Goods and Services
Tax
Reference Manual
for Schools V3.0.1
ACKNOWLEDGEMENTS
Material in this manual has been developed by staff of the GST Implementation Project with advice
and assistance from PricewaterhouseCoopers.
Material has been sourced from publications of the Australian Taxation Office and from the
SA Department of Treasury and Finance.
DISCLAIMER
The information in this manual is intended for use as a reference guide and not as specific GST advice
to individual sites. Readers should be aware that the transactions covered in this manual are
examples of the types of transactions commonly undertaken by sites.
They are intended to be illustrative and not definitive.
(c)
Department of Education and Children’s Services 2002
ii
FOREWORD
This document replaces the original Department of Education and Children’s
Services (DECS) GST publication 'Training Material For Schools' produced in 2000. It
incorporates changes in rulings or interpretation since May 2000 and change to the
Department name in July 2002. The previous manual distributed in 2002 should now
be discarded.
PricewaterhouseCoopers have provided technical input and assisted with the
interpretation of the GST law as it currently applies; staff involved with the
implementation of the Goods and Services Tax across the Department have
prepared and published this version.
This document is accurate at the time of printing, however further amendments to the
GST legislation could still occur which may affect the treatment of transactions as
described in this manual. The department will provide information to ensure schools
are kept up to date with any amendments to the GST legislation that impact on
school transactions.
Manager
Tax Policy Unit
28 October 2001
iii
INTRODUCTION
The purpose of this manual is to provide advice concerning the impact and
management of the Goods and Services Tax (GST) within a school. The objective is
to clarify when GST is to be charged by the school and when it is to be claimed as an
input tax credit.
Although many transaction examples are provided, not all
transactions that actually occur in schools can be covered in this document. In some
cases, school-based officers may need to apply the principles in order to determine
how a transaction is to be treated. Ongoing assistance will be available from the
Department of Education and Children’s Services (DECS) if required.
This manual is structured as follows:
·
Chapter 1 - Overview of the New Tax System
·
Chapter 2 - School Administration Issues
·
Chapter 3 - Transactions
·
Chapter 4 - EDSAS Accounting
·
Chapter 5 - Appendices
Note: Within the Appendices there is a reference chapter covering key terms and
definitions associated with the New Tax System.
All GST codes and procedures used in the manual refer to those used in the EDSAS
GST Solution, Version 1.18A.
iv
TABLE OF CONTENTS
CHAPTER 1 INTRODUCTION TO THE GOODS AND SERVICES TAX .................................................. 1
1.1 OVERVIEW .................................................................................................................................................... 1
1.2 TYPES OF SUPPLIES ....................................................................................................................................... 3
1.2.1 Taxable ................................................................................................................................................. 3
1.2.2 GST-free ............................................................................................................................................... 4
1.2.3 Input Taxed........................................................................................................................................... 4
1.3 AUSTRALIAN BUSINESS NUMBER AND REGISTRATION FOR GST ISSUES ...................................................... 4
1.4 ACCOUNTING FOR GST................................................................................................................................. 5
1.5 APPORTIONMENT .......................................................................................................................................... 6
1.6 PRICING......................................................................................................................................................... 7
1.6.1 Taxable Supplies................................................................................................................................... 7
1.6.2 Input Taxed Supplies eg School Canteen.............................................................................................. 8
1.7 CONTRACTS .................................................................................................................................................. 8
1.8 TAX INVOICE REQUIREMENTS ....................................................................................................................... 9
1.9 RECIPIENT CREATED TAX INVOICES (RCTI)............................................................................................... 10
1.10 ADJUSTMENTS........................................................................................................................................... 12
1.10.1 Change of Use .................................................................................................................................. 13
1.11 DIFFERENT TYPES OF SUPPLIERS............................................................................................................... 14
1.11.1 GST Registered Suppliers to Schools................................................................................................ 14
1.11.2 Suppliers who Possess an ABN but are Not Registered for GST...................................................... 14
1.11.3 Suppliers who do not Possess an ABN.............................................................................................. 15
1.12 PAY AS YOU GO (PAYG) SYSTEM ........................................................................................................... 16
1.12.1 Wages ............................................................................................................................................... 16
1.12.2 Voluntary Agreement to Withhold .................................................................................................... 16
1.12.3 Failure to provide an Australian Business Number (ABN) .............................................................. 16
1.12.4 Reporting Requirements (in addition to the BAS and IAS)............................................................... 18
1.13 REPORTING REQUIREMENTS ..................................................................................................................... 19
1.14 BUSINESS ACTIVITY STATEMENT (BAS).................................................................................................. 19
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1.14.1 BAS (front page) ............................................................................................................................... 19
1.14.2 Goods and Services tax (GST).......................................................................................................... 20
1.14.3 Summary (Back Page of BAS) .......................................................................................................... 21
1.14.4 Summary........................................................................................................................................... 21
1.14.5 Amounts the ATO owes you .............................................................................................................. 22
1.14.6 Payment or refund? .......................................................................................................................... 23
1.15 INSTALMENT ACTIVITY STATEMENT (IAS)............................................................................................... 23
1.15.1 PAYG tax withheld............................................................................................................................ 24
1.16 DIESEL FUEL REBATE SCHEME AND THE DIESEL AND ALTERNATIVE FUELS GRANT SCHEME .................. 25
1.16.1 Diesel Fuel Rebate Scheme .............................................................................................................. 26
1.16.2 Diesel and Alternative Fuels Grants Scheme ................................................................................... 26
1.17 TEXT BOOK REBATE SCHEME ................................................................................................................... 27
1.18 WINE EQUALISATION TAX (WET) ............................................................................................................ 28
1.18.1 WET Calculation .............................................................................................................................. 29
1.18.2 WET Rebate ...................................................................................................................................... 29
1.18.3 Calculating the WET and GST for Retail Sales of Wine................................................................... 30
1.18.4 Wholesale Sale of Wine .................................................................................................................... 31
1.18.5 Accounting for the WET ................................................................................................................... 32
1.18.6 WET Refundable............................................................................................................................... 32
CHAPTER 2 SCHOOL ADMINISTRATION ISSUES .................................................................................. 34
2.1 MANAGING COMPLIANCE ........................................................................................................................... 34
2.2 CASH FLOW MANAGEMENT ........................................................................................................................ 36
2.3 ABN AND REGISTRATION ISSUES ............................................................................................................... 37
2.4 ACTIVITY STATEMENT ISSUES (BAS AND IAS) .......................................................................................... 37
2.4.1 Authorised Contact Person................................................................................................................. 38
2.4.2 Correcting a Previously Submitted BAS............................................................................................. 39
2.4.3 Documentation and Penalties............................................................................................................. 40
2.5 RECORD-KEEPING ....................................................................................................................................... 40
2.5.1 Types of records/documentation......................................................................................................... 40
2.6 ELECTRONIC COMMERCE INTERFACE (ECI)................................................................................................ 42
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2.6.1 Keys and Certificates.......................................................................................................................... 43
2.6.2 Management of Electronic Commerce Interface Security .................................................................. 44
2.6.3 Storage of Electronic Keys and Certificates....................................................................................... 44
2.6.4 Electronic Commerce Interface Security............................................................................................ 44
CHAPTER 3 TYPES OF TRANSACTIONS ................................................................................................... 46
3.1 OVERVIEW .................................................................................................................................................. 46
3.1.1 Revenue Received on Supplies............................................................................................................ 46
3.1.2 Calculating the GST to Charge .......................................................................................................... 47
3.1.3 Expenditure on Acquisitions ............................................................................................................... 47
3.1.4 How to Calculate the GST if Not Shown Separately on the Invoice ................................................... 48
3.1.5 Mixed Supplies.................................................................................................................................... 49
3.2 ACCOMMODATION ...................................................................................................................................... 50
3.2.1 Accommodation Provided on School Premises .................................................................................. 51
3.2.2 Accommodation Provided by an External Contractor........................................................................ 51
3.2.3 Accommodation Provided by Home-Stay Families ............................................................................ 52
3.3 AGENCY TRANSACTIONS ............................................................................................................................ 52
3.4 ASSPA (ABORIGINAL STUDENT SUPPORT AND PARENT AWARENESS) ...................................................... 53
3.5 BOOK DEPOSITS .......................................................................................................................................... 55
3.6 BUILDING FUNDS ........................................................................................................................................ 56
3.7 CAB CHARGES ............................................................................................................................................ 56
3.8 CAMP DEPOSITS .......................................................................................................................................... 57
3.9 CANTEENS................................................................................................................................................... 58
3.9.1 Outsourced Canteens.......................................................................................................................... 58
3.10 CHILD PARENT CENTRES .......................................................................................................................... 59
3.11 COMMISSIONS ........................................................................................................................................... 59
3.11.1 Commission in cash .......................................................................................................................... 59
3.11.2 Bonus Points..................................................................................................................................... 60
3.11.3 Commission in kind .......................................................................................................................... 61
3.11.4 Vouchers ........................................................................................................................................... 62
3.12 COMMUNITY LIBRARIES............................................................................................................................ 63
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3.13 COMPETITIONS .......................................................................................................................................... 64
3.14 CORPORATE CREDIT CARD STATEMENTS ................................................................................................. 64
3.15 DONATIONS............................................................................................................................................... 65
3.16 EXCURSIONS AND CAMPS.......................................................................................................................... 66
3.16.1 Subsidised Camps/Excursions .......................................................................................................... 70
3.17 EXPENSES PAID BY THE DEPARTMENT ...................................................................................................... 70
3.18 EXPORTS ................................................................................................................................................... 71
3.19 FUNDRAISING ............................................................................................................................................ 71
3.19.1 Input Taxed or Taxable Events ......................................................................................................... 71
3.19.2 GST-free Activities............................................................................................................................ 72
3.19.3 Other Specific Fundraising Activities............................................................................................... 73
3.20 GRANTS AND APPROPRIATIONS................................................................................................................. 74
3.20.1 Grants received from DECS ............................................................................................................. 75
3.20.2 Cluster funding "down the line" ....................................................................................................... 75
3.20.3 Grants received from outside of DECS............................................................................................. 76
3.21 HIRE OF FACILITIES AND EQUIPMENT ....................................................................................................... 77
3.22 HONORARIUM PAYMENTS TO CONTRACTORS ........................................................................................... 78
3.23 INTERNATIONAL STUDENTS ...................................................................................................................... 78
3.23.1 Payment received by the school........................................................................................................ 79
3.23.2 Payment to IES for the commission .................................................................................................. 79
3.23.3 Home-stay Payment.......................................................................................................................... 80
3.24 INTRA-SCHOOL TRANSFERS ...................................................................................................................... 80
3.25 LEVIES ...................................................................................................................................................... 81
3.26 LIBRARY FINES ......................................................................................................................................... 81
3.27 MATERIALS AND SERVICES CHARGE......................................................................................................... 81
3.28 MEMBERSHIP FEES AND CLUBS ................................................................................................................ 83
3.29 OUTDOOR SCHOOLS .................................................................................................................................. 84
3.29.1 Out of School Hours Care (including Vacation Care) .................................................................... 84
3.30 PARENTS' CLUBS (AND NON-PROFIT SUB-ENTITIES) ................................................................................. 85
3.30.1 Part of the school/school council GST group ................................................................................... 85
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3.30.2 Non-profit sub-entity (and not registered for GST purposes)........................................................... 86
3.30.3 Other school groups ......................................................................................................................... 87
3.31 PAYMENTS IN KIND (BARTERING AND SWAPPING ARRANGEMENTS) ........................................................ 87
3.31.1 Use of a School Gym in Exchange for Use of Equipment................................................................. 88
3.31.2 Use of Farmer's Tractor ................................................................................................................... 88
3.32 PAYMENTS TO THE DEPARTMENT ............................................................................................................. 89
3.32.1 Use of School Buildings and Grounds eg. Hall hire......................................................................... 89
3.32.2 Hire of Department Bus.................................................................................................................... 89
3.32.3 Salary Recharge ............................................................................................................................... 89
3.32.4 Internet Charge and DECStech Lease.............................................................................................. 89
3.32.5 Photocopying, Vending Machines and Telephones .......................................................................... 90
3.33 REIMBURSEMENT ...................................................................................................................................... 90
3.33.1 Reimbursement to Staff and Volunteers by the school...................................................................... 90
3.33.2 Reimbursement of Costs by the Department..................................................................................... 91
3.34 SALES OF FARMING PRODUCE ................................................................................................................... 92
3.34.1 Share Farming.................................................................................................................................. 92
3.34.2 Food.................................................................................................................................................. 92
3.34.3 Horticultural Supplies ...................................................................................................................... 93
3.34.4 Cropping Supplies ............................................................................................................................ 94
3.34.5 Livestock Supplies............................................................................................................................. 95
3.34.6 Dairy Supplies .................................................................................................................................. 96
3.34.7 Packaging ......................................................................................................................................... 97
3.34.8 Recipient Created Tax Invoices ........................................................................................................ 97
3.34.9 Forward Contracts and Payments.................................................................................................... 97
3.34.10 Auctions .......................................................................................................................................... 98
3.35 SALE OF UNIFORMS ................................................................................................................................... 98
3.36 SECOND-HAND GOODS ............................................................................................................................. 99
3.36.1 Sale by the school ............................................................................................................................. 99
3.36.2 Donated second hand goods........................................................................................................... 100
3.36.3 Goods Purchased from a Registered Supplier................................................................................ 100
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3.36.4 Goods Purchased from an Unregistered Supplier for resale ......................................................... 100
3.37 SHARED FACILITIES ................................................................................................................................ 101
3.37.1 Multi-Campus Sites......................................................................................................................... 101
3.37.2 Shared Facilities by Different Schools ........................................................................................... 101
3.38 SAPSASA AND SASSSA ....................................................................................................................... 102
3.38.1 SAPSASA ........................................................................................................................................ 102
3.38.2 Excerpt from the SAPSASA Information Pack................................................................................ 102
3.38.3 SASSSA ........................................................................................................................................... 104
3.39 SPONSORSHIP .......................................................................................................................................... 104
3.39.1 Cash Sponsorship ........................................................................................................................... 105
3.39.2 Non-Cash Sponsorship ................................................................................................................... 105
3.40 STAFF TRAINING (PROFESSIONAL DEVELOPMENT) ................................................................................. 106
3.41 STUDENT BUSINESS ENTERPRISES........................................................................................................... 107
3.41.1 Student Prizes, Scholarships and Subsidies.................................................................................... 108
3.42 SWIMMING AND AQUATIC CENTRE SERVICES ......................................................................................... 109
3.42.1 Aquatic Centres .............................................................................................................................. 109
3.42.2 Swimming Instructors ..................................................................................................................... 110
3.43 TEXT BOOKS ........................................................................................................................................... 110
3.44 TRANSACTIONS BETWEEN SCHOOLS ....................................................................................................... 111
3.44.1 Cluster Type Arrangements ............................................................................................................ 111
3.44.2 Appropriations 'down the line'........................................................................................................ 111
3.44.3 Transfer of student fees................................................................................................................... 112
3.44.4 Excursions and performances......................................................................................................... 112
3.44.5 Training and Development Courses ............................................................................................... 113
3.44.6 Reimbursement between schools for TRT costs .............................................................................. 113
CHAPTER 4 EDSAS ACCOUNTING............................................................................................................ 114
4.1 OUTLINE ................................................................................................................................................... 114
4.1.1 Accounts Payable ............................................................................................................................. 114
4.1.2 Purchase Orders............................................................................................................................... 115
4.1.3 Accounts Receivable and Tax Invoices............................................................................................. 115
x
4.1.4 Accounts Payable and Purchase Orders .......................................................................................... 116
4.2 SALARIES AND WAGES.............................................................................................................................. 121
4.2.1 Correction Journals.......................................................................................................................... 122
4.3 OTHER TYPES OF TRANSACTIONS ............................................................................................................. 124
4.3.1 Refunds ............................................................................................................................................. 124
4.3.2 Deposit paid for a camp ................................................................................................................... 125
4.3.3 Issuing a Cash Cheque or Petty Cash amount for Camps, OSHC etc.............................................. 126
4.3.4 Journal entry for interest from the SASIF account........................................................................... 127
4.3.5 Entries via Direct Dr/Cr................................................................................................................... 127
4.3.6 Receiving and paying money to the ATO.......................................................................................... 128
4.4 COMPLETING THE BUSINESS ACTIVITY STATEMENTS ............................................................................... 128
4.5 NON-CONSOLIDATED ACCOUNTS ............................................................................................................. 129
CHAPTER 5 APPENDICES............................................................................................................................ 131
5.1 BAS RECONCILIATION .............................................................................................................................. 131
5.1.1 BAS CHECKLIST ............................................................................................................................. 131
5.1.2 Supplies ............................................................................................................................................ 134
5.1.3 Acquisitions: ..................................................................................................................................... 134
5.2 NEGATIVE ENTRIES ON THE BAS .............................................................................................................. 136
5.3 GST-FREE SUPPLIES.................................................................................................................................. 137
5.4 INPUT TAXED SUPPLIES ............................................................................................................................ 137
5.5 EDUCATION COURSE DEFINITION ............................................................................................................. 138
5.5.1 GST-free supplies (related to the provision of an education course and provided by the school) ... 139
5.6 TAXABLE SUPPLIES ................................................................................................................................... 142
5.7 EDUCATION RELATED SUPPLIES ............................................................................................................... 143
5.8 SCHEDULE OF SCHOOL CHARGES .............................................................................................................. 145
5.9 EDSAS GST CODES FOR FINANCIAL TRANSACTIONS .............................................................................. 146
5.9.1 Expenditure....................................................................................................................................... 146
5.10 REVENUE ................................................................................................................................................ 147
5.11 FUNDRAISING FLOWCHART ..................................................................................................................... 153
5.12 SALE OF GOODS (EXCLUDING ALCOHOL PRODUCTS) FLOWCHART .......................................................... 154
xi
5.13 EXCURSION PROFORMA .......................................................................................................................... 155
5.14 CAMP AND EXCURSION BUDGET / COSTING BY TEACHER-IN-CHARGE ................................................... 157
5.14.1 Example 1 - Table using 'total costs' .............................................................................................. 157
5.14.2 Example: Predominantly educational camp................................................................................... 158
5.14.3 Example 2 - Table using 'per student' costs.................................................................................... 159
5.14.4 Example: Predominantly educational camp................................................................................... 160
5.14.5 Example: NOT predominantly educational .................................................................................... 161
5.15 KEY TERMS AND DEFINITIONS ASSOCIATED WITH GST ......................................................................... 162
5.16 SAMPLE TAX INVOICES ........................................................................................................................... 164
5.17 EXAMPLE OF AN ADJUSTMENT NOTE ...................................................................................................... 165
5.18 EXAMPLE OF AN RCTI AND AGREEMENT LETTER .................................................................................. 166
5.18.1 Agreement Letter for an RCTI ........................................................................................................ 167
5.19 RECONCILING THE GST LIABILITY (L-ZZZ-3515) ACCOUNT................................................................. 168
5.20 BAS REPORT FROM EDSAS (CALCULATION SHEET) ............................................................................. 169
5.20.1 Supplies you have made - Right Hand Column of Calculation Sheet ............................................. 169
5.20.2 Acquisitions you have made - Right Hand Column of Calculation Sheet....................................... 170
5.21 'STATEMENT BY A SUPPLIER' FORM ......................................................................................................... 172
5.22 'PAYMENT SUMMARY - WITHHOLDING WHERE ABN NOT QUOTED' FORM ............................................. 173
5.23 GST RULINGS (SELECTION OF) ............................................................................................................... 174
CHAPTER 6 INDEX ........................................................................................................................................ 177
xii
Chapter 1 INTRODUCTION TO THE GOODS AND SERVICES TAX
1.1 Overview
The Goods and Services Tax (GST) is part of the tax system implemented in
Australia on 1 July 2000. GST is a broad-based indirect tax imposed on private
consumption in Australia. It taxes the consumption of most goods and services in
Australia including imports. The GST is set at 10% of the value of supplies.
GST is payable on all taxable 'supplies' made by a registered entity which is carrying
on a business or trade within Australia.
The definition of supply is very broad
including the provision of services and the sale of goods including leasing. GST
does not apply to the payment of salaries and wages and related salary on-costs
such as superannuation and payroll tax.
GST is designed to tax the value added by business by imposing GST on supplies
made by entities registered for GST. Entities registered for GST will generally be
allowed to claim input tax credits for the GST included in the price of business inputs.
GST is a tax on a supply or importation of anything except where the supply or
importation is input taxed or GST-free.
1
The following illustration demonstrates the passage of GST between registered
entities and the final consumer.
Manufacturer sells paper for $220
(Including $20 GST)
$20 GST
$30 GST
Wholesaler buys paper for $220.
Provides stationery for $330
(Including $30 GST)
$20 Input Tax
Credit
School purchases stationery for
$330.
$5 GST
Sells centennial publication of
school history for $55
Australian
(Including $5 GST)
$30 Input Tax
Credit
Taxation
Office
Consumer purchases publication
for $55
Because the paper manufacturer, wholesaler and the school have made these
purchases as part of their business activities and are registered for GST purposes,
they are entitled to claim input tax credits from the Australian Taxation Office (ATO)
for the amount of GST paid on their purchases as shown. Input tax credits are not
available for acquisitions made for personal (ie private, domestic, recreational) or
input taxed purposes. The end consumer however is not entitled to an input tax
credit where the purchase of the historical publication is not for the purpose of
conducting an enterprise. The end consumer bears the cost of the GST.
Note: For every taxable supply, each registered entity charges GST and collects GST
from its customers.
