University of South Australia
GST Training Guide
SCHOOLS & RESEARCH
The items discussed herein are in reference to activities performed by Schools and Research areas
under the broad categories of recipients and services supplied.
This document also outlines the critical aspects in the operation of the new tax system, and the
manner in which information must be provided to the Finance Unit and how receipting will occur
through campus central.
The major focus of the guide is to assess the GST status of revenue raised / identified through
Schools & Research. A brief guide is also made on general operating revenue and expenses.
You should also note that there are circumstances where a GST taxable supply (or sale) will be
considered GST free by virtue of certain legislative provisions relating to export and or noncommercial activities of the University – these are explained in individual sections.
Contents:
1. Overview of GST
2. Education Courses
3. Student Charges
4. University Activities
5. General
6. Research Activities
7. Non-Commercial Activities
8. Export Activities
9. Pricing Guidelines
10. Tax Invoices
11. Adjustment Notes
12. Accounting Procedures
13. Payment Withholding Requirements
14. Export Provisions
15. Food & Beverage Provisions
16. Transitional Rules
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OVERVIEW OF GST
Basic Operation of the GST
Under the GST system, transactions can be classified into 4 categories:
Supplies (sales) with GST in the price:
 Taxable supply – attracts 10% GST,
Supplies with no GST in the price:
 GST free supply,
 Input taxed supply (generally only applies to residential rents and financial activities and is
of limited applicability to UniSA),
 Out of scope supply eg donations, internal transactions, salaries and related costs and
supplies made before July 2000 - do not attract GST.
Taxable Supply
Most transactions are considered to be taxable supplies and attract the 10% GST eg buying a PC
or general consulting services. A taxable supply is generally made where consideration is received
for the provision of goods or services from a GST registered supplier. Consideration is very broadly
defined and includes money, barter, agreeing not to do something and in kind contributions.
Donations are out of scope for GST as a donation is provided for no consideration in return.
Research and consulting services are examples of activities that the University will have to charge
our customers GST.
Generally, GST paid on purchases is refundable to the University when holding a Tax Invoice.
GST Free
GST free means that the customer is not charged GST. However, most goods and services
purchased (inputs) to provide that GST free supply may be subject to GST. However the University
will obtain a refund of the GST paid on purchases from the Tax Office.
GST free services include Education, Health Services, Basic Food, Childcare, Water and
Sewerage, Council Rates, International flights and Religious services.
GST free Education courses include undergraduate and postgraduate award courses, and short
course programs that are an essential prerequisite to entering or commencing (but not to maintain
the practise of) a trade or profession in Australia. Individual subjects within an award course will
also be GST free.
Impact on the University
The University will be caught in the GST system ie it will have to pay 10% GST on most of its non
salary purchases, charge customers GST unless the activity is GST free and complete a monthly
tax return to the Tax Office.
The GST will not impact on University budgets. Instead budgets will be determined and managed
on a GST exclusive basis. This is because of the tax collection and refund aspects of the GST.
The Finance Unit will be responsible for reconciling a GST clearing account and either remitting
GST or receiving GST refunds (as the case may be) on a monthly basis.
University staff will have to come to grips with the new tax environment. They should have a sound
knowledge when discussing and setting prices under contract, be they simple purchase orders,
credit card purchases or long term contracts. Similarly staff connected with raising external
revenue will need to know the GST status of the service e.g. GST free or taxable. Generally staff
would have to be aware of obtaining appropriate records and writing contracts that include GST
where applicable.
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EDUCATION COURSES
Education courses that are GST free are:
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Secondary courses
Tertiary courses
Masters or Doctoral courses
Professional or Trade courses
Recognition of prior learning
Adult and Community Education courses
English Language courses for overseas students
First Aid or Life Saving
More specifically courses are defined:
Tertiary & Secondary Courses
Tertiary courses are defined as those determined by the Minister for Education and include:
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Undergraduate or post graduate accredited higher education courses. Note this includes single
subject studies where the student undertakes formal assessment.
Open Learning courses
Certain accredited vocational education and training programmes including secondary courses
and preparatory courses
Certain combined courses of those above.
The Ministers Determination is provided in a separate section for schools assessment.
Masters or Doctoral courses
Defined as a course accredited at Masters or Doctoral courses by a higher education institution.
Professional or Trade courses
Professional or trade courses are those that lead to a qualification that is an essential prerequisite
 For entry to a particular profession or trade in Australia; or
 To commence the practice of (but not maintain the practise of) a profession in Australia
A qualification is an essential prerequisite if it can be imposed by an industrial instrument or a
profession or trade association that has uniform requirements relating to entry to that trade or
profession.
Examples – Flying hours used to obtain a flying licence is GST free.
– Refresher courses for professionals are not GST free under this exemption.
Recognition of prior learning
The assessment or issue of qualifications for the purpose of the following is GST free:
 Access to education; or
 Membership of a professional or trade association; or
 Registration or licensing for a particular occupation; or
 Employment
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Adult and Community Education courses
These are defined as those determined by the Minister for Education.
The course must:
 Be Open to the public (prerequisites limiting entry are not considered open to the public), and
 Likely to add to employment related skills
 The course must be clear about its employment-related objective and reflect that in the course
content.
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Not be a course that is provided by, or at the request of an employer to the employees of that
employer; and
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Not be a course that is provided by, or at the request of an organisation to the members of that
organisation, except an organisation for which membership is open to adults in the general
community; and
Not be a course that is provided by way of private tuition to an individual.
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A public ruling GSTR 2000/27 has been issued which helps to explain the circumstances in which
ACE courses will be considered GST free.
Several tests are contemplated in the ruling and should be reviewed before a decision is
made on the GST status of a short course. All decisions must be documented and retained
for internal and tax office audit.
These tests include determining whether the course:
1. Is directed at people who want to add to their employment related skills; and
2. The objectives of the course specify the employment related skills to be obtained, and
3. The means of imparting the skills to the participants are clearly determined prior to commencing
the course, and
4. There is reasonable expectation that the skills will be used in employment, business or in a
profession (but not for recreational, hobby or artistic endeavour).
Other considerations include:
5. Are the employment related skills marketed, or
6. Is the course similar to an accredited vocational education and training (VET) program. See
definition in Education Minister’s Determination of Institutions and Courses, or
7. Whether evidence exists that participants gain employment from the skills acquired in the
course – includes basic skills in literacy, numeracy and building on existing skills and
developing skills in new areas.
Courses that do not fit the definitions will be taxable – these are commonly referred to as Short
Courses.
Examples of taxable Short Courses
 Audit students who are not formally assessed – please note that this is currently the subject of a
private ruling as it may be considered an ACE
 Refresher courses to maintain or top up skills
 Any unaccredited courses that do not fit into the exemption categories
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STUDENT CHARGES
The Legislation provides for some exemptions to tax on certain student charges, and these include:
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Education Course - Facilities and Curriculum Related Activities
Administrative services,
Course materials,
Excursions or field trips.
The following are not GST free:
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Supply of any food and or accommodation as part of a filed trip or camp.
Supply of non-course material by way of sale, lease or hire
Supply of membership to a student union.
Education Course
The supply of an education course includes the supply of facilities and curriculum related activities.
These include the provision and maintenance of buildings, grounds, libraries, computer and science
laboratories. Facilities also include access to the Internet and access to the Library.
Library access includes library service charges. Curriculum related activities include excursions –
filed trips and camps that are directly related to the course.
Administrative Services
 Enrolment processing – includes late enrolment fee
 Issue of identity cards
 Assessments of students
 Processing academic results
 Administration of school library – nominal fines etc
Course Materials
Course materials must be provided by the University and are necessarily consumed or transformed
by the students studying the course (GST free) for the purpose of the course.
Necessarily consumed means the materials are essential or fundamental to the course of study.
Consumed means destroyed or used up – eg cooking material or chemicals
Transformed means changed in form (appearance, condition, nature or character etc.)
Examples of course material:
 Photocopied or printed course material that specifically relate to the course eg Readers
 Course notes
 Unexposed film and developing material
 Art supplies
 Ingredients used in cooking class
 Work books that provide space for students to complete exercises
 Consumable stationary to the extent which they are necessary for the course
 Consumable equipment – that is where useful life is not enduring eg medical scalpel
Examples of materials that are not course materials
 Textbooks & Publications
 Musical instruments
 Computers
 Calculators
 Sporting equipment
 TLD and belt holder (medical radiations)
 Student name badges
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Excursions or Field Trips.
Field trips and camps are GST free where they are directly related to the education course and not
predominantly recreational. The field trip must be provided by the University – that is, the University
must collect the field trip fees. If students pay a third party, that third party would charge GST on all
travel and entry fees.
Accommodation and food is specifically taxable and the university must charge GST on all food
supplied even if it was purchased GST free. Food charges may be estimated.
An example of the calculation of Field Trips / Camps is provided below.
$
52.50
Cost to
University
after obtaining
GST refunds
$
50
Charge to
student
including
GST
$
55
Accommodation
165
150
165
Travel and other:
110
100
100
327.50
-
300
-
320
20
-
-
300
Budgeted Item
Budget after
July with
GST
Food
Other may include the
supply of a kayak, tickets
to enter exhibitions etc*
Total
GST collected and paid to
the Tax Office
Net revenue credited to
cost centre
Comments
Initial cost to the University includes
GST of $2.50 ie $25 of food was
subject to GST at the retail counter.
Uni must charge $5 GST on the supply
of $50 of food on GST exclusive basis
Initial cost to the University includes
GST of $15. Uni must charge $15
GST to
Cost to the University includes $10
GST which is not required to be
charged to students
Including GST of $20
*Supplies of items such as kayaks etc are normally taxable to students when an individual hire charge is made
by the University for the item. The Tax Office has indicated that such items may escape tax if they were not
separately charged within the field trip.
Various student fees and charges
The fees and charges (detailed in the Private GST Ruling issued in March), are treated for GST
purposes for students enrolled in a GST free course as follows:
Fee charged for
Enrolment services
Photocopying by students
Printing and laminating for students
Examination arrangements
Internet and E-mail services
Counselling services
Graduation ceremonies
Graduation dinner
Hire of academic dress
Library charges
Provision of testamurs and transcripts to students
Lecture and course notes and guides provided to students
GST status
GST free
Taxable supply
Taxable supply
GST free
GST free
Taxable supply
Taxable supply
Taxable supply
Taxable supply
GST-free
GST-free
GST free
IMPORTANT NOTE
If the University supplies a taxable item within a course fee, these items must be ‘unbundled’ and
GST should be charged where appropriate. If the course fee does not include any amounts for
taxable items and these are provided subsequently for free, then GST is not applicable because the
University was not ‘contractually’ bound to provide those items.
This is still a grey area for both the University and the Tax Office. Essentially where there is no
consideration for the taxable items then GST does not apply.
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UNIVERSITY ACTIVITIES
Please find below the GST status of University Activities.
Sale of Publications – GST taxable
Hire of facilities / conference facilities charges – GST taxable
Fee for Service – GST taxable
For example, reimbursement of salaries and wages by external parties is GST taxable.
Although salaries and wages are exempt from GST, the supply of personnel to an external
organisation is actually a supply of services and is therefore subject to tax.
This is commonly referred to as a fee for service.
Consulting – GST taxable
This relates to consulting with external customers.
