Understanding Deferred GST: What You Need to Know and how to handle it in Business Central
If you're a business owner in Australia, you've likely come across the term "Deferred GST" in your financial reporting. Deferred GST is an accounting concept that relates to Goods and Services Tax (GST) payments, and it can have a significant impact on your cash flow and financial statements. In this post, we'll take a closer look at Deferred GST, what it is, and how it works. What is Deferred GST? Deferred GST is the amount of GST that a business has collected on sales but has not yet paid to the Australian Taxation Office (ATO). The ATO requires businesses to report GST on a quarterly basis through a Business Activity Statement (BAS). However, there are situations where businesses are allowed to defer the payment of GST until a later date. For example, if a business purchases goods or services on credit and doesn't pay for them until a later date, the GST on those purchases can be deferred until the payment is made. This is because the business hasn't ...