Even if your turnover is under the $75,000 threshold, if you work the numbers, you might be increasing your profit if you register for GST.

Example:

A GST registered business with a $60,000 GST turnover would have had to collect an extra $6,000 on top for GST purposes by charging an extra 10% for their services. The turnover would be $66,000, with $6,000 owed to the ATO.

If expenses were $40,000 (GST inclusive), the business would have paid $3,636 of those expenses in GST ($40,000 divided by 11). The business would owe the ATO only $2,364 in GST (the $6,000 GST on turnover, minus the $3,636 GST credits on expenses).

The taxable profit would then be $23,636 ($66,000 turnover, minus $40,000 expenses and minus $2,364 owed to ATO). The business will have to pay tax on the profit at 30% (just for example purposes), totalling $7,090.80, which gives the business a net operating profit of $16,545.20 ($23,636 taxable profit, minus the $7,090.80 payable tax to the ATO).

On the other hand, if the business had not registered for GST, their taxable profit would be $20,000 ($60,000 turnover, minus $40,000 expenses), for which they would have paid $6,000 of tax on it ($20,000 taxable profit at the 30% tax example). The business would have saved $1,090.80 in tax payable to the ATO on their profit ($7,090.80 if GST registered against $6,000 not GST registered). However, their net profit would have only been $14,000 ($20,000 profit minus the $6,000 tax on the profit), meaning that, by not registering for GST, they would have effectively missed out on $2,545.20 of extra net operating profit.