Calculating your GST liability for the Business Activity Statement (BAS) in Australia involves a few steps to ensure accuracy in reporting to the Australian Taxation Office (ATO). Firstly, you need to determine the total amount of GST you have collected from your customers during the reporting period.
This is the GST on your taxable sales, which can be calculated by adding 10% to the sale price or by using the formula where the GST amount (G) is the original price (P) multiplied by 0.1. Conversely, you also need to calculate the total amount of GST you have paid on your business purchases, which you are entitled to claim as credits.
The difference between the GST collected on sales and the GST credits on purchases will give you your net GST liability. If the amount of GST collected is more than the credits, you owe that amount to the ATO. If it's less, you will receive a refund. For a more detailed calculation, you can use the ATO's interactive GST calculation worksheet, which provides a step-by-step guide to work out your GST amounts for the BAS.
It's important to keep all invoices and receipts related to your sales and purchases as they contain the necessary information for calculating your GST liability. Remember, accurate record-keeping and timely calculations are key to ensuring that your BAS lodgements are correct and to avoid any potential penalties or interest charges for errors or omissions.