2
GST registered entities claim input tax credits and account for any GST payable to
the ATO via a Business Activity Statement (BAS) on either a monthly or quarterly
basis. Schools account monthly.
GST is calculated at 10% of the amount of a taxable supply or 1/11th of the GST
inclusive price of the supply as illustrated in the following diagram.
If GST is not included in the price
(GST Exclusive)
GST = 10% of the
price
For example, if the GST exclusive price is $20 then the GST is 10% of $20 (ie $2)
giving a GST inclusive price of $22.
If GST is included in the price
(GST Inclusive)
th
GST = 1/11 of the
total price
For example, if the GST inclusive price of goods is $33, then the GST is 1/11th of
$33 (ie $3). GST must be included in the quoted price of any taxable supply. The
GST inclusive price is the amount the end consumer pays including GST, that is, $33
in the above example.
1.2 Types of Supplies
There are three types of supplies: taxable, GST-free and input taxed.
1.2.1 Taxable
Most supplies are taxable, that is, GST registered entities charge the GST on
supplies made, that are not GST-free or input taxed, to customers. GST registered
entities that purchase these taxable supplies are generally able to claim an input tax
credit for the GST included in the price. Entities or individuals not registered for GST
are not able to claim the input tax credits.
3
1.2.2 GST-free
GST-free means that the GST registered supplier does not charge GST on the
supply. Those supplies which are GST-free are defined in legislation (see Appendix
5.3).
The provision of an education course, or an administrative service directly
related to the supply of that course that is provided by the supplier of the course, is
GST-free. An education course, as defined for GST purposes, includes primary and
secondary courses. Some other services provided by a school are also GST-free
such as Outside School Hours Care (Chapter 3.30) and boarding school
accommodation (Chapter 3.2). However, not all supplies provided by a school are
GST-free. Note that the school still claims an input tax credit for any GST paid on
purchases made in the course of making GST-free supplies.
1.2.3 Input Taxed
Input taxed supplies means that no GST is charged on the supply but the supplier is
not entitled to any input tax credit for anything acquired (or imported) to make that
supply. Input taxed supplies include financial supplies, the lease, hire or licence of
residential accommodation and the sale of used residential premises.
School
canteens may also be treated as an input taxed supply (Chapter 3.9) and some
fundraising events may be treated as input taxed (refer to Chapter 3.19).
As a result of the different types of supplies that may be made by schools, there may
be some apportionment calculations required to determine the input tax credits that
can be claimed from the ATO (refer to Chapter 1.5).
1.3 Australian Business Number and Registration for GST Issues
A company or an entity carrying on an enterprise must have an Australian Business
Number (ABN) which is the identifier for use when dealing with the ATO and other
government departments and agencies.
Employees, hobbyists and individuals
conducting activities without a reasonable expectation of profit cannot register for an
ABN. Non-profit organisations may also register for an ABN. ABN’s will not replace
tax file numbers but have replaced the need to include Australian Company Numbers
and Australian Registered Body Numbers on invoices.
4
Included in the application for an ABN is the option of registering for the GST.
Registering for the GST is a separate decision and, as a result, entities may be
registered with an ABN but not be registered for GST purposes. However,
businesses and organisations with an annual turnover of $50,000 or more and nonprofit organisations with an annual turnover of $100,000 or more are required to be
registered for GST. Each DECS school has an ABN and is registered for GST. Each
school council (or governing council) has an ABN and is registered for GST. The
school and school council (or governing council) are grouped as one entity for GST
reporting.
1.4 Accounting for GST
Schools claim input tax credits and account for GST payable on their Business
Activity Statement (BAS) at the end of each tax period.
Tax periods are the reporting periods for GST and can be quarterly or monthly.
Schools report on a monthly basis, which is more beneficial from a cash flow
perspective.
As schools operate under an accrual basis of accounting they account for all GST
payable and claim all input tax credits in the tax period in which an invoice is issued
or received, or when all or part payment is received (whichever occurs first). An input
tax credit can only be claimed when the school holds a compliant tax invoice, unless
the GST exclusive value of the supply is $50 or less.
The requirements of the BAS are detailed in Chapter 1.13 'Reporting Requirements'.
Within the BAS the total amount of input tax credits is offset by tax payable in the
relevant tax period. Depending on the greater of the two, schools either receive a
refund or are required to make payment to the ATO. In most circumstances schools
are net payers of GST and should therefore receive a refund from the ATO.
All registered bodies are required for GST purposes to keep records that substantiate
all transactions and acts relevant to taxable supplies, acquisitions or importations for
at least five years after the completion of the BAS to which they relate. It is DECS
policy that records be retained for seven years to comply with general accounting
procedures.
5
1.5 Apportionment
Apportionment is the separation of non-creditable and creditable acquisitions for the
purpose of only claiming input tax credits for the creditable expenditure.
It is
necessary when schools acquire something that is used for both creditable and noncreditable purposes. An acquisition is creditable if it is acquired for the business of
the school (ie not private in nature) and it is not for an input taxed activity.
Acquisitions and importations for private or domestic purposes or acquisitions (and
importations) which are not deductible for income tax purposes (eg entertainment
expenses that are not fringe benefits and are not deductible for income tax purposes)
are not creditable expenses.
Note: Entertainment expenses do not include food or drink provided for the purposes
of refreshment that does not generally have the character of entertainment. Light
meals and morning or afternoon teas and food and drink that is provided during work
time and on the school premises are less likely to have the character of
entertainment.
Input tax credits cannot be claimed on input taxed activities so where purchases are
made for partial use in input taxed activities (eg canteen or certain fundraising
events) some form of apportionment will need to be undertaken. This ensures that
the input tax credit claimed from the ATO only relates to that portion of the purchase
that is creditable and not for input taxed activities.
For example, if the canteen is input taxed and the school was being repainted and
the repainting included the canteen then GST would have to be apportioned to reflect
the cost of the canteen repainting. If, for example, the total GST inclusive cost of
repainting the school (including canteen) was $120,000 and the cost of the canteen
repainting was estimated to be $10,000 the school would be entitled to claim input
tax credits on $110,000. The $110,000 would be coded G11 (taxable) to claim the
input tax credits, and the $10,000 would be coded G13 (input taxed).
Apportionment also occurs with invoices for mixed supplies (refer to 'Mixed Supplies'
in Chapter 3.1).
6
1.6 Pricing
By law all prices displayed on price tags and price lists must be inclusive of the GST.
Determination of prices for:
1.6.1 Taxable Supplies
Selling Price = Cost price (incl GST) - GST (1/11th of GST inclusive price) + Mark-up
(% or $) + 10% GST
For example, to determine the selling price for a uniform purchased for a GST
inclusive price of $22.00, use the following method:
1.6.1.1 Example Calculation
GST inclusive cost price
$22.00
Less GST in cost price
$ 2.00 ie. 1/11th of GST inclusive cost price
$20.00
Plus Mark-up
$ 6.00
Example based on typical 30% mark-up on
the $20
GST exclusive price
$26.00
Plus GST component
$ 2.60 10% GST
Equals selling price
$28.60
The school may wish to round the selling price to $30. In this case the GST payable
must be recalculated as 1/11th of the actual selling price ie $2.73 (1/11th of $30).
7
1.6.2 Input Taxed Supplies eg School Canteen
Selling price = Cost price (incl GST) - GST (1/11th of GST inclusive price) +Mark-up
(% or $) + GST component of cost price (previously taken out)
For example, to determine the selling price for a meat pie purchased for a GST
inclusive price of $1.10, use the following method:
1.6.2.1 Example Calculation
GST inclusive cost price $ 1.10
Less GST in cost price
$ 0.10 ie. 1/11th of GST inclusive cost price
$ 1.00
Plus Mark-up
$
0.30 Example based on typical 30% mark-up on
the $1.00
$ 1.30
Plus GST component
$ 0.10
From original cost price
Equals selling price
$ 1.40
No GST is charged/added to the selling price
1.7 Contracts
Supplies made from 1 July 2000 under contracts entered into on or after 8 July 1999
(when GST became law) are subject to GST. There are some transitional rules for
written contracts and agreements entered into before 8 July 1999 where these
involve the supply of anything on or after 1 July 2000. Schools still involved with
such contracts should ring the Global Budget Unit or the Procurement Section
(DECS) if advice is needed.
All schools entering into any new contract as a supplier eg to hire a hall, need to
consider the effects of GST when negotiating the contract price. Failing to do so in
the case of a taxable supply, would result in the school being liable to pay GST and
not being able to recover it from the customer.
8
1.8 Tax Invoice Requirements
An invoice is a document notifying an organisation or entity about an obligation to
make a payment. A GST compliant tax invoice is required in order for registered
bodies to claim an input tax credit. Therefore wherever GST is charged, schools
should ensure that a compliant tax invoice is received except where the GST
exclusive value of the supply is $50 or less. If a supplier's invoice is not compliant the
school should contact the supplier to reissue the invoice.
In most cases tax invoices are issued by GST registered suppliers but in some cases
tax invoices may be issued by the recipient of the supply. This is called a recipient
created tax invoice (RCTI) (refer to Chapter 1.9).
Suppliers who are not registered for GST cannot charge GST and therefore do not
provide tax invoices.
There is no prescribed format for a tax invoice. However tax invoices must include
the following information (for supplies less than $1,000):
·
the ABN of the supplier
·
the GST inclusive price of the taxable supply
·
the words 'tax invoice' stated prominently
·
the date of issue of the tax invoice
·
the name of the supplier
·
a brief description of each good and service supplied
·
when GST payable is exactly 1/11th of the total price, either a statement along
the lines of 'the total price includes GST', or the GST amount.
For supplies of $1,000 or more, the following additional requirements (to that required
for tax invoices less than $1,000) are to be provided:
·
the name of the recipient
9
·
the address or the ABN of the recipient
·
the quantity of the goods or the extent of services supplied.
If the tax invoice is for a mixed supply, ie a taxable supply and either a GST-free or
input taxed supply, the tax invoice must also show:
·
each taxable supply (adequately identified)
·
the amount of GST payable (in relation to the taxable supplies)
·
the total amount payable for the supply
A GST registered supplier must provide a compliant tax invoice within 28 days of
receiving a request from their customer. Even though tax invoices are not required if
the GST exclusive value of the supply is $50 or less (ie $55 GST inclusive), some
documentary evidence to show that the supply is taxable is required. Such
documentary evidence may be a receipt that includes either the amount of the GST
charged, the words 'GST inclusive' if the supply is not a mixed supply or the
description of the goods purchased, but does not need to state the ABN or the words
'Tax Invoice'.
Tax invoices are not required for taxable importations but you must have relevant
documentation issued by Customs (rather than the supplier) to support input tax
credit claims.
Documents such as fliers for Training and Development and subscriptions are
treated as tax invoices provided they include all the information as described above
and also a statement such as: 'This document will be a tax invoice for GST when
completed and payment is made.' A photocopy of the completed document should
be kept and filed as the tax invoice.
Further details regarding tax invoices are discussed in Chapter 4.1.
1.9 Recipient Created Tax Invoices (RCTI)
Recipient Created Tax Invoices (RCTI) are invoices created by the recipient of the
supply, rather than by the supplier. They are used when the supplier does not know
10
the price for the supply at the time when it is made ie the recipient determines the
price at a later date. In these situations the recipient of the supply may be entitled to
create an invoice on the supplier's behalf, provided certain requirements are met.
The recipient will use the RCTI to claim an input tax credit for the GST payable.
Requirements for issuing a Recipient Created Tax Invoice (RCTI) are as follows:
·
There must be an agreement between the recipient and the supplier specifying
the supplies to which the RCTI relates, and that the recipient, not the supplier, will
issue the tax invoice.
·
Both the supplier and the recipient must be GST registered and each must agree
to notify the other party if they cease to be registered.
·
An RCTI must contain all of the information required for a tax invoice and
prominently include the words "Recipient Created Tax Invoice" and must include
the ABN of the supplier and the recipient.
·
The recipient issues the original or a copy of the RCTI to the supplier and retains
a copy or the original that is then used to claim input tax credits.
An example where a school may use an RCTI could be where the school regularly
uses an aquatic centre and is charged on a per student basis. The aquatic centre is
not in a position to invoice the school because they do not know the number of
students attending on the day. The school could create an RCTI on behalf of the
aquatic centre. The school would use the RCTI to claim an input tax credit. The
aquatic centre would use the RCTI to forward the correct amount of GST payable to
the Australian Tax Office.
As there must be a pre-existing agreement between parties to use an RCTI, it would
only be used in situations where the supply occurs on a regular basis.
Refer to the Appendix 5.16, for an example of an agreement letter to use an RCTI
and a copy of a sample Recipient Created Tax Invoice.
11
1.10 Adjustments
On occasions the school may need to make an adjustment to the amount of GST
owed or claimed previously as an input tax credit for taxable supplies. Generally
schools will process adjustments in EDSAS by entering credit notes, refunds or
journals as appropriate.
Each of the following is an adjustment event:
·
the cancellation of all or part of a supply or acquisition
·
the alteration of the price for a supply or acquisition
·
bad debts
·
a change in the use of an acquisition
Note: A mistake is not an adjustment event. Mistakes need to be corrected - refer to
Chapter 2.4.
If the adjustment results in a decrease of the GST payable or an increase in the claim
for input tax credits (ie the ATO owing the school more money as a result of the
adjustment) then the supplier must provide the recipient with an adjustment note. The
school cannot claim such an adjustment unless they hold an adjustment note.
However an adjustment note does not have to be held if the adjustment event would
result in the school owing the ATO more money or if the original invoice was for less
than $50 (GST exclusive). An adjustment note is like an amended tax invoice and
must include:
·
the words 'Adjustment Note' in a prominent place (the words 'credit' or 'debit' may
also be included)
or
·
the words 'Tax Invoice' if the adjustment is shown as a negative or credit amount
to the recipient (eg a refund)
·
the name and ABN of the supplier
12
·
the name of the recipient
·
the address or ABN of the recipient
·
the issue date of the adjustment note
·
the difference between the price of the supply before the adjustment event and
the new price of the supply
·
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 that the
difference in the price of the taxable supply includes GST
·
If the adjustment note relates to a supply of less than $1,000 it is not necessary to
include:
- the name of the recipient, and
- the address or ABN of the recipient
Refer to Appendix 5.15 for an example of an adjustment note.
1.10.1 Change of Use
An adjustment for change in use is only required if the GST exclusive cost of the item
was more than $1,000. Change in use refers to when an acquisition is purchased for
a creditable purpose and input tax credits are claimed but the item is later used for a
non-creditable purpose eg for input taxed activities such as canteen activities. Such
adjustments are made on the June BAS that is at least 12 months after the original
purchase. If the item cost between $1,000 and $5,000 any change in use needs to
be monitored for two adjustment periods, if from
$5,001 to $499,999 for five
adjustment periods. An adjustment period ends each June 30.
If you are required to make such an adjustment, contact the Global Budget Unit for
further assistance.
13
1.11 Different Types of Suppliers
Suppliers to schools of goods and services may fall within one of the following
categories:
·
registered for GST (and therefore possess an ABN)
·
registered for an ABN but not registered for GST where their turnover is less than
$50,000 (or $100,000 for non-profit organisations)
·
do not possess an ABN (and therefore not registered for GST)
It is important to note the different treatment applicable to different types of suppliers
under the new tax system.
1.11.1 GST Registered Suppliers to Schools
These suppliers must charge GST for taxable supplies and should issue a compliant
tax invoice. The school will claim input tax credits from the ATO via its BAS. If such
a supplier does not issue a tax invoice, the school should request a tax invoice and
expect its receipt within 28 days. If the supplier does not provide a tax invoice in that
period, it is DECS policy that the school will pay the supplier the price less the GST.
The supplier, on the other hand, is obligated to pay the GST to the ATO and
therefore will potentially lose revenue by not providing a proper tax invoice to the
school. The school should only pay GST when a tax invoice is provided. Only GST
registered suppliers can issue a tax invoice and charge GST.
1.11.2 Suppliers who Possess an ABN but are Not Registered for GST
These suppliers cannot charge GST on supplies made to the school. The school
simply pays the invoice amount but it is not entitled to claim any input tax credit (as
no GST has been charged).
Some suppliers, because of the additional
administration associated with being registered for GST, have decided not to register
if their turnover is less than $50,000. Being unregistered for GST also means that
the supplier is unable to claim any input tax credits on purchases they have made in
order to provide their supplies. They incorporate the cost of the GST in their prices
and therefore may be uncompetitive against other GST registered suppliers who are
14
able to claim input tax credits. Other than potentially higher prices, there are no other
implications for schools in dealing with unregistered suppliers.
1.11.3 Suppliers who do not Possess an ABN
Suppliers who do not possess an ABN cannot be registered for GST purposes and
therefore cannot charge GST.
You may find that one or more of your suppliers has no ABN. This may be because:
·
The supplier does not need an ABN as
- the supplier is an individual under 18 years of age, is not your employee, and the
payments you make to that individual do not exceed $120 per week, or
- the supplier completes the form 'Statement by a supplier'. The form is used when
suppliers believe that they fit into one of the five recognised groups that do not
require an ABN. In these cases full payment of the invoice should be made by the
school to the supplier and a copy of the completed form filed for audit purposes
(refer to Chapters 1.12 and 2.5).
·
The supplier needs an ABN but has not applied for one.
- These are the cases when sites are required to withhold 48.5% of the payment
unless the GST exclusive price of the supply is $50 or less. In these cases you
must also send to the supplier a completed 'Payment Summary' form, either with
the cheque that you send or as soon as possible afterwards. A copy of the form
can be obtained from a Post Office, newsagent or the ATO website,
www.taxreform.ato.gov.au .
The first time the school has to withhold because of no ABN they must contact the
ATO on 13 24 78 to register the school as a withholder and request to report any
withholding monthly.
15
1.12 Pay As You Go (PAYG) System
Pay As You Go (PAYG) is comprised of two parts - the PAYG withholding system
and the PAYG instalment system. Only the withholding system applies to schools.
The PAYG system specifies new types of situations where withholding applies which
include failure to provide an Australian Business Number (ABN) and voluntary
agreements.
1.12.1 Wages
Under the PAYG system, tax withheld from payments made by the school, on behalf
of the school council, to employees (salaries, wages, commissions, bonuses, and
allowances) is reported on the School Council's Instalment Activity Statement (IAS)
at W2. Gross salaries and wages are reported at W1.
Organisations that have withheld $25,000 or less in the previous financial year are
classified as small withholders and report quarterly, whilst medium withholders who
have withheld between $25,000 and $1 million in the previous financial year must
report monthly. As school councils are generally small withholders the Department
has registered them for reporting on a quarterly basis on the IAS.
1.12.2 Voluntary Agreement to Withhold
There may be individuals or contractors who perform services or work who are not
covered by a specific PAYG withholding category but request tax to be withheld in
order to help them manage their tax obligations. Individuals can only enter into a
voluntary agreement if they have an ABN.
1.12.3 Failure to provide an Australian Business Number (ABN)
Under the Pay As You Go (PAYG) system, if a supplier provides goods or services to
a school for a GST exclusive price of more than $50 and does not quote an ABN on
the invoice, the school is required to withhold part of the payment to the supplier. The
amount withheld is known as a 'Withholding Tax'. The amount to be withheld has
been set at 48.5% which is the top marginal tax rate plus the Medicare levy.
Suppliers, upon request, have 28 days to provide a tax invoice, which includes an
16
ABN. Therefore, the school should wait until this period has expired before
processing the invoice.
For example, a supplier carrying on an enterprise invoices a school for $100. The
invoice does not contain an ABN. Upon request by the school to the supplier for an
ABN, the supplier after 28 days fails to provide it. The school will process an invoice
for $100 from the relevant expense account using code G14, and create a credit note
for $48.50 to the GST Liability Account using code W04. The credit note is applied
against the invoice and a cheque generated to the supplier for $51.50.
If the school is required to withhold because a supplier has no ABN, it must first
register as a withholder (using the school's ABN) with the ATO on 13 24 78 and also
request to report the withholding on a monthly basis. Schools also need to complete
the 'Payment Summary - Withholding where ABN not Quoted' form for each such
withholding event, with one copy retained as a record by the school and the other
copies forwarded to the supplier from whom the 48.5% has been withheld. The
supplier will use this form to claim the withheld amount as a credit in their income tax
return.
The school is not required to provide the supplier with a refund if, at a later stage
after the 28 days request period, the supplier provides an ABN and requests a
refund. The school could offer to hold back payment until the supplier has obtained
and quoted their ABN. The school should not make full payment to the supplier on
the understanding that an ABN will be quoted later.
Schools will report any withheld amounts for suppliers with no ABN to the ATO via
their Business Activity Statement (BAS) at W4.
Schools should not withhold from a payment for failure to quote an ABN if:
·
the total GST exclusive payment is $50 or less (or $120 per week if the supplier is
an individual under 18 years of age and is not an employee of the school)
·
the supplier has provided a 'Statement by a supplier' form stating that one of the
following applies:
- the supply is a private recreational pursuit or a hobby
17
- the supply is private or domestic in nature
- the supplier is a non-resident who is not carrying on an enterprise in Australia
·
the whole of the payment is exempt income for the supplier (eg the supplier is a
non-profit body)
·
the supplier is not an enterprise because they have no reasonable expectation of
profit or gain
Note:
The 'Statement by a supplier' forms are available from a Post Office,
newsagent, the ATO website, www.taxreform.ato.gov.au
or the GST website,
www.gst.nexus.edu.au
For example, a parent repairing school property is paid $60.