Subscriptions for Membership or Services or Journals – GST taxable
Conferences & Seminars – GST taxable
Donations & Gifts Received – Not Applicable or GST taxable
Donation are not caught for GST if:
 The donation is transferred voluntarily by the grantor to the University, and
 The grantee may not receive an advantage of material character, directly or indirectly in
return for the grant
An advantage of material character does not include:
 mere recognition for making the donation or grant eg a thankyou or a banner at a seminar
or congress,
- This area of the Tax Rulings are not clearly defined – a ruling will have to be sought
on individual cases. Eg recognition in widely distributed pamphlets will be considered
advertising (ie more than mere recognition)
 mere directions on how to spend the gift eg target the gift to electronic engineering
research which is of no commercial benefit to the donor.
 A financial acquittal
 Tax deductibility to the donor
Donations essentially arise from benefaction – a grant that is made as a function of
government does not have the characteristic of benefaction and is not a donation.
Government grants & scholarships are considered to be reciprocated with material gain –
this is because the University is supporting the Government’s functions & objectives – except
for DETYA Grants and Appropriations.
Scholarships and Prizes– GST taxable or Not Applicable
Funds received by the University may be GST taxable where there is a contractual obligation
for the University to provide a material benefit to the donor.
If funds are paid direct to the student and there is effectively no involvement by the University,
there would be no impact from GST.
Please note that where there is material recognition, two contracts could be established that document
the donation and the separate ‘material’ supply. This would have the effect of taxing the actual supply
and keeping the donation free of GST.
This course of action has most relevance to private individuals that are not registered for GST and
therefore do not receive refunds of GST paid.
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Bequests from Deceased Estates – Not Applicable
Bequests - a deceased estate will not receive a material benefit and therefore there is no
supply in return for the bequest.
The Not Applicable status also extends to any admin fees charged to the estate.
UniSA provides Scholarships & Prizes to Students – Not Applicable
Scholarships and prizes issued to students are GST free because the student is usually not
expected to provide a supply in return. If a supply was considered to have taken place the
student would not be able to charge GST because they would not be registered for GST or it
would be a private transaction.
DETYA Grants and Appropriations – Not Applicable
Appropriations from Parliament are specifically exempt from GST. This includes all DETYA
operating, service and research grants (ARC) but excludes EIP (Education and Investigations
Program) and REP (Research Evaluation Programme). This also applies to NHMRC grants.
Important note
Some government agencies / departments may be providing the University funding that is
considered an appropriation from parliament. It is important to consult granting bodies to
determine whether or not their grants are subject to GST.
Research & In-kind Contributions – GST taxable
Research is a taxable supply (except for funds received from DETYA, NHMRC).
In some instances, a supply of research will be paid by both cash and in-kind contributions.
In-kind contributions are GST taxable.
Examples include:
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SPIRT grant participant contributions,
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CRC projects, and
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NHMRC
Other Examples include:
 Access to equipment for another supply in return (the valuation of access to equipment is
determined by reference to the market value rent / lease of the item)
You should note that special Tax Invoices could be prepared to ensure that no monies change
hands in respect of the GST – please notify the Finance Unit to organise.
Research Funding
Example: Purchased asset to be shared with the other Universities.
You should note that no matter how the transaction is described, the result would be the same
where GST is concerned (all parties obtain a refund of GST)
If UniSA owns the Asset solely
The GST paid on purchase (including on import) will be refundable to UniSA.
The monies paid by the other institutions would represent a fee for acquiring the right to use
the asset (for what ever period) and would attract GST. These other institutions will claim a
refund from the Tax Office of the GST so paid.
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Where the equipment is owned by each institution proportionately
Where each institution owns a proportion of the equipment, each would be able to claim a
portion of the GST paid on importation. This correctly allows the University to buy the goods
as an agent for the other institutions and ensures that the refund of GST is attributed to the
right institution.
Grant from ARC
DETYA (including ARC) funding is not subject to GST.
Funds Received (or Paid) from Principals for third parties – Not Applicable
Where the University receives funds for the benefit of others and where the University does not
provide a supply in return, there is no impact from GST.
Where the University charges a fee for making disbursements, this fee will be GST taxable
unless the service is exempt due to Export provisions (or other eg bequest from a deceased
estate etc)
Sale of Obsolete Stock – GST taxable
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GENERAL
PAYMENTS
Reimbursements to Employees and Students
The University must obtain a properly formatted Tax Invoice in order to claim a refund of the GST
paid (recorded on the invoice).
There is also no requirement to withhold payment (at 48.5%) from the employee where the invoice
does not quote an ABN. This is because the employee has the requirement to withhold on
purchase.
Reimbursements to office holders (giving their time freely) will similarly not require withholding to
occur with reimbursements.
Payments to Employees or Students for Service (not reimbursement)
The payment must be supported by an invoice with an ABN (a Tax Invoice if registered for GST).
If the service provided to the University was for the employee or students private or domestic or part
of a hobby or recreational pursuit, then the University should not withhold payment if a written
signed statement (to that effect) is made on the invoice or separate statement linked to the invoice.
If the transaction is really one of employment, then those concerned should be paid as an hourly
paid.
Per Diem Allowances (ie cash payments - not reimbursement)
Currently per diems are considered a salary allowance and will not require support of a receipt.
Allowances of this kind are not subject to payroll withholding where they are made in line with
Commonwealth rates.
This area includes per diems paid to unpaid office holders, and visiting scholars (including
conference speakers).
Further advice will be provided if full receipt substantiation is required.
Honorariums
Honorariums are considered a fee for service and withholding will occur where and ABN is not
quoted. These include Thesis Markers and Adjunct Professors (withholding occurs for non-cash
benefits - see Payment Withholding Requirements section).
Thesis markers and Adjunct professors should be encouraged to sign a private purpose declaration
where they are not actually carrying on an enterprise. The University may rely on this statement for
withholding purposes.
Where these individuals do not sign the private purpose declaration, alternative payroll
arrangements (hourly paid) can be made to alleviate administrative costs for payees (so they don’t
have to obtain an ABN and complete Business Activity Statements).
Gifts to Visiting Scholars, Thesis Markers, Adjunct Professors
Small gifts such as a bottle of wine (ie where it is inadequate consideration for service) are not
subject to withholding when paid to the above mentioned. There is also no requirement for these
people to sign a private declaration form. Note – withholding does not occur for payments under
$50.
If the University reimburses these individuals for travel and accommodation expenses and the
University retains an invoice, there is no requirement to withhold as it is an expense reimbursement
and it becomes a University Expense.
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International Flights are GST free
This includes a domestic leg that is included in an international ticket or cross-referenced to the
international flight ticket.
Imports
Imported goods that pass through customs will attract GST on collection. The University will obtain
a refund of the GST paid.
Goods entering Australia by post are subject to GST, however Australia Post can exercise its
discretion on whether or not low value goods will be subject to customs control.
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REVENUE
Reimbursement of salaries by external parties
Although salaries and wages are exempt from GST, the supply of personnel to an external
organisation is actually a supply of services and is therefore subject to tax.
This is commonly referred to as a fee for service.
Employee Reimburses the University for Personal Expenses
Reimbursements by employees are effectively sales and the appropriate GST treatment must be
made to the sale. Essentially, the University should charge the gross amount of the expense.
Examples
An international flight reimbursed in full or part, by a lecturer will be a GST free sale by the
University.
A domestic flight (that is not part of an international flight ticket) reimbursed in full or part will attract
GST. If the flight was for $440 (including GST) then the reimbursement will be $440 in full or $220
for 50% of which the University will remit GST of $40 and $20 respectively to the Tax Office.
Other examples include reimbursement of Mobile Phone use.
OTHER
Agency Relationships
When the University acts as a selling agent for another organisation, the University is permitted to
issue University invoices quoting the University’s ABN. The principal may remain anonymous.
If the principal is registered or required to be registered for GST, the University must issue Tax
Invoices. Where the principal is not registered or not required to be registered for GST, the
University must not charge GST and not issue Tax Invoices.
The sales by the University on behalf of the principal are to be considered sales by the principal for
GST purposes.
For example – sales by the University may include GST but will not be recorded as taxable sales of
the University. This is achieved by recording those sales as ‘Not Applicable’ in the University’s
general ledger. The principal would be notified of the sales made and the principal must remit GST
to the Tax Office.
Subsequent payment to the principal of monies collected, would similarly not be subject to GST, as
the University is not purchasing any items – merely remitting funds collected for the principal.
Any commission earned by the University will be a taxable sale for the University (must charge 10%
GST). As such a tax invoice must be forwarded to the principal to enable their refund of the GST
paid (if registered for GST).
Important Note
The government is reviewing the workings of agent relationships. It is proposed that GST attaches
to every transaction.
For example – sales by the University will be considered sale of the University (university to remit
GST to the Tax Office) and the subsequent payment to the principal of funds collected will be
considered a purchase by the University. In this case the University will require a Tax Invoice in
order to claim a refund of the GST paid to the principal.
Deposits – Not Applicable
Deposits received or paid are not a taxable supply. GST will only apply when charges are made
against the deposit. This includes deposits for Hotel Accommodation.
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A.
GST Training Guide
RESEARCH ACTIVITIES
General Rules
1. Where the supply of a research grant spans 1 July 2000, the supply is taken to be spread
uniformly over the period of the supply ie from contract start date to end date.
2. Where there are discrete deliverable’s or milestones due under the contract each is seen as a
separate supply.
Eg where a contract is for $150,000 and there a two deliverable’s upon which payments are
67% for a deliverable before July 2000 (say 30 April 2000) and 33% after June 2000 (30
September 2000) – the apportionment for GST is as follows:
30% or $50,000 is deliverable after July. This amount must be apportioned for GST on a
uniform basis from 1 July to 30 September 2000 ie 3months / 5months x $50,000 = 30,000.
GST = 10% of $30,000 = $3,000.
3. Where a contract does not include a GST contract clause, then relevant staff should contact the
funding body to negotiate payment for the GST. Funding bodies that are registered for the
GST are able to claim back the GST charged, so there is no real impact to the funding body.
4. GST is payable in the tax period in which the earlier of the following events occurs:
 An invoice is issued or
 The grant is received
5. Payments for research grants can occur in three ways
 Direct credit to the University bank account, and the University sends a tax invoice to
the funding body if required,
 Direct credit to the University bank account, and the funding body issues a recipient
created tax invoice (RCTI)
 Payment after the issue of a University invoice.
The gross amount of the grant received must be raised in Finance One and will correctly record the
GST portion of the fee invoiced.
Some funding bodies will create their own recipient created tax invoices. These invoices are
created in lieu of the University preparing tax invoices and allows for efficiencies for both the
supplier (University) in not having to raise invoices and the funding body as it allows them to receive
refunds for the GST incorporated in the funding at an earlier time. Examples of these bodies
includes (some RDC’s and NHMRC if we agree).
Where RCTI’s are made, the funding body must provide the University a copy of the RCTI for our
records. The receipted funds must be coded to the General Ledger as appropriate for GST.
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B.
Exceptions – where Research grants are GST free
The GST legislation has a number of exceptions that mean no GST is applicable where certain
conditions are met. These are:
1. Appropriations
Research grants provided by appropriation are out of scope for GST. This only applies where
the appropriation is specified under a specific act of parliament and excludes cases where a
government entity makes a research grant out of its general appropriations. Examples of
qualifying grants are:

All ARC grants

All DETYA grants except EIP (Education and Investigations Program)
2. Donations
Research Grants are not caught for GST if:
 The donation is transferred voluntarily by the grantor to the University, and
 The grantee may not receive an advantage of material character, directly or indirectly in
return for the grant
An advantage of material character does not include:
 mere recognition for making the donation or grant
 mere directions on how to spend the gift eg target the gift to electronic engineering
research which is of no commercial benefit to the donor.
 A financial acquittal
 Tax deductibility to the donor
Donations essentially arise from benefaction – a grant that is made as a function of
government does not have the characteristic of benefaction and is not a donation.
Government grants & scholarships are considered to be reciprocated with material gain –
this is because the University is supporting the Government’s functions & objectives.
3. Exports
Broadly speaking, supplies of services or rights that are for consumption outside Australia are
GST free, subject to certain conditions. Specifically, the following are GST free:
1. A supply that is directly connected with goods or real property situated outside Australia
2. A supply that is made to a recipient who is
 not an Australian resident AND
 is not in Australia when the research is undertaken
AND the research is not directly connected with goods situated in Australia when the
research is undertaken or with real property situated in Australia.
3. A supply that is made to a recipient who is
 not in Australia when the research is done AND the effective use or enjoyment of the
research takes place outside Australia
AND the research is not directly connected with goods situated in Australia when the
research is undertaken or with real property situated in Australia.
4. A supply of rights if the rights are for use outside Australia OR the supply is to an entity that
is not an Australian resident AND is outside Australia when the rights are supplied.
Research undertaken by UniSA staff in a permanent overseas establishment for overseas
clients would not attract GST.
Research undertaken by UniSA, and a researcher from overseas assists in the research
in Australia, will still be considered consumption outside Australia (as the recipient is
considered to be the overseas company which is outside Australia and not the individual
researcher).
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Examples – adapted from Tax Ruling GSTR2000/D7 (draft)
Example 25 - Services done in Australia but consumed outside Australia
If Account Co performs taxation services in Australia but the recipient of the supply of those
services is not an Australian resident and is not in Australia while the taxation service is
performed, the supply of those taxation services is GST-free, provided the service is not directly
connected with goods situated in Australia when the service is performed, or with real property
situated in Australia.
Example 26 – Service done in Australia but consumed outside Australia
Dobe is a self-employed marine biologist and he is providing research assistance to Phillip, a
New Caledonian resident who is conducting research in marine biology. The research
assistance is in the form of collating and providing details of sources of information and finding
and providing available papers on specific areas.
The research work is carried out by Dobe in Australia. The performance of the service occurs in
Australia. The supply of the information and papers to Phillip is connected with Australia.
The service provided by Dobe in this example is not directly connected with goods or real
property situated in Australia and therefore, is GST-free under Subsection 38-190(1) provided
that while the research work is done by Dobe, Phillip is not in Australia.
Example 27 – Service done in Australia
An architect draws up a plan in Australia for renovations of a building in Perth. The recipient is
not an Australian resident and is not in Australia while the services of the architect are
performed. However, because the supply is directly connected with real property situated in
Australia, the supply of that service is not GST-free under
subsection 38-190(1).
Example 30 – Advice prepared in Australia, but used outside Australia
An Australian resident lawyer supplies legal advice to a US resident company. The US
company has a permanent establishment in Australia but the US company is not represented in
Australia in relation to that supply. The supply of the legal advice to the US company is GSTfree under subsection 38-190(1) because the company is not an Australian resident and the
company is not in Australia while the legal services are performed . It is assumed in this
example that the supply is not directly connected with goods or real property situated in
Australia.
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4. Transitional Rules
Contracts for research grants signed on or after 8 July 1999 will attract GST for the component
attributable to post 30 June 2000, unless one of the exceptions above or a transitional rule
applies.
Under GST transitional rules, contracts signed before 8 July 1999 are GST free if certain
conditions are met, even if the supply is partially or fully performed after 30 June 2000. This
depends on whether the contract:
 is non-reviewable or reviewable
 is with a buyer who would be entitled to full input tax credits (refunds of GST paid on
purchases)
A non-reviewable contract is one where the consideration or price paid for the supply is fixed
or is to be calculated according to some prescribed formula and cannot be varied or reviewed
by either party to the agreement. It may contain specific provisions that the contracted price
does not include GST.
A reviewable contract is one that allows for a 'review opportunity'. A review opportunity in a
contract means an opportunity for the supplier to change the price because of GST or to
generally review or renegotiate the price (this includes a change of scope of the contract).
Full input tax credits (refunds of GST from purchases) are only available where the funding
entity is registered for GST. Almost all Australian based funding bodies will be registered for
GST.
The following research grants are GST free, even though there is a supply after 30 June
2000:
Contracts entered into before 2 December 1998.
Non reviewable:
1. Contracts paid in full before 2 December 1998 are GST free for the life of the contract.
2. Contracts paid in full on or after 2 December 1998 are GST free until 1 July 2005.
Reviewable:
3. Contracts paid in full before 2 December 1998 are GST free until first review
opportunity
4. Contracts paid in full on or after 2 December 1998 are GST free until the first review
opportunity or 1 July 2005, whichever is the earlier.
Contracts entered into on or after 2 December 1998 and before 8 July 1999.
If the recipient is entitled to full input tax credit:
Non reviewable:
1. GST free until 1 July 2005
Reviewable:
2. Contracts paid in full before 2 December 1998 are GST free until first review
opportunity
3. Contracts paid in full on or after 2 December 1998 are GST free until the first
review opportunity or 1 July 2005, whichever is the earlier.
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C.
GST Training Guide
In-kind Contributions
1. Consideration for Supply
Where In-kind contributions represent consideration (price paid) for a supply, GST will apply to
the amount contributed in the same manner in which cash payments are subject to GST.
The valuation of In-kind contributions should be that ascribed by an arms length transaction and
is usually noted in agreements – particularly SPIRT grants and CRC projects, however In-kind
contributions have the potential to affect every collaborative arrangement where a supply is
made.
2. Supply
SPIRT industry partner agreements make it clear that developed intellectual property (IP) is
owned by the parties as tenants in common which suggests that the collaborative arrangement
is best categorised as one where there is no supply from one party to the other. That is, the
participants spend their own funds in developing their share of the IP.
However the industry partner agreement states that the parties agree that each party shall have
at least a non-exclusive right to use any background intellectual property within the terms of the
agreement. As such, there is a supply of background intellectual property.
CRC projects represent work performed under the CRC funding umbrella and confer rights to
purchased participation of CRC developed intellectual property.
That is, individual contracts between the parties are viewed as transactions with the CRC for
accessing CRC IP and the purchase of a right to access future CRC IP.
Purchased equity may be viewed as a financial supply, in much the same way as purchasing
company shares or an interest in a partnership. Financial supplies are ‘Input Taxed’ which
means the purchase price should not have GST added on.
Under normal tax rules, an arrangement may be considered a partnership where income is
earned jointly. A private tax ruling for the ‘Water Quality’ CRC (mid 1990’s) suggested that
each project was a partnership for tax purposes. Further, the Tax Office allowed the CRC in
total (for all projects) to be considered as a partnership for ease of administration.
Additionally, the CRC and SPIRT arrangements may fall under recently introduced GST joint
venture rules. This may have the effect of requiring an ABN for each venture or project. These
rules are new and have not been examined by the GST project team.
It appears that the Research industry will treat CRC’s as separate and distinct GST entities.
This accords with the Tax Office view that the CRC’s are partnerships. It seems that this will
have the effect of treating in-kind contributions as a supply of service between the CRC and the
project contributors.
3. Double Supply
Clearly, In-kind contributions represent supplies in themselves and the consideration for the
supply is usually the reciprocated supply of research results.
As such the industry partner / CRC can and should charge GST for their supplies. See below in
Accounting for In-kind transactions.
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4. Accounting of In-kind transactions
This aspect of the accounting function is yet to be developed fully. Notwithstanding the
possible ‘tax’ scenarios outlined above, the CRC’s will invoice the University GST on In-kind
contributions along with SPIRT participants.
As a result, University would similarly charge GST for In-kind contributions to the CRC/SPIRT
participant.
Invoices for In-kind contributions should be raised by both parties in the same month. This
would alleviate the need for actual cash to change hands between the parties for the GST
applicable to the In-kind contribution – this can only be achieved where the value of In-kind
contributions from both parties is equal. This is likely to be acceptable to the Tax Office since
the parties although working collaboratively are engaging each other at arms length.
Eg Research contract for UniSA to provide research for Cash contribution of $1100 including
GST and In-kind of $660 including GST.
Tax Invoice issued by UniSA:
UniSA
Tax Invoice
ABN 37 191 313 308
To: ABCD
Exclusive
Supply of research (cash)
1000
GST
100
Total
1100
60
660
UniSA
Tax Invoice
ABN 37 191 313 308
To: ABCD
Supply of In-Kind
600
ABCD
Tax Invoice
ABN 45 787 343 295
To UniSA
Exclusive
Supply of Inkind
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600
GST
60
Total
660
The GST payable
by the University to
the Tax Office
(based on our
invoice) will be off
set immediately
and for the same
amount based on
the supplier’s
invoice (from which
we obtain a refund
of GST as with any
other purchase).
Our systems need
only record the
revenue & expense
within the BAS (or
tax return) – there
is no need to
record these
amounts within
University cost
centres.
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Alternative Approach
An extension to the example above, is where the University prepares an RCTI (recipient
(receiver of supply) created tax invoice) in lieu of an invoice from the supplier / industry
participant. This invoice will be used by the University to obtain a refund of the GST paid to the
industry partner. Note that the use of the RCTI is subject to certain requirements to be agreed
between the University and the industry partner – including provision of the RCTI to the supplier
within 28days for their records.
Eg Research contract for UniSA to provide research for Cash contribution of $1100 including
GST and In-kind of $550 including GST.
Require Tax Invoice of $1650 (include $150 GST)
Require RCTI for $550
Possible Tax Invoice and RTCI per GSTR2000/10 para 17 and 50-52 re set-off of expenses
etc (must show gross amounts). This approach is now with the Tax Office for their review.
UniSA
Tax Invoice
ABN 37 191 313 308
To: ABCD
1500
GST
150
Total
1650
500
50
550
Exclusive
Supply of research
ABCD
Recipient Created Tax Invoice
ABN 45 787 343 295
To UniSA
Supply of Inkind
Net payable
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NON-COMMERCIAL ACTIVITIES
GST free Override for Certain GST Taxable Supplies (Sales)
Special provisions are available under the GST legislation that enables certain GST taxable (or
input taxed) supplies (sales) to be considered GST free.
These provisions are available to Charities and / or Gift Deductible entities. Under tax law the
University is considered both a Charity (provision of public education) and a Gift Deductible entity.
Nominal Consideration (Price)
(1) A supply is GST-free where:
(a) if the supply was accommodation, the consideration is less than 75% of the GST
inclusive market value of the supply;
(b) if the supply was not accommodation, the consideration is less than 50% of the GST
inclusive market value of the supply.
(2) A supply is GST free where:
(a) if the supply was accommodation, the consideration is less than 75% of the cost to the
supplier of providing the accommodation;
(b) if the supply was not accommodation, the consideration is less than 75% of the cost of
acquiring or the supplier (UniSA) is liable to pay for the thing supplied.
Where any items are considered to fall under these broad exclusions, appropriate
documentation should exist outlining on what basis the GST free status was determined.
Second-hand Goods
A supply of second-hand goods by the University is GST-free if:
(1) the goods were supplied to the University
(a) as a gift; or
(b) by way of a supply that was GST free because of a previous application of this rule.
However, the supply is not GST-free if the University has dealt with the goods in such a way that
the goods no longer have their original character.
Raffles and Bingo
A supply is GST-free if, the University supplies:
(a) a supply of a ticked in a raffle; or
(b) an acceptance of a person’s participation in a game of bingo; or
(c) a gambling supply of a kind specified in the regulations; and
The supply does not contravene a State or Territory law.
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GST Training Guide
EXPORT ACTIVITIES
Exported goods or services are broadly categorised under three main categories:



Supplies of things, other than Goods or Real Property, for consumption outside Australia;
Exports of Goods; and
Lease etc. of Goods used outside Australia.
The legislation for each of these payments has been restated in a separate section ‘Export
Provisions’ for University application. Some guidance is provided below however.
1
Supplies of things, other than Goods or Real Property, for consumption outside
Australia
This area of the GST legislation is concerned with the supply of services and rights.
1.1
Consulting and Research – Export (GST free)
Consulting services to non-residents who are not in Australia when the consulting service is
performed will be GST free as an Export – as long as the research is not directly connected
with goods or real property situated in Australia.
1.2
Subscriptions to Journals – GST taxable
Journal and magazine subscriptions that are paid for in advance are payments for a right to
receive future issues of the journals or magazines.
The journals and magazines are considered goods and therefore must be delivered within 60
days of payment or issue of an invoice (which ever is the earliest) (or such further period
as the commissioner allows)
Such rights are considered the sale of goods, and are taxable where the goods do not pass
to the recipient within 60 days. Under the GST Act, the University will have to apply to the
Commissioner of Taxation to make a special determination in regards to the ‘further period’ in
which goods can pass as Export.
1.3
Commissions and Royalties for Rights Granted – Export (GST free)
Rights granted for use of intellectual property will be GST free as an Export where the rights
are granted for use outside Australia. Where rights are granted for use in and out of
Australia, the royalty relating to use in Australia is subject to GST.
2
Export of Goods
A supply of goods will generally be GST free where the University exports the goods from
Australia before, or within 60days of receiving payment or on issuing an invoice for payment
(which ever is earlier).
Activities that would be GST free by virtue of this ‘export’ provision are:
2.1
Publications
Sales of publications will be GST free if they are sold on a one off basis (ie not part of a
subscription service). Please note that an item is GST free where the exchange of title to
ownership occurs overseas.
Subscriptions to publications are considered the sale of goods, and are taxable where the
goods do not pass to the recipient within 60 days. . Under the GST Act, the University will
have to apply to the Commissioner of Taxation to make a special determination in regards to
the ‘further period’ in which goods can pass as Export.
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PRICING GUIDELINES
Quoting Prices
You should note that under the Australian Competition and Consumer Commission (ACCC) prices
must be quoted on a GST inclusive basis for goods and services supplied after 30 June 2000. This
does not preclude us from showing the GST amount separately.
Eg a GST inclusive price of $110 can be show as:
Goods / Services
GST
Total
$100
$10
$110
Quotations on or After 1 July 2000
According to ACCC price exploitation guidelines, brochures, price lists and enrolment forms must
either be reprinted with GST inclusive prices or prices should be over-marked with stickers (you
cannot over-mark with textas or pens).
Price rules
The University shall not increase prices by more than 10% for goods and services (inclusive of
GST). Further, the University must pass on any cost savings received from our suppliers.
The University is currently wholesale sales tax (WST) exempt and therefore we do not expect
significant net price changes (after GST is refunded) to our purchases after June. As a result our
price setting may only require minimal price reductions, if any before adding GST (where
applicable).
Adjusting Trading Stock Prices
Where the University does hold trading stock at 1 July 2000 (eg the Sports Centres) prices must be
adjusted for the removal of WST and the addition of GST. In order to claim a refund of the WST
included in stock held at 1 July 2000, a stock take is required to identify items held and the WST
applicable to those items.
Price setting
1.



