Common GST Mistake: Gift cards

Even though the Goods and Services Tax (GST) has been in operation for more than 10 years, despite its best efforts to educate the general public, the Australian Taxation Office (ATO) is still receiving business activity statements (BAS) containing many errors. Most of these errors relate to the over-claiming of GST input tax credits (ITCs) but in general, can be attributed to a misinterpretation (or lack of knowledge) of GST legislation.

Below is a list of some of the most common errors business owners make when preparing the BAS.

1) Gift cards: These are GST free and like recharges, the GST is not accounted for until the cards are used to purchase goods.

2) Bank Fees: There are two main types of bank fees – general bank charges like monthly/annual fees and merchant banking fees. General bank fees are input-taxed, so no GST to claim there but merchant bank fees do attract GST. Note, PayPal merchant fees are GST free, however eWay merchant fees are subject to GST – be careful!

Motor Vehicle Registration: In Victoria, the vehicle registration is broken up into 3 parts: Registration Fee, TAC Charge and Duty Insurance. Only the TAC Charge includes GST; the other 2 components are GST Free. Similar scenarios exist in other states (check with your local roads and motor vehicle authority for more information).

Transport Accident Commission (TAC) charge


3) (NSW Motor Vehicle Registration renewal paper does not seem to include GST item at all. It has two items only. They are Registration fee $67 and Motor vehicle tax $474 for 2016 HYU.)


GST on car registration costs (NSW)

Goods and Services Tax is not applicable on registration costs, except for:
CTP insurance premium for conditional registration and Unregistered Vehicle Permits
Heavy vehicle inspection fees.

https://www.rms.nsw.gov.au/roads/registration/fees/index.html

4) Donations: Donations are GST Free.

5) Are hearing aids subject to GST?

In short, the answer is NO.

Hearing aids, batteries and most related accessories are GST-FREE as they are considered medical aids and appliances under Schedule 3 to the GST Act.

https://www.hearingsavers.com.au/gst-and-hearing-aids/

The sale/purchase of vouchers: The supply of a voucher does not attract GST. GST only applies once the voucher is redeemed. This is to prevent double taxation of supplies.



redeem verb (EXCHANGE)

redeem a coupon, voucher, etc.

to exchange a piece of paper representing a particular amount of money for that amount of money or for goods to this value


full list on the link below.

ref: https://www.e-bas.com.au/bookkeeping-blog/29-common-gst-mistakes