Australian GST Guide for eCommerce Businesses

Goods and Services Tax (GST) is Australia's broad-based consumption tax of 10%, administered by the Australian Taxation Office (ATO). For eCommerce businesses — whether Australian-based selling domestically or internationally, or overseas businesses selling to Australian customers — understanding GST obligations is essential to avoid unexpected tax debts, penalties, and compliance issues.

The GST landscape for eCommerce has changed dramatically since 2018 when Australia introduced new rules requiring overseas sellers of low-value goods and digital services to register and remit GST on sales to Australian consumers. These rules, combined with Australia's existing GST framework, create obligations that many eCommerce operators — particularly small businesses and international sellers — overlook entirely.

Key Takeaways

• GST registration is required once your GST turnover meets or exceeds AUD $75,000 in the current or previous 12 months (or $150,000 for non-profits)
• Taxi services and ride-sharing have a $0 threshold — register from the first dollar of income
• GST is 10% on most goods and services; food (most basic), healthcare, education, and childcare are GST-free
• Overseas sellers of low-value goods (under AUD $1,000) to Australian consumers must register if their Australian sales exceed AUD $75,000
• The simplified GST registration system (for foreign businesses) streamlines compliance for overseas sellers
• Business Activity Statements (BAS) are typically lodged quarterly; monthly for businesses with AUD $20M+ turnover
• Input tax credits (ITCs) allow GST-registered businesses to reclaim GST paid on business purchases
• The GST Margin Scheme applies to property transactions and can significantly reduce GST payable on qualifying sales

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GST Registration Requirements

The $75,000 threshold:

You must register for GST if your GST turnover (turnover from all sales subject to GST, including zero-rated sales) is at or above:

• AUD $75,000 for most businesses
• AUD $150,000 for non-profit organisations
• AUD $0 for taxi drivers and ride-sharing drivers (Uber, Didi, etc.)

GST turnover is calculated over the current month plus the preceding 11 months (current GST turnover) and projected forward over the next 12 months (projected GST turnover). If either measurement exceeds the threshold, registration is required.

Excluding from GST turnover:

The following are excluded from your GST turnover calculation: input-taxed supplies (GST-free and input-taxed sales), sales outside Australia (with some exceptions for connected with Australia), and supplies from the sale of capital assets used in your business.

Voluntary registration:

Businesses below the threshold can register voluntarily. This makes sense if you buy significant business inputs with GST and want to claim input tax credits, or if your customers are businesses who can claim back the GST you charge (making your pricing neutral to them).

Registration process:

Register through the Australian Business Register (ABR) or your myGov / ATO Online Services account. You need an Australian Business Number (ABN) before registering for GST. If you are a foreign entity, you can obtain an ABN and GST registration through the ATO's business registration portal. The simplified GST registration system (for foreign businesses selling digital products and low-value goods to Australian consumers) is available at ato.gov.au.

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What GST Applies To: Taxable, GST-Free, and Input-Taxed

Taxable supplies (GST at 10%):

Most goods and services supplied by a registered business in the course of carrying on an enterprise in Australia are taxable. Examples:

• Clothing and footwear (most)
• Electronic goods
• Motor vehicles
• Hardware and tools
• Restaurant meals and hot takeaway food
• Alcohol and tobacco
• Cleaning services
• Accounting and legal services
• Software (sold to Australian consumers)
• Consultancy fees

GST-free supplies:

GST-free supplies are not subject to GST, but the seller can still claim input tax credits on purchases used to make them. Key GST-free categories:

Food: Most basic food is GST-free — fresh fruit and vegetables, meat (uncooked), bread, cereals, milk, eggs, and most ingredients for home cooking. However, the ATO's food rules are complex. Hot food is taxable. Snack foods (biscuits, confectionery, savoury snacks, soft drinks) are taxable. Mixed food supplies may need to be apportioned.

Health and medical: Most medical, dental, nursing, midwifery, optometry, physiotherapy, and related professional services. Prescription medications. Hearing aids and accessories.

Education: Services provided by recognised educational institutions and universities. Not generally applicable to private tutoring or training companies.

Childcare: Approved childcare services (long day care, occasional care, family day care, after-school care).

Exports: Goods physically exported from Australia are GST-free (zero-rated). Services supplied to non-residents who are overseas when the service is performed are also GST-free (with specific rules).

Financial services (input-taxed): Not GST-free, but input-taxed — no GST on the supply and no input tax credit on related expenses. Includes bank fees, insurance, most financial transactions.

Input-taxed supplies:

The seller does not charge GST but also cannot claim input tax credits on related purchases. Significant input-taxed supplies: financial services (loans, deposits, most insurance) and residential rent. A landlord charging residential rent does not charge GST on rent and cannot claim GST on property-related expenses (repairs, management fees, etc.).

