Local · AU
What is the difference between GST-free and input-taxed sales?
Short answer
Both can involve sales without GST charged, but their treatment of related GST credits differs. Eligible costs connected with GST-free sales can generally support credits; costs connected with input-taxed sales are generally restricted, subject to specific rules.
Detailed answer
Do not use one no-tax code for everything
A GST-free supply and an input-taxed supply are legal categories, not interchangeable labels. The classification depends on the actual goods, services or transaction and any conditions. Using a generic zero-tax code can obscure reporting and lead to incorrect credit claims. Some businesses make several kinds of supplies and need more than one treatment.
Review related purchases
Check whether costs relate to taxable, GST-free, input-taxed or private activities. Mixed-use costs may need allocation and certain financial supplies have special rules. Keep the reasoning and supporting documents, and ask a registered adviser to review borderline classifications before filing. Do not assume that charging no GST means all associated purchase GST is recoverable.
Official sources
Published by Expert Bookkeeping Services · Last updated 2026-11-01. General information only — confirm specifics for your situation with a qualified adviser.
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