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GST

GST (Goods and Services Tax) is a 10% tax applied to most goods and services in Australia. For business owners, GST affects equipment purchases, vehicle upgrades, Equipment Finance, Vehicle Finance, and Business Loans. GST must be reported through BAS, and eligible businesses can claim GST credits on financed assets. Related concepts: BAS, Depreciating Asset, Instant Asset Write-Off. Relevant hubs: Business Owners Finance Hub, Tradie Hub.

Why GST Matters

For business finance, GST influences how loans are structured, what can be claimed on BAS, and the true cost of financed assets. Understanding GST ensures correct tax treatment and avoids ATO issues.

  • Reduces cashflow pressure through GST input credits
  • Impacts loan amounts and repayment structures
  • GST affects asset write-offs and depreciation schedules
  • Essential for BAS compliance
  • Important for tradies, truckers and SMEs purchasing equipment

How GST Works With Asset Finance

  • Business pays GST upfront on asset purchase or through the finance contract
  • GST can usually be claimed back on the next BAS
  • GST does not apply to interest, only to the asset value
  • Lenders require ABN and GST registration for low doc products
  • GST credits improve cashflow for growing businesses

GST treatment may differ for hire purchase, chattel mortgage and lease structures.

Official reference: ato.gov.au

Do I pay GST on financed equipment?
Yes — GST applies to the asset value, and you may claim it back through BAS, which is why many businesses pair asset purchases with Working Capital Loans to smooth cashflow.
Can I claim GST on a vehicle?
Yes, if the vehicle is used for business purposes and the business is GST-registered. Finance options like Vehicle Finance can be structured around your GST position and BAS cycle.
Does GST apply to interest?
No — GST applies to the asset, not the finance interest portion. This is important when comparing structures like chattel mortgage versus lease, especially if you’re also looking at Low Doc Asset Finance.
Do I need to be GST registered for low doc loans?
Most low doc lenders require GST registration for at least 6–12 months. That’s common for tradies and truckers moving from start-up phase into growth, and ties in with the strategies in our Low Doc Cashflow Loans guide.
How do I claim GST back?
GST credits are claimed in your BAS submission if you're registered for GST. Your accountant or bookkeeper will usually match your financed asset to your BAS, especially where you’re also using tools like a Business Line of Credit for cashflow.