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GST Explained/ plus Benefits of GST Registration

by Ragini Salampure

Every business owner selling goods and services needs to be registered and licensed.  GST is one of those bodies you want your business to be registered to. This is an indirect tax used on the supply of goods and services, paid by the consumers, and is remitted to the state or the government by the seller(s).

It is also based on the destination, comprehensive, and multistage. To register for GST Australia, you must also first learn the different types of GST there are as well as the benefits and why you should even consider registering your business for GST. Read on to find out.

Types of GST

To start with, there are four main types of GST;

Central Goods and Services Tax (CGST)

This type of Goods and Services Tax is imposed on all the goods and services sold within a state and is levied by the state government. If your business runs within your state and not outside the border, this is the type of GST you want to register for.

One of the advantages of registering for CGST is that it replaces all other taxes including CST, SAD, and State Tax. Prices of goods and services under this tax are also charged according to the marketplace.

State Goods and Services Tax (SGST)

Just like CGST, SGST is also imposed on goods and services sold within a state and are levied by the state government.

It replaces other kinds of existing taxes including; VAT, Entry Tax, Sales Tax, and Entertainment Tax. It also is great for business transactions within the state. 

Union Territory Goods and Service Tax (UTGST)

Union Territory Goods and Services Tax (UTGST) is imposed on Intra UT supply of goods and services sold. The main purpose of this is to provide the same benefits as SGST including replacing most types of other taxes such as VAT, sales tax, and entertainment tax.

Integrated Goods and Services Tax (IGST)

Unlike SGST and CGST, IGST (Integrated Goods and Services Tax is imposed on goods and services being transacted in different states (interstate transactions) or when the movement of goods and services happens from one state to another. It also is levied on goods imported and distributed in the said states.

Benefits of GST

There are many reasons why you should register your business for GST Australia. Here are some of them; 

  • One of the benefits is that it removes the cascading effects of tax (tax on tax). It combines all the taxes imposed on goods and services under one umbrella. What this means is, when businesses used to pay VAT and Service Tax separately, they now can now file them at one go.
  • Another reason is that it makes the whole taxation process simple, fast, and more convenient. You can spend less money and time on tax filing because multiple other tax compliances including VAT, CST, and service tax under one file are already brought together under one file.
  • Starting a new business is easier with GST registration now. New companies don’t have to comply with different multiple rules to get started. Centralized registration has made it easy for the transaction of goods and services across different borders and different states. It has also helped eliminate high costs of procedures and made all paperwork and tax guidelines less complicated.

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