Handling the GST on cattle and beef sales
The GST and beef production
There are a number of key points to know about GST with respect to beef production.
- If you are a commercial producer of beef cattle you should apply for an Australian Business number (ABN). If you have not already done so, fill in an application form as soon as possible. If you do not have an ABN, you will not be able to claim rebates on the GST paid on expenses.
- Registered businesses will be required to submit a Business Activity Statement to the Australian Tax Office (ATO) every three months although some producers may choose to report monthly.
- If your business is registered and you sell stock to another party GST is added to any sales.
- If you are registered for GST and you sell through an agent or direct to an abattoir the statement you receive will satisfy taxation requirements. In the saleyard case the agent will provide the buyer with the tax invoice including the vendor's ABN. The agent will provide the vendor with a statement detailing the transaction, including the amount of GST collected. Likewise with sales direct to an abattoir or company feedlot a statement will be provided to the vendor. If you sell stock to another farmer or to a retailer, you are required to charge GST and provide the buyer with a tax invoice detailing the transaction. The required layout is outlined in the Australian Tax Office (ATO) booklet How to keep your business records pages 4 and 5 or the Commonwealth Department of Agriculture, Fisheries and Forestry booklet Your Farm Business and the GST – a detailed guide on pages 64 to 68 or check out the web site on www.affa.gov.au/taxreform.
- If you buy stock from someone else, ensure they provide you with a tax invoice so that you can claim any GST charged. If the purchase is made from a hobby farmer, no GST should be added but you should obtain a statement from the hobby farmer that the sale relates to a hobby. If a statement is refused you should withhold 48.5% of the money due and include this amount in your next Business Activity Statement.
- If you sell stock to another farmer or retailer and do not provide a tax invoice which includes your ABN, this business should deduct 48.5% from any payment. You will be entitled to claim this withheld amount as a credit in your next tax return.
- If you have a job done by a contractor for your business and they do not provide you with a tax invoice including an ABN you are required to withhold 48.5% of the amount due and include this amount in your next Business Activity Statement.
- Ensure you have a recording system in place that makes it easier to complete your business activity statement.
- Bidding at auction will be on a GST exclusive basis. In other words, GST is not included. If the vendor is registered for GST, the bidder must pay an additional 10%. The auctioneer will announce when the vendor is not registered for GST meaning that no GST will be charged on this transaction.
- If your turnover is less than $50,000 per year you have the choice of registering. If you do not register, you will still pay tax on inputs but will not be permitted to charge GST on outputs. The decision to register or not should be based on whether the amount you are likely to be able to claim is more than the cost of the paperwork that is required.
- Breeding services such as embryo transfer, artificial insemination, purchase of semen will attract a GST.
- GST will be payable on agistment.
