Goods and Services Tax (GST) in Procurement (GST)

What is GST in Procurement?

The Goods and Services Tax (GST) is Australia’s broad-based consumption tax of 10%, administered by the Australian Taxation Office (ATO). In government procurement, GST affects how tenderers price their submissions and how agencies evaluate and compare offers. Mishandling GST in a tender response is a common error that can lead to pricing confusion or non-compliance.

How Does GST Apply to Government Tenders?

Most government procurement documentation requires tenderers to present pricing in one of the following ways:

• GST-exclusive pricing with GST shown separately — this is the most common format as it allows agencies to compare prices on a like-for-like basis and claim input tax credits
• GST-inclusive pricing — used less frequently but sometimes required for consumer-facing services
• Returnable pricing schedules that explicitly break down the GST component

Agencies typically evaluate tenders on a GST-exclusive basis because Commonwealth and state government entities can claim GST input tax credits, making the net cost the relevant comparison point.

GST-Free Supplies in Procurement

Not all supplies attract GST. Common GST-free categories relevant to government procurement include:

• Certain health and medical services
• Some educational supplies
• Exports of goods and services
• Water and sewerage services (in some cases)

If your goods or services are GST-free, you must clearly state this in your tender response to avoid pricing misunderstandings.

Tips for Tenderers

• Follow the pricing format specified — if the tender asks for GST-exclusive pricing, do not include GST in your line items.
• Ensure your ABN is current — agencies will verify your GST registration status.
• Itemise GST clearly — ambiguity around whether pricing includes GST can disadvantage your bid during evaluation.
• Check for GST-free components — if part of your supply is GST-free, break it out separately to give the agency an accurate cost picture.