To avoid the
withholding obligation the parent will need either an ABN or to complete a 'Statement
by a supplier' form if they fall into one of the categories listed above. It is important
that the supplier is aware of the implications of completing the 'Statement by a
supplier' form and that the selected category accurately reflects their situation.
If a school suspects that an ABN quoted by a supplier may be false or incorrect, the
school should confirm the accuracy of the ABN with the ATO on 13 72 26 or via the
Australian Business Register website at www.abr.business.gov.au . (This website
also indicates whether the entity is GST registered.) If the ABN provided by the
supplier is confirmed as false, the school must withhold 48.5% of the invoiced
amount. If a supplier completed the 'Statement by a supplier' form but the school has
reasonable grounds to think the statement is false, the school must withhold.
1.12.4 Reporting Requirements (in addition to the BAS and IAS)
The ATO will issue annual reconciliation forms for reporting PAYG withholding by 14
August and ABN withholding by 31 October for the previous financial year.
18
1.13 Reporting Requirements
All schools will be required to complete a monthly Business Activity Statement, which
is due on the 21st of the following month. School councils that pay wages will
complete an Instalment Activity Statement each quarter. (Refer to Chapter 4.4)
On the back of the BAS or IAS is a pre-printed message at the top of each section
indicating whether the school is required to report for that section and, if so, the
reporting period.
The ATO will issue annual reconciliation forms for reporting PAYG withholding by 14
August and ABN withholding by 31 October for the previous financial year.
1.14 Business Activity Statement (BAS)
Schools need to complete a monthly Business Activity Statement that reports sales
and purchases they make.
Each month schools receive a BAS from the ATO. The BAS must be completed and
returned to the ATO even if there is no tax liability for that period.
The BAS should be completed in black pen, signed by the Principal, both sides
copied and the copies filed with other relevant reports. Entries should be in whole
dollars (drop cents, do not round off) without dollar signs or any other symbols such
as a "+" or "-" sign. Items that do not need to be filled out should be left blank. Do not
write across the forms or attach any notes as the forms are scanned by the ATO and
this will delay processing.
The BAS, and GST payment where required, are due for lodgement with the ATO 21
days after the end of the month. If the due date for lodging the BAS falls on a public
holiday or weekend, the BAS and any payment must reach the ATO by the following
business day.
1.14.1 BAS (front page)
Each period the ATO will forward the BAS to the school with the 'personalised' details
are entered.
19
Title
Description
Document Identification Number
Identifies the specific BAS document.
Australian Business Number (ABN)
This is the number received when an entity
or business registers with the ATO.
Form due on
The ATO must receive the BAS by this date.
Payment due on
The ATO must receive payment by this date.
GST accounting method
This describes the accounting method used
by the entity ie. Cash or non-cash (accruals).
Your phone number
The contact telephone number of the entity.
1.14.2 Goods and Services tax (GST)
For the MONTH from 1 to 30 _(month, year)_
Item
Title
Description
G1
Total sales & income etc.
G1 includes all business receipts (ie taxable,
GST-free and input taxed sales) for the current
tax period excluding appropriations, donations,
gifts, bequests and insurance settlement
proceeds which fall outside of the legislation.
Does the amount shown at G1 include
GST?
Yes if you have made taxable supplies ie there
is an amount at G09 on the EDSAS BAS
Report.
No if G09 shows a zero amount on the EDSAS
BAS Report.
G2
Exports
G2 is the value of export sales made in the
course of business (not usually relevant to
schools).
G3
Other GST-free supplies
G3 is the value of GST-free supplies made,
other than export sales, which had no GST
included in the price.
G10
Capital purchases
G10 is the value of all capital acquisitions
made during the period. Note that capital
expenditure is not distinguished from other
expenditure items in school accounts and
hence this item will be left blank until
instructed by DECS to do otherwise.
G11
Other acquisitions
G11 is the value of all other acquisitions made
during the current tax period. It includes all
acquisitions that are taxable, have no GST in
the price or are input taxed.
20
The PAYG income tax instalment Option 1 or Option 2 sections are not relevant to
schools so are left blank.
1.14.3 Summary (Back Page of BAS)
The back page of the BAS records the GST payable on sales at 1A and GST credit
amounts from purchases at 1B. Any withheld amounts from suppliers with no ABN
are entered at item 4.
The amounts entered at 1A and 1B are not 1/11th of the G1 and G11 amounts
entered on the front page as these G1 and G11 totals also include supplies and
purchases that do not include GST. The amount entered at 1A is equal to the amount
shown at G09 on the EDSAS BAS Report and the amount entered at 1B is equal to
the amount shown at G20 on the EDSAS BAS Report
The only Pay As You Go Withholding reported by the school on the BAS is at 4 for
suppliers with no ABN. Pay As You Go salaries and wages paid by School Council
and the PAYG withheld tax are reported on the Instalment Activity Statement.
Schools do not report any Fringe benefits tax (FBT) instalments.
1.14.4 Summary
Amounts you owe the ATO
Item
Title
Description
1A
Goods & Services Tax
payable
This is the total amount of GST payable as calculated
at item G9 on the calculation sheet.
1C
Wine Equalisation Tax
payable
Wine Equalisation Tax (WET) is a tax on the last
wholesale sale (ie a sale to a reseller) of wine in
Australia.
This section of the BAS is only applicable to schools
that produce wine.
1E
Luxury car tax payable
Luxury car tax is a tax on the sale of cars that exceed
the luxury car tax threshold.
This section is not applicable to schools.
4
Pay As You Go
withholding tax
Any amounts withheld from suppliers with no ABN are
reported here. (PAYG tax withheld is reported on the
School Council's IAS.)
21
Item
Title
Description
5A
PAYG income tax
instalment
Taxpayers with business or investment income are
required to pay PAYG instalments on that income.
This section is not applicable to schools.
6A
FBT instalment
This item refers to FBT payable by employers in
respect of fringe benefits provided to employees.
This section is not applicable to schools.
7
Deferred company/fund
instalment
This section is not applicable to schools.
8A
1A + 4 (+ 1C if relevant; This calculation determines the total from the debit
1E, 5A, 6A and 7 are
side of the BAS ie the amount owed to the ATO by
not relevant to a
the school.
school)
1.14.5 Amounts the ATO owes you
Item
Title
Definition
1B
Credit for GST paid
This is the total amount of GST credit as calculated at
item G20 on the calculation sheet.
1D
Wine Equalisation Tax
refundable
The Commonwealth rebate is claimed here. Also,
where an error has been made in a previous
calculation of WET or special circumstances exist it
may be necessary for a refund to be claimed. This
section of the BAS is only applicable to schools that
produce wine. This section is not applicable to schools.
1F
Luxury car tax
refundable
This item is for a luxury car tax refund if there has been
a decreasing adjustment.
5B
Credit from PAYG
income tax instalment
variation
This item is for a PAYG instalment credit if there has
been a variation to the instalment rate. This section is
not applicable to schools.
6B
Credit from FBT
instalment variation
This item is for a FBT credit if there has been a
variation in notional tax. This section is not applicable
to schools.
8B
1B (+ 1D + 1F + 5B +
6B as relevant)
This calculation determines the total from the debit side
of the BAS ie the amount owed to the ATO by the
school.
22
1.14.6 Payment or refund?
Item
Title
Is 8A more than 8B?
Definition
Yes if 8A is more than 8B, ie the school is required to
pay the ATO.
No if 8A is less than 8B, ie the school is entitled to a
refund from the ATO.
9
Net amount for this
statement
This calculation determines the net total of GST, WET
and withholding tax included in the BAS.
If the amount is positive, the amount is payable to the
ATO by the school. If the amount is negative, the
amount will be refunded to the school by the ATO. Do
not include the negative sign on the BAS.
Declaration
The BAS must be signed and dated by the school
principal prior to sending to the ATO.
Hrs., Mins.
Optional entry stating an estimate of the time taken to
complete the BAS, including the time taken to collect
any information.
Where the school is required to forward a payment to the ATO with a BAS, that
payment is coded G21 in EDSAS.
More information is available in Chapter 2.4.
1.15 Instalment Activity Statement (IAS)
The Instalment Activity Statement reports gross salaries and wages paid and PAYG
tax withheld by the school council or governing council.
The IAS must be completed and returned to the ATO even if there is no tax liability
for that period.
The IAS and the tax payment where required (coded G21), are due for lodgement
with the ATO 21 days after the end of the period.
If the due date for lodging the IAS falls on a public holiday or weekend, the IAS and
any payment must reach the ATO by the following business day.
The IAS should be completed in black pen, both sides copied and the copies filed
with other relevant reports. Entries should be in whole dollars (drop cents, do not
23
round off), without dollar signs or any other symbols such as a "+" or "-" sign. Items
that do not need to be filled out should be left blank. Do not write across the forms or
attach any notes as the forms are scanned by the ATO and this will delay processing.
Each period (ie quarter) the ATO will forward the IAS to the school council with the
'personalised' details entered.
Title
Description
Period to be reported
Document Identification Number
Identifies the specific IAS document.
Australian Business Number (ABN)
This is the number received when an entity
or business registers with the ATO.
Form due on
The ATO must receive the IAS by this date.
Payment due on
The ATO must receive payment by this date.
GST accounting method
This describes the accounting method used
by the entity ie. cash or non-cash (accruals).
Your phone number
The contact telephone number of the entity.
1.15.1 PAYG tax withheld
For the quarter from __(Period)__
Only complete W1, W2 and 9.
Item
Title
Description
W1
Total of salaries, wages and
other payments
W1 is the amount of salary
and wage payments made
which are not part of DECS
central payroll system.
W2
Amounts withheld from
salaries, wages and other
payments
W2 is determined by
referring to the Taxation
Commissioner's published
tax tables.
W3
Amounts withheld from
investment distributions
where no TFN is quoted
W3 applies only to payments
made for interest, dividends
or unit trust distributions so
will not apply to schools.
24
Item
Title
Description
W4
Amounts withheld from
payment of invoices where
no ABN is quoted
W4 is the total amount
withheld from all payments
where an ABN was not
quoted. However schools will
report this on the BAS.
9
Total payment amount
This is the total amount of
payment due to the ATO and
is equal to the W2 amount.
(Schools do not report W3 or
W4 on the IAS.)
Declaration
The IAS must be signed and
dated by the school principal
prior to sending the IAS to
the ATO with the cheque.
Hrs., Mins.
Optional entry stating an
estimate of the time taken to
complete the IAS, including
the time taken to collect any
information.
More information is available in Chapter 2.4.
1.16 Diesel Fuel Rebate Scheme and the Diesel and Alternative
Fuels Grant Scheme
Schools that use diesel fuel in their buses or agricultural machinery should be aware
of changes to the Diesel Fuel Rebate Scheme and the introduction of the Diesel and
Alternative Fuels Grants Scheme following the introduction of the GST.
·
Amendments have been made to the Diesel Fuel Rebate Scheme that extend the
rebate to include not only diesel, but also other like fuels. The Rebate Scheme
only applies to off-road use.
·
A new Diesel and Alternative Fuels Grants Scheme came into effect 1 July 2000
and provides a major cut in diesel and alternative fuel costs for enterprises
providing on-road transport services to regional and rural areas. This affects
schools in rural areas who own and operate bus services for their students.
25
1.16.1 Diesel Fuel Rebate Scheme
The Diesel Fuel Rebate Scheme provides a rebate for customs and excise duty paid
on diesel consumed in eligible off-road uses. This includes fuel used for agricultural
activities conducted by schools. If a school does not currently receive a rebate, but
believes it may be eligible for entry into the scheme, an application form is available
through the ATO. The rebate received is not subject to GST, code G21.
1.16.2 Diesel and Alternative Fuels Grants Scheme
The Diesel and Alternative Fuels Grants Scheme is available for certain on-road
transport activities conducted in rural areas. Schools that own a vehicle with a gross
vehicle mass (GVM) of 4.5 tonnes or more that is registered for use on public roads
and use diesel or alternative fuel in the vehicle for the purpose of carrying on their
enterprise are eligible to register for the scheme. It is likely that a "full sized" bus, if
owned by the school, will fit this requirement but not a mini-bus or van. Details of
gross vehicle weights are found on the registration permits. To be eligible for the
scheme, the school must:
·
use the vehicle for transporting passengers or goods as part of carrying on their
business or enterprise
·
purchase the diesel fuel
·
be registered for the fuel grants scheme
For buses greater than 20 tonnes gross vehicle mass (GVM) all trips on public roads
are eligible for the grant. For buses with a GVM of 4.5t but less than 20 t the
following additional restrictions apply:
·
The school must use the fuel in the vehicle operating on a public road in Australia:
- between a point outside a metropolitan area and another point outside a
metropolitan area, or
- between a point outside a metropolitan area and a point inside a metropolitan
area,
26
or
- between metropolitan areas (eg Adelaide and Whyalla)
Schools or school councils that own and operate buses for student transport
including Country Areas Programs (CAP) buses are entitled to claim this grant
providing they meet all of the above conditions. Similarly, external bus operators who
provide contracted service to schools for student transport are eligible for the grant
providing they also meet all of the stated conditions.
In situations where DECS owns and operates school buses and pays the fuel costs,
the grant will be claimed by the department.
Schools located on the fringe of the metropolitan area may still be eligible to claim a
partial rebate if they are transporting students from outside the metropolitan area.
Schools that own and operate buses that operate solely in the metropolitan area are
not eligible for the scheme (unless the bus is greater than 20 tonnes gross mass).
Schools that are registered for the scheme are entitled to make claims for all fuel
used for eligible purposes from 1 July 2000. Once registered, schools are able to
choose whether they want to claim the grant monthly, quarterly or annually. The ATO
provides claim forms, which may be lodged electronically. Adequate records must be
kept to substantiate the claim and prove the entitlement to a grant.
To register for the grant or to obtain more information about the grant scheme, ring
the ATO Diesel Fuel Infoline on 1300 657 162 and quote your ABN. The ATO will
then forward an application form to register your school for the scheme.
1.17 Text Book Rebate Scheme
The Educational Textbook Subsidy Scheme (ETSS) was established to offset any
price increases on new textbooks as a result of the GST. The scheme affects schools
that either sell textbooks directly to students or require the students to purchase
prescribed textbooks from a retailer.
27
The available subsidy is calculated as 8% of the retail price for textbooks that are
included on prescribed or recommended textbook lists from approved Australian
Educational Institutions and is available to students studying at these institutions.
Booksellers, eg private companies or schools who sell textbooks and who have
registered for the scheme are able to claim the rebate on the textbooks where that
rebate has been passed on as a discount to students. Participation in the scheme is
voluntary.
Schools that sell textbooks to students can register for the scheme electronically at
www.textbooksubsidy.gov.au or by requesting a registration kit from the scheme
hotline on 1300 139 249.
A student or parent/caregiver who wishes to obtain the discount will need to
purchase the textbooks from a registered supplier, have a current textbook list from
the educational institution and show the student's Identification Details.
Sales of textbooks to educational institutions do not attract a subsidy.
1.18 Wine Equalisation Tax (WET)
The wine equalisation tax (WET) applies when wine is produced and then sold or
used by the producer (eg a school). The WET rate of 29%, applies to the sale of
grape wine, grape wine products such as marsala, vermouth, wine cocktails and
creams, other fruit wines and vegetable wines, cider, perry, mead and sake
(collectively referred to as 'wine' in this document). The WET is levied on the last
wholesale sale of the wine. The WET also applies when the producer (eg the school)
sells directly to the consumer or applies the wine to its own use (eg wine tastings,
gifts).
There is no specific exemption from the WET available to schools and, therefore, the
school must account for its WET payable and refundable and report the amounts
appropriately in the BAS.
Note: Schools selling wine need to contact the South Australian Office of Liquor and
Gaming regarding their individual licensing requirements. However, the type of
license granted has no affect on the WET liability.
28
Generally schools that produce their own wine are involved in the retail sale of the
wine directly to the consumer eg to parents, other community members or to
restaurants. Schools may also dispose of the wine they produce by applying it to their
own use, eg through wine tastings, donations or as gifts. In these cases of 'own use'
the WET liability is still payable by the school, based on a notional wholesale price,
as it is considered the last 'wholesale sale'.
The calculation of the WET relating to a notional wholesale price is either calculated
using the 'Half-retail-price method' (which is 50% of the GST inclusive selling price of
the wine multiplied by the WET rate of 29%), or the 'Average wholesale price
method'. The 'Average wholesale price method' can only be used when at least 10%
of the value of all sales of wine are of the same vintage and grape variety in a
wholesale transaction. It is recommended that schools calculate the WET using the
'Half-retail method'.
The following table indicates the method for calculating the WET in relation to the
types of supplies made by schools.
1.18.1 WET Calculation
Purpose
WET Calculation
Retail sale of wine
50% of GST inclusive retail selling price of
the wine x 29%
Application to own use of wine
50% of GST inclusive retail selling price of
the wine x 29%
Wholesale sale of goods subject to WET
Wholesale Price (excluding WET and GST) x
29%
1.18.2 WET Rebate
Small winemakers (including schools) are entitled to a Commonwealth rebate of
14%. If they also hold a Producer's Licence, they are in addition entitled to a State
rebate of 15% of their WET liability if the wholesale value of wine sold at 'cellar door'
and mail order is equal to, or less than, $300,000 per annum.
29
The Commonwealth WET rebate is claimed as a credit on the BAS at item 1D and
the State Government rebate is claimed through a separate application to the South
Australian Office of Liquor and Gaming.
For example, if the retail value of a school's cellar door and mail order sales is $3,000
(GST inclusive) the WET liability is $435 (29% of 50% of the retail value of $3,000)
and is entered at 1C on the BAS. Under the rebate arrangements, the school, who in
this case holds a Producer's Licence, is entitled to a Commonwealth rebate of $210
(14% of $1,500) which is entered at 1D on the BAS and a State Government rebate
of $225 (15% of $1,500) via a separate application.
1.18.3 Calculating the WET and GST for Retail Sales of Wine
A school may sell wine direct to the community or over the counter from the
premises. The school must collect and remit the WET and the GST.
The sale of wine, even if used as a fundraiser, is always subject to GST. If the school
had bottled the wine the sale is also subject to the WET.
The following example illustrates how both the WET and the GST are calculated on
wine produced by the school.
If the retail price of wine per bottle (including WET and GST) is $11, the calculations
are as follows:
Retail selling price (GST inclusive)
$11.00
GST is calculated as 1/11th of the retail price (ie of $11)
$ 1.00
(Alternatively if the school determines the GST exclusive price of a bottle of wine to
be $10.00, GST is calculated as 10% of $10.00 ie $1.00, giving a retail price of
$11.00.)
WET is calculated as 29% of 50% of the retail GST inclusive price ie $ 1.60 (29% x
(50% of $11.00)), and is included at 1C on the BAS.
The Commonwealth WET rebate of $0.77 (14% X 50% X $11.00) is entered at 1D on
the BAS, which results in a net WET liability of $0.83 (item 1C subtract 1D) payable
30
to the ATO. If the school is eligible, the 15% State rebate of $0.83 (15% X 50% X
$11.00) obtained via an application to the South Australian Office of Liquor and
Gaming will offset the WET liability resulting in an overall revenue to the school of
$10.00 from the wine sale.
Calculating the WET for 'Application of wine to own use' eg wine tastings, gifts
If a school gives away bottles of wine it has produced to parents or supplies the wine
to be consumed at school functions without charging or conducts a free wine-tasting,
the school still incurs a WET liability, as the giving away of wine is regarded as an
application of own use by the school. The WET is calculated on the GST inclusive
retail price of the bottles of wine used in the wine-tasting event or given away in the
same manner as the calculation for a retail sale of the wine. GST is not payable as
there is no consideration provided by the consumer and the transaction is not
reported as revenue on the BAS. However, the WET liability must be calculated and
reported at 1C on the BAS.
Using the same example as above where the GST inclusive retail price is $11.00,
the WET is $1.60 (ie 29% of 50% of $11.00) which is included at item 1C on the
BAS. This is offset by the Commonwealth rebate of $0.77 (ie 14%) which is entered
at item 1D on the BAS, so the net WET payable is $0.83 ($1.60 minus $0.77). The
State Government rebate may also be available in respect of the wine provided for
tasting which will offset the WET liability.
1.18.4 Wholesale Sale of Wine
As part of an education course, a school may produce wine that it on-sells to a
winery, bottle shop or retailer. An input tax credit is claimed for any GST paid on
purchases associated with the production and sale of the wine. Upon selling the
wine the school must collect and remit WET and GST. (It is assumed in this example
that the purchaser has not provided a 'quote' in respect of the sale. Purchasers
provide a quote when they intend to either sell the wine wholesale, for export, or for
use in further manufacturing activities.)
The wholesale sales price of wine per bottle (excluding WET and GST) is the price at
which it is sold to the retailer. The WET is calculated as 29% of this price ie not the
31
'Half-retail price' or the 'Average wholesale price'. For example, if the wholesale sales
price is $8.00, the calculations are as follows:
Wholesale price
$ 8.00
WET is $8.00 x 29% (included at 1C on the BAS)
$ 2.32
$10.32
GST is 10% of $10.32
$ 1.03
Total wholesale sales price (including GST and WET) to the retailer $11.35
The Commonwealth and State rebates are not available with respect to wholesale
transactions.
There may be cases where a school sells wine that is not the last wholesale sale of
wine, for example where a recipient provides a quote form, which includes their ABN,
as prescribed in legislation (refer to Appendix 5.17 for an example). Therefore, these
sales are not subject to the WET. Exports of wine are also not subject to the WET.
