What is a taxable activity for GST Act 1985?

Under S 6(1)(a) of the GSTA, there are 4 requirements that must be met to show there is a taxable activity; there must be an activity, this activity is carried out regularly, the activity must involve/intend to involve the supply of goods/services to other person and this supply must be made for intended consideration.

Firstly, there must be an activity being carried out.  An activity is not a taxable activity if it is recreational in nature. An example of this is a hobby where the person is less interested in monetary reward derived from the activity and more so in the enjoyment and pleasure derived. 

Secondly, the activity must be carried out regularly. This means the activity is a systematic and organised operation where tasks are being completed in regular intervals and a pattern can be identified. There is regular commitment of time, money and effort. With this being said, sales and profit figures need not be regular. 

Lastly, the good/services must be sold to another person for consideration. This means that there must be an intention to make a profit and the activity is not being carried out with the intention to be charitable or to fulfill ones personal passions. There is intention to sell the taxable supply for consideration. 

With the 4 requirements above, an activity can be identified as taxable or not. Only when an activity is taxable, can one be registered for GST.

 If you are still uncertain about whether your activity is taxable or not, reach out to us through the contact us option below. 

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