If you elect to pay GST by installments, you pay a quarterly GST installment that ATO will work out for you and you report your genuine GST information yearly on an annual GST return.
ATO will work out the installment amount to pay based on:
- the net GST amounts you most recently reported, generally for the past income year, depending on how long you have been registered for GST
- a gross domestic product (GDP) adjustment.
If you think that using this amount will mean you pay more or less than the GST liability you expect for the year, you can vary it. However, penalties may apply if the total amount you paid for the year is less than you should have paid.
If you pay the installment amounts we set for you and your GST liability for the year turns out to be more than what you have paid, ATO will not punish you.