If a school sells to a reseller who does not provide a quote, WET is liable on the full
selling price (ie the wholesale price) of the wine.
1.18.5 Accounting for the WET
The school, as a producer of wine, needs to ensure there is a form of recording all
retail sales, wholesale sales and any application to their own use of wine (outside of
EDSAS) to assist with the WET calculation and entitlement to the rebates available.
WET is accounted for in the period in which payment is made by the wholesaler or
other retail customers or when an invoice is raised for the supply of wine.
1.18.6 WET Refundable
If a school pays more WET than was properly payable, the school is entitled to claim
a refund. A separate section within the BAS (item 1D) is provided for this purpose
(item 1D is also used to claim the Commonwealth rebate). Reasons for a WET
32
refund may include an overpayment due to the price being adjusted or when the
school has written off bad debts in relation to wine sales.
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Chapter 2 SCHOOL ADMINISTRATION ISSUES
2.1 Managing Compliance
Principals must ensure compliance with the requirements of the GST and must
establish procedures that ensure that the GST treatment of transactions is correct.
The GST has implications at all levels of the school and in servicing of all staff is
required. Potential risks include under-claiming or over-claiming input tax credits;
incorrect GST classification of supplies; miscalculating GST on supplies or
acquisitions; failing to substantiate the election of activities as GST-free or input
taxed and failing to submit the BAS and IAS by the due date.
In order to minimise compliance risks Principals must ensure that staff and
volunteers receive appropriate training. Staff need to be in-serviced formally
regarding the GST documentation and substantiation that is required to comply with
GST Legislation eg what constitutes a compliant tax invoice (refer to Chapter 1.8).
Staff also needs to understand the implications of the GST when costing excursions
and camps (refer to Chapter 5.12).
Under GST Legislation the school is now required to obtain certain documentation
and the Finance Officer needs to be supported with this compliance by the
management and staff. Compliant tax invoices need to be obtained, invoices for
reimbursement of mixed supplies (ie supplies from supermarkets) should not include
personal shopping items, and an ABN must be obtained from the supplier or
'Statement by supplier' form completed for any payment over $50 (GST exclusive) for
a supply of goods or services. The Finance Officer also needs to be notified about
any activities in the school that involve financial transactions before the activity
occurs (and before any costs are determined). The Finance Officer can then treat the
transaction appropriately for GST in EDSAS and also assist staff in costing the
activity. Documents substantiating the GST treatment of camps and excursions must
be kept by the Finance Officer for audit purposes.
34
The Principal should:
·
sign the BAS each month and ensure it is forwarded to the ATO by the due date
(21st of each month)
·
complete a quick check of entries to ensure there are no negatives on the BAS
and an entry has been made at each of G1, G3, G11, 1A, 8A, 1B, 8B and 9 and
the appropriate boxes crossed
·
become familiar with the amounts entered each month and query any
abnormalities
·
check the EDSAS BAS Report (Calculation Sheet) and determine if:
- the separate companies and any other groups of the school that do not report in
EDSAS have been consolidated
- the consolidated amounts from the EDSAS BAS Report (Calculation Sheet) are
transferred correctly on to the BAS
- the amounts seem consistent with previous months
- there is always an amount at G04 (SASIF interest revenue is reported monthly
with this code as is any input taxed fundraiser revenue or canteen revenue)
·
check that
- the L-ZZZ-3515 A/C is reconciled with the refund (or payment) due
- the BAS Report (Calculation Sheet) has been reconciled with the Reconciliation
Reports
- the ATO refund is received each month
- supporting documentation for camps and excursions (conducted both in and out
of the school), input taxed fundraising activities, agency transactions, 'Statement
by supplier' forms etc are completed/obtained and filed for audit purposes
- compliant tax invoices are held
35
·
sign the 'Missing Transaction Report' each month to ensure all transactions have
been coded for GST (ie the Report should be blank)
·
have in place a back up process for completing the BAS in an abnormal situation
such as an unexpected absence of the Finance Officer
Note: Checking the final reports does not in any way alert the Principal as to whether
the correct GST codes have been used. It is important that finance staff access the
GST Manual and any training to refresh or update their knowledge.
2.2 Cash Flow Management
There is a cash flow cost associated with GST for schools.
In most instances,
schools are net payers of GST, that is, they pay more GST on their purchases than
they collect from supplies made. Therefore, schools generally are owed monies by
the ATO. The time it takes for the ATO to refund amounts affects the school's cash
flow. The cash flow cost is the lost interest (revenue) that would have been earned
by the school if funds had remained in the school's bank account.
Schools should minimise the cash flow cost by processing invoices efficiently within
each month. Although a school has up to 21 days after the end of the month to lodge
its BAS, it should seek to do so as soon as possible. The ATO must pay any amount
owing to the school within 14 days of the school lodging its BAS.
Schools should aim to have processed all invoices received in any given tax period
through their Accounts Payable Module in that tax period in order to minimise the
cash flow cost associated with the GST. In accrual accounting the input tax credits
are claimable in the period when the invoice is entered into EDSAS. Even though
the invoice is processed in a particular month, the cheque for payment can be
generated in the following month (dependent on supplier trading terms) to manage
the cash flow more effectively.
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2.3 ABN and Registration Issues
DECS schools have been issued with an ABN and are registered for GST purposes.
The school council or governing council, being a separately incorporated body, also
has an ABN and is registered for GST.
Under the grouping provisions in the GST legislation both the school and school
council are grouped for GST purposes with the school nominated as the reporting
body ie the school's ABN is used on the Business Activity Statement (BAS).
Grouping means that the school and school council are treated as one entity for GST
purposes and report all supplies and acquisitions for the group on the BAS each
month. Included within the entity registration is any other school group such as the
Outside School Hours Care, Child Parent Centre and Parents' Clubs which fall under
the control of either the principal or school council.
Any transactions within a GST group eg transferring funds from one budget line to
another, are not treated as supplies for GST purposes so are not recorded on the
BAS (code G21). All transactions of the group with parties outside of the group will
need to be included in the school BAS each month.
Schools are able to set up a building fund or a library fund according to specific
guidelines and register it with the ATO as a deductible gift recipient (DGR).
Registration as a DGR for the fund(s) enables the school to provide receipts to
donors that can subsequently be used for income tax deductions. Receipts need to
show the name of the fund, the ABN and that the receipt is for a gift, with the date
and amount of the gift. Schools can request a Gift Pack on DGR endorsement and
an application form from the ATO on 13 24 78. The item number to be used on the
application form for the school building fund is 2.1.10 and for the library fund, 12.1.2.
2.4 Activity Statement Issues (BAS and IAS)
The BAS must be signed by the Principal and forwarded to the ATO each month
even if there are no transactions during the month. The BAS, and payment of the
GST where required, are due for lodgement with the ATO 21 days after the end of
the month.
37
Cell 9 on the back page of the BAS will usually be a negative result (ie 8A is usually
less than 8B so the 'No' box is crossed) as this indicates that the school is due for a
refund. However the negative sign should not be included when entering the value.
(See Appendix 5.2 on what to do if any of the other cells are negative in a particular
month, as negative amounts should not be entered on the BAS.)
The IAS reports salaries and wages paid by the school council. As the IAS is
addressed to the school council, schools need to ensure a process is in place for this
form to be passed on to the school finance officer as soon as it arrives in the school.
Both the BAS and the IAS should be completed in black pen, with whole dollar
entries only (drop the cents, do not round off) and without dollar signs or any other
symbols such as a "+" or "-" sign. Items that do not need to be filled out should be
left blank. Do not write across the forms or attach any notes as the forms are
scanned by the ATO and this will delay processing. If there are any problems
regarding the BAS or IAS the school should ring the ATO on 13 24 78.
The Principal must sign the forms and both sides copied and filed with the relevant
reports. If the due date for lodging the BAS or IAS falls on a public holiday or
weekend, the BAS, IAS and any payment must reach the ATO by the following
business day.
2.4.1 Authorised Contact Person
If a school rings the ATO to discuss a BAS or IAS related issue the ATO officer may
request to speak only with the authorised officer, that is, the Principal. The Principal
can arrange for an additional contact officer(s) (eg the Finance Officer) to be
established, or advise of a change to the authorised contact person (eg a new
Principal), by contacting the ATO either on 1300 130 926 or by fax on 07 3213 8844.
If in writing, the changes are to be detailed on a school letterhead stating the school's
name, address and ABN, and must include the name, position and business
telephone number of the new or additional contact person(s) and be signed by the
Principal. This will enable these officers to undertake communications with the ATO
on behalf of the school regarding taxation-related matters. However the Principal is
still responsible for signing the BAS and IAS.
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2.4.2 Correcting a Previously Submitted BAS
If a school realises that a previously submitted BAS was incorrect and the mistake
affects the GST liability (ie GST payable or GST credit), a correction is required (refer
to Chapter 4.5). If the mistake has no impact overall on the GST liability (eg a
transaction coded G21 instead of G14) the school should make a record of the
incorrect coding for audit purposes and proceed with the correct treatment for any
future transactions of that nature but does not need to correct the mistake in EDSAS
or notify the ATO.
If a mistake on an earlier BAS results in the ATO owing money to the school as
·
The result of a failure to claim input tax credits for a creditable taxable expense
where a compliant tax invoice is held, for example, a payment was coded G14 but
should have been coded G11 (with a compliant tax invoice) then there is no time
or amount limit and the mistake can be corrected on any later BAS.
All other mistakes from an earlier BAS have limits to both the amount of the
correction and the time period allowable for the correction to be made on a
subsequent BAS. These limits are:
·
a net GST correction limit of less than $5000 (ie. the total GST effect of all the
errors), providing the school's annual turnover is less than $20m., and
·
a time limit of 18 months for correcting these errors on a later BAS
If the net error of GST overpaid to the ATO on supplies is $5000 or more the school
needs to contact the ATO on 13 24 78 to either revise the BAS on-line or to organise
a revision statement to be forwarded.
Note: The correction limits are the net effect of the total of all errors occurring in
earlier BAS(s). They are the maximum amount of corrections allowable on a later
BAS and are not a 'per BAS' or 'per mistake' limit. In determining whether corrections
are within the limits, total overpayments can be offset against total underpayments.
Types of mistakes that have these limits are those when too much or too little GST
has been paid on supplies or too much input tax credit has been claimed on
39
expenses. For example, a supply was coded G01 and should have been G03, or a
supply was coded G04 but should have been G01, or an expense was coded G11
but should have been G14.
Note: The code G01 was incorrectly used and the GST was added to the price
charged, rather than merely entering the incorrect code, the GST must be
reimbursed to the customer.
2.4.3 Documentation and Penalties
Records need to be kept to support all corrections and filed with the appropriate BAS
records. Mistakes corrected on a later BAS according to the time and correction limits
outlined do not incur penalties or interest.
2.5 Record-keeping
Schools are required to record and be able to explain all transactions relevant to
determining the BAS return and maintain them for seven years (DECS policy) or five
years (ATO requirement) from the date of the transaction. Records to be kept should
include the normal accounting records for audit purposes, reconciliation reports, any
documentation supporting decisions on tax treatment (see below) and a copy of the
completed BAS. A copy of the IAS also needs to be kept. School based officers
therefore need to maintain an efficient filing system and administrative processes.
2.5.1 Types of records/documentation
·
BAS Reconciliation Reports
- For each company in EDSAS, copies of the BAS reconciliation reports ie
Accounts Receivable, Accounts Payable, General Ledger, Debit/Credit, Monthly
Reconciliation, Transactions with Missing GST Codes report, and the BAS Report
(Calculation Sheet) must be filed with a copy of both sides of the BAS. A copy of
the calculations used for any consolidations and the blank 'Transactions with
Missing Codes' report, signed by the Principal (this indicates all transactions have
been coded), also need to be filed.
·
'Statement by a supplier' form
40
- A copy of the form is available from both the ATO and GST websites or from Post
Offices and Newsagents. Details concerning the form are included in Chapter
1.11. The completed form should be filed, with reference made to the file on the
relevant invoices, and kept for seven years. Only one form is required to be
completed by the supplier for similar activities, with a new form completed only if
the nature of the activity or service changes. However, it is recommended that the
statements be updated each year.
·
'Payment Summary - Withholding where ABN not Quoted' form
Refer to Chapter 1.12
·
Excursions/Camps
- Schools are required to keep supporting documentation that substantiates the
GST treatment of an excursion/camp. An example template that satisfies GST
requirements is included in Appendix 5.11 and is available on the website
www.gst.nexus.edu.au . Principals must verify the curriculum and educational
components of the excursion/camp and the GST charge where applicable by
signing this or some other similar form of documentation. The substantiation
would indicate that the camp/excursion is predominantly educational if treated as
GST-free (except food that is taxable) and also indicate whether the charge to
students includes a food component. A copy of the letter going home to parents
with details of costs could be used providing it addresses the requirements.
Camps/excursions that have been treated as non-commercial supplies (refer to
Chapter 3.16) require substantiating documentation detailing the GST inclusive
costs of the supply and the charge to the students. Any documentation is to be
kept and filed for audit purposes.
The camp and excursion approval form ED169 has provision for Principal verification
of the camp/excursion as predominantly educational but does not detail GST
treatment of charges. Its purpose is to satisfy the 'Camps and Excursion Guidelines
for Schools' rather than satisfy financial audit requirements.
·
Fundraising
41
- Where schools elect to treat a certain fundraising event as either input taxed or
taxable they must document this election.
Transactions that are coded G21 such as agency transaction or deposits should also
be documented in a similar manner to fundraising documentation to verify the code
used and the documentation kept for audit purposes.
The following example may be adapted to suit school requirements.
Date
Account Code
GST
Code
06/08/01
R-ZRC-6820-0001
Chocolate sales
G04
22/08/01
R-ZRC-6820-0002
Raffle
G03
24/08/01
R-SGE-6484- Book
Scholastic Book Club
G21
Principal's verification
The Principal can sign at the end of each page or month rather than for each
separate activity.
2.6 Electronic Commerce Interface (ECI)
Schools that wish to submit their BAS electronically require:
·
minimum system requirements of
- Windows 95/98/2000/Me or Windows NT Workstation Version 4.0
- Pentium 133 or better
- 100MB free disk space
- Internet connection permitting HTTP traffic using a 28.8K modem or better
- 800 x 600/256 colour screen resolution
- 32 MB RAM for Windows 95/98, 64MB RAM for Windows NT
- Netscape Navigator 4.07 browser (or higher) or Microsoft Internet Explorer 4.01
or higher
- Laser or ink-jet/bubble jet (300dpi) for printing
42
·
Three items of information from the ATO:
- an e-mail from the ATO titled "Your Keys and Certificates"
- a letter from the ATO providing your Personal Identification Code (PIC)
- a CD from the ATO containing the Electronic Commerce Interface software
If your school is planning to submit electronically, contact the ATO Public Key
Infrastructure (PKI) Business Support Centre on 13 24 78 to register for electronic
lodgement.
Note: If you want to continue submitting the BAS manually no further action is
required and the ATO will continue to mail a paper-based BAS each month.
The ECI software is an ATO product and as a result there will be limited support
available from within the department. However, it is compatible with school systems.
Support is available from the PKI Business Support Centre on 13 24 78 for
administrative and registration issues and the Electronic Services Delivery (ESD)
Technical Support Centre on 1300 139 373 for 'technical' problems.
2.6.1 Keys and Certificates
The keys and certificates are issued in the name of the authorised officer and are
placed on a secure ATO web site for collection by the authorised officer. The
authorised officer of the school is the Principal, but some sites may have also
nominated the Finance Officer and/or Deputy/Assistant Principal as additional
authorised persons via a request to the ATO.
The ATO provides notification via mail of the website address and the password
required for initially retrieving the keys and certificates.
Detailed information that provides step by step instructions on how to access the
keys and certificates and how to install the ECI software are provided on the CD that
is sent out from the ATO. During the process of installation you may be asked to
upgrade to Adobe Acrobat Reader 4.0, Internet Explorer 5.0 and/or Microsoft Java
43
Virtual Machine Build number 3188. These are all available to down load from the
ECI CD and you should proceed with the upgrade.
2.6.2 Management of Electronic Commerce Interface Security
The school certificates are protected by a single password that the authorised officer
must select and maintain. It is critical that this password is protected.
The exact combination of organisation name, user name and password that is
entered during the certificate installation process is required when accessing the
system so needs to be recorded and then stored securely.
2.6.3 Storage of Electronic Keys and Certificates
During the down load process of the keys and certificates from the ATO the user will
be prompted for a storage location and file-name for the keys and certificates file. It is
important to store the file in a secure environment on the computer system and hold
a back up copy on some other electronic medium that is also stored securely (eg
floppy disk). If you choose to change the file name to make it easier to recognise, do
not modify the file extension (the extension should remain as .p12).
2.6.4 Electronic Commerce Interface Security
The keys, certificates and passwords allow access to the ATO website and the BAS
documents for the school. Due to the confidential nature of this financial information
care should be taken to limit the access to these documents to authorised personnel
only. As this information is accessible via the Internet there is the potential for it to be
viewed by anyone that has the ECI software and keys and certificates for the school.
The password to the ECI can be modified and existing keys and certificates
cancelled if necessary in order to maintain security of financial information. To cancel
existing keys and certificates and request new ones contact the PKI Support team on
13 24 78.
There may be a number of circumstances under which the school may choose to
request new keys and certificates from the ATO or change the access passwords. In
44
line with good security practice, new keys and certificates must be requested and
passwords changed under the following circumstances:
·
the Authorised Person for the site leaves the organisation or relocates to a
different site
·
the school believes that the confidentiality of the keys and certificates or
passwords has been compromised in some way
To change the password providing it has not expired (refer the expiry date column of
the 'Maintain Certificates' screen of the ECI software):
·
go to the Maintain Certificates screen
·
highlight the certificate relating to the school
·
press the Delete button at the bottom of the screen
·
a dialogue box will appear - Press OK
·
press the Import button at the bottom of the screen
·
a dialogue box will appear - Follow instructions to reimport keys and
certificates and set a new password
If the password has passed the expiry date please contact the ATO to have new
certificates and keys issued.
45
Chapter 3 TYPES OF TRANSACTIONS
3.1 Overview
3.1.1 Revenue Received on Supplies
GST is charged by a GST registered entity ie a school, on all taxable supplies but not
on supplies that are GST-free or input taxed. Refer to Chapters 5.3, 5.4, 5.5 and 5.6
of the Appendices for further clarification on what type of supplies are classified as
taxable, GST-free or input taxed.
The following education courses are defined for GST purposes to be GST-free:
·
all State and Territory recognised pre-school and kindergarten courses
·
special education courses for children and students with disabilities
·
primary and secondary courses covered under a determination by the Education
Minister
In South Australia, all courses provided by DECS schools, including re-entry courses,
are considered to be 'education courses' for GST purposes. The supply of course
materials by a school that are necessarily* consumed or transformed by the students
when undertaking the education course is also GST-free.
Schools must charge GST on supplies they make that are taxable (ie supplies that
are neither GST-free nor input taxed) and provide an appropriate tax invoice where
required. Generally only other GST registered entities require a tax invoice as only
GST registered entities can claim input tax credits. Tax invoices are produced in
EDSAS (refer Chapter 4.1). Any other forms used by schools that effectively act as
*
'Necessarily' means that materials must be essential or fundamental for the student to use or convert
in undertaking the course. 'Consumed' means destroyed or expended by use ie used up, eg a
workbook, student planner or pen. 'Transformed' means changed in form or character, eg chemicals in
a chemical class or art materials used in an art class.
46
an invoice, for example, manually produced invoices, must also comply with the GST
requirements.
The onus is on the school to charge GST on all taxable supplies. Where GST is not
charged on taxable supplies, the school is still liable for the GST payable (ie 1/11th of
the revenue is GST).
3.1.2 Calculating the GST to Charge
The GST of 10% is calculated on the price the school charges for its taxable
supplies.
3.1.2.1 Example Calculate hall hire
GST exclusive price
$75.00
G01
Revenue Account
GST (10% of $75)
$ 7.50
G01
L-ZZZ-3515
GST inclusive price
$82.50
If the school charges $82.50, it will (within EDSAS) record $75.00 as revenue and
$7.50 as GST payable using the code G01.
The school may wish to 'round down' the amount to $80. In this case, the GST
payable must be recalculated as 1/11th of the actual price charged ie $7.27 ($80
divided by 11) and the revenue would be $72.73 ($80 less $7.27).
GST is not charged on supplies for input taxed activities, eg canteen sales.
3.1.3 Expenditure on Acquisitions
It is necessary to clearly separate expenditure from revenue when considering GST,
except where input taxed activities are concerned.
Schools are charged GST on almost all purchases from GST registered suppliers.
Schools enter the details of a compliant tax invoice for a taxable supply into EDSAS
using the code G11 with the GST (ie 1/11th of the GST inclusive amount) debited to
the GST Liability Account, L-ZZZ-3515.
47
Note: Schools can claim input tax credits for GST paid on purchases unless it is an
acquisition (or importation) that is:
·
related to input taxed activities eg input taxed fundraising events
·
for private or domestic purposes (which should not occur in accordance with
DECS policy)
·
not deductible for income tax purposes (eg entertainment expenses that are not
fringe benefits and are not deductible for income tax purposes)
- Entertainment expenses do not include food or drink provided for the purposes of
refreshment that does not generally have the character of entertainment. Light
meals and morning or afternoon teas and food and drink that is provided during
work time and on the school premises are less likely to have the character of
entertainment
If the GST has been calculated incorrectly by the supplier, the school needs to
contact the supplier and request that a compliant tax invoice is issued. If it is a mixed
supply the school must separate the items from the invoice to enter the GST-free
acquisitions using the code G14 and the taxable acquisitions using the code G11
(with 1/11th of the taxable amount to the GST Liability Account).
