Registering for GST

Monthly, Quarterly or Annual GST Returns

When Should GST Returns be Lodged?

The Australian Business Number registration form, which incorporates the GST registration election, requires a church to nominate whether it will lodge GST returns monthly or quarterly.

Provided the church’s turnover is less than $20m, it can elect to lodge returns monthly or quarterly. The church must nominate which method it will use when it lodges its registration form.  Where the church's turnover is less than $150,000, it can choose to report GST on an annual basis.

Where a church elects to lodge its returns monthly, the due date for lodgement is 21 days after the month end.

The dates for quarterly returns are as follows:

     

Quarter

Date due

    Quarter 1 (July to September) 28 October
    Quarter 2 (October to December) 28 February
    Quarter 3 (January to March) 28 April
    Quarter 4 (April to June) 28 July

Monthly verses Quarterly Returns

An entity is likely to choose to lodge quarterly returns if it has to remit GST each quarter to the Taxation Office. This will occur if the GST collected by the entity on its revenue transactions is greater than the GST input tax credits it can claim back on its purchases. Most businesses will be in this category.

An entity might choose to lodge monthly if it usually receives a refund from the Taxation Office. This will occur if the GST collected by the entity is less than the GST input tax credits it can claim back on its purchases. Lodging monthly will allow the entity to receive its refund more promptly, thus improving its cash flow. Most churches will be in this category. Many of a church’s revenue transactions will be free of GST. For example, most of a church’s revenue comes from tithes and offerings, which are not subject to GST.

The main disadvantage of lodging monthly is the increased administrative requirements of needing to prepare twelve returns each year rather than four. For this reason, most churches will choose to lodge quarterly returns.

 

Summary

Advantage of Lodging Monthly

  Receive GST refund more promptly, resulting in an improved cash flow

Disadvantages of Lodging Monthly

  Greater administrative burden
  Remit GST earlier where the GST collected exceeds the GST paid

 

A church that has chosen to lodge monthly can change to a quarterly basis at the end of a quarter and vice versa.  This change can be made by an authorise person over the phone with the Taxation Office.  

Annual GST Reporting

Where a church is not required to register as its turnover is less than $150,000 and has not chosen to pay its GST in instalments, it can elect to report GST annually.  This election must be made by 21 August if you currently report monthly and 28 October if you report quarterly.  If you are registering for GST for the first time, you have up to six months to elect to report annually for that year.  The Taxation Office may consider late applications in special circumstances.

An annual election will remain in force until you revoke it or you no longer qualify (for example your turnover exceeds $150,000).

If you elect to report GST annually, you may still receive Instalment Activity Statements on a monthly or quarterly basis in order to remit other tax obligations such as PAYG withholding liability.  The annual GST return will be due for lodgement on 28 February after the end of the financial year.

As most churches receive GST refunds each period, few churches will wish to utilise this election. Although it may slightly reduce the administrative burden on church treasurers, churches will need to wait much longer to receive their GST refunds.