No article should give you your rate or your threshold - they change and they differ. Here is the list to take to an accountant instead.
Why This Article Has No Numbers In It
Search for GST for tailors and you will find articles confidently quoting a rate and a turnover limit. Some of them were written three years ago. Some are about garment manufacturing, not stitching. Some are simply wrong.
Rates, thresholds and due dates are set by statute and revised. They also depend on things about your shop: whether you stitch cloth the customer brings or sell finished garments, which state you are in, and what your turnover actually is.
Acting on a wrong figure from a blog costs a penalty. Walking into an accountant's office with the right questions costs one appointment.
An article can tell you which questions matter. Only an accountant can tell you your answer.
The Distinction That Changes Everything
Ask this before anything else, because the whole answer hangs on it.
- The customer brings cloth and you stitch it. You have supplied a service
- You buy cloth, stitch a garment and sell it. You have supplied goods
- You do both, which most shops do
These are treated differently. A shop that does both may need to account for them separately. Any advice that does not begin by asking which one you are is advice about somebody else's shop.
The Nine Questions
Print this. Take it to a local accountant once. Write the answers next to each.
- Given my turnover and what I actually do, must I register for GST at all?
- If not now, at what point would I have to? What number should I be watching?
- For stitching charges on the customer's own cloth, what rate applies to me?
- For garments I make and sell, what rate applies?
- Is the composition scheme open to me, and would it be better or worse for my shop?
- What exactly must appear on my bill once I am registered?
- Which returns do I file, and on what dates?
- Can I claim input credit on cloth, thread and machines - and is that worth the paperwork for me?
- What records must I keep, and for how long?
That last one is the question with the longest tail. Getting the record-keeping right from the start is far cheaper than reconstructing two years of bills later.
What to Keep, Whatever the Answer Is
These are worth keeping whether or not you are registered, and they are what any accountant will ask for first.
| Record | What it must show | Why |
|---|
Every bill you issue | Date, customer, item, amount | This is the whole basis of everything |
Bill numbers in sequence | No gaps, no repeats | A gap is the first thing anyone questions |
Purchases | Cloth, thread, machines, with the seller's bill | Needed for any credit claim |
Advances taken | Date and amount, against the order | Part payments are still receipts |
Monthly totals | What came in, what went out | Turns nine months of panic into an hour |
The single most valuable habit is unbroken bill numbering. It costs nothing and it answers the question everybody eventually gets asked.
On what a bill should carry, see the tailor bill format.
Three Mistakes That Are Expensive
- Registering because somebody said you should, without checking whether you had to. Registration brings returns, and returns brought late bring penalties
- Bills on loose paper with no numbering. Whatever your position turns out to be, this is the thing that cannot be fixed afterwards
- Taking a rate from an article - including this one, which is why there is not one here
A fourth, less obvious: assuming that because you are small, none of it applies. It may well not - but that is a sentence an accountant should say to you, not one to assume.
If You Do Register
The practical changes in the shop are small, and worth setting up on the first day rather than the first return.
- Your GST number goes on every bill
- Bills need the fields your accountant lists - set the format once and stop thinking about it
- Returns have dates. Put them in a calendar with a reminder, not in your head
- Keep purchase bills from suppliers, filed by month
Software helps with exactly one part of this - producing correctly formatted numbered bills and adding up the month without arithmetic. It does not decide your rate and it does not file for you.
On billing set up for this, see GST billing for tailors.
Frequently Asked Questions
What is the GST rate for tailoring?
This article will not give you a figure, and you should be careful with any that does. The rate depends on whether you are supplying a stitching service or selling a garment, and rates are revised over time. Ask a local accountant what applies to your shop this year.
Do small tailoring shops need GST registration?
It depends on your turnover, your state and what you supply. There is a threshold, it is not the same for everyone, and it changes - which is exactly why it belongs in an accountant's answer and not in a blog post.
Can I issue a bill without GST?
If you are not registered you do not charge GST, but you should still issue a numbered bill for every order. The numbering matters more than most owners realise, and it costs nothing to start today.
Do I need software for GST billing?
No - a numbered bill book works. Software helps by producing consistent bills and totalling the month for you, which saves hours at return time. It does not decide your rate or file anything on your behalf.
What if I have not been keeping proper records?
Start today rather than trying to reconstruct backwards, and tell your accountant honestly where you are starting from. Every month of clean records from now on makes the position better.
For billing itself, see GST billing for tailors.
On daily cash, advances and balances, see tailor shop accounts.
On what the shop actually earns, see is a tailoring shop profitable.
Plans and what each includes are on the pricing page.
One Appointment, Nine Answers
Take the nine questions to a local accountant this month and write the answers down. Whatever they turn out to be, you will be running the shop on facts about your own position instead of on something you read.
You can start free on the Basic plan - ten customers, twenty orders a month, no card.
Note: this article deliberately contains no GST rate, threshold, due date or form number. Those are set by statute, are revised, and depend on your turnover, your state and whether you supply goods or services. Only a qualified local accountant can tell you what applies to your shop.