Reviewing Costs and Margins
Add the GST exclusive costs of supply to,
A profit margin, and
Add GST to the total of the above figures.
Or
2. Market Prices
 Market prices include GST, therefore
 GST is 1/11th of the market price
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Examples considering costs:
Pricing a Conference (minimum to recover)
Venue hire
$1100 includes GST of 100
Catering
$220 includes GST of 20
Speaker Fee
$330 includes GST of 30
Own staff costs
$600 no GST on wages
Total
$2250
Less GST refund
($150)
Cost to UniSA
$2100 minimum cost to recover
Number of guests
50
Cost per guest
$42
Profit margin
$3
Round up or down,
$45
Add GST at 10%
$ 4.50
Cost per head
$49.50
You may wish to round to $50, in which case GST is 1/11th = $4.54
The main point here, is to realise that GST is always 1/11th of the price charged.
Selling an item at Cost (ie reimbursement of mobile phone calls etc)
University purchases a piece of equipment
$110 includes GST of $10
Refund of GST from Tax Office
($10)
Cost to recover on sale
$100
Add GST at 10%
$10 remit to Tax Office
GST inclusive price
$110
Research Projects, Consultancies and Grants
Research projects, consultancies and grants (‘projects’) are generally entered into to provide a
result. This means that the supply made by the University would typically be for one supply and
GST would be added on the total funds requested.
Project for service to commence after 30 June 2000 (basic example)
Budgeted Item
Computers / Equipment
Salaries and Oncosts
Travel
Photocopying,
printing
phone calls
&
Total
Less GST credits (ITC)
Total funding required
Add GST
Total funding sought / invoiced
GST paid to the Tax Office
Net revenue credited to the
cost centre
Budget now
with out
sales tax
$
10000
18000
5000
2000
Budget
after July
with GST
$
11000
18000
5500
2200
35000
-
36700
(1700)
35000
3500
38500
(3500)
35000
35000
3500
38500
(3500)
35000
Comments
Includes GST paid (ITC)of 1000*
Includes GST (ITC) of 500*
Includes GST (ITC) of 200*
Per computer, travel & printing and
phone calls, these are refundable to the
University*
Net cost to University*
GST payable to Tax Office
#
* You should note that the Finance Unit will pay the GST on purchases via a corporate GST account. The Tax
Office will refund this GST paid so long as the University holds a properly formatted Tax Invoice from the
supplier. The GST is therefore not a cost borne by the relevant cost centre.
# GST collected will be recorded against the corporate GST clearing account and remitted to the Tax Office
monthly.
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Research cont.
Apportionment of revenue applicable to GST
Where there are discrete deliverable’s or milestones due under the contract each is seen as a
separate supply.
Eg where a contract is for $150,000 and there a two deliverable’s upon which payments are 67%
for a deliverable before July 2000 (ie $100,000 on 30 April 2000) and 33% or $50,000 after June
2000 (30 September 2000) – the apportionment for GST is as follows:
33% or $50,000 is deliverable after July. This amount must be apportioned for GST on a uniform
basis from 1 May to 30 September 2000 ie 3months (from July) / 5months x $50,000 = 30,000.
GST = 10% of $30,000 = $3,000.
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10
GST Training Guide
TAX INVOICES
Contents:
1 Minimum Requirements for Tax Invoices
2 Examples of Tax Invoices from Suppliers
3 Example of Tax Invoices issued by the University
1
Minimum Requirements for Tax Invoices
A final GST ruling on Tax invoices has not been issued, however a draft ruling contains the
main points that are expected to be shown on a Tax Invoice. Tax Invoices must be provided
to any customer that requests a Tax Invoice within 28 days (subject to $55 limit – see below).
Tax Invoices need only be prepared where GST has been applied.
1.1
Tax invoices are not necessary / required where it includes a taxable item valued $55
(incl. GST) or less.
1.2
For invoices where the total payable (including GST) is greater than $55 and less than
$1000, the information required in Tax Invoices







ABN
The GST inclusive price of a taxable supply
The word ‘tax invoice’
The date of issue of the tax invoice
The name of the supplier
A brief description of the thing supplied
A statement that
 the total amount payable includes GST (where it is exactly 1/11th of the price) or
 the total amount of GST
Where the invoiced amount contains taxable supplies only and the GST is less than 1/11th of
the total invoice, the invoice must show:
 the GST exclusive amount of the taxable supplies and
 the amount of GST payable on the taxable supplies.
Where the invoice contains a mixed supply of GST taxable, free and not applicable (amounts
out of scope ie for goods or services delivered before July 2000 in which case GST does not
apply)
 clearly identify each taxable supply
 the total amount of GST payable
 the total amount payable
1.3
Tax invoices where the total payable is $1000 or more, the information required must
include the information described above and the following:
 The name of the recipient
 The address or the ABN of the recipient
 For each description – the quantity of the goods or the extent of the services supplied
1.4
Recipient Created Tax Invoices (RCTI)
In some circumstances the entity receiving the good or service can create their own Tax
Invoices to enable refunds of GST paid, instead of the supplier issuing a tax Invoice. For this
to occur, the University must agree in writing, and be provided with a copy of the RCTI for our
records and processing.
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2.1
GST Training Guide
Examples of Tax Invoices from Suppliers
Supply of less than $1000 and the GST is exactly 1/11th of the total price
NOTE: ITEMS IN BOLD MUST BE SHOWN, ITEMS NOT IN BOLD ARE REQUIRED FOR
INVOICES $1000 or MORE
TAX INVOICE
Construction Co
ABN 47 191 313 308
To UniSA or ABN
Date 5 / 7 / 2000
Description of
Qty
Supply
Solid decorator
10
doors
TOTAL
The total price includes GST
Total
Payable
1650
1650
OR
Don’t
need
Qty of
goods
Must make
this
statement
if GST not
shown and
GST is
exactly
1/11th of
the price.
TAX INVOICE
Construction Co
ABN 47 191 313 308
To UniSA or ABN
Date 5 / 7 / 2000
Description of
Qty
Supply
Solid decorator
10
doors
GST
TOTAL AMOUNT PAYABLE
OR
Total
Payable
1500
150
1650
Or show
GST
separately
For Subscription Notices
TAX INVOICE
State Library
ABN 47 191 313 308
Journal Subscription Notice
To UniSA or ABN
Date 5 / 7 / 2000
Description of
Qty
Supply
Journal
10
subscription
GST
TOTAL AMOUNT PAYABLE
Total
Payable
400
40
440
Must have
additional
statement
otherwise
regard as
noncomplying
and you
will need to
obtain a
Tax
Invoice.
This will become a tax invoice when paid
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2.2
GST Training Guide
Supply of less than $1000 and the GST is less than 1/11th of the total price (Mixed
Supply)
In this example, roof tiles are taxable and bottled water is GST free.
It could well be an invoice for research ie taxable supply after 30 June 2000 and non-taxable
before 1 July 2000.
TAX INVOICE
Construction Co
ABN 47 191 313 308
To UniSA or ABN
No need to
have
asterix if
line item
shows
GST
applicable
Date 5 / 7 / 2000
Description of
Qty
Supply
Unit
Price
GST
Total
Payable
Roof tiles (*)
150
5.50
Bottled water
50
1.00
TOTAL AMOUNT PAYABLE
Total includes GST of
(*) indicates taxable supply
75
75
825.00
50.00
875.00
Each
different
type of
supply to
be
shown
Show
total
GST
Must
indicate
supplies
with
GST
OR
Where the invoice contains taxable supplies only
Eg an amount is out of scope for GST due to transitional rules
TAX INVOICE
Construction Co
ABN 47 191 313 308
To UniSA or ABN
Date 5 / 7 / 2000
Description of
Qty
Supply
50
70
Secondment
services 50 hrs in
July
Secondment
services 70 hrs in
June
Totals
Price
excl.
GST
2500
GST
Total
Payable
250
2750.00
3500
-
3500.00
6000
250
6250.00
Taxable
supply is
shown in
total,
however
some of it
not
applicable
(N/A) to
GST.
Totals excluding
GST &
GST total
Note in this example 50 hours were taxable and 70 hours were out of scope ie Not Applicable
to GST as this service was performed before 1 July 2000.
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GST Training Guide
Examples of Tax Invoices Issued by the University
Essentially, the University should show the GST incorporated in the price.
3.1
Supply of less than $1000 and the GST is exactly 1/11th of the total price
NOTE: ITEMS IN BOLD MUST BE SHOWN, ITEMS NOT IN BOLD ARE REQUIRED FOR
INVOICES $1000 or MORE
TAX INVOICE
UniSA
ABN 37 191 313 308
Uni
preference
to show
GST
To Construction Co or ABN
Date 5 / 7 / 2000
Description of
Qty
Supply
Solid decorator
10
doors
GST
Total
Payable
1650
150
TOTAL
3.2
Don’t
need
Qty of
goods
1650
Supply of less than $1000 and the GST is less than 1/11th of the total price (Mixed
Supply)
In this example, roof tiles are taxable and bottled water is GST free.
It could well be an invoice for research ie taxable supply after 30 June 2000 and non-taxable
before 1 July 2000.
TAX INVOICE
UniSA
ABN 37 191 313 308
To Construction Co or ABN
Date 5 / 7 / 2000
Description of
Qty
Supply
150
50
Food &
Accommodation
Camp
Totals
GST
Total
Payable
75
825.00
75
50.00
875.00
Show
total
GST
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OR
Where the invoice contains taxable supplies only
Eg an amount is out of scope for GST due to transitional rules
TAX INVOICE
UniSA
ABN 37 191 313 308
To Construction Co or ABN
Date 5 / 7 / 2000
Description of
Qty
Supply
50
70
Secondment
services 50 hrs
in July
Secondment
services 70 hrs
in June
Totals
Price
excl.
GST
2500
GST
Total
Payable
250
2750.00
3500
-
3500.00
6000
250
6250.00
Totals excluding
GST &
GST total
Note in this example 50 hours were taxable and 70 hours were out of scope ie Not Applicable
to GST as this service was performed before 1 July 2000.
OR
For Subscription Notices - Alternative method, see Accounting Procedures
TAX INVOICE
UniSA
ABN 47 191 313 308
Journal Subscription Notice
To State Library or ABN
Date 5 / 7 / 2000
Description of
Qty
Supply
Journal
10
subscription
GST
TOTAL AMOUNT PAYABLE
Total
Payable
400
40
440
Must have
additional
statement
otherwise
regard as
noncomplying
and you
will need to
provide a
Tax
Invoice.
This will become a tax invoice when paid
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ADJUSTMENT NOTES
You should note that where a GST taxable price increase or decrease arises to a previously issued
Tax Invoice, an Adjustment Note must be issued to the customer. This essentially records the
change in GST applicable to the transaction.
Adjustment Notes must be issued within 28 days of request or if before receiving a request, within
28 days of the supplier becomes aware of the adjustment, to those who had previously received a
tax invoice.
Information required on an Adjustment Note (GST Ruling 2000/1) is provided below.
1
Abbreviated Adjustment Note (where tax invoice issued and total payable is less than
$1000)
 The words ‘Adjustment Note’ must be present (or variations: Credit Adjustment Note etc
or may use the word Tax Invoice so long as the refund/adjustment and GST appear as
negative values)
 ABN
 Name of supplier
 Issue date of the Adjustment Note
 The difference between the price of the supply or supplies before the adjustment event
and the new price of supply, and
 A brief explanation of the reason for the adjustment, eg ‘discount’ or ‘return of goods’
 The amount of the adjustment to the GST payable or a statement to the effect that the
difference in the price of the taxable supply includes GST
2
Requirements for adjustment notes (other than abbreviated adjustment notes, ie
where tax invoice issued and total payable is $1000 or more) should include those
items above and:
 The name of the recipient
 The address or ABN of the recipient
3
Where adjustment events occur for supplies that are partly taxable:
The difference between the price of the taxable supply before the adjustment event and the
new price of the taxable supply, and the amount of the adjustment to the GST payable.
4
Where supplies for which the GST is less than 1/11th of the price of the taxable supply:
 The amount of the adjustment to the GST payable; and
 The difference between the GST exclusive price of the supply before the adjustment
event and the exclusive price of the supply.
Important
Refunds of previously taxed items must be made by the Finance Unit to facilitate the
production of Adjustment Notes.
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12
GST Training Guide
ACCOUNTING PROCEDURES
Revenue
Invoices with GST raised in Finance One will be complying Tax Invoices. Tax Invoices are required
by GST registered customers to obtain a refund of the GST included in the price of the invoice.
1
Revenue Invoiced in Finance One
Finance One will correctly allocate revenue and GST to the relevant general ledger accounts. This
is achieved by entering a total GST inclusive amount and correctly selecting the appropriate GST
code for one of the 5 categories:





