FAQs about GST
Answers to some of the most frequently asked questions about GST are outlined below. If your question is not covered please contact us.
Does our organisation need to have an Australian Business Number (ABN) if we wish to apply for a grant and do we need to register for GST?
If a community organisation does not have an ABN or does not advise the GCBF of its ABN and is successful in receiving a grant, the Fund is obliged to withhold 48.5% of any grant payment and remit this to the Australian Taxation Office Office (ATO). If the applicant organisation is unincorporated and has a sponsor, the 48.5% withholding rule will apply if the sponsor does not have an ABN.
Alternatively, an organisation may apply to the Australian Taxation Office for Income Tax Exempt (ITE) status. A copy of a signed 'Statement by a Supplier Form', which declares your income tax exemption status must be attached to your application form.
To apply for an ABN, identify your ITE status or to register for GST, contact the Australian Taxation Office on 13 61 40 or visit their website at www.ato.gov.au.
If we are registered for GST and receive a grant, will the grant include the GST component of our budget?
If the applicant organisation is GST registered, the GCBF will deduct any GST from the amount sought as the organisation will be able to claim a credit on any GST paid for services or items purchased. If the applicant organisation is not GST registered, the Fund will leave the GST in the amount sought as the organisation will not be able to claim a credit for any GST paid.
We are a branch of a statewide organisation. Will we receive the GST on our goods and services we wish to purchase if we are not registered for GST?
The head office of a statewide organisation sponsoring a 'branch' will be paid the Goods and Services Tax for the grant. The GST component on goods or services purchased with the grant will not be paid to branches of statewide organisations.
What does 'grossing up' mean?
If an applicant or sponsor organisation is GST registered, the Fund is required to 'gross up' the grant by 10% because the grant itself attracts GST.
The grant cheque contains a GST component (1/11th of the grant value) and this amount must be sent to the ATO. A copy of a Recipient Created Tax Invoice (RCTI) will be attached to the grant cheque. This is not money that can be spent by the organisation on the project as it is separate from the grant allocated.
We are a branch of a statewide organisation and are not registered for GST. We applied for a grant of $1,100 (including GST) to purchase play equipment. We were successful and received a grant of $1,000 with an additional $100 for the GST on the grant amount. We would like to know why the grant amount approved was only $1,000 as this amount seems to leave us out of pocket $100 for the GST on the purchase price of the play equipment. How can we get the additional $100?
Your grant of $1,000 is the correct amount. The GST component on the goods or services purchased with a grant is not paid to branches of statewide organisations. At the time of processing your grant, the Gambling Community Benefit Fund Secretariat deducts the GST component (in this case $100) from your grant budget.
The head office of your statewide organisation is responsible for managing the GST obligations for goods and services purchased with the grant. This means that your head office will incur the GST component of your project costs unless it manages the payment of suppliers for your project.
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Last reviewed 2 June 2008
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