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GST stands for 'Goods and Services Tax'. As the name suggests when most goods and services are provided (supplied) to consumers and businesses, they are taxed.
The GST aims to tax "private final consumption expenditure" in Australia. Consequently, the tax has been defined as a "broad-based consumption tax" which is charged nearly every time a business supplies goods or services in the course of its business activity.
The essential design feature of GST is that tax paid by a registered business on its purchases is available as a credit or refund against GST charged by that business on its sales. The aim is that no part of the tax represents a cost to the business but is borne by the consumer. This is achieved through the mechanics of the crediting system whereby tax is both levied and credited (refundable) on each business transaction in the supply chain until the point of sale to the end consumer (normally a private individual) or unregistered small business. The end consumer pays GST (with limited exceptions) but is not able to claim a credit for GST paid.
When did GST Start?
The GST was introduced on July 1 2000. Most businesses are now required to account for GST on their products and services at the rate of 10%.
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