Supplies (sales) with GST in the price:
(T) Taxable supply – attracts 10% GST,
Supplies with no GST in the price:
(F) GST free supply,
(E) Export
(N) Not Applicable - out of scope supply eg donations, internal transactions, funds received
from one party to be directed to another party (excludes taxable scholarships) and supplies
made before July 2000 - do not attract GST.
(I) Input taxed supply for Whyalla Student Accommodation & Campus Services Residential
Invoices (Magill House),
For example in a mixed supply:
An invoice for $950 (including GST) may comprise:
 (T) $550 taxable supply (sale), and
 (F) $400 GST free supply
$50 = 1/11th of the $550 Taxable sales (or $50 = 10% of $500) will be recorded against the GST
clearing account for later remittance to the Tax Office. The remainder ($900) will be recorded as
revenue against the relevant cost centre.
All final processing into Finance One requires the gross amount of taxable sales along with ‘sales
with no GST in the price’ from which the system will correctly allocate amounts to revenue and the
GST clearing account.
NOTE: This applies equally for cash sales, petty cash and journals that record original
receipt of revenue.
All revenue items are tracked throughout processing using the GST codes outlined above
for gross taxable amounts. This level of tracking is required to prepare our monthly tax
return (or BAS - Business Activity Statement) on a gross basis.
Receipt of funds previously invoiced in Finance One
Funds receipted that relate to invoices raised in Finance One should be processed in the usual way
ie with sub-receipts / direct to Finance Unit.
These funds are usually directed to the Finance Unit for processing against the debtor.
Revenue Journals
Revenue may be introduced into Finance One by journal. In such cases the correct GST code must
be assigned to the general ledger account entry.
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GST Training Guide
Revenue not Invoiced in Finance One
Campus Receipting
The Campus receipting system has been modified to process the various GST codes. It does this
by assigning one GST code to each PLU.
A PLU is the code that is used to process receipts through campus receipting against the various
General Ledger accounts. Eg PLU 10352 = GL Account 40 70800 6429
Because there is only one GST code per PLU, there will be occasions where one type of revenue
(general ledger account) will have more than one PLU.
For example: within Camps and Field Trips the accommodation and food is taxable where as the
travel and entry fees etc is GST free.
This will require two PLU codes – one for the taxable portion and one for the GST free portion. An
example is provided below.
2.1 Cash Sales
Cash sales occur where funds are collected at the same time the goods or services are provided.
Some customers that are not registered for GST may request a Tax Invoice (students) in which
case the University must comply to do so within 28 days (unless the taxed item is $55 or less).
2.1.1 Taxable Sales
Where the sale includes a Taxable sale, the new ‘Tax Invoice’ (cash sale receipt) must be used
where there is no other means of producing a Tax Invoice (eg Campus Receipting or GST
complying cash register).
This will help you keep track of the gross amounts that include GST.
Example:
The receipt of a Camp or Field Trip will have to be split between its taxable and GST free
components. The taxable sale in this example is $825.
TAX INVOICE
UniSA
ABN 37 191 313 308
GST Code
recorded
on second
copy if
receipted
through
Finance
Unit
To Construction Co or ABN
Date 5 / 7 / 2000
Qty
Description of
Supply
Camp – Travel &
Other
Accommodation
and Food
Account
code
GST
code
F
GST
Total Payable
-
50.00
T
75
825.00
Totals
75
875.00
Place GL account code if receipting
through Finance Unit or PLU if receipting
through Campus receipting on second
copy
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GST is
1/11th of
the total
taxable
sale
Show
total
GST
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
GST Training Guide
If the cash sale is receipted through the Finance Unit, the general ledger account code and
GST code will be used to correctly allocate each amount on the invoice. As with normal
invoicing in Finance One, the GST will be allocated to the GST clearing account as 1/11 th of the
taxable supply of $825 = $75
The gross taxable item must contain GST exactly =1/11th of the total.
Amounts processed in the general ledger:
Revenue to cost centre/s
GST Clearing Account

Taxable Free
750
50
75
Totals
800
75
If the cash sale is subsequently receipted through Campus Receipting, the correct PLU must be
identified on the cash sale ‘Tax invoice’ for each (differently taxed) supply made. Eg a cash
sale may contain any of the GST code types referred to above (Taxable, GST free, Export or
Not Applicable etc).
As mentioned previously, Campus Receipting PLU’s can only assign one type of GST code per
PLU. Therefore sales of one item requiring two GST codes will require two PLU’s recorded; ie
one for each different GST treatment of the sale.
In the camp / field trip example above, one PLU is required for the taxable portion and another
for the GST free portion.
The campus receipting system will be updated to provide the taxable and GST free PLU’s
for existing camps. Other revenue items will require the various schools and units to
establish new PLU’s for the different types of sales eg Taxable (T), Export sales (E) and
amounts received as donations (N). Schools and Units will be provided their own
specific PLU’s for future reference.
2.1.2 Sales with no GST in the price (GST Free, Export or Not Applicable etc)
Where the sale does not include GST ie it is GST free, Export or Not Applicable, you may use a
normal sub-receipt. There is no legal requirement to give a ‘Tax Invoice’ for GST free sales. To
avoid confusion with customers, it may be prudent to note on the receipt that GST did not apply to
the item sold.
However for internal processing you must clearly identify the amounts by GST code: (F) GST free,
(E) Export, (N) Not Applicable etc before processing is made to the General Ledger or use the
correct PLU if the receipt is provided to Campus Central.
2.1.3 Sales Summary for input into Finance One
For ease of input into Finance One, amounts should be summarised according to general ledger
account code and GST code.
Example
Account Code
GST
free (F)
Export
(E)
40 70800 XXXX
40 70800 YYYY
50
100
80
100
825
500
875
780
Totals
150
80
100
1325
1655
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Not
Applicable
(N)
Taxable
(T)
Totals
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2.2
Subscription Notices and Conferences
Subscription notices issued are not considered invoices. They represent offers to join or renew a
service. The service is subject to 10% GST.
2.2.1 Issuing Tax Invoices associated with Subscriptions and Conferences
Because the new tax regime requires businesses to hold Tax Invoices in order to claim refunds of
GST paid on purchases, many may not pay on subscription notices.
(a) To overcome this, the University should issue subscription forms as registration forms clearly
showing the GST applicable. The registration form should not contain the words Tax Invoice,
although the University ABN should appear. The registration form should state that a Tax
Invoice will be issued requiring payment on return of a completed form. Finance One should
then be used to prepare a Tax Invoice requiring payment.
(b) Alternatively, you may issue a subscription notice, which states that a Tax Invoice will be issued
on payment. In this case you must issue a cash receipt Tax Invoice to the customer. It is
unclear how many businesses would pay without first receiving a Tax Invoice.
(c) Alternative approach - Issuing Subscription Notices as Tax Invoices
The subscription notice may be regarded as a ‘Tax Invoice’ where it is properly formatted,
displaying the words Tax Invoice and our ABN, the date of issue and includes the words ‘this
will be a Tax Invoice when paid’
Where this option is used, a normal sub-receipt must be used to record receipt of funds – a Tax
Invoice cannot be issued twice to the customer.
In this case, the sub-receipt must be completed with the appropriate details eg correct PLU or
general ledger account code with appropriate GST code.
Example:
UniSA
ABN 37 191 313 308
Journal Subscription Notice
Note: must
have word
Tax Invoice,
ABN, show
GST & date
of issue.
Tax Invoice
15/7/2000
To ABCD
Address or ABN (if invoice greater than $1000)
Journal subscription for 12 months
GST
Total
$400
$40
$440
This will be a tax invoice when paid.
Must have additional statement otherwise regard as noncomplying and you will need to provide a Tax Invoice.
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2.3
GST Training Guide
Manual Invoices – Word Document
2.3.1 Tax Invoices
The University should not issue Word document Tax Invoices unless prior approval is obtained from
the Finance Unit. This is because the University is liable for GST at the earlier of invoice or receipt
of funds and the need to meet the requirements of Adjustment Notes (eg. adjustment notes will be
required for prepaid services where actual service differs to that invoiced)
Invoices raised as a ‘Word document’, that contain GST should be properly formatted as a Tax
Invoice. The Tax Invoice should disclose the GST for each item and totals should be provided.
See examples under ‘Tax Invoices’
Subsequent receipt of funds must be recorded on a sub-receipt (a cash sale Tax Invoice cannot be
issued – you cannot issue two Tax Invoices). As outlined above the sub-receipt must be coded for
the different GST code types (Taxable, GST free, Export or Not Applicable etc) or use the correct
PLU.
Because adjustment notes are required where prices or actual supply vary, it is crucial that invoices
be raised in arrears (instead of in advance). Where adjustments do occur – the Adjustment Note
can be reported on the next Tax Invoice, so long as the invoice is issued within 28 days.
2.3.2 Invoices with no GST in the price (GST Free, Export or Not Applicable etc)
Invoices raised as a ‘Word document’, that do not contain GST need not be provided as a Tax
Invoice. To avoid customer confusion, you should make a note on the invoice indicating that GST
does not apply to the item/s sold.
The receipt of funds must be recorded on a sub-receipt (a cash sale Tax Invoice cannot be issued).
As outlined above the sub-receipt must be coded for the different GST code types referred to above
(Taxable, GST free, Export or Not Applicable etc) or use the correct PLU.
3
Commission and Royalty Revenue from Rights granted
Commission and Royalty revenue is determined in effect by the paying party. The payer will require
a Tax Invoice to obtain a refund of the GST paid.
The options to control the GST applicable and provide for Tax invoices is as follows:
(a) Request advice of the fee before receipt of funds, after which a Tax Invoice must be
prepared from Finance One, or
(b) Provide a cash sale Tax Invoice when funds are received (funds should be received with
sufficient advice from which to prepare a Tax Invoice), or
(c) Have the payer prepare a Recipient Created Tax Invoices. The University would have to
agree in writing and the payer must furnish a copy to the University.
After recording the receipt of funds, payments could be deposited with:
 Campus receipting along with an appropriate PLU, or
 Provided to the Finance Unit with completed receipt details.
Each of the three approaches will require communication with the payer to determine the most
effective course of action.
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GST Training Guide
Commissions from Sale of Goods on Consignment
The sale of goods on consignment are actually sales of the principal. Therefore the principal must
account for the GST on items sold.
There are a number of alternatives available to account for the commission earned on sale of
consignment stock. The use of any of these will depend on existing receipting systems (eg manual
cash sale, cash register or campus receipting) and level of training required of staff.
4.1



Where a manual cash sale Tax Invoice is issued to the customer and the commissions
are retained on the sale of an item, the following procedure could be adopted:
On sale, the customer must be given an appropriate receipt: If the principal is registered for GST – manual cash sale Tax Invoice must be issued
showing GST,
 if the principal is not registered for GST - a sub-receipt must be issued (GST cannot be
charged on behalf of the Principal).
You should not give a Campus services receipt as this will show the incorrect GST to the
customer due to the following coding at campus receipting: PLU (taxable) for the commission portion eg if sale for $100 and commission is 20% then
$20 dollars must be coded with a taxable PLU.
 The remaining portion $80 must be coded with a PLU that is coded (N) Not applicable.
Subsequent payment of the $80 is merely a transfer to the Principal. This is not a purchase
and the FS3 form should be coded with an (N) Not Applicable.
 Because the agent requires a Tax Invoice for the commission withheld, you must prepare a
manual cash sale Tax Invoice which should accompany the cheque issued, detailing the
commission withheld and which highlights the GST.
NOTE: other methods are available for handling commissions, some of which involve
preparing correcting journals depending on whether or not the item is sold mainly through
campus central etc.
Please contact the Finance Unit to discuss.
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GST Training Guide
Deposits received for Hotel Accommodation
Conference fees may include deposits for Hotel accommodation.
5.1
Where the deposit is used by the University to purchase accommodation, which is an
expense of the University – the University must obtain a Tax Invoice on purchase of the hotel
accommodation to obtain refunds of the GST. The Tax Invoice issued by the University for the
conference must highlight GST applicable to all costs.
5.2
Where the University merely collects a deposit on behalf of a Hotel, GST should not be
charged to the conference participant for that deposit. The deposit must be coded with GST code
(N) Not Applicable. Subsequent payment must be supported by an invoice coded as GST code (N)
or and FS3 GST code (N) (ie the University is not entitled to a refund for the GST – it is not a
University expense). That is the conference participant will be provided a Tax Invoice from the
Hotel from which they will be able to claim a refund of the GST.
Example:
UniSA
15/7/2000
ABN 37 191 313 308
Conference
Tax Invoice
To ABCD
Address or ABN (if invoice greater than $1000)
GST
Conference costs
15
Dinner
6
Hotel Deposit
Total
21
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Total
$165
$66
$110 (N)
$341
GST code (N)
when using
Finance One or
when cash
receipting use
PLU with GST
code (N).
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GST Training Guide
Expenditure
1
Expenditure made through Accounts Payable
Expenditure made through Accounts Payable will correctly allocate the expense and the GST to the
relevant general ledger accounts. This is achieved by entering a total GST inclusive amount and
correctly selecting the appropriate GST code:
Acquisitions (purchases) with GST in the price:

