I asked the same question back in 2009, and here is the solution found after talking with the ATO. SOLUTION FOUND
I just spoke to 3 lovely people at the ATO. www.ato.gov.au
Any overseas service
transactions are considered export of services and attract no GST. In the BAS they are C1 and C2 (nothing from 1a).
I sell a artwork service
to an international customer in US dollars for USD100. If I choose to keep the payment in US dollars in my PayPal account, I have to choose a regular date to make an estimate to Australian dollars.
eg on the day, or end of month etc. But always make it consistent
and have something to show how I made the calculation. It does not attract GST.
They also referred to rulings GSTR 1001/2 and GSTR2000/31 to read more.
The only two currencies I deal with are Australian dollars and US dollars so that actually is easier to understand for me.
I ended up making the conversion at the end of each month whenever I had US dollar sales and keeping a PDF showing the conversion in PayPal. PayPal gives you the estimate conversion for that date so it's easy to keep a record.