Do the Australian online stores require to include GST in the product price display?
The answer depends on the business’s annual GST turnover. If an Australian online store—or any Australian business—has a gross income above $75,000, it is required to register for GST. Once registered, the business must include GST on the items it sells.
However, if the gross GST turnover is less than $75,000, the business is not required to register for GST and therefore must not display prices with GST or charge GST to customers.
Even with turnover below $75,000, you can choose to register for GST voluntarily. See more details..
🌟 What is GST means in Australia?
The Goods and Services Tax (GST) in Australia is a broad-based consumption tax of 10% on the sale of most goods, services, and other items consumed in the country.
Key Aspects of GST
✍️ Rate: The standard GST rate is a flat 10%. To calculate the GST component from a GST-inclusive price, you divide the total price by 11.
✍️ Mechanism: It is an indirect tax, ultimately paid by the final consumer, but collected by businesses and remitted to the Australian Taxation Office (ATO).
✍️ Purpose: The revenue generated funds public services such as healthcare, education, and infrastructure across Australia’s states and territories.
✍️ Input Tax Credits: Businesses registered for GST can generally claim credits (referred to as input tax credits) for the GST they pay on goods and services purchased for their business use. This ensures that GST is only a cost to the final consumer, not the businesses in the supply chain.
🌟 Ok. What is the GST turnover means?
GST turnover is your total business income (gross income), but it specifically excludes the Goods and Services Tax (GST) itself and certain types of sales.
The calculation of GST turnover does not just depend on a single year’s invoices, but is assessed based on a rolling 12-month period.
Calculating GST Turnover
You must monitor both your:
✍️ Current GST turnover: Your total gross business income for the current month and the previous 11 months.
✍️ Projected GST turnover: Your likely total gross business income for the current month and the next 11 months.
You reach the threshold and must register for GST if either of these calculations is $75,000 or more (or $150,000 for non-profit organisations).
Key Exclusions from GST Turnover
When calculating your GST turnover, you must exclude the value of the following types of sales:
✍️ GST included in sales: The 10% GST amount itself is not part of the turnover calculation.
✍️ Sales not connected with Australia: Income from purely offshore sales.
✍️ Input-taxed sales: Certain sales where no GST is charged, such as residential rent or financial supplies (e.g., bank interest).
✍️ Sales not for payment: Sales that are effectively gifts or not made for a payment.
✍️ Sale of a business asset: Amounts received from the one-off sale of a capital asset, such as a large piece of machinery.
🖊️ Note
“GST turnover” is not simply the total value of all invoices issued. It’s a specific figure based on your gross business income (before any expenses or profit calculations) over a 12-month period, minus the actual GST component and other specific non-taxable income sources.
🖊️ Example:
Question:
A dropshipping business sells an item for $100. It was listed on AliExpress for $80, so the seller earns $20 from the sale. For GST turnover calculations, which amount is considered: the $100 or the $20?
Answer:
For GST turnover calculation purposes, you must consider the full sales price of AUD$100, not just your $20 profit margin.
The Australian Taxation Office (ATO) defines “GST turnover” as your total business income or gross income, not your net profit after expenses.
Explanation of the Calculation
✍️ Your Gross Income (Turnover contribution): AUD$100 (the total amount the customer pays you).
✍️ Your Expense (AliExpress cost) : AUD$80 (this is an expense you can record in your books for income tax purposes, but it doesn’t reduce your GST turnover figure).
✍️ Your Profit: AUD$20.
Your GST turnover is based on the total value of the supply you make to the customer. In this case, each $100 sale contributes $100 toward the $75,000 threshold.
If your total gross sales (from all Australian-connected business activities) reach or exceed $75,000 in a rolling 12-month period, you are legally required to register for GST.
🌟Key Details
✍️ Under $75,000 turnover: You are not required to register for GST. If you are not registered, you do not charge GST on your sales and should not include it in your prices. Your invoices or receipts should indicate that no GST has been charged.
✍️ $75,000 turnover or more: You must register for GST with the Australian Taxation Office (ATO) within 21 days of reaching the threshold. Once registered, you must:
⊙ Include the 10% GST in the price of most goods and services you sell.
⊙ Display the GST-inclusive price as the total price to consumers, as required by the Australian Consumer Law.
⊙ Issue tax invoices for sales over $82.50 (including GST) if requested.
✍️ Voluntary Registration: Even with turnover below $75,000, you can choose to register for GST. If you do, you must comply with all GST obligations, including collecting and remitting GST, but you can also claim GST credits for business expenses.
In essence, whether GST is included in the displayed price depends entirely on the business’s GST registration status, which is primarily determined by the turnover threshold.
✨ Summary
Australian online stores must include GST in their displayed prices only if they are registered for GST, and registration depends on their annual GST turnover.
When GST Must Be Included
A business must register for GST when its GST turnover reaches $75,000 or more in a rolling 12‑month period (or $150,000 for non‑profits).
Once registered, the business must:
Charge 10% GST on most sales.
Display GST‑inclusive prices to consumers.
Issue tax invoices for sales over $82.50 if requested.
When GST Must Not Be Included
If a business earns less than $75,000, it is not required to register for GST.
If not registered:
It must not charge GST.
It must not display GST‑inclusive prices.
Voluntary Registration
Businesses under the threshold may register voluntarily.
If they do, they must follow all GST rules but can also claim input tax credits on business purchases.
What GST Is
GST is a 10% consumption tax on most goods and services in Australia.
It is paid by consumers but collected and remitted by businesses.
Registered businesses can claim input tax credits to avoid GST becoming a business cost.
Understanding GST Turnover
GST turnover is total gross business income, excluding:
The GST component itself
Offshore sales
Input‑taxed sales (e.g., residential rent, financial supplies)
Sales not for payment
One‑off sales of business assets
It is calculated over a rolling 12‑month period, using both:
Current GST turnover (past 11 months + current month)
Projected GST turnover (current month + next 11 months)
Example
If a dropshipper sells an item for $100 (profit $20), the full $100 counts toward GST turnover—not the profit.