(T)Taxable - contains 10% GST, and
Acquisitions (purchases) with no GST in the price:

(F) Free (includes non-Tax Invoices)

(N) not applicable eg donations, internal transactions, purchases made before July
2000 and payments made to or on behalf of a Principal (ie where UniSA is an Agent)
etc, or
Those sales (or supplies) that contain GST in the price but for which a GST refund is
not allowed:
Acquisitions (purchases) with GST but we cannot obtain a refund:
 Input Taxed – for Whyalla Student Accommodation & Campus Services Residential
Invoices (Magill) – note, it is envisaged that this code will not be used. A procedure will
be established to ensure (as this code does) that all GST connected with Whyalla
Student Accommodation remains a cost of the cost centre (ie there is no refund of GST
for Input taxed items).
Invoices sent to Accounts Payable must be coded with the appropriate general ledger code and the
GST portion will be handled by the system. This amount is refundable to the University by the Tax
Office.
Invoices requiring break up to multiple general ledger codes must have due regard for the GST
contained in the invoice. Gross amounts costed that include GST must contain GST that is exactly
1/11th of the total amount costed.
For example:
Invoice contains:
Taxable items of
Free items of
Total invoice
$110
$50
$160
If there is a 50/50 split, the accounts and amounts to be posted to the general ledger are dissected as:
40 70800 XXXX
$55 (T) GST included =
$5
40 70800 XXXX
$25 (F)
40 70800 YYYY
40 70800 YYYY
Total Processed
$55 (T)
$25 (F)
$160
GST included =
$5
General Ledger processing
40 70800 XXXX
$75
40 70800 YYYY
$75
GST Clearing Account
$10
Total processed
$160
Note: you cannot process $80 (T) and $80(T) – this will give a higher GST refund.
You should also note that in order to obtain the GST refund, the University must hold a properly
formatted Tax Invoice.
The Tax Invoice is the only authority that ensures that a supplier is
registered for GST (it is effectively a combination of the words Tax Invoice and their ABN).
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Petty Cash
Petty cash payments may have GST incorporated in the price.
Where you identify the Taxable items, the FS14 Petty Cash Reimbursement form should be
prepared highlighting the total amount including GST and the total amount without GST, separately
(example provided below).
You should note that suppliers do not have to provide a Tax Invoice where the taxable amount of
the item/s of the invoice is/are less than $55 including GST.
As a result you may, in some cases receive an invoice / receipt that does not contain the word Tax
Invoice and or properly allow you to identify the taxable supplies.
Where this occurs the University may determine if the supplier is registered for GST by:
 asking the supplier or
 from past dealings you received a Tax Invoice.
Example:
Invoice / receipt contains:
milk
$8.00,
biscuits
$16.50,
coffee
$10.00
plain water
$5.50
Total $40.00
The FS14 should be prepared as follows:


taxable purchases
GST free purchases
$16.50 (biscuits - where GST is exactly 1/11th of the price)
$23.50 (all others)
$40.00
When reimbursement of the Petty Cash float is required, the FS3 Expenditure Claim form
should be completed in the following manner:
cost centre code 40 70800 XXXX
Taxable (incl GST)
$ 16.50
GST Free
$ 23.50
Taxable
$ 15.00
$ 1.50
GST Free
$ 23.50
General ledger processing:
cost centre code 40 70800 XXXX
GST clearing Account
Totals
$38.50
$ 1.50
$40.00
The Australian Competition and Consumer Commission (ACCC) has published material on the
taxability of items – on their own web site. www.accc.gov.au under GST
Food & Beverage Provisions are also provided herein for reference.
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GST Training Guide
Expenditure made through Imprest Accounts and by Credit Card
Staff making payment through imprest accounts and credit cards must have due regard to:
 Payment Withholding Requirements (see separate section),
 How a Tax Invoice must be formatted in order for the University to claim a refund on any GST
paid, and
 That acquittal of expenditure must be made for relevant cost centres by recording amounts that
include GST of exactly 1/11th of the price of those taxable amounts.
Eg FS3 Expenditure Claim form should indicate items as follows:
cost centre code 40 70800 XXXX
Taxable
$ 16.50
GST Free
$ 23.50 (per example over page)
There is no need to show the GST separately.
4
Refunds of items sold which include Tax
Refunds of items sold which include Tax must be supported by an Adjustment Note where a Tax
Invoice was originally issued.
Because the issue of cash sale Tax Invoices may vary, refunds must be referred to the Finance
Unit – indicating if the item was taxable.
Adjustment Note Requirements
Adjustment Notes for a Tax Invoice originally issued under $1000 need only show:
 Show the word Adjustment Note or Tax Invoice where the refund is shown as a credit to the
 The name of the supplier
 The issue date of the Adjustment Note
 The amount refunded
 An explanation for the adjustment eg refund
 The amount of GST included in the refund
5
Journals
Journals are usually prepared for internal re-allocations and should be coded with (N) Not
Applicable GST code.
Journals recording the original entry of income or expense must be coded with the appropriate GST
codes.
Important Note
Correcting journals that effect a change in the original GST code entered must be referred to the
Finance Unit for actioning.
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PAYMENT WITHHOLDING REQUIREMENTS
Generally, under Pay As You Go (PAYG) Legislation, where a supplier does not quote an
Australian Business Number (ABN), the University must withhold 48.5% of the payment and remit
this to the Tax Office to the credit of the supplier. The amount withheld is not a tax in itself. The
Commissioner of Taxation holds this amount to the credit of the suppliers tax account.
University staff (including Credit Card holders) must only deal with suppliers that:

have an ABN, or

issue an invoice which is less than $50, or

are specifically exempt from withholding requirements, see section ‘6. Exclusions to
withholding’ (overseas entity, income tax exempt body, private purpose declaration made
etc). Verbal advice from the Tax Office suggests that

there is no requirement to withhold from students when making payments for
reimbursements of study / research material,

a ‘private nature’ declaration should be sought when paying private individuals for
sleep research (see 10.11 ).
It is important to note that where an ABN is required - obtaining and retaining records of a supplier’s
ABN is only the first step in a purchasing transaction. To complete the transaction we must obtain a
supplier’s Tax Invoice. Without the Tax Invoice we will lose our right to claim a refund of the
GST. That lost refund will be charged to the relevant cost centre.
You should also note that it is possible for a supplier to have an ABN but not be registered for GST;
in which case an ordinary trade invoice will suffice. A properly formatted Tax Invoice (including the
ABN) is our authority that the business is registered for GST.
1
The Australian Business Number
The ABN is a unique identifier that will be used with Tax Invoices and for dealings with the
Tax Office and other government agencies.
For bodies registered under Corporations Law, their ABN will be formed by prefixing two
digits to their ACN/ARBN. These entities must have their identity established and go through
the normal registration process to obtain their ABN. The ABN will eventually replace the ACN
and the ARBN
The ABN will be structured as XX XXX XXX XXX
2
Who needs an ABN?
An ABN is required by those entities (eg companies, trusts, partnerships and sole-traders)
that
(a) carry on an enterprise in Australia or
(b) in the course or furtherance of carrying on an enterprise, they make supplies that are
connected with Australia.
All Australian resident entities will carry on an enterprise in Australia or make supplies
connected with Australia.
Non-residents may require an ABN where they make supplies connected with Australia. This
occurs where the entity carries on an enterprise through a permanent establishment.
A permanent establishment includes having a branch office or an agent in Australia.
Therefore non-resident suppliers do not need to provide you with an ABN unless they have a
permanent establishment in Australia.
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Example 1
If the University order goods for your business from an overseas business; the supplier does
not need an ABN and the University does not need to withhold. The University may need to
pay GST and customs duty when the goods are imported into Australia.
Example 2
The University orders goods from an overseas business. The goods are delivered and their
agent in Australia invoices the University. If the agent does not quote their ABN on the
invoice or any other document, the University will need to withhold.
3
Contractor v’s Employee
The use of an ABN by a contractor (under any legal capacity) will not automatically absolve
the University’s responsibility to determine whether the relationship with the contractor for the
services provided are really one of a contractor or employee relationship.
You should also note that an ABN will be withdrawn by the Australian Business Registrar
where it considers that a genuine business is not being carried on, and the arrangements are
substantially payment of salary.
4
Requirement to Withhold
Generally, where a supplier provides an invoice that does not quote an Australian Business
Number (ABN), the University is liable to withhold 48.5% of the payment and remit the
amount to the Tax Office, on behalf of the supplier. The supplier is entitled to a full tax credit
of the amount withheld on lodgement of their income tax return/s by obtaining Payment
Summary forms from the University (Accounts Payable to prepare).
Example 1
Cost of purchase
Amount withheld
Net to supplier
$1000 amount to cost centre
$ 485 to the Tax Office
$ 515
You should note that the liability to withhold remains with the University even if the
full amount of the invoice was incorrectly paid to the supplier.
The effect of not withholding when required, will be to increase the cost of the supply to the
relevant cost centre, ie the University is still liable to the Tax Office for withholding; example:
Example 2
Cost of purchase
Amount withheld
$1000 to supplier
$ 485 has to be paid to the Tax Office even though supplier has
been paid in full
Total cost to cost centre $1485
University staff (including Credit Card holders) must only deal with suppliers that:

have an ABN, or

issue an invoice which is less than $50, or

are specifically exempt from withholding requirements, see section ‘6 Exclusions to
withholding’ (overseas entity, income tax exempt body etc).
Purchasing staff and credit card holders must obtain and record supplier ABN’s (usually on
invoice, but see credit card examples below) before payments are made.
Accounts payable will be responsible for processing withholding payments on
invoices they receive for payment.
Credit card holders will be responsible for ensuring that an ABN is obtained and
recorded for credit card transactions.
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Recovery of amounts withheld where full invoice amount has been paid to the
supplier:
University staff must refer the matter to The Finance Unit for action.
5
Withholding for Non-cash benefits (Barter)
The rules for withholding apply where a non-cash payment is made in lieu of cash and
an ABN is not quoted.
However, instead of withholding 48.5 per cent of the goods and services, the University need
to pay to the Tax Office an amount equal to 48.5 per cent of the market value of the goods
and services supplied, before the goods & services are actually supplied.
For example: If the University agrees to do consulting work worth $1000 for an advertising
business in exchange for $1000 worth of advertising, and the advertising business does not
quote their ABN (on supply of advertising), the University must pay an amount of withholding
tax of $485 to the Tax Office before our services are rendered.
In this situation the University would also become a supplier of consulting services to the
advertising business. Unless the University quotes our ABN to the advertising agency, they
would also need to pay $485 to the Tax Office before the time they supply the advertising to
the University.
In this situation, the University is entitled under PAYG legislation to recover the amount
withheld from the payee and be required to provide a payment summary form to the
advertising agency.
University staff must notify Accounts Payable of barter transaction details where suppliers do
not quote their ABN.
6
Exclusions to withholding
The University does not have to withhold due to a failure to quote an ABN if:
 The payment does not exceed $50
 The whole of the payment is exempt income (exempt from income tax) of the supplier;
eg
 where the supplier is a charity, or non income taxable government body or
 a non resident / overseas entity
 the payment represents an expense payment benefit (ie a reimbursement of an
expense, but not an allowance to an employee (as this would come under payroll
withholding) and
 special employee allowances, such as living-away-from-home)

