GST and Tax Compliance Sydney — Australia GST 10% and India GST for Indian Businesses 2026

GST and Tax Compliance Sydney — Australia GST 10% and India GST for Indian Businesses 2026

Australia's Goods and Services Tax (GST) at 10% applies broadly, with a registration threshold of AUD 75,000 annual turnover. Indian businesses with Australian subsidiaries must lodge Business Activity Statements (BAS) with the ATO, comply with Australia's corporate income tax at 25% (30% for large companies), and continue managing the India parent entity's GST obligations. MICS provides integrated dual-country tax compliance for Indian businesses in Sydney.

Australia GST Fundamentals

GST Registration

• Mandatory threshold: AUD 75,000 annual GST turnover
• Voluntary registration: below threshold — beneficial when incurring significant input tax credits
• Registration: ATO Business Portal — Australian Business Number (ABN) and GST registration
• Tax invoice: required for all GST transactions above AUD 82.50 (incl. GST)

Australia GST Rate Structure

• Standard rate: 10% on most goods and services
• GST-free (0%): basic food, medical services, education, exports (goods and services exported outside Australia)
• Input-taxed: financial services, residential rental, precious metals
• Out of scope: private transactions, third country supplies

Business Activity Statement (BAS)

• Lodgement: quarterly for most businesses; monthly for businesses with GST turnover above AUD 20 million
• BAS sections: GST (section 1A), fuel tax credits (section 7), PAYG withholding (section W1/W2), PAYG instalments
• Lodgement deadline: 28 days after quarter end (extended to 4 weeks when lodged via a tax agent)
• ATO portal: BAS lodged via ATO Business Portal, myGov, or tax agent portal
• Penalties: failure to lodge penalty and general interest charge on late payment

GST on IT Services Exported to India

For Indian IT companies billing from Sydney to India clients:

• GST-free exports: services supplied to entities carrying on business outside Australia are GST-free
• Connected with Australia test: services not connected with Australia — GST-free
• Input tax credit: Australian GST on business costs is fully claimable for GST-free exporters
• Documentation: export evidence required (contracts, India client details, payment records)

Non-Resident GST (Digital Economy)

• From July 2017: offshore suppliers of digital products/services to Australian consumers must register for GST if turnover above AUD 75,000
• Low Value Imports (since July 2018): GST applies to low value imported goods under AUD 1,000

Australia Corporate Income Tax

• Rate: 25% for base rate entities (aggregated turnover < AUD 50 million); 30% for large companies
• Tax return: annual company tax return (CTR) lodged with ATO
• PAYG instalments: quarterly income tax instalments — prepayment of expected annual tax
• Capital Gains Tax (CGT): 50% CGT discount for assets held 12+ months
• Thin capitalisation: interest deduction limits for foreign-controlled Australian entities
• Transfer pricing: ATO's arm's length requirement for related party transactions with India parent
• Withholding tax: 30% on unfranked dividends, 10% on interest, 5% on royalties to India (DTAA)

India-Australia DTAA

• Australia-India Double Taxation Agreement: reduces withholding tax on dividends (15%), interest (15%), royalties (10%)
• Mutual agreement procedure: for resolving double taxation disputes

India GST for Parent Entity

When India parent receives services from Australian subsidiary:

• Import of Services: reverse charge mechanism (RCM) under India GST
• GST rate: 18% on consulting and IT services from Australia
• GSTR-3B: RCM reported and GST paid by India parent; ITC claimable
• Place of supply: services used in India — India is place of supply, RCM applies

FEMA Compliance (Australian Investment)

• ODI Form: initial investment in Australian subsidiary reported to RBI via authorised dealer
• Annual Performance Report (APR): annual reporting on Australian subsidiary financials
• FEMA penalties: late APR filing attracts RBI compounding penalty
• Repatriation: dividend and royalty repatriation from Australia to India

Transfer Pricing (Australia–India)

• ATO TP documentation: mandatory for cross-border related party transactions above AUD 2 million
• OECD Guidelines: Australia follows OECD Transfer Pricing Guidelines
• Country-by-Country Report (CbCR): for groups with global revenue above AUD 1 billion
• Safe harbour: ATO provides simplified TP rules for certain low-risk transactions

Pricing

• Australia GST (BAS lodgement): AUD 600–2,000/quarter (Rs. 33,000–1,12,000)
• Australia corporate tax: AUD 2,000–8,000/year
• India GST + reverse charge: Rs. 2,500–7,000/month
• Transfer pricing documentation: AUD 5,000–15,000/year
• FEMA + ODI compliance: Rs. 10,000–25,000/year

Free India-Australia tax consultation: +91 9355273535 | admin@mics.asia