GST on business energy prices: inclusive or exclusive?

Business energy rates are usually published excluding GST, with GST applied once at the total, while household rates are usually published including it. So a business rate and a household rate that look similar as printed numbers are not the same price, and two business rates from different sources are not comparable until you know which basis each one is on.

That is the whole answer. The rest of this page is why the convention exists, how to check your own bill, and how we handle it, because the basis question is the one business readers check first and they are right to.

Are business energy prices quoted with or without GST?

Usually without, but retailers are not consistent, so check rather than assume. The reliable test is on your own bill: look for a stated GST line near the total, and for wording on the rates table saying whether the rates shown include GST.

If the bill prints a GST amount, that amount is the authority on your bill's basis. If it prints rates and a total with no GST line at all, that is worth a call to your retailer before you use those numbers for anything, because you cannot tell which convention you are reading.

Why are business rates quoted excluding GST and household rates including it?

Because the two audiences pay a different real price for the same electricity. A GST registered business claims the GST back as an input tax credit, so the number that matters to it is the ex-GST figure. A household cannot claim anything back, so the number that matters to it is the amount that leaves the bank account.

Publishing conventions followed the audience. It is a reasonable practice on both sides and it is not an attempt to make anything look cheaper. It just means the printed number answers a different question depending on which market it was written for.

How much GST is on a business electricity bill?

Electricity and gas supply is a taxable supply, so GST applies at the standard rate of 10 per cent on the charges. It applies to the charges as a whole rather than to some lines and not others.

The practical shape of it on a bill: charges are listed, they total, GST is 10 per cent of that total, and the amount payable is the two added together. Where a bill quotes rates ex-GST and a total inc-GST in the same document, both statements are correct and the gap between them is exactly the tax.

Does GST apply to the supply charge and the demand charge too?

Yes. The daily supply charge, usage charges, demand or capacity charges, network charges and metering charges are all part of the taxable supply, so GST applies across them rather than to the usage line alone.

This matters when you are checking arithmetic, because a demand charge on a large site can be a substantial share of the bill. If you gross up only the usage rates and forget the fixed and demand components, your ex-GST to inc-GST conversion will come out short.

Can my business claim the GST back?

If your business is registered for GST, the GST on a business energy bill is generally claimable as an input tax credit in your business activity statement. If it is not registered, it is not claimable, and the GST is simply part of your cost.

The distinction that catches people is that having an ABN is not the same as being registered for GST. The Australian Taxation Office requires registration once your GST turnover reaches $75,000 or more, or $150,000 for a non-profit organisation (ATO, registering for GST). A sole trader trading under that threshold can hold an ABN, not be registered, and have no claim to make.

We are a comparison service and not your accountant, so treat this as background and take the actual question to them or to the ATO.

Is GST charged on a solar feed-in credit?

In our arithmetic, no: a feed in credit is netted off after GST has been applied, because it is a payment to you rather than a charge to you. Applying GST to it would be treating money coming in as though it were money going out.

Whether a feed in payment is itself a taxable supply for your particular business is a tax question about your circumstances rather than a pricing question, and it belongs with your accountant.

Why can't I compare a business rate against a household rate as printed?

Because one includes about a tenth more than the other before either of them has said anything about the actual price of electricity. Put a business rate quoted ex-GST beside a household rate quoted inc-GST and the business rate will look cheaper by roughly the tax, whether or not it is cheaper at all.

The fix is to establish the basis of both numbers first and convert one of them, or to compare totals that are unambiguously on the same basis. There is no version of this where you can skip the step and be right by luck.

Why does another site show a higher rate than you do for the same plan?

Most often because it is publishing on a GST inclusive basis and we are anchoring on the ex-GST figure. Same plan, same retailer, same rate, two conventions. A difference in basis reads exactly like a difference in price, which is why any figure you carry across two sources needs its basis established before you compare it to anything.

Publishing GST inclusive is a legitimate choice, not an error. It is simply a different convention, and the incompatibility is between the conventions rather than between the numbers.

How does Fix Your Bill handle GST?

One basis, applied once, on both sides of the comparison. Every plan rate we price is anchored on the ex-GST figure the retailer lodges on the Consumer Data Right register, GST is applied a single time to the final annual amount rather than to each rate, and where your own bill prints a GST line we treat that line as authoritative for your bill instead of recomputing it.

Two consequences worth stating plainly, because they are commitments rather than preferences.

We never consult whether you are registered for GST. Not in pricing, not in display, not in the rate table. It is irrelevant to the comparison: both sides of the subtraction are final sell prices, and a comparison has one basis or it has none. We know this specifically because an earlier version of our engine inferred a business classification from an ABN, built a GST assumption on top of that inference, and produced business savings that were overstated as a result. The error was not arithmetic. It was a plausible interpretation laid over data that was already explicit, which is the failure mode we now design against.

Where the basis of your bill cannot be settled, we say so. It is surfaced as unknown rather than defaulted to whichever convention would be convenient. A comparison that grosses up one side and not the other is wrong by about a tenth, which is more than large enough to change which plan comes out ahead.

Where to go next

For the GST line in the context of the whole bill, along with everything else printed on it, how to read a business electricity bill walks it line by line. If your bill carries a demand line, demand charges explained covers that charge, and kW vs kVA on a business electricity bill covers the unit it is priced in.

To see what your own site would pay across the published plans, on one basis and with the workings shown, upload your business bill or start at business electricity plans.