The payee has made a written, signed statement that the supply is private or domestic
in nature or relates to a hobby eg
 a ‘private nature’ declaration should be sought when paying private individuals
for sleep research.
 Also note; verbal advice from the Tax Office suggests that there is no
requirement to withhold from students when making payments for
reimbursements of study / research material.
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7
Withholding for transactions that were initiated before 1 July 2000
If the transaction is fully paid for and the supply is fully received before 1 July 2000, Pay As
You Go withholding does not apply. Otherwise, it depends on when the University pays for
the goods or services and when they are supplied. The table below summarises:
Paid in full
before 1 July
2000
Supply received in full
before 1 July 2000
Yes
Yes
No
No
8
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Yes
No
Yes
No
Withholding if no ABN
quoted by supplier?
No
No
No
Yes
Credit Card Transactions (Telephone and Internet)
Because credit card transactions and payments made over the telephone and Internet occur
at the same time, it is important to make sure that we are dealing with suppliers that have an
ABN.
The government is considering guidelines in respect of credit card transactions, particularly
where telephone and Internet charges are made.
The Tax Office’s Tax Reform web site provides the following questions and answers to
deal with obtaining quotes of ABNs:
8.1
I order some supplies by credit card over the phone. What do I do?
A: Before placing the order, ask the supplier for their ABN. Make a record of it and keep it
with any other documents that relate to the supply. Documentation must be retained with
credit card reconciliation forms.
If the supplier does not have an ABN, the University will need to withhold. Do not authorise
the supplier to charge the whole amount to your credit card.
University staff should not deal with a supplier that does not quote an ABN(especially by
credit card )
8.2
I order supplies over the Internet. What do I do?
A: If the supplier is based in Australia, you will need their ABN, otherwise you will have to
withhold. If they have displayed their ABN on their web site, you can record it and keep it
with the record of the transaction.
If the supplier is not carrying on an enterprise in Australia (does not have a permanent
establishment in Australia eg branch office or agent in Australia), they will not need to quote
an ABN and you will not need to withhold from payments you make to them.
9
Reimbursement of Employee Expenses
Where an employee purchases an item (good or service) and the University reimburses the
employee for the University related expenditure (University then takes possession of the
invoice), the onus is on the employee to have correctly withheld amounts from the original
supplier who did not quote an ABN.
The University is not required to withhold tax from the reimbursement to the employee.
The ATO has stated that the employee is required to withhold when purchasing for
business use. As a result employees should only deal with suppliers that quote an
ABN. The vast majority of suppliers will have ABN’s eventually.
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Tax Office’s Tax Reform web site questions and answers in obtaining quotes of ABNs:
10.1
Can documents quoting an ABN, other than invoices, be acceptable?
A: Yes. The document must relate to the supply. Some examples are:


a quotation notice which formed the basis of the supply being accepted
an invoice you created because the supplier did not give you one (Recipient Created
Tax Invoices)
renewal notices, such as for insurance, motor vehicle registration and magazine
subscriptions
an order form
contracts or lease documents, and
catalogues, magazines or other promotional material.




10.2
Do the documents quoting an ABN have to be in paper form?
A: The documents may be in electronic form but must be able to be related to the supply.
10.3
I order some supplies from catalogues or other promotional material. Is
quotation of an ABN in the promotional document sufficient?
A: Yes. The document must relate to the supply and you must keep a copy. If you also
receive an invoice which has the supplier's ABN you do not have to keep the catalogue or
magazine as well.
10.4
I use regular suppliers for a lot of my supplies. Do I have to make sure that
every invoice I receive from them has an ABN?
A: No. Regular suppliers can give you a periodic quotation of their ABN which covers all the
supplies they make to your business for a specified period, such as a financial year.
You must keep records that can verify the supplier, the supplier's ABN and the payments
made in relation to the supplies.
At least once a year you should check that the ABN quotation is correct and up to date.
10.5
I have a two-year lease agreement. Is it sufficient for the lessor's ABN to be
quoted on the lease agreement?
A: Yes. If the lease agreement document states the lessor's ABN you will not need to
withhold from lease payments.
10.6
Am I responsible for ensuring that a supplier's quoted ABN is correct?
A: Not usually. In general, if the ABN quotation looks reasonable to you, you can accept it.
However, if you have reason to suspect that it might not be genuine or that it does not belong
to the supplier who quoted it, you should check it out. Things that may alert you include:



