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Claire’s Column – GST Mistakes

Claire’s Column – GST Mistakes

8 Feb, 2019

To tie in with our GST focus this newsletter, I am going to discuss the top three mistakes made in reporting GST. These are:

  • Insurance
  • Vehicle registration
  • Cattle sales

Not many people realise insurance payments include stamp duty charges, which are notsubject to GST. To correctly record GST Credits on insurance payments you must report the premium and the stamp duty separately.

Insurance policies include a breakdown of the total premium, stamp duty, broker fees and GST. When reconciling insurance payments it is important to only claim GST on the insurance premium and any broker fees. Be sure to separate out the stamp duty component as a GST-free Expense.

When providing information for a quarterly BAS or an Annual Return to our office, it is important to provide a copy of your policies. Please do not hesitate to contact the office if you would like any assistance.

Vehicle registrations
There is no GST on registration payments, unless the payment includes CTP insurance.

Your Vehicle Registration Notice will indicate whether or not CTP insurance is payable under the ‘Fee Breakdown’ section. You will also receive a separate document with CTP insurance information. This is usually a pink piece of paper, showing the total insurance premium paid and the GST included in the premium, as well as additional fees and charges such as stamp duty.

When reconciling a registration payment, start with the CTP insurance premium, claiming GST on the premium. Enter the remaining fees and levies relating to CTP insurance as a GST-free expense. Finally, enter the remaining registration paid as a GST-free expense.

Trailers and heavy vehicle registrations do not include CTP insurance and therefore no GST Credits can be claimed.

If you are unsure if you have entered registration payments correctly, please send in a copy of the Registration Notice and CTP Insurance information to our office for assistance.

Cattle sales
When reconciling cattle sales, it is important to check the sale invoice for any sale expenses such as vendor commission and transaction levy. These expenses are deducted from the gross proceeds.

Please follow these steps to record cattle sales:

  • Gross Cattle Sale as Income – GST on Income
  • Less: Transaction levy – GST-free Expense
  •  Less: Commission, yard dues, dipping fees etc. – GST on Expense

This should equal the net sale proceeds that were deposited into your bank account.

Avoiding mistakes when recording GST for the period can be as simple as checking invoices. Ultimately the amount of GST you record should match the invoice.

Thanks for reading.


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T 07 4922 4244 · 184 Quay Street · PO Box 975 · Rockhampton · QLD 4700

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