9Explain how the GST System works and why it was
9Outline the method of collection of tax and the goods and
services to which the tax applies
9Describe the basic operation of the system
9Describe the registration process
9Illustrate the GST accounting requirements
9Identify GST-free supplies
9Identify Input Taxed supplies
9Explain the obligations of a registered business
Chapter 4 Goods and Services Tax
Office Tax Procedures 7th Edition 2007
MULTIPLE CHOICE ANSWERS:
The date of 2 December 1998 is significant because it affected some contracts
already in place.
The actual date that the legislation started and sales tax ceased was 1 July 2000.
Goods and imports
Goods and services and imports
This is zero rated – this effectively allows input tax credits to be claimed against
purchases for the supply of GST-free goods and services.
Input taxed supplies are totally exempt from GST so no rate is applied
Receive input tax credits, which are netted off against output tax payable.
Exporters only have to worry about input tax credits, because all exports will most
likely be zero rated
GST is a value added tax, as each entity will add value to the goods that are passed
on in the chain.
The introduction of GST has broadened the tax base.
In actual fact, only if a customer requests one, does a tax invoice have to be given. In
reality most entities automatically give a tax invoice.
The tax invoice will not be required if the value is under $50. The sale could actually
be $55 or less, inclusive of GST
It may be possible with ATO approval, to continue as a cash payer even after the
threshold exceeds $1m
All of these are valid
This is the top marginal income tax rate plus the Medicare levy.
The input tax credit would be $300
Non-GST registered busin