What to do when your supplier isn't registered for GST

How to find out if your supplier is registered for GST

You can easily find out whether your supplier is registered for GST by doing a search on the ABN Lookup website or by calling the ATO on 132866. You will need the details of your supplier’s ABN in order to conduct the search.

If you search using the ABN Lookup website you can determine whether the ABN is current and whether that ABN is currently registered for GST. The website also has historical information about the ABN and the GST registration. 

You should always have all of your supplier’s ABN details as part of your business records. However, as a supplier can register for GST at any time, you should check their GST registration status on a regular basis. It is suggested you review the currency of an ABN and the GST registration at least once a year. 

What if your supplier is not registered for GST, but includes GST on its invoice?

In these circumstances, the payer is not entitled to claim the GST component as an input tax credit.

Example:

A gives B a tax invoice for plumbing services performed and the total amount payable is $1100.00, of which $100.00 is the GST component. B looks up A’s ABN on www.abr.business.gov.au and discovers that A is not registered for GST.

In these circumstances, A should not be charging GST as A is not registered for GST. Therefore, B should only pay A the amount of $1000.00. It’s good business practice to send payment with a cover letter explaining why A has only been paid $1000.00.