Acquisitions from non GST-registered suppliers do not include GST and are
processed in EDSAS using the code G14. Any suppliers who do not provide an ABN
in respect to a supply with a value over $50 are subject to withholding tax provisions
unless they are entitled to complete a 'Statement by a supplier' form (refer to Chapter
1.11).
3.1.4 How to Calculate the GST if Not Shown Separately on the Invoice
GST registered suppliers may provide invoices that show only the GST inclusive
price for the supply. If the invoice is only for taxable supplies, the GST is 1/11th of
the GST inclusive total. For example, if a supply is made for the GST inclusive price
of $825, the GST would equal $75.00 (1/11th of $825).
48
3.1.4.1 Example Calculate GST and enter in EDSAS
This would be entered in EDSAS as follows:
GST exclusive cost of taxable supply
$750.00
G11
Expense Account
GST (1/11th of $825)
$ 75.00
G11
L-ZZZ-3515
Total of Invoice
$825.00
3.1.5 Mixed Supplies
For mixed supplies, that is supplies that include GST-free or input taxed goods and
taxable goods, the invoice must indicate which items include GST and the amount of
GST payable.
The following is an example of a mixed supply invoice:
Sample docket
Simply Supermarket
ABN 987654321XX
Tax Invoice
Items
Price
* Cordial
2.84
Apples
4.50
* Foam Cups
3.08
*Biscuits
2.99
Total
13.41
Rounded
13.40
Total includes GST of
*
taxable
0.81
items
05/03/01
49
The invoice is entered in EDSAS using both the codes G11 and G14. The GST paid
is not 1/11th of the total bill but is 1/11th of the taxable supplies.
Total Taxable
Total GST-free
$2.84
$4.50
$3.08
$2.99
$8.91 (Alternatively, to avoid adding all taxable items, multiply the GST,
ie 81c, by 11 to give the GST inclusive amount of $8.91.)
The GST exclusive value of the taxable supply is $8.10 ($8.91 - 81c) which is the
actual expense to the designated expense account.
3.1.5.1 Example Mixed Supply enter in EDSAS
This would be entered in EDSAS as follows:
GST-free acquisitions
$ 4.50
G14
Expense Account
GST exclusive cost of taxable acquisitions
$ 8.10
G11
Expense Account
GST
$ 0.81
G11
L-ZZZ-3515
Total of Invoice
$13.41
3.2 Accommodation
The supply of student accommodation to students undertaking a primary, secondary
or special education course is GST-free if the supplier of the accommodation is also
the supplier of the course. Student accommodation is GST-free if provided in a
hostel whose primary purpose is to provide accommodation for students from rural or
remote locations who are undertaking such courses.
GST-free student accommodation includes the supply of cleaning and maintenance,
electricity, gas, air-conditioning or heating, telephone, television, radio or any other
50
similar thing. However, the charge to cover food costs and other additional services
such as a charge for the student's private laundry is taxable. Although some basic
foods purchased by consumers are GST-free, food and drink consumed on the
premises of a hostel, where it is supplied, is subject to GST.
3.2.1 Accommodation Provided on School Premises
DECS operates a South Australian Rural Student Association Program (SARSAP)
which provides hostel style accommodation to secondary students at several sites.
In the case of hostels being managed by a sub-committee under the control of the
school council, transactions are processed within the school/school council entity.
The GST treatment of charges to students is outlined above. The school claims any
input tax credits on their expenses where GST is charged.
A hostel located on school premises with the primary purpose of providing
accommodation for students from rural or remote locations who are undertaking
education courses may be operated by a separately incorporated entity. If the entity
is registered for GST purposes, it charges GST on the food component of fees but
the supply of the student accommodation is GST-free. The hostel claims input tax
credits for any GST paid on related purchases. If the entity is not registered for GST
purposes, it does not charge GST on the food component however it is not able to
claim any input tax credits for GST paid on purchases.
Where a single fee is charged to students for the provision of boarding
accommodation that includes the provision of food or additional services, GST is
charged on that portion of the fee that relates to the food and additional service
components only. The ATO will accept an apportionment on a reasonable basis
(supported by evidence) rather than an exact determination of relative costs.
3.2.2 Accommodation Provided by an External Contractor
Where accommodation for students is provided by a GST registered external
organisation located off the school premises, GST is payable.
Under some programs students do not pay the hostel provider, DECS or the school
directly for accommodation and tuition charges. The Commonwealth Government
51
provides a grant payment to DECS that, in turn, pays the contractor for
accommodation related services.
3.2.3 Accommodation Provided by Home-Stay Families
Some international students studying in Adelaide stay with 'home-stay' families.
Some of these students pay a fee to DECS that covers their accommodation and
DECS in turn pays the home-stay families. For students on short-term visits, the
school generally makes the payment to the home-stay family.
If the home-stay family is not GST registered as a provider of accommodation, the
payment from either DECS or the school to the home-stay family does not incur GST
(refer to Chapter 3.23 re coding for IES home-stay payments). If the home-stay
family is GST registered, the charge is taxable and the home-stay family must
provide the school or DECS with a tax invoice from which the school or DECS can
claim an input tax credit.
Any payments that are direct from international students to home-stay families do not
affect the school.
For further discussion on issues related to international student issues, refer to
Chapter 3.23.
3.3 Agency Transactions
Schools on occasion act as an agent for other organisations. Acting as an agent
involves the collection of money on behalf of another organisation and the payment
of that total amount collected to the organisation. Some examples include a Book
Club, a student dinner at an outside venue, a recreational excursion eg movie deal
and photography sales. The receipt and payment for agency transactions are not
recorded on the BAS (code G21).
If the school itself purchases goods from the Book Club/Book Fair it is making a
taxable acquisition and a tax invoice is required so input tax credits can be claimed
(code G11).
52
Some agency transactions may attract a commission, often a percentage of the
sales. Commission is taxable (code G01) and 1/11th of the commission is GST
payable. For details see Chapter 3.11.
3.4 ASSPA (Aboriginal Student Support and Parent Awareness)
ASSPA Committees and Homework Centres are considered to be separate entities
and, irrespective of whether the ASSPA funds are consolidated within the school's
accounts, their transactions must not be reported on the school's BAS. Schools must
treat ASSPA Committees and/or HWCs in the same way that they treat any other
separate entity for GST purposes. In accordance with DETYA (now DEST) policy and
ATO advice provided to DETYA (now DEST), any ASSPA Committee and/or
Homework Centre that is GST registered should not be grouped with a school for
GST purposes.
DETYA (now DEST) policy is that ASSPA Committees should open their own bank
accounts and maintain their financial records independently of a school. However, in
some cases DETYA (now DEST) has given approval for ASSPA funds to be held in
the school's consolidated account, providing it is accounted for separately.
ASSPA and/or HWC Funds Held Separately from School Consolidated Accounts
This makes transactions between the school and the committee more visible for GST
purposes. Schools must apply the same GST treatment to any transactions between
the ASSPA Committee and the school as they would to any other independent body.
ASSPA and/or HWC Funds Held within School Consolidated Accounts
The ASSPA Committee and/or the HWC, being an independent entity, are not part of
the school's registration so all ASSPA funds must be accounted for separately from
school funding and their transactions are not reported on the school's BAS.
The school receipts Commonwealth funding for the ASSPA Committee to the ASSPA
account with the code G21. Any expenses that the ASSPA Committee incurs are
paid from the ASSPA line of the consolidated account with the code G21. (Note that:
The ASSPA Committee is not entitled to claim the input tax credits for its own taxable
expenses on the school BAS.)
53
When the school receives payment from the ASSPA Committee for particular
activities, which are determined according to the ASSPA guidelines, the revenue is
coded according to the nature of the supply provided by the school to the ASSPA
Committee.
The following examples illustrate the principles outlined above:
·
The ASSPA Committee is paying the excursion fees for an indigenous student
consisting of transport costs of $15 (G03) and food costs of $3.30 (G01) per
student.
- If an invoice has been raised for the student then a credit note is created to the
ASSPA account (rather than to the account(s) used in the original invoice) for the
total of $18.30, with the code G21. This is then applied to the student invoice.
- If no invoice is raised for the excursion then the payment by the ASSPA
Committee is processed as follows:
·
DR
ASSPA expense/liability A/C
$18.30
G21
CR
Excursion Revenue A/C
$15.00
G03
CR
Excursion Revenue A/C
$ 3.00
G01
CR
L-ZZZ-3515
$ 0.30
G01
The ASSPA Committee decides to pay half of the cost of $110 (GST inclusive) for
an Indigenous performance group. The AP invoice to the performance group
would be processed as follows:
ASSPA expense/liability A/C
$55
G21
Performance Expense A/C
$50
G11
L-ZZZ-3515 A/C
$ 5
G11
Note: The change in GST treatment of ASSPA transactions as to that previously
advised.
54
3.5 Book Deposits
Deposits held as securities are not recorded on the BAS (code G21). However, if
they are forfeited or applied towards the consideration for taxable supplies (eg lost
books) then GST is payable.
For example, a student pays the school a $100 book deposit. Upon receiving the
deposit the funds are not subject to GST and are coded G21. If the school returns
the $100 deposit to the student there is no GST liability and the cheque would be
coded G21. If however the student has forfeited $40 because of a damaged or lost
book to this value, GST is payable as follows:
·
that GST is charged as 10% of the withheld amount of $40 ie GST payable, being
$4
·
the school pays the student $56 (ie $100 less the $44 owing)
·
the school pays the ATO via its BAS, $4
·
the school keeps the balance, $40, as recoveries to replace the lost or damaged
book
EDSAS entries for the above example would be as follows:
·
Generate a cheque to the student for the balance ie $56 code G21
Then a journal as follows:
- DR
Book Deposit Refunds
$44
G21
- CR
Resource Centre Revenue
$40
G01
$ 4
G01
- CR GST L-ZZZ-3515
A journal can be used for charges to a number of students by calculating the total
amount to be withheld and journal this total in one transaction.
Alternatively, if refunding the balance of a book deposit to one student only, an AR
invoice for $44 ($40 to Resource Centre Revenue and $4 to L-ZZZ-3515 code G01)
55
and AR Credit Note for $44 (to Book Deposit Refunds Account L-ZZS-3510 code
G21) can be created to the individual student.
GST is only payable on the amount of the deposit forfeited by the student. The
liability for the GST is passed onto the student and they are charged the GST
inclusive price.
The GST payable arises in the tax period when the amount is
recognised as being forfeited, that is, in most cases, at the end of the year.
3.6 Building Funds
Monies paid to School Building or Library Funds are not subject to GST (code G21)
as they are considered to be a donation (refer to Chapter 3.15).
In order for donors to be provided with income tax deductible receipts the Building or
Library Fund must first be registered as a Deductible Gift Recipient with the ATO
(refer to Chapter 2.3).
3.7 Cab Charges
Cab drivers are required to provide a tax invoice, if requested, for any fare with a
GST inclusive price of $55 or greater. The tax invoice must show that the total fare
includes GST, or show the amount of GST payable. For amounts less than $55, a
"cab" receipt is all that is required to claim an input tax credit (all taxi operators are
required by legislation to be GST registered). Reimbursement to teachers who
present either a receipt for a fare less than $55.00, or a tax invoice, can be
processed in the normal way and input tax credits claimed (code G11).
If a school uses a voucher system for taxi services the company will supply a tax
invoice. The cab fares include GST and input tax credits are claimed in the usual way
(code G11). Service fees charged by a voucher system operator may be treated in
different ways. Some voucher system operators charge GST on their service fees.
Other operators treat their service fees as input taxed transactions. Schools will
have to examine the tax invoices provided by the operators to establish the correct
treatment.
56
3.8 Camp Deposits
If a deposit is paid as a security to hold a camp booking then the deposit is not
recorded on the BAS (code G21). When the school is invoiced for the full cost of the
campsite booking the deposit will be credited from the total amount, again using the
code G21.
For example, a campsite requires a $200 deposit. This is entered in EDSAS as
follows:
·
Cheque for initial deposit $ 200 G21 Camp Expense Account (no tax invoice
required)
The campsite then invoices the school for full payment of the booking. They charge
$1,760 (GST inclusive) for 20 students to cover accommodation and food (a
breakdown of costs is included). A compliant tax invoice is received showing the full
amount of the cost as $1,760 GST inclusive (with 1/11th of $1,760 being the GST
payable ie $160) less the $200 deposit resulting in $1560 payable to the campsite.
This would be entered in EDSAS as follows:
·
Payment to campsite
Credit note for the deposit
$1,600
G11
Camp Expense Account
$ 160
G11
L-ZZZ-3515
$ 200
G21
Camp Expense Account
·
Apply the credit note and the invoice in 'Approve to Pay'
·
Generate the cheque to the campsite for the balance owing of $1,560.
The tax invoice sent by the campsite must show the full amount of the campsite
charge ie $1,760 in the example, with 1/11th of this charge as GST payable before it
credits the deposit that has already been paid. If the invoice has already netted off
the deposit before GST was calculated, the invoice would not show the correct
amount of GST payable that the school is entitled to claim. In this case the school
should request another invoice from the supplier.
57
3.9 Canteens
Canteens operated by schools are not registered separately from the school council.
They form part of the school/school council GST group. School operated canteens
can elect to be treated as input taxed activities. Most schools have elected to treat
their canteens as input taxed because this choice results in slightly cheaper prices for
the students and simplifies the accounting for GST.
Treating the canteen as input taxed means that GST is not charged on sales of food
to students but, on the other hand, schools are not able to claim any GST paid on
canteen purchases. The GST paid on purchases is incorporated as part of the cost
when calculating the amount charged to students (see Chapter 1.6).
For a supply of food to be input taxed, the following conditions must be met:
·
The supply is made by a canteen run by a primary or secondary school and
operating on its own grounds.
·
All supplies of food must be treated as input taxed.
·
The canteen can only sell food as input taxed. If the canteen sells uniforms or
stationery these supplies must be treated separately. (See Chapter 3.37 for the
GST treatment of the sale of uniforms and Chapter 5.6 for the sale of stationery.)
Any internal transfers of money between the school and the canteen are within the
same GST group (even if a cheque needs to be written between company 1 and
company 2) so are coded G21.
3.9.1 Outsourced Canteens
Where a school has outsourced its canteen, any revenue received by the school from
the private canteen provider is taxable (code G01). The private canteen provider
cannot elect to use the input taxed method.
58
3.10 Child Parent Centres
Child Parent Centres (CPCs) whom operate within a school fall under the school's
registration for GST purposes. Fees charged to parents/caregivers are GST-free as
the service is defined as a pre-school course.
3.11 Commissions
Commissions are taxable; that is 1/11th of the commission earned is GST payable.
When schools have raised funds by selling toys, books or other items, they have
often netted off the payment from the customers (for example students) against the
payment to the supplier in order to retain the commission. It is recommended that
schools treat the sale as an 'agency transaction' thereby separating amounts
belonging to the school and to the company concerned. The commission is the only
amount that is actual revenue for the school.
In EDSAS:
·
Receipt the payments from the customer using the code G21,
and either
·
Pay the total amount of money received to the supplier (code G21), then invoice
the supplier for the agreed amount of commission with 1/11th GST, G01
or
·
Raise an AP invoice for the total amount of money received (code G21) and then
an AP credit note to a revenue account for the commission (code G01, with
1/11th GST). Send the cheque to the supplier for the net payment.
3.11.1 Commission in cash
An example of commission in cash is when schools receive money from a
photographer who has taken student photos.
The GST treatment of a cheque for $400 received as commission is as follows:
59
·
GST payable on this commission is $36.36 (1/11th of $400).
·
The commission of $400 is receipted in CRE using code G01 with $363.64 to the
revenue account and $36.36 to the GST Liability account, L-ZZZ-3515.
The school may need to issue a tax invoice to the supplier to enable them to claim
their input tax credits. In this case, an AR invoice can be raised, code G01 (with
1/11th GST payable), and the cheque receipted against the invoice.
Schools may wish to negotiate with GST registered suppliers to 'gross up' the
commission. The supplier can claim the input tax credits and the school will receive
the full commission.
3.11.2 Bonus Points
Scholastic Australia has obtained a private ruling for the Reading Rewards Program
that enables the redemption of the bonus points to be treated as a Loyalty Program,
which does not attract GST. To enable schools to treat the bonus points as part of
the Loyalty Program they are required to complete an application form for
membership and forward it to Scholastic Australia. Once this form has been
completed and returned, the earning and redeeming of the bonus points are not
subject to GST. However, goods received as commission for participation in the
Scholastic Book Fair are not covered by this ruling (refer to Chapter below
'Commission in kind').
If bonus points are earned through any program other than Scholastic Australia the
bonus points received are considered a taxable supply, that is 1/11th of the value of
the bonus points earned is GST payable. Bonus points are not considered in the
same way as a voucher as they have no physical existence, and the GST liability is
incurred when the bonus points are earned. An AR Invoice is entered for the value of
the bonus points (the supplier may request the tax invoice to enable them to claim
their input tax credits) and at a later stage, when the bonus points are redeemed for a
supply, an AR credit note is generated. If a compliant tax invoice is received from the
supplier for the value of the goods obtained with the bonus points the entries for the
credit note are coded G11 with 1/11th to the GST Liability A/C. However, if no
compliant tax invoice is received for goods that have a GST inclusive market value
60
greater than $55, the input tax credit can not be claimed. In this case, the AR Credit
Note is created for the total of the GST inclusive market value of the goods to the
appropriate expense A/C using the code G14. The actual 'cost' of the GST liability is
met by the particular budget line related to the expense A/C used.
3.11.3 Commission in kind
If a supplier provides a commission 'in kind', ie goods or services, the commission is
still taxable. The market value of the goods received as commission needs to be
determined and this is the value of the commission. Note that Scholastic Australia
have obtained a private ruling such that the bonus points earned as part of the
Rewards Loyalty Program is not considered commission provided the school
completes the appropriate forms (refer to Chapter above). However in all other
cases, including Scholastic Book Fairs, the market value of any goods received from
a supplier for whom the school has acted as an agent is considered commission.
For example, a school sells computing software totalling $2,000 to parents and
receives software valued at $400 from the supplier as commission.
·
All money (ie $2,000) is receipted using code G21.
·
Generate a cheque to the Software Company for the total of the agency
purchases ($2,000), and code G21.
·
Create an AR invoice for the GST inclusive market value of the software ($400).
- $363.64 to the revenue account
G01
- $ 36.36 to the GST account (L-ZZZ-3515)
G01
When the software for the commission is received with a compliant tax invoice, in
order to claim input tax credits:
·
Create an AR credit note for the GST inclusive market value of the software
($400).
- $363.64 to the expense account
G11
61
- $ 36.36 to the GST Liability account
·
G11
Apply the credit note to the invoice in the CRE
If no compliant tax invoice is received for goods that have a GST inclusive market
value greater than $55, the input tax credit can not be claimed. In this case, the AR
Credit Note is created for the total of the GST inclusive market value of the books ie
$400, to the appropriate expense A/C using the code G14. The actual 'cost' of the
GST liability ie $36.36, is met by the particular budget line related to the expense A/C
used.
Alternatively the transaction can be processed as a Journal by debiting both the
Information Technology Expense and Liability A/C, code G11, and crediting the
Information Technology Revenue and Liability A/C, code G01. If no compliant tax
invoice is received for goods that have a GST inclusive value greater than $55, the
debit transaction is coded G14 to the Information Technology Expense A/C with no
debit to the Liability A/C.
3.11.4 Vouchers
The GST legislation states specific rules for the treatment of vouchers such that the
GST liability is incurred when the voucher is redeemed, not when the voucher is
received. To be entitled to the concession the voucher must have physical existence
ie a voucher, token, coupon or similar article, with the monetary value stated.
When the voucher is redeemed against a purchase, enter the full amount of the
invoice with the GST breakdown using code G11 to the Expense and Liability A/Cs
(provided a tax invoice is received). Enter the voucher amount as a Credit Note (with
1/11th GST) using code G01 to the Revenue and Liability A/C's. An AP credit at G01
reduces the claim for input tax credits and has the same GST implications as
entering an AR invoice for the commission at G01.
An example is provided on the next page.
62
Example:
·
A $50 sports equipment voucher is received. Sports
Equipment to the value of $220 (GST inclusive) is purchased.
A compliant tax invoice is obtained for the value of the purchase.
- AP Invoice
- AP Cr Note
E-CHP-7172
$ 200.00
G11
L-ZZZ-3515
$ 20.00
G11
R-CHP-6805
$ 45.45
G01
(you may need to add this commission code)
L-ZZZ-3515
$
4.55
G01
·
Apply both the invoice and credit note in 'Approve to Pay'
·
Generate a cheque to the supplier for $170 (ie $220 - $50 voucher) which is sent
with the voucher.
Schools should negotiate with GST registered companies so that the commission
received is 'grossed up' (ie GST is added to the commission). In the case of
payments 'in kind', if the market value is based on the GST inclusive price then an
allowance has been made for the GST. If it is based on the GST exclusive price then
sites should negotiate with the supplier to gross up the value, as 1/11th of its value is
still taxable. The school is liable for 1/11th of the commission received as GST
payable irrespective of whether the commission has been 'grossed up'.
3.12 Community Libraries
Some schools have a community library on site whose services extend beyond the
school community. Usually the local council contributes funding for the provision of
this service. A management committee may oversee the operations of the library,
typically consisting of school, school council, local council and community
representation.