Wrong configuration. An ABN has 11 digits, or 14 if it belongs to a branch of a larger
business. There are no letters
Sequential numbers, repeating numbers or unusual number patterns.
Invoice details do not match the details of the person you believed was supplying you or
the type of supplies you are receiving.
You will be able to check an ABN by using the Australian Business Register, which provides
details of the names and addresses of suppliers holding valid ABNs. To use the register, call
13 72 26.
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If the ABN quoted on the invoice is not valid or the details do not match the supplier, you
should withhold 48.5 per cent of the payment.
Finance One will maintain records of ABNs, which can be viewed to check a suppliers ABN,
however this is only current to the last update, based on previous invoices or other advice.
10.7
My supplier has provided an ABN differing from one on a previous invoice.
What should I do?
A: Check with the supplier, who may have several different enterprises and has accidentally
quoted the wrong ABN. Check the validity of the ABN with the Australian Business Register
(or Finance One).
If the ABN does not belong to the supplier then you must withhold 48.5 per cent of the
payment.
10.8
Do I have to get an ABN or withhold for small amounts?
A: No. When the payment for the full supply is $50 or less, exclusive of GST, you do not have
to get an invoice with an ABN or withhold. Similarly, tax invoices are not required if the GSTexclusive value of the supply is $50 or less. However, you should have evidence such as
cheque butts and purchase orders to support claims for input tax credits relating to these
supplies.
You cannot avoid having to withhold by breaking down a larger supply into $50 amounts, but
a series of small supplies of under $50 would not require withholding where no ABN was
quoted.
Examples
You have your shop sign painted. The painter invoices you for $100 and does not have an
ABN. You cannot turn this into two $50 transactions and avoid withholding.
You have flowers delivered for your public office once a week and you are invoiced $40 each
time. As these are separate transactions, you would not need to withhold if the florist does
not quote an ABN.
10.9
Do I have to withhold when the supplier is a charity?
A: You do not have to withhold where a charity provides some evidence that its income is
exempt from taxation. This may be in the form of an ABN or a copy of the charity's notice
from the Commissioner of Taxation. If the charity provides you with a copy of its notice from
the Commissioner of Taxation you should keep it with your transaction records so that you
can show why you did not withhold.
You should note that Charities are non-profit entities and exist for public benefit or the relief
of poverty. This includes education, research & science, culture, health, religion, aged,
defence, unemployment and youth etc
A Non-profit entity is an organisation that cannot distribute profits or assets to members
while it is operating or on winding up, either directly or indirectly.
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10.10
GST Training Guide
If a supply is for personal, not business use, do I have to withhold if the
supplier does not quote their ABN?
A: Not if you are an individual and the supply is not for your business purposes. For example,
if you buy a bar refrigerator from another business to use at home, you will not need to
withhold if the other business does not quote its ABN.
However, if your business is a partnership, company or trust, and you buy the refrigerator
through your business, this exception will not apply. You will have to withhold if the supplier
does not quote their ABN.
10.11
My supplier claims a supply is not a business transaction for them. Do I still
have to withhold if the supplier does not quote an ABN?
A: You do not need to withhold when no ABN is quoted if:
 The supplier is an individual (not in business as a partnership, company or trust).
 The supply, for the supplier, is private or domestic. For example, when another business
person sells to your business a second-hand computer which has only been used at
home by the supplier for private purposes and is not part of their trading stock or
business equipment.
 The supply is made as part of a private recreational pursuit or hobby. For example, when
you buy a picture to hang in your public business office from an artist who paints as a
hobby.
In these cases, the supplier should provide you with a written statement. A form for this will
be available from the ATO soon, or suppliers can create their own.
It should contain:
 the supplier's name and address
 a statement that the supply is either
 private or domestic, or
 part of a hobby or private recreational pursuit and that therefore they do not need to
quote an ABN and you do not need to withhold from your payment to them, and
 the supplier's signature.
The statement can be on the invoice. If it is separate, you must be able to link it to your
transaction records so that you can show why you did not withhold. If you suspect that the
statement is false you must withhold from the payment if the supplier does not quote their
ABN.
10.12
My supplier claims that payment for a supply is exempt from income tax. Do I
need to withhold if they do not quote an ABN?
A: You do not have to withhold from payments to suppliers whose income is exempt from tax.
Common types of income tax exempt bodies include:
 religious institutions
 schools, pre-schools, colleges, universities and other public educational institutions
 community service organisations, such as sports clubs, community centres, youth groups,
community arts or theatres and other associations that have community service
purposes, and
 public hospitals and non-profit private hospitals.
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The supplier should provide you with a statement. A form will be available from the ATO
soon, or suppliers can create their own. It should contain:
 the name and address of the organisation
 the type of organisation, such as school, sports club or religious body
 a statement that its income is exempt from tax under subdivision 50A of the Income Tax
Assessment Act 1997, and that therefore it does not need to quote an ABN and you do
not need to withhold from your payment, and the signature of an appropriate office
holder.
The statement can be on the invoice. If separate, keep the statement with your transaction
records so you can show why you did not withhold.
If you suspect the statement is false, you must withhold 48.5 per cent from the payment if the
supplier does not quote their ABN.
The supplier does not need to provide proof of the income tax exempt status of the payment.
You can accept the statement unless you have reasonable grounds to believe it is false, in
which case you must withhold if no ABN is quoted.
10.13
My supplier claims that they are not carrying on an enterprise, and do not
need an ABN. Do I have to withhold from payments to them?
A: You do not have to withhold from a supplier who is not carrying on an enterprise. The
definition of enterprise is very broad and most activities that are not private or domestic or
private recreational pursuits or hobbies would be enterprises. However, some activities may
not be considered to be an enterprise and the operator would not be entitled to an ABN. Such
activities are usually quite small and may be operated from home.
In these cases the supplier should provide you with a copy of a notice from the Registrar of
the Business Register, currently the Commissioner of Taxation, stating that their activities are
not considered to be an enterprise.
You should keep a copy of this notice with your transaction records so you can show why you
did not withhold.
10.14
I often buy second-hand goods for use in my business and business
premises. What do I need to do?
A: If you are buying goods from a second-hand dealer they must provide you with an ABN.
If you are buying goods from a garage sale and it is obvious that the sellers are not carrying
on an enterprise you are not required to get a statement from them but you should note the
circumstances of the purchase in your records.
10.15
My company is part of a corporate group. Do we have to get an ABN every
time we pay another group member for supplies?
A: No. As long as every member of the group keeps a register of the ABN of all the
other members that supply it and is able to link each transaction to the correct ABN,
you will not need to have the ABN quoted with each transaction.
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EXPORT PROVISIONS
Contents:
1. Supplies of things, other than Goods or Real Property, for consumption outside
Australia;
2. Exports of Goods; and
3. Lease etc. of Goods used outside Australia.
4. Tooling used by non-residents to manufacture goods for export
1.
SECT 38-190 Supplies of things, other than goods or real property, for
consumption outside Australia
(1)
The third column of this table sets out supplies that are GST-free (except to the extent
that they are supplies of goods or *real property):
[If any of the items listed below is met, the supply or transaction will be GST free –
subject to subsection (2), (3) and (4)]
Supplies of things, other than goods or real property, for consumption outside Australia
These supplies are GST-free (except to the extent that they
Item
Topic
are supplies of goods or *real property)...
1
Supply
a supply that is directly connected with goods or real property
connected with situated outside Australia.
property outside
Australia
2
Supply to *non- a supply that is made to a *non-resident who is not in Australia
resident outside when the thing supplied is done, and:
Australia.
(a) the supply is neither a supply of work physically performed on
goods situated in Australia when the work is done nor a supply
directly connected with *real property situated in Australia; or
(b) the *non-resident acquires the thing in *carrying on the nonresident's *enterprise, but is not *registered or *required to be
registered.
3
Supplies used or a supply:
enjoyed outside (a) that is made to a *recipient who is not in Australia when the
Australia
thing supplied is done; and
(b) the effective use or enjoyment of which takes place outside
Australia;
other than a supply of work physically performed on goods
situated in Australia when the thing supplied is done, or a supply
directly connected with *real property situated in Australia.
4
Rights
a supply that is made in relation to rights if:
(a) the rights are for use outside Australia; or
(b) the supply is to an entity that is not an *Australian resident
and is outside Australia when the thing supplied is done.
5
Export of
a supply that is constituted by the repair, renovation, modification
services used to
or treatment of goods from outside Australia whose destination is
repair etc.
outside Australia.
imported goods
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(2)
However, a supply covered by any of items 1 to 5 in the table in subsection (1) is not GSTfree if it is the supply of a right or option to acquire something the supply of which would be
*connected with Australia and would not be *GST-free.
(3)
Without limiting subsection (2), a supply covered by item 2 in that table is not GST-free if:
(a)
it is a supply under an agreement entered into, whether directly or indirectly, with a
*non-resident; and
(b)
the supply is provided, or the agreement requires it to be provided, to another entity in
Australia.
(4)
A supply is taken, for the purposes of item 3 in that table, to be a supply made to a *recipient
who is not in Australia if:
(a)
it is a supply under an agreement entered into, whether directly or indirectly, with an
*Australian resident; and
(b)
the supply is provided, or the agreement requires it to be provided, to another entity
outside Australia.
[Please note that membership fees and subscription services are considered rights and
therefore will be GST free. However if a subscription is issued for goods eg journals /
magazines they will be taxable unless the goods are exported within 60 days of the earlier of
receipt of money or invoice.
The University must apply to the Tax Commissioner for variation to the 60day rule.]
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2.
GST Training Guide
SECT 38-185 Exports of goods
(1)
The third column of this table sets out supplies that are GST-free:
GST-free exports of goods
Item
Topic
1
Export of goods—
general
2
Export of goods—
supplies paid for by
instalments
3
Export of aircraft or
ships
4
Export of aircraft or
ships—paid for by
instalments
5
Export of goods that
are to be consumed
on international
flights or voyages
6
Export of goods
used to repair etc.
imported goods
7
Goods exported by
travellers as
accompanied
baggage
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These supplies are GST-free ...
a supply of goods, but only if the supplier exports them from
Australia before, or within 60 days (or such further period as the
Commissioner allows) after:
(a) the day on which the supplier receives any of the *consideration
for the supply; or
(b) if, on an earlier day, the supplier gives an *invoice for the
supply—the day on which the supplier gives the invoice.
a supply of goods for which the *consideration is provided in
instalments under a contract that requires the goods to be exported,
but only if the supplier exports them from Australia before, or within
60 days (or such further period as the Commissioner allows) after:
(a) the day on which the supplier receives any of the final instalment
of the consideration for the supply; or
(b) if, on an earlier day, the supplier gives an *invoice for that final
instalment—the day on which the supplier gives the invoice.
a supply of an aircraft or *ship, but only if the recipient of the aircraft
or ship exports it from Australia under its own power within 60 days
(or such further period as the Commissioner allows) after taking
physical possession of it.
a supply of an aircraft or *ship for which the *consideration is
provided in instalments under a contract that requires the aircraft or
ship to be exported, but only if the *recipient exports it from Australia
before, or within 60 days (or such further period as the
Commissioner allows) after, the earliest day on which one or more of
the following occurs:
(a) the supplier receives any of the final instalment of the
consideration for the supply;
(b) the supplier gives an *invoice for that final instalment;
(c) the supplier delivers the aircraft or ship to the recipient or (at the
recipient's request) to another person.
a supply of:
(a) *aircraft's stores, or spare parts, for use, consumption or sale on
an aircraft on a flight that has a destination outside Australia; or
(b) *ship's stores, or spare parts, for use, consumption or sale on a
*ship on a voyage that has a destination outside Australia;
whether or not part of the flight or voyage involves a journey
between places in Australia.
a supply of goods in the course of repairing, renovating, modifying or
treating other goods from outside Australia whose destination is
outside Australia, but only if:
(a) the goods are attached to, or become part of, the other goods; or
(b) the goods become unusable or worthless as a direct result of
being used to repair, renovate, modify or treat the other goods.
a supply of goods to a *relevant traveller, but only if:
(a) the supply is made in accordance with the rules specified in the
regulations; and
(b) the goods are exported as accompanied baggage of the relevant
traveller.
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(2)
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However, a supply covered by any of items 1 to 6 in the table in subsection (1) is not GSTfree if the supplier reimports the goods into Australia.
(3)
Without limiting items 1 and 2 in the table in subsection (1), a supplier of goods is treated, for
the purposes of those items, as having exported the goods from Australia if:
(a)
before the goods are exported, the supplier supplies them to an entity that is not
*registered or *required to be registered; and
(b)
that entity exports the goods from Australia; and
(c)
the goods have been entered for export within the meaning of section 113 of the
Customs Act 1901; and
(d)
since their supply to that entity, the goods have not been altered or used in any way,
except to the extent (if any) necessary to prepare them for export; and
(e)
the supplier has sufficient documentary evidence to show that the goods were
exported.
However, if the goods are reimported into Australia, the supply is not GST-free unless the
reimportation is a taxable importation.
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3.
GST Training Guide
SECT 38-187 Lease etc. of goods for use outside Australia
A supply of goods is GST-free if:
(a)
the supply is by way of lease or hire; and
(b)
the goods are used outside Australia.
Note: If goods are leased or hired and used partly in Australia and partly outside Australia, the
supply could be taxable to the extent that the goods are used in Australia (see section 9-5).
4.
SECT 38-188 Tooling used by non-residents to manufacture goods for export
A supply of goods is GST-free if:
(a)
the *recipient of the supply is a *non-resident, and is not *registered or *required to be
registered; and
(b)
the goods are jigs, patterns, templates, dies, punches and similar machine tools to be used in
Australia solely to manufacture goods that will be for export from Australia.
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FOOD AND BEVERAGE PROVISIONS
Schedule 1—Food that is not GST-free
1
Food that is not GST-free
Food specified in the third column of the table is not GST-free.
Food that is not GST-free
Item
Category
Food
1
Prepared food
quiches
2
sandwiches (using any type of bread or roll)
3
pizzas, pizza subs, pizza pockets and similar *food
*food marketed as a prepared meal, but not including soup
4
5
6
platters etc. of cheese, cold cuts, fruit or vegetables and other
arrangements of *food
hamburgers, chicken burgers and similar *food
7
hot dogs
8
Confectionery
confectionery, *food marketed as confectionery, food marketed as
ingredients for confectionery or food consisting principally of
confectionery
9
popcorn
10
confectionery novelties
*food known as muesli bars or health food bars, and similar
11
foodstuffs
12
crystallised fruit, glace fruit and drained fruit
13
crystallised ginger and preserved ginger
14
edible cake decorations
15
Savoury
snacks
potato crisps, sticks or straws, corn crisps or chips, bacon or pork
crackling or prawn chips
16
seeds or nuts that have been processed or treated by salting,
spicing, smoking or roasting, or in any other similar way
17
18
caviar and similar fish roe
*food similar to that covered by item 15 or 16, whether or not it
19
consists wholly or partly of any vegetable, herb, fruit, meat, seafood
or dairy product or extract and whether or not it is artificially
flavoured
*food consisting principally of food covered by items 15 to 18
20
Bakery
products
cakes, slices, cheesecakes, pancakes, waffles, crepes, muffins and
puddings
21
pavlova and meringues
22
pies (meat, vegetable or fruit), pasties and sausage rolls
23
tarts and pastries
24
doughnuts and croissants
25
pastizzi, calzoni and brioche
26
scones and scrolls
27
bread (including buns) with a sweet filling or coating
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Food that is not GST-free
Item
Category
Food
28
Ice-cream food
ice-cream, ice-cream cakes, ice-creams and ice-cream substitutes
29
frozen confectionery, frozen yoghurt and frozen fruit products (but
not frozen whole fruit)
30
flavoured iceblocks (whether or not marketed in a frozen state)
any *food similar to food listed in items 28 to 30
31
32
Biscuit goods
*food that is, or consists principally of, biscuits, cookies, crackers,
pretzels, cones or wafers
2 Prepared food, bakery products and biscuit goods
For the purpose of determining whether particular *food is covered by any of the items in the
table relating to the category of prepared food, bakery products or biscuit goods, it does not
matter whether it is supplied hot or cold, or requires cooking, heating, thawing or chilling prior to
consumption.
3 Prepared meals
Item 4 in the table only applies to *food that requires refrigeration or freezing for its storage.
4 Candied peel
None of the items in the table relating to the category of confectionery include candied peel.
5 Goods that are not biscuit goods
None of the items in the table relating to the category of biscuit goods include:
(a)breakfast *food consisting principally of compressed, rolled or flattened cereal; or
(b)rusks for infants or invalids, or goods consisting principally of those rusks.
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Schedule 2—Beverages that are GST-free
1 Beverages that are GST-free
Beverages specified in the third column of the table are GST-free.
Beverages that are GST-free
Item
Category
Beverages
1
Milk products
any of the following products:
(a) milk, skim milk or buttermilk (whether liquid, powdered,
concentrated or condensed);
(b) casein;
(c) whey, whey powder or whey paste
*beverages consisting of products referred to in item 1 (or a
2
combination of those products), to the extent of at least 95%, but
not including flavoured beverages
3
4
Soy milk and
rice milk
5
Tea, coffee
etc.
lactose
*beverages consisting principally of soy milk or rice milk, but not
including flavoured beverages
tea (including herbal tea, fruit tea, ginseng tea and other similar
*beverage preparations), coffee and coffee essence, chicory and
chicory essence, and malt
6
malt extract, if it is marketed principally for drinking purposes
7
preparations for drinking purposes that are marketed principally as
tea preparations, coffee preparations, or preparations for malted
*beverages
8
preparations marketed principally as substitutes for preparations
covered by item 6 or 7
9
dry preparations marketed for the purpose of flavouring milk
10
Fruit and
vegetable
juices
concentrates for making non-alcoholic *beverages, if the
concentrates consist of at least 90% by volume of juices of fruits
non-alcoholic carbonated *beverages, if they consist wholly of
juices of fruits or vegetables
non-alcoholic non-carbonated *beverages, if they consist of at least
11
12
13
Beverages for
infants or
invalids
14
Water
90% by volume of juices of fruits or vegetables
*beverages, and ingredients for beverages, of a kind marketed
principally as *food for infants or invalids
natural water, non-carbonated and without any other additives
2 Tea, coffee etc.
None of the items in the table relating to the category of tea, coffee etc. include any *beverage
that is marketed in a ready-to-drink form.
3 Fruit and vegetable juices
For the purposes of items 11 and 12 in the table, herbage is treated as vegetables.
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TRANSITIONAL RULES
Under GST transitional rules, contracts signed before 8 July 1999 are GST free if certain conditions
are met, even if the supply is partially or fully performed after 30 June 2000. This depends on
whether the contract:
 is non-reviewable or reviewable
 is with a buyer who would be entitled to full input tax credits (refunds of GST paid on
purchases)
A non-reviewable contract is one where the consideration or price paid for the supply is fixed or is
to be calculated according to some prescribed formula and cannot be varied or reviewed by either
party to the agreement. It may contain specific provisions that the contracted price does not include
GST.
A reviewable contract is one that allows for a 'review opportunity'. A review opportunity in a
contract means an opportunity for the supplier to change the price because of
 a general review or renegotiation of the price (this includes a change of scope of the contract)
or
 to incorporate the GST itself (ie usually contract clauses enable the supplier to pass on
Australian rates and taxes – this will include GST, therefore causing a review under the contract
for GST purposes).
Full input tax credits (refunds of GST paid on purchases) are only available where the funding
entity is registered for GST. Almost all Australian based funding bodies will be registered for GST.
The following contract (research grants, leases licences and royalties) are GST free, even
though there is a supply after 30 June 2000:
Contracts entered into before 2 December 1998.
Non reviewable:
5. Contracts paid in full before 2 December 1998 are GST free for the life of the contract.
6. Contracts paid in full on or after 2 December 1998 are GST free until 1 July 2005.
Reviewable:
7. Contracts paid in full before 2 December 1998 are GST free until first review opportunity
8. Contracts paid in full on or after 2 December 1998 are GST free until the first review
opportunity or 1 July 2005, whichever is the earlier.
Contracts entered into on or after 2 December 1998 and before 8 July 1999.
If the recipient is entitled to full input tax credit:
Non reviewable:
4. GST free until 1 July 2005
Reviewable:
5. Contracts paid in full before 2 December 1998 are GST free until first review opportunity
6. Contracts paid in full on or after 2 December 1998 are GST free until the first review
opportunity or 1 July 2005, whichever is the earlier.
Important
You should note that in most (if not all) cases under contract, whether or not GST applies,
the payer will always receive a refund for the GST paid. If the University charges GST
incorrectly, the payer will still be entitled to a refund. This applies similarly if the University
pays GST when not required.
The impact therefore on incorrect charging or payment rests with cash flow and loss of
interest earnings.
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GST Training Guide
TRANSITIONAL RULES FOR CONTRACTS
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