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eCommerce and GST: Australian Sellers

GST on domestic eCommerce:

If you are an Australian business registered for GST selling goods or services to Australian customers through your own website or marketplace, standard GST rules apply. Charge 10% on taxable sales, claim input tax credits on your business purchases, and lodge BAS quarterly.

Selling through Australian marketplaces:

Amazon Australia, eBay Australia (for sellers above the low-value threshold), and other major Australian marketplace platforms are "electronic distribution platform" (EDP) operators. They may be responsible for collecting and remitting GST on your behalf for sales under AUD $1,000, depending on their platform policies. Verify your specific marketplace's policies — the rules shift responsibility between seller and platform.

Exporting goods:

Goods exported from Australia are GST-free. You can zero-rate exports and claim input tax credits on all costs attributable to the export sales. Keep export documentation (commercial invoices, freight documents, customs export declarations) to substantiate the GST-free treatment in case of ATO audit.

Digital products and services to Australian consumers:

Australian residents purchasing digital products (ebooks, apps, streaming services, online courses, software licences, digital subscriptions) from overseas suppliers are subject to GST at 10%. This is handled differently for Australian vs. foreign businesses — Australian businesses charge GST; foreign businesses (see next section) must register in Australia.

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Overseas Sellers: Low-Value Goods and Digital Services

Australia has taken an aggressive approach to capturing GST from overseas businesses selling to Australian consumers. Two sets of rules apply:

Digital products and services (since 2017):

Overseas businesses supplying digital products and services (streaming, apps, online subscriptions, consulting delivered electronically) to Australian consumers must register for GST if their annual sales to Australian consumers exceed AUD $75,000. Register through the ATO's simplified GST registration system (no need for a full Australian tax presence).

Digital services subject to these rules include: streaming platforms, digital downloads, online games, remote administration services, online advertising, and software as a service. Services where the supplier is physically in Australia delivering the service are excluded — they are already taxable as Australian supplies.

Low-value goods (since 2018):

Overseas businesses selling goods valued at AUD $1,000 or less to Australian consumers must register and charge GST if their total Australian sales exceed AUD $75,000 per year. This applies to goods shipped from overseas — whether through your own website or through marketplaces.

Important: The $1,000 limit applies per transaction, not per item. A single order with multiple items totalling over $1,000 may have customs duty and GST assessed at the border (traditional import model) rather than triggering the low-value GST rules.

Simplified registration:

The ATO provides a simplified registration and reporting system for overseas sellers of digital services and low-value goods. You register once, report in AUD (or an agreed foreign currency), and pay GST quarterly. The simplified system does not allow input tax credit claims — if you want to claim ITCs on Australian purchases, you need full standard registration.

Excluded from low-value goods rules:

• Goods over AUD $1,000 (assessed at border)
• Alcoholic beverages (assessed at border)
• Tobacco products (assessed at border)
• Sales through electronic distribution platforms where the platform operator is responsible for GST

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Business Activity Statements (BAS)

The Business Activity Statement is the form you use to report and pay your GST obligations to the ATO, along with any PAYG withholding (employee tax), PAYG instalments, and fringe benefits tax (FBT) instalments.

BAS lodgement frequency:

• Quarterly: Most businesses (ATO assigns this based on your turnover)
• Monthly: Businesses with annual GST turnover of AUD $20 million or more
• Annually: Businesses using the GST annual apportionment election or annual tax period

Key BAS labels for GST:

GST accounting methods:

Cash basis: Report GST when you receive payment from customers and when you pay suppliers. Suitable for businesses with turnover under AUD $10 million. Easier cash flow management — you do not pay GST until you collect it.

Accruals basis: Report GST when you issue tax invoices (for sales) and when you receive tax invoices (for purchases), regardless of when cash moves. Required for businesses with turnover AUD $10 million or more. Gives more accurate picture of GST position.

Lodgement and payment deadlines:

Quarterly BAS: Due 28 days after the end of the quarter. Quarters: July–September (due 28 October), October–December (due 28 February), January–March (due 28 April), April–June (due 28 July).

Late lodgement penalties: Failure to lodge (FTL) penalty of 1 penalty unit per 28 days, up to a maximum of 5 penalty units. Each penalty unit is currently AUD $330 (2026 value). Interest accrues on outstanding GST debts at the shortfall interest charge rate.

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Input Tax Credits: What You Can and Cannot Claim

Input tax credits (ITCs) are the GST equivalent of input VAT recovery in the UK and EU. You can claim ITCs on purchases used in your business to make taxable (or GST-free) supplies.

Requirements for claiming ITCs:

1. You are registered for GST
2. The purchase is for your enterprise (not private use)
3. You hold a valid tax invoice from the supplier (for purchases over AUD $82.50 including GST)
4. The supply was not input-taxed

Tax invoice requirements:

A valid tax invoice must show: supplier's ABN, statement that it is a tax invoice (or "Tax Invoice" in the document), date, description of goods/services, GST amount (or statement that the price includes GST), and the total price. For invoices over AUD $1,000, must also include the recipient's name and address.