In most cases the ultimate responsibility for the service resides with the school
council. In this case, for GST purposes, the community library falls under the school
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council's registration and any associated transactions are included in the school's
BAS. Grants paid by the local council to the school's community library can be
considered as an appropriation (refer to Chapter 3.20).
However if a binding
agreement exists between the local council and the school related to the library
service to the community this would constitutes a supply and the grant would be
taxable. The local council would then 'gross up' the payment and also would require
a tax invoice from the school or the library for the grant (code G01) to enable them to
claim an input tax credit for the GST paid. The transfer of funds from the school to
the community library is not subject to GST as it is a transaction within a GST group.
If the community library is separate from the school/school council, that entity will
have considered its status under the new tax system independently.
If it is
separately registered any transactions between it and the school/school council is
subject to GST.
3.13 Competitions
If an external organisation sells a test to a school for example, the XYZ Maths
Competition, the GST registered organisation charges the school GST (code G11).
XYZ is not providing an education course. It is selling a test to the school and
therefore the supply of the test is taxable.
If the test is deemed to be part of the education course provided by the school, then
the school charge to the students is GST-free (code G03). The school is providing
an education course to the students, where, in this case, the test is part of that
course. For example if the XYZ test costs $3.30 GST inclusive, the school charges
the student $3 GST-free (code G03). If the test is not deemed to be part of an
approved education course, then the school charges $3.30 (code G01).
3.14 Corporate Credit Card Statements
A registered entity that holds a corporate credit card statement from certain specified
providers can claim input tax credits without holding a tax invoice. The input tax
credit may be claimed if the statement contains information similar to that required of
a tax invoice.
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The ATO has indicated that financial institutions which use:
·
VISA International
·
American Express International
·
Diners Club International
·
MasterCard International
Are considered to be corporate card providers.
Statements from the institutions listed above can be accepted as compliant tax
invoices for taxable supplies. However tax invoices do need to be obtained from
suppliers where the supply is a mixed supply (ie taxable and GST-free/input taxed) or
a taxable supply where the GST is not 1/11th of the price (eg long-term
accommodation).
Where corporate cards are provided by an institution other than those listed above, a
tax invoice must always be obtained from the supplier in order to claim input tax
credits.
Note: Currently only AMEX is the corporate credit card provider for the whole of
government.
3.15 Donations
A donation is the provision of funding that is untied in every way (ie without
obligations, a supply or conditions attached). It is not a donation if the provision of
funds is attached to any condition, that is, if the school is required to provide goods or
services (refer to Chapter 3.20 on Grants) or the 'donor' receives any material gain.
For example, if an accounting firm provides a school with surplus computers valued
at $5,000 with no conditions attached, it is a donation (code G21). If the school
decides to insert in its newsletter an acknowledgment for the donated computers, it is
still a donation. Mere recognition or acknowledgment of a donation does not
necessarily constitute material gain to the giver and would not alter its status as a
donation or gift.
65
If, however, the local accounting firm providing the school with the surplus computers
placed the condition that a small advertisement be placed in the school's newsletter
that would give a material advantage to the accounting firm, it would not be a
donation. This condition would be a form of advertising and therefore be taxable.
The school would be liable for 1/11th of the $5,000, ie $454.55 as GST payable.
However the school is able to claim an input tax credit for the acquisition ie 1/11th of
the $5000 'cost' of the computers, provided the supplier is GST registered and
provides a compliant tax invoice. The school also needs to issue a compliant tax
invoice to the supplier for the value of the advertising to enable them to claim their
input tax credits. For supplies of equal value, the GST paid and claimed as an input
tax credit are the same. See Chapter 3.41 on 'Non-cash sponsorship'.
For the tax treatment of advertising or sponsorship see Chapter 3.41.
If the school makes a donation to a charity (ie a payment made freely with no
expectation of material gain) the transaction is not included on the BAS (code G21).
3.16 Excursions and Camps
The supply of an excursion, field trip or camp by a school is GST-free (code G03)
provided it is directly related to the curriculum and is not predominantly recreational
in nature. However, the food component is a taxable supply (code G01) and GST
must be charged. Although in most cases a school excursion or camp will be directly
related to the curriculum and not predominantly recreational, if it is considered
predominantly recreational, GST is charged on all components, not just food.
The school is entitled to claim input tax credits on all acquisitions related to the
camp/excursion where GST has been charged (code G11), irrespective of the
consequent GST treatment of the supply to students.
The charge to students to cover all camp/excursion costs eg transport,
accommodation, entrance fees is based on the GST exclusive cost (the school
claims the input tax credits for any GST paid). However, the GST exclusive food cost
must then have 10% added as GST payable. If the camp/excursion is not
predominantly educational, the 10% GST must be added to all other costs. Refer to
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Appendix 5.11 for an example of how to determine camp/excursion costs and
charges.
When establishing the food charge to students the ATO will accept an estimate
rather than an exact determination of relative costs, providing it has been made on a
reasonable basis (supported by evidence such as an outline of estimated costs). It is
the actual amount that is charged to students for the food cost that is taxable,
irrespective of the actual food expense that is incurred. Even if an excursion/camp
involves students assisting in the preparation of the food, GST is payable on the
charge to the students that is attributable to food.
The Principal must determine the extent of curriculum content to assess whether the
excursion/camp can be substantiated as not predominantly recreational. To
determine whether an excursion, field trip or camp is not predominantly recreational
ie it is predominantly educational, relevant factors that could be considered include
the purpose of the activity and curriculum links, the time when it is offered, the cost
and who would be attending. The basis for any decision making should be applied
consistently across all excursions/camps.
While some non-related curriculum activities may take place during an excursion,
such activities will generally not alter the GST-free status of the excursion providing
the activities overall are predominantly part of an education course. For example, an
outdoor education camp may include a trip to the movies but if the camp
predominantly relates to an approved education course being provided by the school,
the charge for the movie will still be considered GST-free. The activity is being
undertaken as part of a camp that is considered not predominantly recreational.
Schools are required to keep supporting documentation that substantiates the GST
treatment
of
camps/excursions.
An
example
template
that
satisfies
GST
requirements is included in Appendix 5.11 and is available on the website
www.gst.nexus.edu.au . Principals must verify the curriculum and educational
components of the excursion/camp and the GST charge where applicable by signing
this or some other similar form of documentation. A copy of the letter going home to
parents with details of costs could be used providing it addresses the requirements.
Any documentation is to be kept and filed for audit purposes.
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The camp and excursion approval form ED169 has provision for Principal verification
of the camp/excursion as predominantly educational but does not detail GST
treatment of charges. It is intended to satisfy the Camps and Excursion Guidelines
for Schools rather than for financial audit purposes.
The following examples illustrate how various excursions may be interpreted for GST
purposes.
·
An end of year excursion to the cinema is held for students during Activities
Week. This would be assessed as predominantly recreational and therefore the
total supply, made by the school to the students, would be taxable.
·
A primary school excursion to the city for four days includes a visit to the art
gallery, museum, and other visits that relate directly to the curriculum. The
students also went to the beach for a picnic and to a theatre to view a movie. As
the time spent at the theatre and the beach totalled only five hours over the four
days, the excursion was assessed as predominantly educational and therefore
the supply made by the school to the students is GST-free, other than the food
component which is taxable.
·
An end of year school formal is organised where food is provided. It may be
argued that the school formal forms part of the student's education course
however the activities conducted at the formal should be considered. For
example, how much time is spent undertaking curriculum related activities,
compared to recreational related activities? In addition, the supply of food, drinks
and any fees paid by attending parents, other family and guests are taxable. A
school formal may be interpreted as a taxable supply (code G01) on the basis of it
being considered predominantly recreational. Furthermore, it may be easier for
schools to treat the total supply as taxable so as to avoid the complexity of
charging for a mixed supply and charging different amounts to different
participants (ie students, parents, guests etc.). In addition, if the total charge to
attendees equates exactly to the amount quoted by the venue, the school may
also treat the receipt and payment of the ticket cost as an agency transaction
(code G21).
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·
Students from all over the state participate in the secondary schools swimming
carnival. Participation in the carnival is directly related to the curriculum of a
secondary course. The supply of the excursion is therefore GST-free. If the
supply made by the school to the students for the carnival included the provision
of food or a taxable supply such as a uniform, GST would be charged to the
students on those components of the supply.
·
A school held a ski trip in July for the first twenty paying students. The ATO may
refer to the following factors in determining that such an excursion is actually a
taxable supply:
- Most students will not be undertaking the ski trip. In other words, students can
achieve all the objectives of the education course without undertaking the ski trip.
- The ski trip is not designed to cater for most of the students undertaking the
course, ie, only twenty can attend.
- A reasonable person from outside the school would more than likely judge the trip
as recreational.
These factors may not be conclusive in forming a judgement however they may
support the view that it is predominantly recreational. If upon audit, the ATO ruled
that such an excursion was a taxable supply, the school would be liable for the GST
payable and other related expenses, such as interest and possible ATO imposed
fines.
Any additional costs for teachers and parents to attend an excursion or camp are
typically covered in the overall charge to students in which case there are no GST
implications. However, on the rare occasion a teacher or parent is required to pay to
attend a camp or excursion, for example a ski trip, the charge is taxable. These fees
are taxable because the parent/volunteer or teacher is not undertaking an 'education
course' as defined in the legislation that relates to the excursion. The teacher may
be able to claim a personal income tax deduction for any work-related expense.
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3.16.1 Subsidised Camps/Excursions
A supply by a school made for less than 75% of the GST inclusive cost of providing
that supply is considered non-commercial and, as such, is GST free. If a school
subsidises the cost of a camp so that the charge to students is less than 75% of the
GST inclusive expense incurred for that camp, the camp can be treated as a GST
free supply, including any food charge and irrespective of whether the activity is
predominantly educational or not. For example, a camp with accommodation costs
$825 and transport $137.50 (GST inclusive) and food costs $412.50 (GST inclusive).
Total costs
$1375 (GST inclusive)
No. Of students
25
Cost per student
$55 (GST inclusive)
Non-commercial cut-off
75% of $55 = $41.25
($1375 ¸25)
If the students are charged less than $41.25 for attending the camp, the supply is
GST-free as it is considered a non-commercial supply. This includes the supply of
food on the excursion/camp and if the camp is recreational, all other components as
well.
Documentation substantiating that the supply is provided for less than 75% of the
GST-inclusive cost is to be filed and kept for audit purposes.
3.17 Expenses Paid by the Department
GST is paid and claimed as input tax credits by DECS on expenses paid on behalf of
schools, such as telephone and security charges. There is no impact on schools.
For Partnerships 21 schools, DECS pays expenses on behalf of schools as normal.
DECS pays into the school's SASIF account the balance of any appropriation funding
owing after expenses have been paid. This payment is an appropriation grant and
therefore is not subject to GST (code G21). Refer to Chapter 3.20.
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3.18 Exports
Supplies are generally GST-free if exported from Australia within 60 days after the
receipt of consideration or the date of invoice. If payment to the school is made by
instalments, the supply is GST-free if the goods are exported within 60 days from
when the school receives the final instalment or provides an invoice for the final
instalment.
3.19 Fundraising
Schools can elect to treat certain fund-raising events as either input taxed or taxable
but must keep a record of which treatment is elected for the activity. Raffles, bingo,
non-commercial activities and the sale of donated second-hand goods are GST-free.
3.19.1 Input Taxed or Taxable Events
The types of fund-raising activities that schools can elect to treat as either input taxed
if irregular (no more than 15 'like' activities a year) or taxable include:
·
fetes, performances, gala shows, fundraising dinners, charity auctions, fashion
parades or similar events
·
an event comprising the sale of goods for $20 or less (per item), other than the
sale of alcohol or tobacco products, where the sale of the goods is not part of the
school's normal business eg
·
sausage sizzles, cake stalls etc
·
chocolate, lamington and sock sales if not commission based
·
food sold to staff by students if the intention of the activity is fundraising
If such events are elected to be treated as input taxed, any GST paid on expenses
related to the activity can not be claimed as an input tax credit (ie the total GST
inclusive expense is coded G13). The revenue from an input taxed activity is coded
G04.
71
Where possible, it is generally more advantageous for schools to treat fundraising
events, as defined above, as input taxed activities. If the school paid more GST on
purchases than 1/11th of the revenue received (ie the activity ran at a loss), it would
be more advantageous to treat the event as taxable.
Activities that form a part of a series or are a regular run of like or similar events (ie
more than 15 a year) are considered part of the school's normal business and do not
fall into the definition of a fund-raising event. For example, an activity conducted on a
weekly basis could not be treated as an input taxed fundraising activity.
Note: When checking that the number of similar activities has not exceeded 15 in a
year, the activities of all sections of the school must be considered ie fundraising
events run by the school sports clubs and the parents' clubs must be included unless
they are set up as separate non profit sub entities (refer to Chapter 3.31).
Where the school is acting as an agent and receives a commission, the activity
cannot be treated as input taxed, as commissions are taxable.
The sale of alcoholic beverages cannot be treated as input taxed (ie is taxable) when
the activity is the actual sale of alcoholic products. However, this restriction does not
apply where the fundraising activity is a fete, ball, gala show, dinner or performance,
which involves the sale of alcoholic beverages.
3.19.2 GST-free Activities
Raffles, bingo, non-commercial activities and the sale of donated second-hand goods
are GST-free (code G03). Non-commercial activities are those activities that relate to
a supply for less than 50% of the GST inclusive market value, or less than 75% of
cost (eg goods sold at a garage sale). The school is entitled to claim input tax credits
for any GST paid on purchases made in the course of making GST-free supplies.
See Appendix 5.9 and 5.10 for fundraising 'and sale of goods' flow charts.
72
3.19.3 Other Specific Fundraising Activities
3.19.3.1 A-Thons
Where an event such as a "Read-a-Thon" is run by a school, the revenue is
considered to be a donation. The donor is not receiving a service or supply in return
for the payment. Donations are not taxable and are not recorded on the BAS (code
G21).
Where such an event is run by an outside agency and the school receives a
commission, the commission is taxable.
3.19.3.2 Casual Days
Casual days can be treated as an input taxed fundraising activity.
3.19.3.3 Tuckshops
Tuckshop days that are held regularly are not considered a fundraising activity under
this definition, as they are considered to be part of the normal business activity of the
site. However the school can elect to treat the activity as input taxed in the same way
as a canteen can be treated as input taxed.
If the school holds occasional 'tuck shop' days where they sell meals or snacks to
students or staff, this activity can be treated as an input taxed fundraising activity
(code G04) as it would be classed as an event comprising the sale of goods for $20
or less (per item). Any expenses related to this activity can not be claimed as an
input tax credit (ie the total amount, including GST, coded G13).
3.19.3.4 Recycling Cans
The deposit schools receive from recycling depots for returnable cans collected by
the school is GST-free (code G03) providing the cans retain their original character
(although they can be crushed for more efficient handling) and the school does not
make any payment to the supplier of the cans when they are collected.
73
3.19.3.5 Services eg car wash
The supply of services eg car washing or gardening can not be treated as an input
taxed fundraiser according to the legislation. The supply is taxable (code G01 for the
revenue and G11 for any related expenses) unless the activity is run by a non-profit
sub-entity (refer Chapter 3.31).
3.19.3.6 Student Representative Council (SRC) fundraising
The SRC can either be included as part of the school/school council GST group, with
all revenue and expenses of the SRC recorded on the BAS and the election made to
treat certain fundraising events as described in the legislation as input taxed, or the
SRC can operate as a non-profit sub-entity. As a non-profit sub-entity, the SRC does
not include their expenses or revenue on the school's BAS but can donate any profit
to the school (G21). In this case, the fundraising activities conducted by the SRC
would also not be included in the tally of 15 allowable 'like' input taxed fundraising
activities. Refer to Chapter 3.31 re the requirements to set up a non-profit sub-entity.
3.20 Grants and Appropriations
Payments between one government related entity and another government-related
entity that are not part of a commercial transaction* are not subject to GST where the
payments (ie funds) are covered by an appropriation.
A government appropriation refers to money allocated for general government
activities either by a statute of the Commonwealth, a State or a Territory, or by
delegated legislation. In many cases, the purpose of the funding is specified in very
general terms. All DECS sites (including School Councils) and other government
agencies or bodies (eg Department of Human Services, Local Councils etc) are
*
A commercial activity refers to one where goods, services or property rights flow to the payer in
return for payment. Property rights include the right to use intellectual property that is the result of a
project funded by a grant payment to a government-related entity. Incidental requirements such as
accountability requirements or compliance with departmental controls are not considered 'goods,
services or rights'.
74
government related entities. Grants made from government to schools that fall into
the appropriations provision and do not constitute fees for goods or services are not
subject to GST (code G21). If, however, a government related entity is purchasing
specific goods or services from a school, the grant is considered a taxable supply
and GST is payable (code G01).
3.20.1 Grants received from DECS
School funding, providing it is non-commercial in nature, received from both the
Commonwealth Government and the State Government (eg DECS) to a school is
considered appropriation funding, and is not subject to GST (code G21). Some
examples of DECS grants to government schools which are not subject to GST
include the following: DECStech, Early Assistance, Vacation Counselling Service,
VET in Schools, Child Protection, Disability Schools Program, Rural Hostel Program,
Kickstart for Youth, and VET Industry Training Program. This is not intended to be an
exhaustive list.
3.20.2 Cluster funding "down the line"
A school may hold appropriation funding received from DECS for joint use with other
schools eg a cluster arrangement. If at a later date, the school re-allocates these
funds to the other schools in the cluster, the payment or transfer of these funds is not
taxable under the appropriations provision (code G21). This includes the situation
where the cluster schools are requesting reimbursement from the cluster funding for
a specific amount (eg for 2 days TRT and costs of catering supplied).
However, not all payments between sites are classified as appropriations. When the
Department or other government-related entity, including a school, provides a grant
to a site in exchange for specific goods, services and/or rights, it is considered a
taxable supply. An example of a taxable supply between schools would be where
one school invoices another school for TRT reimbursement that is not from cluster
appropriation funds or project appropriation funds but is a result of a supply made
directly to that school eg a teacher from one school was released to work with
another school and reimbursement of the TRT cost incurred to replace the teacher is
sought.
75
3.20.3 Grants received from outside of DECS
Grants paid to a school by organisations outside of DECS may be subject to GST.
The grantor will generally determine the GST treatment of the funding. However, the
following guidelines are to assist in clarifying the different GST treatment.
If the organisation providing the grant is another government related entity, and the
grant is appropriation funding, then it is not subject to GST (code G21). For example,
SSABSA, a government related entity, have allocated funds for Literacy Programs in
schools. SSABSA have provided guidelines on possible projects that a school may
wish to undertake, and also require a report or acquittal on how the funds were used.
This grant is considered appropriation funding. The report is not a supply as it is
incidental to the purpose of the funds which is the provision of a literacy program.
However a government related entity eg the Local Council, may choose to treat a
funding payment as a taxable grant (code G01). In this case they would usually
'gross up' the grant to cover the GST liability and may request a tax invoice from the
school. Other government entities such as the Department of Family and Community
Services (FACS) issue a recipient created tax invoice to the school for any taxable
grants (code G01).
If a payment is not appropriation funding but there is no obligation tied to the grant
and no other supply or service is to be provided by the school ie the donor does not
receive any advantage of a material character in return for making the grant, it is not
a supply and therefore no GST is payable (code G21). Public recognition or
acknowledgment of this type of grant does not necessarily constitute material gain.
For example, a service club has donated a mini bus to a school for use in the
schools' Special Education Program. The bus has a small sign on the door "Donated
by Greenglades Service Club". Providing there is no obligation tied to the supply of
the bus other than the expectation that it will be used for the Special Education
Program, the supply of the bus would be considered a donation. The creation of
expectations between the parties does not establish a supply and there is no material
gain for the service club by the acknowledgment on the bus door. However, if the
service club insisted on a sign or endorsement in a prominent position as a condition
76
of the grant, such an obligation could be interpreted as sponsorship or advertising
and the supply would be taxable (code G01).
If a grant is of a commercial nature in that it involves a supply of services, goods,
rights or an obligation then it is taxable (code G01). Where the grant involves a
supply of only a right or obligation there needs to be a binding commitment* supplied
by the grantee. For example, a publishing company supplies resources to a school
with the requirement that the school provides written feedback as to the suitability or
success of the resources. The feedback is a condition of the supply and could be
seen as providing a material gain to the publishing company in terms of market
research. This supply would be taxable (code G01) with 1/11th of the value of the
supply as GST payable. If however, the publishing company did not stipulate that the
written feedback was a condition of the supply, the resources provided would be
treated as a donation to the school (code G21).
GST registered organisations making a taxable grant may decide to increase or
'gross up' the grant to cover the GST liability as they are entitled to claim an input tax
credit equal to 1/11th of the grant and are issued a tax invoice by the school.
3.21 Hire of Facilities and Equipment
Schools must charge GST on the hire of the facilities and equipment to outside
organisations or individuals (code G01). This includes the hire of rooms within the
building and sporting facilities.
The hire of musical instruments by the school to students enrolled at that school who
are undertaking a music course as part of the curriculum is GST-free (code G03)
*
For there to be a supply of an obligation, the obligation must be binding. The creation of expectation
does not establish a supply. Examples of arrangements that indicate whether an agreement regarding
an obligation is binding include a contract, a provision that the grant is to be repaid in specified
circumstances, the provision of a guarantee or an agreement such as a deed. The agreement does
not need to be in writing.
77
irrespective of whether the school originally hired the musical instruments from an
external provider or owns the instruments. If a school hires musical instruments to
another school, the supply is taxable. However, if this school then on-charges their
students for the musical instrument hire, this charge is GST-free.
