GST and STCs is one of the most searched questions in installer circles, and the reason is that the answer is always “it depends”. It depends on whether you are registered for GST, who the customer is, whether the system is used in a business and whether the rate you were quoted includes GST. This guide does not try to give you the one true answer. It lays out the scenarios in a table so you can find the one that matches your business, and then it covers the quoting and invoicing habits that stop mistakes.
It is general information at the time of writing, and it is not tax advice. For the BAS mechanics in more detail, see our companion article on STC GST treatment for installers. For a short answer, there is also do I charge GST on STCs.
Start with one question: are you registered?
GST registration is required once your annual turnover reaches the threshold set by the ATO, and many installers register earlier. Your certificate income counts towards turnover. That means an installer with a few large jobs and a lot of STC income can cross the threshold sooner than they think. If you are near it, ask your accountant now.
The scenario table
| Scenario | GST on the system sale | GST on selling the certificates |
|---|---|---|
| Registered installer, household customer | Yes. Per ATO guidance, based on the full price including the value of the up-front discount | Yes, generally, based on the amount of the sale |
| Registered installer, business customer | Yes, same approach | Yes, generally |
| Unregistered installer | No | No |
| Household owner who creates and sells their own STCs | Not in business, so usually no | Usually no, as it is not made in the course of an enterprise |
| Business owner who assigns the right for a discount | May apply to the owner’s supply | Depends on use of the system in the business |
These rows describe the general position in the ATO’s guidance. Edge cases exist, such as mixed-use systems and entities that are only just registered, and your accountant is the right person for those.
Rates: ex GST or inc GST
A published rate is only useful if you know what it includes. Take a rate of $38.00.
| If the rate is | You receive per STC | On 45 STCs |
|---|---|---|
| $38.00 ex GST, registered | $38.00 plus $3.80 GST = $41.80 | $1,710.00 plus $171.00 GST = $1,881.00 |
| $38.00 inc GST, registered | $34.55 plus $3.45 GST | $1,554.55 plus $155.45 GST |
| $38.00, unregistered | $38.00, no GST | $1,710.00 |
The difference between the first two lines is about $155 on one job. When you compare traders, make sure the rates are on the same basis. At the time of writing STC spot has been roughly $38 to $40 and the clearing house ceiling is $40, so a rate described as “$40” is only meaningful if you know whether GST is on top. Our published rate is on /pricing/, where the basis is stated.
What a tax invoice looks like
For certificate sales, a trader can issue a recipient-created tax invoice, or RCTI, on your behalf. It should show:
- The words “tax invoice” or RCTI wording.
- Your name and ABN, and the trader’s.
- The date and a description of the supply, including the number of certificates and the claim reference.
- The rate, the GST and the total.
If you are registered and an RCTI is in place, you do not issue your own invoice. If either condition is missing, a different process applies. The RCTI, GST and ABN resource explains the arrangement and what the desk checks.
From the desk: change nothing about your GST status without telling your trader first. If you register, cancel or change entity mid-year, it alters how paperwork is issued, and the fix is easy before a payment and annoying after it. Likewise, an ABN that does not match the account holder is the most common reason a payment is held.
Customer quotes and the discount
On the customer side, the clearest quotes show the gross price, the STC discount, the net price and the GST. For example:
| Line | Amount incl GST |
|---|---|
| System and installation, gross | $8,900 |
| Less STC discount (45 STCs at about $38.50) | -$1,733 |
| Customer pays | $7,167 |
| GST included in the gross price | about $809 |
Presenting both numbers helps the customer see the real value of the discount, and it supports your accounting treatment of the up-front discount. It also matters for the STC discount explained question homeowners ask.
Common GST errors with STCs
- Treating the discounted price as the supply. The ATO guidance treats the up-front discount as part of the value, so GST on the system is based on the higher number.
- Mixing ex and inc rates when comparing traders.
- Forgetting certificate income in turnover, and registering late.
- Not reconciling RCTIs to your sales records.
- Using a personal account and a business ABN that do not match, which stalls payment.
- Assuming household and business customers are the same.
Settling and GST timing
GST on certificate sales falls into your BAS in the period you report it, which depends on cash or accrual. A faster settlement brings the cash and the GST obligation forward together, so keep a GST reserve. How to improve cash flow as a solar installer shows how to size one.
Records to keep
Keep the signed assignment form, the customer invoice, the RCTI and the remittance. If you are ever audited on the certificates or the tax, those four documents answer most questions. See how STC audits work.
A quick check before you sign with a trader
Ask three questions, and get the answers in writing. Is the published rate ex GST or inc GST? Will you issue an RCTI for every payment? What does the remittance show, and does it separate the GST from the certificate value? A trader that answers these three plainly has probably thought about your bookkeeping. One that does not may leave the reconciliation to you, and you will feel that at the end of every quarter. The switch checklist has the other questions worth asking.
What to do next
- Confirm your GST registration status and your turnover position with your accountant.
- Check whether each trader’s rate is ex or inc GST, and put it in writing.
- Show gross price, discount and net price on every customer quote.
- Make sure your ABN, entity name and bank account match.
- See how it works for the settlement flow, and start trading when you are ready to put your certificates through a desk that issues RCTIs.