Financial Services

GST Status of Transactions Policy

Whereas most kinds of regular transactions attract GST, not all do.

Policy statement

Inputs and input tax credits

"Inputs" refer to acquisitions made by the University.

The University is entitled to input tax credits on creditable acquisitions and creditable importations for an amount equal to the GST payable on the supply of the thing acquired.

Most costs incurred from external entities will include a GST component. As GST is a consumption-based tax (it is designed to tax the consumer/end-user), in most cases any GST charged to an enterprise registered for GST may be claimed back from the Australian Taxation Office (ATO). As the University is registered for GST it is not considered as the consumer/end-user and therefore input tax credits may be claimed back from the ATO where:

  • you are in possession of the tax invoice at the time of claiming the input tax credits
  • the acquisition is solely or partly for a creditable purpose.

It is not for a creditable purpose if it:

  • relates to making a supply that would be input taxed
  • is of a private or domestic nature
  • is a non-deductible expense so the supply to you is a taxable supply.

The University will pay the supplier the full GST-inclusive amount as per the tax invoice supplied. Only the GST-exclusive amount will be costed against the University's departmental accounts.The GST component is coded directly to a GST account, which is then claimed back from the ATO centrally.

No GST incurred

No GST will be incurred on the following types of acquisitions/inputs:

  • Payments for something that is not a taxable supply such as:
    • acquisitions from Australian suppliers who are not registered (below the $50,000 annual turnover threshold). For example, most payments of honorariums will be to non-registered individuals
    • expenses incurred overseas (or reimbursements of employees' for expenses incurred overseas) that are not connected with Australia
    • salaries/wages/allowances paid to staff
    • scholarships/stipends/fellowships paid out
    • taxes/fines and other out-of-scope Division 81 supplies
    • donations and gifts where there is no material benefit
    • internal charges between departments/entities under the University's ABN
    • payments to an individual that is party to a PAYG voluntary agreement with the University.
  • Input-taxed transactions such as:
    • financial supplies including:
      • investment of funds
      • interest expense
      • repayment of loans
    • residential rent
    • sale of residential premises
    • fundraising events conducted by charitable institutions
    • residential accomodation supplies.
  • GST-free inputs such as:
    • basic food
    • health
    • education
    • childcare
    • exports that have no connection to Australia
    • international travel
    • non-commercial activities of charitable institutions (subject to strict criteria and limited use)
    • overseas transport
    • raffles conducted by charitable institutions (subject to strict criteria)
    • religious services
    • water, sewerage and drainage.

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GST incurred but is not claimable

GST will be incurred but the input tax credits may not be claimed from the ATO (that is, they will be blocked) on the following inputs:

  • expenses incurred in producing input-taxed income
  • transactions greater than $55 (GST-inclusive) where a valid tax invoice is not held
  • non-deductible expenses, such as:
    • relatives' travel expenses
    • recreational club expenses
    • entertainment expenses.

Outputs

The GST treatment of outputs of the University (or "supplied") will depend on the clarification of the supply for GST purposes.

The following table outlines the types of supplies which may be made by businesses and their treatment under the GST legislation.

Taxable, GST-free and input-taxed "supplies" described above rely on the following definition of "supply" from the GST legislation.

For GST purposes, a supply can include:

Supply Type Description Examples
Taxable
  • For a supply to be 'taxable', it must be:   
    •    
    • for monetary, or non-monetary consideration
    •    
    • in the course or furtherance of an enterprise
    •    
    • connected with Australia
    •    
    • supplied by an enterprise that is registered, or required to be registered.
    •    
  • GST collected must be remitted to the ATO.
  • Input tax credits may be claimed on creditable acquisitions incurred in providing taxable supplies.
  • Books sold by the University which do not satisfy the definition of GST-free course materials
  • Hire of academic dress
  • Conference/workshop fees
  • Facility hire charges
  • Presentation fees
  • Library photocopy cards
  • Commissions
  • Research grants
GST - free
  • For a supply to be GST-free, it must satisfy one of the provisions outline in Division 38 of the GST Act.
  • No GST is levied on GST-free supplies.
  • Input tax credits may be claimed for GST incurred on creditable acquisitions relating to the provision of GST-free supplies.
  • Certain health services
  • Certain childcare services
  • Export of goods and services
  • Accredited Award Education Courses
Input Taxed
  • Input-taxed supplies are defined under Division 40 of the GST Act.
  • There is no GST levied on input tax supplies.
  • Input tax credits may not be claimed for GST incurred on acquisitions relating to the provision of input taxed supplies.
  • Financial supplies
  • Fundraising events (election option – strict guidelines apply)
  • Residential rent
  • Residential accommodation supplies
  • Sales of residential premises
Out of Scope
  • Supplies that are not taxable, not GST-free or input taxed are outside the scope of GST
  • There is no GST component included in these transactions
  • Salaries, wages and allowances
  • Transactions between departments of the University
  • Fines where there is no return supply for the penalty. For example, items included on the Treasurer's Division 81 Determination

Taxable, GST-free and input-taxed "supplies" described above rely on the following definition of "supply" from the GST legislation.

For GST purposes, a supply can include:

  • goods
  • services
  • provision of advice or information
  • grant, assignment or surrender or real property
  • creation, grant, transfer, assignment or surrender of any right
  • financial supplies
  • entry into or release from an obligation:
    • to do anything
    • to refrain from an act
    • to tolerate an act or situation.

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