A non-refundable charge to students for lock or locker hire is GST-free (G03).
However, if the payment is a refundable deposit for the locker or lock use it is coded
G21. If the deposit is forfeited due to loss of the key or damage to the locker then the
forfeited component is taxable (code G01) with 1/11th of the amount forfeited as GST
payable.
3.22 Honorarium Payments to Contractors
Payments of token amounts, for example, a payment to a parent for umpiring
sporting activities or volunteer helpers are effectively contract payments. That is,
schools are paying a contractor for a service. To avoid withholding requirements for
payments over $50 (GST exclusive) an ABN or 'Statement by supplier' form is
required.
The normal registration issues under the new tax system apply. If the contractor
believes they are carrying on an enterprise they should have applied for an ABN. If
they are not carrying on an enterprise, for example, their service is part of a hobby or
a recreational activity, or there is no real expectation of profit or gain, they should
provide the school with a completed 'Statement by a supplier' form in order to avoid
the withholding tax requirement. Refer to Chapter 1.12. If a 'Statement by supplier'
form is provided, the payment is coded G14.
3.23 International Students
International students studying in Adelaide do so on either a long-term or a shortterm basis. In both cases the students pay International Education Services (IES),
DECS.
IES collect the money from the students on behalf of the participating schools to
cover the charge for the education course undertaken by the student. The charge for
an education course by a school is GST-free. However IES charge the school a
78
commission for the services that they provide in making the initial arrangements,
enrolling the students and collecting the fees. The charge by IES for this commission
is taxable.
3.23.1 Payment received by the school
Schools receiving international students will receive a payment from IES into their
SASIF account for the tuition fees collected (the full 100%) which are GST-free, and,
in the case of short term visits as part of the Study Tours Program, an additional
amount for the home-stay component, which is an agency transaction.
IES will request from schools the information regarding student enrolment ie the
names and enrolment dates of the students, and an invoice for payment. If, for
example, a school is to receive $3600 for a Study Tour Program which consists of
tuition fees of $2000 and a home-stay payment of $1600, the invoice would be
processed by the school with $2000, code G03, and the home-stay component, code
G21.
Note: The supply between IES and the school for tuition fees and home-stay is not
taxable. This process has been changed from the procedure advised for 2000 and
2001 to more accurately identify the taxable supply (ie the commission) and also so
that IES generates a tax invoice for this supply.
Once the school receives the IES payment into SASIF, the invoice is then credited
using the same GST codes as the original invoice. The journal entries for the SASIF
payment are then processed as follows:
DR
A-ZZZ-1210 (SASIF)
3600 G21
CR
R-ZOE-6890 (Overs Stud)
-1600 G21 (Home-stay)
CR
R-ZOE-6495 (OS Fees)
-2000 G03 (Tuition fees)
3.23.2 Payment to IES for the commission
IES will send the school a tax invoice for the commission which will be 'grossed up' to
include GST. Schools will pay this using the code G11 and claim the input tax credit.
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3.23.3 Home-stay Payment
The payment from IES that relates to the provision of home-stay accommodation
from IES to schools for students on short-term visits as part of the Study Tours
Program is considered an agency transaction ie both IES and the school are acting
as an agent between the student and the home-stay family. This portion of the
payment from IES is not recorded on the BAS (code G21).
If the payment to the home-stay parent from the school is equal to the home-stay
payment received from IES, it is not recorded on the BAS (code G21). However,
using an example where IES pays the school $160 for the home-stay, the following
situations could occur:
·
The school pays more than $160 per week to the home-stay family eg $200, so
the additional payment by the school of $40 is considered a school expense paid
to a non-registered supplier. The payment to the home-stay family of $200 is then
processed with $160 code G21 and $40 code G14.
·
The school pays the home-stay family less than $160 eg $140, so the decrease in
the payment is seen as a commission ($20) from the parent to the school and is
coded G01, with 1/11th as GST payable. In this case the payment to the parent is
processed as follows:
AP Invoice
$160.00
G21
(Expense A/C)
AP Credit Note
$ 18.18
G01
(Revenue A/C)
$
G01
(L-ZZZ-3515)
1.82
Documentation needs to be kept by the school substantiating that the payment to the
home-stay family is private in nature.
3.24 Intra-School Transfers
Transactions within the GST registered group, for example between the school and
school council, are not subject to GST (code G21).
This includes any transfer
between the canteen and the school.
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3.25 Levies
Some schools charge a levy for additional materials not covered by other student
fees: for example, a technology levy or library levy.
The levy is not subject to GST if it is for a GST-free supply such as an education
course or for administrative services directly related to the supply of such a course.
For example, a levy to fund computers, laboratory equipment or books in a school is
therefore GST-free (code G03). If the school charges an excursion levy in the
Materials and Services fee, code G03 but a part of it is later used for a taxable
component eg food, a journal would be required to change the appropriate amount
from code G03 to G01.
Fundraising levies incorporated in to the Materials and Excursion Fee are considered
a fee charged for the provision of school facilities and are GST-free (code G03). It is
irrelevant whether the fee charged is voluntarily or compulsorily paid.
3.26 Library Fines
A school library may issue fines to students for overdue, lost or damaged books. If
the fine is of a nominal amount then it is considered to be a school administration
service charge, so is GST-free (code G03). However, if the fine approximates the
cost of replacing the lost or damaged book then it is seen as consideration for the
supply of the book and is taxable (code G01).
3.27 Materials and Services Charge
A comprehensive guide to the treatment of the Materials and Services Charge is
outlined in the DECS publication "2001 School Charges - Information Pack"
distributed in January 2001. Further information is also available by contacting the
Global Budget Unit.
The supply of an education course by a school, and administrative services provided
by the school that are directly related to the supply of the course, are GST-free (code
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G03). Course materials supplied by a school that are necessarily* consumed or
transformed by the students when undertaking the education course are also GSTfree, including any charges to cover the provision of such materials. Other charges
that relate to the supply of an education course such as the lease or hire of
curriculum related goods eg musical instruments, curriculum related excursions and
activities (not including any food charge), curriculum related instruction (eg tutors)
and the supply of facilities (eg a library charge) are also GST-free. Book deposits are
not subject to GST and are not reported on the BAS (code G21) unless forfeited
through the loss of or damage to a book by the student, when they become taxable
(code G01).
If materials supplied by the school are not consumed or transformed whilst
undertaking the course, they are taxable. For example, the sale to a student of items
such as a school magazine, uniform or stationery that is not necessarily consumed or
transformed (eg ruler, calculator, scissors or school bag) are all taxable supplies
(code G01). However, in the case of class sets of non-consumable items that are
held in classrooms eg scissors or rulers, there is no GST impact for students as the
ownership of the items is retained by the school.
Refer to Appendix 5.6 or the DECS publication "2001 School Charges - Information
Pack" for a more comprehensive list of both GST-free and taxable supplies.
Only GST-free supplies can be included in the Compulsory Materials and Services
Charge for 2001 and future years. The School Council Approved Voluntary Charge
can be used to provide both GST-free and taxable supplies to students.
Detailed records need to be kept by the school on how the school charges are
determined ie what is included in the Compulsory Materials and Services Charge and
what is included in the School Council Approved Voluntary Contribution. A Schedule
outlining the breakdown of the Compulsory Materials and Services Charge and the
School Council Approved Voluntary Contribution is required to be completed by the
Principal and approved by resolution of the School Council. A copy of this schedule
*
Refer page 1 Chapter 3
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must accompany the invoice for school charges to parents/caregivers and adult
students, and also be kept for audit purposes (refer to the appendix for a copy of the
Schedule format or to the DECS publication "2001 School Charges - Information
Pack").
3.28 Membership Fees and Clubs
If a school is a member of any GST registered organisation or club, it pays GST on
its membership fees. The school is entitled to claim any GST paid as input tax
credits provided a compliant tax invoice is obtained (code G11).
Within schools, there are various clubs covering such activities as chess, rowing,
debating etc. Transactions associated with the club may or may not be processed
within the school's accounting system.
Students may pay a membership fee to
belong to such clubs.
Consider the example of a school rowing club where all expenses associated with its
activities are paid through EDSAS and students pay a membership fee. All GST paid
on purchases is claimed as an input tax credit by the school (code G11).
If
membership of the club is considered to be a part of an education course, any
membership fee charged to the student is GST-free (code G03). If not related to an
education course, GST is payable by the student (code G01).
If club transactions are processed outside of EDSAS, the issue to be determined is
whether or not the club is truly independent of the school/school council. If the club
were determined to be independent of the school entity, the club would have
determined its treatment of the new tax system. Such an organisation may have
chosen not to register for GST.
More than likely however, clubs would be under the principal's or school council's
control. If such a club is using a separate accounting system, the BAS produced by
the school within EDSAS (see Chapter 4.8) must be modified to include the
transactions recorded by the club.
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3.29 Outdoor Schools
Outdoor schools charge other schools a fee per student for services, accommodation
and food. These other schools then charge their students a fee for attendance.
The fee charged by outdoor schools to other schools is taxable, as it is a transaction
between two separately registered entities (code G11).
The school, when invoicing their students, must determine if the camp/excursion is
part of an approved education course (refer Chapter 3.16).
If it is part of an
approved education course, fees charged to the students are GST-free (code G03)
except for the component that relates to food (code G01). The outdoor school will
need to provide a breakdown of the fee detailing the amount attributable to food.
For example, the outdoor school fee is $22 per day GST inclusive, which is
comprised of $11 for food ($10 plus $1 GST) and $11 ($10 plus $1 GST) for the
activities and accommodation. The outdoor school invoices the school for $22 ($20 +
$2 GST) per student. The school pays the outdoor school $22 (code G11) and
claims the GST of $2 per student as an input tax credit. The school in turn, charges
the student $21 ($10 food + $1 GST coded G01 plus $10 accommodation coded
G03). As the accommodation and activity supply is GST-free (the camp is considered
part of an education course) only the GST exclusive amount is charged to students.
Items sold by the outdoor school, such as posters and books, are taxable.
3.29.1 Out of School Hours Care (including Vacation Care)
The supply of OSHC and/or vacation care by OSHC services located on DECS sites
is GST-free as it is a supply of childcare as set out by the GST Legislation. Childcare
for GST purposes include family day care, occasional care, OSHC and vacation care.
Goods and services that are directly related to a supply of childcare and supplied by,
or on behalf of, a childcare provider, are GST-free. For example, supplies of food,
bed linen and nappy wash services supplied as part of the care are GST-free (code
G03). Note that the GST treatment of food supplies is different for Childcare
compared to that for schools.
84
OSHC services located on a DECS school site fall under the school/school council
entity. If separate accounting systems are being used by the OSHC service details
all of their financial transactions for the month must be incorporated into the school's
BAS. In this case, when the school receives a refund from the ATO, the school
needs to pay the appropriate part of it back to the OSHC.
Note: OSHC grants from Family and Community Services (FACS) can be either
appropriation funding (G21) or taxable (G01). In the case of taxable grants, FACS will
issue a recipient created invoice. It is important that this invoice is passed onto the
Finance Officer so that the payment can be correctly coded for GST.
(Currently, to avoid inconsistencies in the BAS reports as a result of a direct credit to
the Liability A/C, the taxable revenue should be credited with the total amount to a
Revenue A/C, code G01, then a journal entry, code G21, to transfer the GST amount
to the L-ZZZ-3515 A/C.)
3.30 Parents' Clubs (and Non-profit Sub-entities)
Parents' clubs may elect to be treated for the GST either as a separate "non-profit
sub-entity" (provided their annual turnover is less than $100,000) or as part of the
school/school council GST group. Both of these options are available whether the
club operates an independent bank account or is consolidated with the school/school
council account. However if the non-profit sub-entity status is chosen this election
must be minuted by the school council or the school finance advisory committee and
the decision holds for the following 12 month period. If the non-profit sub-entity's
transactions are processed in EDSAS (code G21) it must also have a separate line
so that the transactions can be separately identified.
3.30.1 Part of the school/school council GST group
In this case clubs:
·
are able to claim input tax credits on their acquisitions (provided a compliant tax
invoice is held) unless the acquisitions are for input taxed fundraising events
·
can use the school/school council ABN
85
·
have their transactions (ie all revenue and expenses) recorded on the BAS
·
must provide the school with documentation (including tax invoices to support
input tax credit claims) which accounts for all supplies and acquisitions, not just
profit
·
include any input taxed fundraising activities in the tally of 'like' events (refer to
Chapter 3.19)
For Parents' clubs that are part of the school GST group, transactions are treated the
same as other school transactions. The GST paid on acquisitions is claimed as an
input tax credit (code G11) and GST is charged on taxable supplies (code G01).
However, for input taxed fundraising activities, acquisitions are coded G13 (no input
tax credits are claimed) and supplies are coded G04 (no GST is charged).
Transactions between the P&F club and the school do not incur any GST (code G21)
as they are within the same GST group.
For Parents' clubs that operates a separate accounting system, arrangements need
to be made to include their financial transactions for the month (ie all expenses and
all revenue) onto the school's BAS.
Other supporting documentation such as
compliant tax invoices must be provided to the school. Upon receiving the refund
from the ATO, the school would reimburse the Parent Club for the input tax credits
they are entitled to. Where a club or activity that is part of the school GST group has
already netted the expenses from the revenue, the Finance Officer will need to raise
an AR invoice for the balance of the revenue not receipted through the CRE and
apply a Credit Note for the expenses, or enter a journal to debit the expenses and
credit the revenue, using the relevant GST codes.
3.30.2 Non-profit sub-entity (and not registered for GST purposes)
In this case clubs:
·
do not charge GST on supplies ie do not pay 1/11th of their revenue to the ATO
·
pay GST on taxable acquisitions but can not claim input tax credits
·
do not report their financial transactions in the school BAS
86
·
can either operate an independent bank account or be consolidated with the
school/school council account
·
can use the school/school council ABN
·
can have transactions entered in EDSAS (using the code G21, not on BAS) but
must have a separate line
·
can donate any profit to the school (which the school receives using code G21)
An advantage of the club being treated as a separate unregistered non-profit subentity occurs when more than 15 similar fund-raising activities (of a type which could
be treated as input taxed if there were no more than 15) are undertaken by the whole
school entity. In this case, if the club is a non-profit sub-entity, then its activities are
not included when the number of such activities is counted. It also removes the
reporting and documentation requirements that would otherwise be required by the
school if they were not a non-profit sub-entity.
3.30.3 Other school groups
Other groups of the school such as a School Sport Club Fundraising Group, Uniform
Shop, student enterprises or the SRC can also elect to be treated for the GST as a
separate "non-profit sub-entity" providing they satisfy the conditions as stated in this
chapter. However the school is not entitled to claim input tax credits that relate to the
costs incurred by unregistered sub-entities. The school may need to apportion input
tax credits for expenses that are incurred by the sub-entity but paid by the school eg
electricity (refer to Chapter 1.5).
3.31 Payments in Kind (Bartering and Swapping Arrangements)
A barter transaction involves the provision of two supplies without the exchange of
money. When non-cash consideration for a supply has been provided, GST may still
be payable. Consider the following examples.
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3.31.1 Use of a School Gym in Exchange for Use of Equipment
School A does not have a gym. It arranges with school B to use its gym for its
volleyball club.
In exchange for use of the gym, school A purchase volleyball
equipment that the students of school B are able to use in their own sporting
programs.
Each school is considered to be making a taxable supply. Therefore the schools are
required to charge GST on the value of the supply they are making and are entitled
to an input tax credit on the GST paid on the supply they are receiving. Note that tax
invoices need to be supplied for input tax credits to be claimed. For supplies of equal
value, the GST paid and claimed as an input tax credit are the same.
3.31.2 Use of Farmer's Tractor
A local farmer has agreed to provide the school with use of his tractor as part of its
school farming activities. No consideration is made, however the school voluntarily
provides the farmer and his family with some of the produce of the farm.
In this example, there is no payment in kind but rather the farmer has donated the
use of the tractor. The school subsequently donates some of its produce to the
farmer. Neither supply is considered taxable in this case. If the farmer expected
produce in exchange for the use of the tractor, each party is considered to be making
a supply. If the farmer is registered for GST the 'hire' of the tractor by the farmer to
the school is a taxable supply. The supply of the produce by the school to the farmer
is a separate supply that may be GST-free or taxable depending on the nature of the
produce.
Bonus points are also considered a form of barter. Refer to Chapter 3.11.
Generally, the school is required to remit GST in the period they receive the goods or
services (as a form of payment) or raise an invoice, whichever occurs first. Similarly,
a school is entitled to claim input tax credits for the value of the payment made (in
cash or 'kind') when they receive a compliant tax invoice.
88
3.32 Payments to the Department
If the department invoices a school for the supply of goods or services, it will charge
GST. The school will pay the department the full amount and claim the GST as an
input tax credit (code G11).
3.32.1 Use of School Buildings and Grounds eg. Hall hire
The payment to DECS is taxable. Schools continue to complete the form ED132. The
cheque for the amount owing is forwarded to the Receiver of Revenue (code G11)
who will issue a compliant tax invoice/receipt within a few days so the school can
claim the input tax credit on the GST paid.
3.32.2 Hire of Department Bus
The payment to DECS is taxable. The school calculates the amount owing to DECS
using the current form and adds 10% to the amount owed to DECS on this supply.
The cheque is forwarded to the Receiver of Revenue (code G11) who will issue a
compliant tax invoice/receipt within a few days so the school can claim the input tax
credit on the GST paid.
However, the following charges are not considered a supply between DECS and
schools but are treated as a form of (reverse) appropriation funding ie code G21.
3.32.3 Salary Recharge
The provision of Salary Recharge services, including the on cost, to schools is not
subject to GST due to the appropriation provisions (code G21). The salary recharge
invoicing process does not add GST to the cost account that relates to the school.
However, if a school invoices another school or group for reimbursement of a 'TRT'
day expense, other than from cluster or project funding, this charge is taxable (refer
to Chapters 3.20 and 3.47).
3.32.4 Internet Charge and DECStech Lease
The payment to DECS for the sa.edu.au Internet provider service or the DECStech
lease charges are not subject to GST due to the appropriation provisions (code G21).
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3.32.5 Photocopying, Vending Machines and Telephones
Any fees charged by a school for ad hoc photocopying are taxable (code G01) with
1/11th of the revenue as GST payable.
In the case of photocopying vending machines, 1/11th of the amount collected from
the machine must be remitted to the ATO as GST payable (code G01). This also
applies to photocopying cards, other vending machines and telephones.
However, supplies made from vending machines that were in operation on 1 July
2000 that only accept one denomination of coin, do not give change and
consideration from the machine cannot exceed $1 by inserting a maximum of two
coins, can be treated as input taxed supplies up until 1 July 2005. Once a supplier
revokes the election to treat the supplies as input taxed, the election cannot be
reapplied.
If canteens receive a commission from the supplier of a drink or snack machine this
commission is taxable revenue to the canteen (code G01) as it is revenue for
providing a service, not from the supply of food.
3.33 Reimbursement
3.33.1 Reimbursement to Staff and Volunteers by the school
Schools can reimburse an employee or volunteer for expenses incurred that directly
relate to school activities. Reimbursement of expenses for acquisitions that have no
GST in the price are coded G14. Expenses for acquisitions that include GST are
reimbursed for the GST inclusive amount (code G11) providing a compliant tax
invoice is obtained. It is recommended that if GST has been charged and the
employee/volunteer fails to provide a compliant tax invoice only the GST exclusive
amount is reimbursed (code G14). The school requires a tax invoice so that it can
claim an input tax credit. For GST purposes, the tax invoice, although made out to
the employee or volunteer, will be treated as if made to the school as long as the
expenses are incurred in connection with the carrying on of the school enterprise.
Note, however, that a totally compliant tax invoice is not required if the GST exclusive
90
amount is $50 or less but some form of documentary evidence is still needed to
support the input tax credit claim (refer to Chapter 1.8).
For example, a teacher purchases $66 (GST inclusive) worth of art supplies for her
Year 5 class. She seeks reimbursement from the school office. However she did not
obtain a tax invoice from the art supplier. The teacher can either return to the art
supplier or obtain a tax invoice or accept reimbursement from the school for the GST
exclusive amount, ie $60. If the GST exclusive amount is reimbursed the transaction
would be coded G14 (acquisition with no GST in the price). Alternatively the teacher
may decide to obtain a tax invoice and, upon providing it to the school finance officer,
is reimbursed for $66 (code G11). The school is then able to claim $6 as an input tax
credit.
If a teacher or volunteer is being reimbursed for use of a motor vehicle for schoolrelated business, the payment by the school is not taxable and no tax invoice is
required.
This transaction is coded G14. Where the payment exceeds $50 the
teacher is required to complete a 'Statement by supplier' form indicating that the
supply is private in nature.
3.33.2 Reimbursement of Costs by the Department
At times, schools incur costs that are reimbursed by the department eg for
replacement of stolen goods. The school in these cases should forward a claim form
to DECS seeking reimbursement for the GST exclusive amount. Reimbursements
from DECS to government schools are considered a form of appropriation funding so
no GST liabilities will arise as a result of the reimbursement. The school will claim
the input tax credit for any GST paid relating to the purchase.
For example, a school is replacing a stolen TV. The invoice paid by the school is for
$660 GST inclusive. The school makes payment to the supplier (code G11) and
forwards a reimbursement claim to the Department for $600 (the GST exclusive
amount). The school claims the $60 GST as an input tax credit.
