Registering for GST in Australia has several benefits for businesses.
Firstly, it allows businesses to claim GST credits for any GST paid on goods and services purchased for business operations. This can lead to significant savings, especially for businesses with high input costs. Additionally, GST registration can enhance the credibility of a business, as it signals to clients and suppliers that the business has a turnover exceeding the $75,000 threshold, which may be beneficial when dealing with other registered businesses or in B2B transactions.
Moreover, being GST-registered is often a prerequisite for applying to government grants and assistance programs, which can provide financial support and incentives for business growth.
It also ensures compliance with tax laws, avoiding penalties and legal issues associated with failure to register when required. Furthermore, for businesses that are below the threshold but expect to exceed it, registering early can prevent a situation where they might have to pay GST retrospectively without having collected it from customers. Lastly, GST registration can assist with cash flow management, as businesses collect GST from sales which is not due to the ATO until the business lodges its activity statements, providing short-term use of the funds.