Partial ITCs (mixed business/private use):

If a purchase is partly for business and partly private (e.g., a car used 70% for business and 30% personal), claim ITCs for the business portion only (70%). Document your apportionment methodology. For car expenses, the ATO's logbook method or the cents-per-kilometre method determines the business use percentage.

Blocked credits:

Cannot claim ITCs on: entertainment (where the entertainment is exempt from FBT or is not a deductible expense), private expenses, and some membership fees.

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GST and Property Transactions

Property transactions have complex GST rules that depend on whether the property is new or established residential, commercial, or mixed-use.

New residential property:

The sale of new residential property by a builder or developer is taxable at 10%. Buyers of new residential property pay GST as part of the purchase price. Since 2018, the buyer (not the seller) is responsible for remitting the GST component to the ATO at settlement under the GST Residential Withholding rules — the buyer pays 1/11th of the purchase price (or 7% for margin scheme property) directly to the ATO at settlement.

Established residential property:

Private sales of existing residential property are input-taxed — no GST applies. A private individual selling their home does not charge GST.

Commercial property:

Generally subject to GST at 10%. The Margin Scheme can apply if the seller purchased the property under the Margin Scheme or before 1 July 2000.

Going concern exemption:

Selling a business as a going concern (including the property it operates from) is GST-free if both parties are registered for GST, the sale includes everything necessary to continue the business, and both parties agree in writing that the supply is a going concern.

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Frequently Asked Questions

Do I charge GST on sales to New Zealand customers?

No. Goods exported to New Zealand (and all other countries) are GST-free as exports. Services supplied to New Zealand businesses are generally GST-free (supply to a non-resident). Services supplied to New Zealand consumers may be GST-free if the service is physically performed outside Australia. However, New Zealand has its own GST (15%) and overseas sellers to NZ may have obligations under NZ GST rules if their NZ sales exceed NZD $60,000.

What is the difference between GST-free and input-taxed?

Both have a GST rate of zero to the customer, but they differ in input tax credit entitlements. For GST-free supplies (exports, basic food, health, education), the seller charges no GST but can claim input tax credits on all related purchases. For input-taxed supplies (residential rent, financial services), the seller charges no GST and cannot claim input tax credits on related purchases. Input-taxed is more restrictive and applies to specific industries where adding GST was deemed impractical.

I sell on both my own website and through Amazon Australia. How does GST work for each?

For your own website sales to Australian consumers, you are responsible for collecting and remitting GST. For Amazon Australia sales, Amazon operates as an electronic distribution platform (EDP) and is responsible for collecting GST on your behalf for goods valued under AUD $1,000. This means Amazon adds GST to the customer's price and remits it to the ATO — you receive payment net of GST and do not report those Amazon sales as GST-inclusive on your BAS. Keep records distinguishing which sales were made through the EDP vs. your own site.

How do I handle GST on dropshipping from overseas suppliers to Australian customers?

If you are an Australian business dropshipping from overseas suppliers to Australian customers, you are making a domestic sale to the Australian customer (potentially GST applicable if registered) and you are importing goods (import GST applies when goods clear customs if over AUD $1,000, or if through a registered overseas seller for goods under $1,000). Get advice on your specific supply chain structure — the GST treatment depends on where legal title passes, who is the importer of record, and who the ATO considers to be making the supply to the Australian consumer.

Can I claim ITCs on business entertainment?

Partially. Entertainment expenses that are subject to Fringe Benefits Tax (FBT) do not attract input tax credits. However, if the entertainment is provided to employees and the employer elects to use the "50/50 split method" for meal entertainment FBT, 50% of ITCs are claimable. Entertainment provided to non-employees (clients, contractors, prospects) is generally not deductible and not ITC-eligible. Use an entertainment log to track who attended and the business purpose for each entertainment expense.

What is the penalty for failing to register for GST when required?

If you fail to register when required, the ATO can assess GST from the date you were required to register, plus a failure to register penalty (up to 25% of the tax avoided) and general interest charges on the outstanding debt. The ATO may also apply the Taxable Supply Information (invoice) obligations retroactively. Voluntary disclosure before ATO detection significantly reduces penalties — the ATO applies a 20% penalty reduction for voluntary disclosures made before any audit notification.

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Next Steps

Australian GST compliance for eCommerce businesses — particularly those selling internationally or receiving international customers — requires current knowledge of the ATO's evolving rules for low-value goods, digital services, and marketplace obligations. Getting GST right from the start avoids significant retrospective tax debts and penalty exposure.

ECOSIRE's accounting team provides GST compliance support for Australian eCommerce businesses and overseas businesses with Australian GST obligations. We handle ATO registration, BAS preparation and lodgement, low-value goods and digital services compliance for international sellers, and ATO correspondence management.

Explore ECOSIRE Accounting Services to connect with a GST specialist who understands the eCommerce landscape in Australia and can keep your compliance current as the rules continue to evolve.