top of page

Does GST Apply When Selling Your Goods Online?

The internet has completely revolutionized the way businesses operate. In the past, businesses were limited to brick-and-mortar locations and had to rely on traditional marketing methods to reach their target audiences. Today, businesses of all sizes can reach a global audience with just a few clicks of a button, thanks to the power of eCommerce.

Building an eCommerce business is a great way to tap into the vast potential of the online marketplace. With an eCommerce business, you can reach customers worldwide and sell products or services 24/7.

With that in mind, you're probably wondering whether GST applies to your online sales. As an eCommerce business owner, it's essential to know whether or not you need to charge GST on your products or services.

GST Implications on Online Goods

Whether or not you have to charge GST on your online sales depends on a few factors, including:

  • Taxable supplies: GST is payable on these supplies.

  • GST-free supplies: No GST is payable on these supplies.

  • Input-taxed supplies: No GST is payable on these supplies.

Domestic Online Sales (Does GST Apply?)

When it comes to selling goods and services online, GST is only applicable if the sale is considered a taxable supply. Generally, a taxable supply is considered any goods or services sold within Australia that are not specifically exempt.

Exempt items include things like fresh food, most health services, and some education courses. If your online sale includes any of these exempt items, then GST will not apply.

If your online sale is considered a taxable supply and GST does apply, you will need to charge 10 per cent GST on the sale price and include this in the total price charged to the customer. You will also need to include your ABN and GST registration numbers on your invoices and receipts.

Online Sales of Goods to Overseas Customers

When you provide online services to customers located outside of Australia, you do not need to charge GST on the sale. This is because GST does not apply to exports of services. However, you will still need to include your ABN and GST registration numbers on your invoices and receipts. This is so that your customers can claim a GST credit if they are based in Australia.

If you are registered for GST, you can claim a GST credit for any GST paid on business expenses related to your online services. This includes expenses such as web hosting fees and advertising costs. Keep in mind that online sales to an overseas customer may require you to pay GST, mainly if you don't export the goods within the first 60 days after you've issued the invoice and received the payment for the goods.

Online Sales Services to Overseas Customers

Sales of digital products or services to customers outside of Australia are not subject to GST. This means that businesses do not have to charge GST on such sales, so long as the recipient was not within Australia when your services were performed or supplied.

The Bottom Line: Understanding GST Implications for eCommerce Businesses in Australia

As an eCommerce business owner, it's crucial to have a clear understanding of the GST implications for your business. By understanding the GST rules that apply to your business, you can ensure that you comply with the law, and that you are collecting the correct amount of GST on your sales.

As an eCommerce business owner, you have a lot on your plate. Not only do you have to worry about the day-to-day operations of your business, but you also have to keep track of your finances. This can be a daunting task, especially if you're not familiar with accounting. That's where we come in!

At the Ecommerce Accountant, we specialize in providing accounting services for eCommerce businesses. Contact us today to learn more about our services and how we can help you grow your eCommerce business!


25 views0 comments

Comments


bottom of page