GST-free
Sales with no GST where you still claim credits on your purchases.
A GST-free sale is a supply you make without charging GST while keeping the right to claim GST credits on what you bought to make it. Basic food, most health and education services, and exports are the usual examples. On the BAS, GST-free sales are reported at G1 and G3 (exports at G2); purchases with no GST in the price go to G11 and G14.
GST-free is a real sale or purchase that happens to carry no GST, and it still has to be reported — which is what separates it from BAS Excluded, where the money is not a supply at all. It is also distinct from input-taxed: both have zero GST on the sale, but only GST-free keeps your credits.
Worked example
A physiotherapist bills $150 for a treatment, which is GST-free. It is reported at G1 and G3, so no GST is owed on it. The $66 of clinic supplies bought that month carried $6 of GST, and because the treatment is GST-free rather than input-taxed, that $6 is still claimable at 1B.
Common mistake
Putting a bank fee under GST-free income logic and claiming a credit. A bank fee is a purchase with no GST in the price — G11 and G14 — and there is nothing to claim on it, however it is labelled.
Grounded in ATO guidance. Figures last checked . General information, not tax advice.
Related terms
Input taxed
Sales with no GST that also deny credits on related purchases.
Tax treatment (GST treatment)
The code that decides which activity-statement label a transaction feeds.
BAS Excluded (out of scope)
Money that is not a supply and does not appear on the activity statement.
GST (Goods and Services Tax)
Australia’s flat 10% tax on most goods and services.
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Questions about this term
GST-free: common questions
- Do I still report a GST-free sale on my BAS?
- Yes — a GST-free sale is a real supply that happens to carry no GST, and it still has to be reported. It goes to G1 and G3 (exports at G2). That reporting is what separates GST-free from BAS Excluded, where the money is not a supply at all and appears on no label.
- Do I charge GST on a sale to an overseas customer?
- Generally not — exports are one of the usual GST-free examples. The sale is reported at G1 and G2 rather than carrying GST, and because it is GST-free rather than input-taxed, you keep the right to claim credits on what you bought to make it.
- Can I claim GST credits if my sales are GST-free?
- Yes — that is what makes GST-free different from input-taxed. A physiotherapist billing $150 for a GST-free treatment can still claim the $6 of GST on $66 of clinic supplies at 1B. Both kinds of sale carry zero GST, but only GST-free keeps your credits.
- Is a bank fee a GST-free purchase I can claim a credit on?
- No — a bank fee is a purchase with no GST in the price, reported at G11 and G14, so there is nothing to claim on it however it is labelled. Applying GST-free income logic to it and claiming a credit is the common slip; a purchase can only earn a credit if GST was actually inside the price.
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