay
C The furniture retailer can claim a
credit for the $20 GST included in the
price he paid to the furniture
manufacturer. The retailer offsets that
$20 against the $30 GST collected on
the sale of the table to the consumer,
and pays $10 GST to us.
C Retailer sells table
for $330, including
$30 GST
GST on sale $30
Less GST credit $20
Net GST to pay $10 Retailer pays
$10 GST to us
Retail GST to pay
The consumer who buys the table
bears the $30 GST included in the
price, as consumers cannot register for
GST and cannot claim GST credits.
Consumer pays $330 (including $30 GST)
to the retailer
$30 total GST
paid to us