Common GST mistakes in BAS reports

Prepping your BAS can be tricky, and errors may easily slip in. The key is to stay mindful of common pitfalls to sidestep them. Thanks to the progress in online accounting software, the BAS preparation process has become somewhat more manageable. However, despite these advancements, several common mistakes still tend to crop up regularly. 

  1. Incorrect tax codes in your chart of accounts

If you setup your own accounting software or have added new accounts to your Chart of Accounts, they may have the incorrect default tax type linked. Its important to have your accountant review your chart of accounts to ensure there is no incorrect defaults set. This will make preparing your BAS easier and minimize errors.

  1. Claiming GST against all expenses

There are common business expenses that do not have a GST component. They include:

  • A portion of Motor Vehicle registration
  • Bank charges
  • ASIC fees
  • Interest
  • Staple foods such as fruit & vegetables


  1. Forgetting to include cash sales

Gone are the days of accepting cash payment for an Invoice and discounting the GST amount. The ATO has a sophisticated process of cross-matching data, especially in the building & construction industry, so make sure you declare all cash payments, regardless of the method of payment, on your BAS reports.

  1. Forgetting to include cash purchases

If you paid for business expenses using cash these can easily be missed in your accounting software. Ensure you keep the receipt and manually include these in your BAS report guarantee you receive your entitled GST credit.

  1. Claiming on GST for private purchases

Items like personal loans, directors fees and any other purchase for private consumption cannot have the GST credit collected on your BAS statement.

  1. Not including capital sales

If you sell a motor vehicle owned by your business, you generally have to account for GST if the disposal is a taxable sale. Meaning you will be liable to pay GST of one-eleventh of the sale price of the vehicle. GST is not payable on the disposal of privately owned assets.

  1. Claiming GST credits on purchases where the supplier is not registered for GST

Check the source invoice to see if it has GST or not. When in doubt, you can utilise the ABN lookup page and type in the supplier’s ABN number or look up their business name to check their GST registration status.