6 Mistakes Retailers Should Avoid When Filing GST Refunds

Goods and services tax (GST) is a standard tax levied on product sales made within a country. As a business, this covers your physical products, software as a service, and any other digital service. Unlike previously, when online purchase was exempt from the GST filing, now you have to pay a flat rate of 10% for online and in-person goods. 

Unfortunately, in some cases, you’ll likely make mistakes and overpay like every other task or tax payment activity. It makes you eligible for a refund. You can also apply for a refund if you paid GST on goods you bought for business uses. To successfully claim your GST refund, you need to get everything correct. Here are some mistakes you should avoid as a retailer:

Filing Under The Wrong Heading And Category



There are very many tax heads that you need to choose from when filing your GST report. These include the Central Goods and Services Tax, Integrated Goods and Services Tax, and State Goods and Services Tax. If you aren’t keen, you could quickly fill in your GST refund or liability under the incorrect heading.

Hence, when filing for your refund, you must be cautious about the heading under which you place it. Remember, the Goods and Services Tax Network (GSTN) doesn’t allow the interchangeability of taxes. Choosing the wrong header and category puts you in unfavorable working conditions caused by unforeseen cash flow.


Errors In Uploading The Data


Uploading GST data is typically done invoice-wise, especially for all the outward supplies. This data includes invoice number, date, tax rate, and place of supply. This document can involve a lot of data, and you can make errors while entering them. It can cause mismatches, and you must avoid them as much as possible. There’s no provision to amend the document, so be careful of what you enter. An easy way to mitigate this would be by using technology and software that has changed the face of retail marketing.   

Claiming A Refund For Small Purchases



When you purchase less than AUD$82.50, you don’t have to use a tax invoice to claim your GST refund. Instead, you need the following documentation to prove your purchase:

  • Invoice
  • The diary entry that has your suppliers name
  • Receipt 
  • The cash register docket

Also, instead of visiting the Australian tax office for a GST refund, you could seek it directly from your supplier.


Charging The Wrong GST Rate


All sales you make are subject to goods and services taxes after registration. It exempts only GST-free sales and exports. If you charge a higher rate, you could face charges and penalties. Other than that, having the wrong rates will impact your GST refund. Hence, you must often check the goods and service rates to be on the right side.  

Categorizing Of Nil Rated And Zero Rated Tax



As a taxpayer, you could easily confuse the nil-rated and zero-rated supplies. They don’t mean the same thing. Zero-rated supplies are tax-free exports, and nil-rated supplies are goods and services with a 0% tax rate. In the case of nil-rated supplies, there’s no need to fill in the tax credit. Therefore, when filing your returns, you must be careful not to enter the exports under the nil-rated account. It could affect your application for GST refunds. 

Also, fill in your NIL return if you have no transactions to report for a given tax period. If you fail to file this or do it late, it results in penalties.

Not Knowing When To File For Refund



When filing for your GST refund, you need to know when to do so. It is because there’s a limitation to when you can get the refund. The credits for business expenses you bought can be made using your quarterly BAS statement that you submit to the Australian Tax Office.  

However, you can’t get a refund if you have business-related expenses that you purchased from a supplier not registered for GST. Also, you will need to have your business registered for GST. Else your refund efforts will become fruitless. Other factors that disqualify your GST refund application include claiming GST on wages, lack of a tax invoice for any purchase above AUD$82.50, and others without GST in their prices.


Filing your GST is beneficial to your retail business. Consistent, efficient, and correct filing of taxes is vital in ensuring your business doesn’t break the law through tax avoidance and corruption. Therefore, with the above tips and adequate preparation, you can avoid mistakes when filing your GST refunds and get your money back. Better still, delegate the filing task to certified professionals with a firm grasp of the ins and outs of GST filing.


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