Three kinds of sale
If you are registered for GST, everything you sell in Australia falls into one of three groups:
- Taxable sales carry 10% GST. This is the default; most goods and services are taxable.
- GST-free sales carry no GST, but you can still claim GST credits for the purchases that go into them. Examples include most basic food, many health and medical services, some education courses, some childcare, and exports.
- Input-taxed sales carry no GST and you generally cannot claim GST credits on related purchases. Examples include residential rent, most financial supplies and some sales of residential premises.
Which group a sale belongs to depends on what it is, not on how you would like to treat it. The ATO's GST-free and input-taxed pages list the categories, and the details matter (for example, plain bread is GST-free but a ready-to-eat sandwich is taxable). If you are unsure about a product, check the ATO's guidance or ask your tax adviser before invoicing.
What the ATO requires on a mixed invoice
The ATO's tax invoice page says that a tax invoice that includes taxable and non-taxable items must clearly show which items are taxable, and must also show each taxable sale, the amount of GST to be paid, and the total amount to be paid. In practice:
- Put taxable and non-taxable items on separate lines.
- Mark each line's tax treatment. The generator prints a Tax column with "GST", "GST-free" or "No GST" (input-taxed).
- Show the GST amount, worked out on the taxable lines only.
- Show the total payable.
The generator adds a short note under the totals explaining that GST applies only to lines marked GST, which removes any doubt for the customer's bookkeeper.
Why "Total price includes GST" does not work here
The ATO allows the statement "Total price includes GST" in place of a GST figure only where the GST is exactly one-eleventh of the total price. On an invoice with GST-free items, the GST is less than one-eleventh of the total, so the statement would be wrong. Show the GST amount. The generator adds the statement automatically only when every line is taxable.
A worked example
| Item | Tax | Amount (ex GST) | GST |
|---|---|---|---|
| Catering: sandwiches and hot food, 30 people | GST | $600.00 | $60.00 |
| Fresh fruit platters, 3 | GST-free | $90.00 | – |
| Bottled water, 30 | GST | $45.00 | $4.50 |
| Totals | Subtotal $735.00 | GST $64.50 | |
Total payable is $799.50. GST is 10% of the $645.00 of taxable sales, rounded once on the total. The fruit platters carry no GST. (This is an illustration of the layout; whether a particular food is GST-free depends on the ATO's food rules.)
Mixed sales: one item, two treatments
Sometimes a single sale has a taxable part and a GST-free part, such as a hamper containing both GST-free food and taxable wine. The price has to be apportioned between the parts on a reasonable basis and each part invoiced with its own treatment. The ATO publishes a ruling on apportioning (GSTR 2001/8). If you sell bundles regularly, set up each component as a saved item with the right tax code so the split is consistent.
Entering prices inclusive of GST
If you type prices inclusive of GST, a GST-free line's amount is simply its price; a taxable line's GST is one-eleventh of its price. The generator handles both modes and shows the method under the GST settings.
If you are not registered for GST
Tax codes only matter if you are registered. If you are not, none of your sales include GST, so there is nothing to mark: untick "Registered for GST" and every line is treated the same, with no GST column and a note that no GST was charged.