When the school receives the reimbursement from DECS it must credit $600 against
the original cost. In this example $600 would be receipted to the expense account in
CRE (code G21).
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3.34 Sales of Farming Produce
3.34.1 Share Farming
If a school is involved with a share farm, for example a cooperative or a partnership,
they must establish which entity or entities are carrying on the enterprise in order to
identify who is responsible for making taxable supplies and who is entitled to claim
input tax credits.
3.34.2 Food
Most food for human consumption is GST-free.
Food that falls into any of the
following categories is not GST-free.
·
Restaurant, hot takeaway, catered and prepared food
·
Some bakery products and savoury snacks
·
Confectionery, ice cream and biscuits
·
Some beverages
Food that is a combination of both GST-free and taxable 'food' items is not GST-free.
For example, a snack pack containing both cheese (GST-free) and biscuits is not
GST-free.
Certain animals and plants are not treated as GST-free food for human consumption
until they have been subject to further processing or treatment. These include:
·
Live animals - however live crustaceans and molluscs (for example, lobsters,
oysters and crabs) are GST-free if they are sold for human consumption.
·
Unprocessed grains, cereals or sugar - however, if they have been processed or
treated to make them suitable for human consumption they are GST-free.
·
Plants under cultivation - plants can not be sold GST-free if they are still growing
in a growing medium.
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Food marketed for consumption by animals is not GST-free, as it is not sold for
human consumption.
3.34.3 Horticultural Supplies
The following example and diagram shows when GST is applied in the supply chain.
A school sells punnets of broccoli seedlings to a market gardener. As the seedlings
are plants under cultivation, GST is payable on the sale even though the broccoli is
ultimately for human consumption. The school invoices the market gardener the
sales price plus GST (GST inclusive price).
The market gardener grows and picks the broccoli and sells it to a wholesaler. At
this stage the market gardener does not charge GST on the sale of the broccoli as it
is now treated as food for human consumption. The wholesaler sells broccoli to a
retailer GST-free.
The retailer sells the broccoli to a consumer GST-free.
The
wholesaler also sells broccoli to a restaurant, which is also GST-free. Where the
restaurant prepares the broccoli as part of a meal served by the restaurant, the
restaurant charges GST.
Schools need to identify at which level of the supply chain they operate in order to
determine whether their supply is GST-free or taxable.
School Nursery sells broccoli seedlings
GST Payable
Market Gardener (sells broccoli)
Supply Chain
GST Free
Wholesaler (sells broccoli)
GST Free
Retailer (sells broccoli)
GST Free
Restaurant (prepares
and sells meal)
GST Payable
Consumer
Consumer
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Food fit for human consumption sold at the school or 'farm gate' is generally GSTfree. The sale of rotten fruit or vegetables is subject to GST as it is considered unfit
for human consumption. Food for consumption by pets is not GST-free.
3.34.4 Cropping Supplies
As with horticultural supplies, the supplier (ie the school) needs to determine at which
level of the supply chain they operate in order to determine whether their supply is
GST-free or taxable.
The following example and diagram demonstrate when GST is payable.
A school grower sells wheat to a mill. Where the wheat has not been subject to any
processing or treatment, GST is payable on the sale even though the wheat is
ultimately for human consumption. The mill then processes the wheat and sells it to
a refinery.
GST is still payable, as the wheat is not considered fit for human
consumption. The refinery processes the wheat and sells it to a wholesaler. As it is
now fit for human consumption, the sale to the wholesaler is GST-free. The sale of
processed wheat by the wholesaler is also GST-free, as is the sale by a retailer to a
consumer.
If a school sells wheat to the Australian Wheat Board (AWB) under a Harvest
Payment Agreement it will receive periodic payments (pool distributions) from the
AWB. The AWB will issue a recipient created invoice for the supply, which is taxable
(code G01). The GST liability is attributed when either the payment is received or the
invoice is issued. Any loan drawdown (harvest advance) provided by AWB to the
school is an input taxed supply (code G04). Payments to the AWB that are related to
the loan such as the loan repayment, interest charge and underwriting fee are input
taxed expenses (code G13). The payment of the levy charge to the AWB is not
subject to GST (code G14). If the payment by the AWB has had expenses netted
from it, the Finance officer is required to debit the expenses and credit the total
revenue, rather than just credit the net amount paid into the account.
Any share dividend issued to schools from the AWB is not reported on the BAS (code
G21).
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School Grower (sells wheat)
GST Payable
Mill (sells wheat)
Supply Chain
GST Payable
Refinery (sells processed wheat)
GST Free
Wholesaler (sells processed wheat)
GST Free
Retailer (sells basic
foods)
GST Free
Restaurant (prepares
and sells meal)
GST Payable
Consumer
Consumer
3.34.5 Livestock Supplies
The supply of livestock is taxable. The supplier (school) needs to determine at which
level of the supply chain they operate in order to determine whether the supply is
GST-free or taxable. The following example and diagram demonstrate when GST is
payable.
A school sells a live cow to an abattoir. The sale of a live animal is subject to GST.
The abattoir processes the carcass for sale to a wholesaler.
The selling price
charged by the abattoir does not include GST nor does the sale from the wholesaler
to the butcher or restaurant. When meat fit for human consumption is sold by a
butcher to the consumer it is GST-free.
However, if the meat is included in a
restaurant meal GST is payable.
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School Grazier (sells live cows)
GST Payable
Abattoir (sells meat)
Supply Chain
GST Free
Wholesaler (sells meat)
GST Free
Butcher (sells meat)
GST Free
Restaurant (prepares
and sells meal
GST Payable
Consumer
Consumer
When livestock eg sheep, is sold through a stock agent, the stock agent generally
enters into an agreement with the school to issue a recipient created tax invoice
(RCTI). Upon receipt of the invoice, the school processes an AR invoice in EDSAS
using the code G01, with 1/11th as GST payable, and raises an AR credit note, code
G11, for any fees charged by the stock agent (ie commission) in respect of the sheep
sales.
3.34.6 Dairy Supplies
The supply of unprocessed cow's milk is taxable, as such milk is not yet considered
to be food for human consumption. Therefore the sale of milk from a school to a milk
processor is taxable. Sales from the milk processor to a retailer or business for
further processing, such as a chocolate maker, are GST-free. Sales by the retailer of
plain cow's milk to consumers are GST-free.
Sales by the chocolate maker to
consumers are taxable, as the food (milk) has been included in a confectionery
supply.
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Supplies of other types of processed milk, such as goat's milk, are GST-free.
3.34.7 Packaging
Packaging of food is treated in the same way as the contents.
For example,
packaging for GST-free food is also GST-free. However, packaging that is in addition
to what is necessary for the supply of food is taxable. For example, if broccoli is
supplied in a plastic container intended for re-use, the container is taxable. The
supply would be partly taxable and partly GST-free.
3.34.8 Recipient Created Tax Invoices
Within the agricultural sector, invoices are often prepared by the person or business
purchasing products, for example, a fruit or vegetable processor. This is often the
case as the purchaser is required to test for quality or quantity. As the purchaser
advises the grower of the selling price, it is often the purchaser that prepares a
statement of sale. For tax purposes, such a statement of sale can be a recipient
created tax invoice (RCTI) and an agreement is required for this arrangement (refer
to Chapter 1.9).
In these situations the GST registered external entity pays the school an amount for
the produce including GST where applicable. In certain circumstances, the external
entity provides the school with a recipient created tax invoice when the value of the
produce becomes known. The external entity raises the invoice on behalf of the
school and uses the RCTI to claim the input tax credit.
Where the external entity is not registered for GST, GST is still payable by the school
on the revenue. However the tax invoice requirements will not need to be met as the
external entity will not be able to claim input tax credits. An unregistered entity is not
able to issue an RCTI.
3.34.9 Forward Contracts and Payments
A forward contract occurs when the school agrees to lock in a price for the supply of
something in the future. For example, in September 2000 the school agrees to
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supply broccoli seedlings at a predetermined price to a market gardener in March
2001.
When the school entered into the forward contract in September 2000 and no
payment was made to the school, GST will be payable on the amount received (ie
1/11th) by the school in March 2001 (or when an invoice is issued).
Where part payment is received before March 2001, for example in September 2000,
GST will be payable on the total amount to be received by the school in the same
period as the first payment is made.
3.34.10 Auctions
The auctioneer must announce whether the school, as the vendor, is registered for
GST. The agent must also announce before the sale whether it will be a GST
inclusive or GST exclusive sale. If GST exclusive, the auctioneer will add GST to the
'knock down price'. If GST inclusive, the 'knock down price' is the GST inclusive
selling price. In either case the school will need to remit 1/11th of the price it receives
for the stock. If the purchaser is registered for GST, they are able to claim an input
tax credit based on a tax invoice supplied by the vendor (ie the school or its agent ie
the auctioneer).
Note: Charity auctions conducted as a fundraiser can be treated as an input taxed
activity. Refer to Chapter 3.19.
Fees charged by a GST registered auctioneer are taxable and the school requires a
tax invoice from the auctioneer in order to claim an input tax credit.
3.35 Sale of Uniforms
Schools either sell new or second hand uniforms they own, or sell second hand
uniforms as an agent for parents.
When schools purchase uniform stocks from a GST registered supplier, they pay
GST and claim input tax credits (code G11). The school adds their mark-up to the
GST exclusive price and then adds 10% GST. The uniforms are sold at the GST
inclusive price (code G01) with 1/11th being GST payable.
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Second-hand uniforms purchased by the school and then resold are also taxable
(code G01). The school is entitled to a notional input tax credit when these uniforms
are resold (refer to Chapter 3.38). However, the sale of donated second hand
uniforms is GST-free (code G03). Refer to Chapter 3.38.
The commission received on the sale of second-hand uniforms sold on consignment
for parents is subject to GST.
The GST payable is calculated as 1/11th of the
commission received by the school. Therefore in negotiating the commission, GST
needs to be considered so it is reflected in the selling price of the second-hand
uniforms. For example, a second-hand uniform is sold through the school's uniform
shop for $50 and it was agreed that the school would receive 20% of the sale. The
transactions are as follows:
·
Payment Received for sale
$50.00
G21
·
Accounts Payable Invoice to parent
$50.00
G21
·
AP Credit Note (20% commission on $50)
$10.00
- Revenue account
$ 9.09
G01
- GST to L-ZZZ-3515 (1/11th of $10.00)
$ 0.91
G01
·
$ 40 (ie $50 - $9.09 - $0.91)
Cheque generated to the owner
3.36 Second-Hand Goods
3.36.1 Sale by the school
If a school sells second-hand goods that it owns, such as used furniture, GST is
payable, unless the sale is considered non-commercial, calculated at 1/11th of the
selling price (code G01). If the price at which the second hand goods are sold is less
than 50% of the GST inclusive market value or less than 75% of the GST inclusive
cost of the goods, the sale is non-commercial and the goods are sold as GST-free
(code G03). Documentation needs to be kept to substantiate the non-commercial
treatment (eg record of the original cost or a reasonable estimation of the cost if no
record is available and the sale price).
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3.36.2 Donated second hand goods
The sale by a school of donated second hand goods is GST-free (code G03) as long
as they have retained their original character ie the school has not altered the goods
in any way.
3.36.3 Goods Purchased from a Registered Supplier
If a school purchases second-hand goods from a registered supplier, GST is payable
and claimed as an input tax credit just as in any other transaction between two GST
registered entities.
3.36.4 Goods Purchased from an Unregistered Supplier for resale
As a GST registered entity the school, if it subsequently sells those goods
purchased, is required to charge GST. However, if the goods are sold at less than
50% of the GST inclusive market value or less than 75% of the cost they can be sold
GST-free (ie a non-commercial sale). The market value of the goods is to be
determined by a reasonable comparison with the market price at a sale by a similar
organisation (eg another school) for a similar good.
If the school sells the goods as taxable the school can claim an input tax credit on the
purchase price even though no GST was paid. To make the claim documentation
must be kept showing the name and address of the person from whom the school
bought the goods, a brief description of the goods (including their quantity), the date
and the amount paid.
If the purchase price was less than $300 the school is
permitted to claim an input tax credit for 1/11th of the price paid. If the purchase
price was more than $300 the school must claim whichever is the smaller amount of
1/11th of the price paid and the GST payable on the sale of the goods by the school.
Generally the claim is made in the tax period in which payment is received for the
goods or the period in which an invoice is raised for their sale (whichever comes first)
ie when the school sells the goods. However, if the price paid for the second-hand
goods is less than $300, schools can claim the input tax credit in the period in which
they paid for the goods or received the invoice.
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For example, a school purchases second-hand uniforms for an amount that is less
than the $300 threshold from parents, for the purpose of selling them to new
students. The school can claim 1/11th of the purchasing price (code G11) as an
input tax credit (providing documentation is kept as discussed above) in the period of
purchase, even though no GST was charged. Upon selling the uniforms, GST is
payable at 1/11th of the selling price (code G01).
If a school purchases second-hand goods from an unregistered supplier, such as a
parent, there is no GST in the price. There is no GST impact if the goods are simply
used by the school.
3.37 Shared Facilities
Schools may share facilities with other schools, both public and private, with or
without any monetary consideration.
3.37.1 Multi-Campus Sites
If one school is comprised of several sites, transactions between each campus are
not taxable, being within the one registered entity. For BAS purposes, transactions
of all campuses would need to be consolidated on a monthly basis.
3.37.2 Shared Facilities by Different Schools
For example, schools A and B jointly own and share a building and sporting grounds.
Both schools are registered for GST. School A pays all the accounts relating to the
building, including contents and sporting grounds.
School B pays an amount to
school A on a term by term basis for their share of the costs.
School A pays GST on all expenses incurred and claims the input tax credits (code
G11). School A then seeks reimbursement from school B for its share of the costs
incurred. School A invoices School B for the amount owing (including GST) and
provides them with a tax invoice for this amount including GST (code G01). School B
makes the payment (code G11) and claims the GST paid as an input tax credit.
In any shared arrangement, the separate schools must identify which entity makes
which taxable supplies and creditable acquisitions.
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If school A owned the building, school B would be paying a hiring charge, which is
taxable.
The GST treatment is the same whether the schools involved are public or private.
3.38 SAPSASA and SASSSA
3.38.1 SAPSASA
SAPSASA is a separately registered entity for GST purposes. Any transactions
between schools and the central SAPSASA body are taxable.
Any payments from a school directly to SAPSASA for sports clothing or participation
in certain carnivals (eg Cross-country Carnival, Basketball Carnival) are taxable
(code G11). However most of the SAPSASA transactions undertaken by a school are
district related and schools will be invoiced by the District Coordinator's base school.
Each year an information pack with detailed information about financial processes
will be sent to all District Coordinators and their schools by SAPSASA.
The payment of the SAPSASA affiliation fees and District levies from participating
schools to the District Convenor's base school is taxable (code G11). The District
Convenor sends the other schools involved a tax invoice so that they can claim input
tax credits for the GST paid.
Payments for SAPSASA district activities (exchanges etc) are usually collected from
the students by the team manager or coach and forwarded to the base school. The
transport and entry fees etc for these activities can only be charged GST-free to
students if the Principal of their school has signed off on SAPSASA activities as
being predominantly educational. The tax invoice for the affiliation fee and district
levy has provision for this to occur. A copy of this form must be returned to the base
school and be filed by them. If any school does not return the completed form to the
base school the students from that school must be charged GST on the whole cost of
the activity.
3.38.2 Excerpt from the SAPSASA Information Pack
Responsibilities of the Finance Officer(s)
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- If the District SAPSASA is attached to a new base school any remaining funds
should be transferred to the new base school (code G21).
- The Finance Officer of the base school should set up an account line for
SAPSASA (using level 2 code ZOS) in EDSAS. (Note - there is no requirement to
set up a separate company within EDSAS.)
- On receipt of the compliant tax invoice from the District Convenor, each school in
the district generates a cheque for the total fee (code G11) made out to the
District Convenor's base school.
- The Principal of each school in the district needs to complete and sign the
Affiliation Fee Tax Invoice (Form 1) to confirm that SAPSASA District activities are
predominantly educational so that the charges for transport for the activities can
be treated as GST-free to their students.
Each school in the district must
photocopy the completed Form 1, retain the original as their tax invoice and return
the copy to the base school. The base school should file the copy with their other
BAS material. (If any Principal does not complete this section students from that
school must be charged GST on the whole cost of the activity.)
- Any charges that are for items such as clothing, food or photographs are taxable.
- The District Convenor's base school receipts each cheque for the Affiliation Fee
and District Levy in CRE Cash Sale (code GO1). (There is no need to create an
EDSAS tax invoice as the District Convenor will have sent manual tax invoices ie.
Form 1, to the schools).
- The transfer journal for the affiliation fee and the district levy to be paid by the
District Convenor's base school to the SAPSASA line is an internal transaction
(code G21) and therefore is for the GST exclusive amount only.
- The District Convenor's base school, on receipt of the SAPSASA tax invoice
(Form 2 - see District Convenor's responsibilities), pays SAPSASA the Affiliation
Fees (code G11). A copy of the tax invoice must be retained for audit purposes.
(The District Levy amount remains in the SAPSASA General Ledger Line of the
base school.)
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3.38.3 SASSSA
In most cases schools make payment directly to SASSSA for their involvement in
SASSSA activities. This payment is taxable (code G11) and SASSSA will provide the
school with a compliant tax invoice to enable the school to claim an input tax credit
for the GST paid. Fees charged by a school to their students for participation in a
sporting activity are treated like any other excursion, that is, if the activity is part of
the curriculum of an approved education course, the fees are GST-free (code G03).
Input tax credits are claimed on any taxable expenses (code G11) that are incurred
relating to the sporting activities. If there is any charge for food, this is treated as
taxable (code G01).
For some zone events such as a swimming or athletics carnival, SASSSA invoices
the zone for 1/3 of the cost of the event. If a zone is operating through a base school
the base school pays the tax invoice (code G11) and then invoices the participating
schools for their share. This is treated as taxable by the base school (code G01).
The other schools will pay using the code G11 and claim the input tax credits. If any
zone is not operating through a school but has obtained its own ABN and did not
register for GST then the zone will not be able to claim input tax credits but will not
charge GST to the participating schools when they invoice these schools for their
share of the expense. Thus it will be a G14 expense for these schools.
If the participating schools charge their own students for attending this activity they
will invoice GST-free (code G03) providing the activity is considered as part of an
educational course. If there is any charge for food, this is treated as taxable (code
G01).
Students participating in interstate competitions are invoiced directly from SASSSA
so there is no GST impact for schools. As SASSSA is a GST registered entity, they
must charge GST to the students.
3.39 Sponsorship
Sponsorship occurs when money or goods are given by the sponsor in return for the
provision of advertising. Sponsorship is taxable. Sponsorship differs from a donation
as the provision of funds or equipment is in exchange for something else, that is, it is
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tied and the provision of the funds or equipment is conditional upon the supply of the
advertising.
3.39.1 Cash Sponsorship
If money is given to a school as a sponsorship for advertising in a school newsletter,
the school should provide the sponsoring organisation with a tax invoice detailing
1/11th of the amount as GST payable (code G01).
3.39.2 Non-Cash Sponsorship
If a sponsor provides goods and services in return for other goods and services, such
as advertising or promotions, there is a supply by both parties to each other. This is
called a 'contra sponsorship'. If both the school and sponsoring organisation are
registered for GST, they are liable to pay GST on the supply to each other and if they
hold compliant tax invoices are able to claim the corresponding input tax credits.
If parties deal at arms-length, the value of each supply will generally be the same.
Each party would need to provide the other with a tax invoice to enable input tax
credits to be claimed.
For example, a fertiliser company provides $375 worth of
fertiliser to a school in exchange for the erection of an advertising sign on the school
fence. The value of the advertising can also be valued at $375. GST paid and
claimed by both the Fertiliser Company and the school would therefore be the same.
Supplies provided by each party may be valued differently. In such cases, different
values will be shown on the tax invoices provided by each party.
If a supply is made with no conditions or obligations by an external organisation and
the school voluntarily wishes to acknowledge the funding or goods, this does not
constitute a sponsorship arrangement and is treated as a donation (refer to Chapter
3.15) using code G21. Mere acknowledgment of the supply does not necessarily
constitute a sponsorship arrangement if there is no binding agreement or obligation
to do so and the organisation does not receive any material gain.
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3.40 Staff Training (Professional Development)
A supply is GST-free if it is for an education course which is defined within the GST
legislation ie a preschool, primary, secondary, tertiary, masters or doctoral, special
education, adult and community education, English language for overseas students,
first aid or life saving, professional or trade or tertiary residential course.
A professional or trade education course is defined as a course leading to a
qualification that is an essential prerequisite for entry to a particular profession in
Australia or to commence practice of a profession or trade in Australia. The supply of
adult and community education courses that are likely to develop employment related
skills of the person undertaking the course are GST-free. Outside of this definition of
an education course all other courses are taxable.
Most professional development type courses attended by school staff are taxable, as
they would not fit into the above definition of a GST-free education course. However
GST is only charged by the supplier if they are GST registered.
For example, school A is providing the teachers of school B with some training in
vocational education in schools. This is a professional development activity for the
teachers of school B that is not a prerequisite to them performing their profession in
Australia. Although the activity may benefit their performance as a teacher, it is not a
GST-free supply as defined in the legislation. This supply is therefore taxable and
code G01 is used by school A when charging for the activity.
If a school is paying for professional development where GST is charged they are
entitled to claim the input tax credits (code G11). In the following example the total
cost of the professional development is $330 GST inclusive. If the school pays half
of the fee and a teacher pays the balance, the school has two options:
·
The school pays the complete invoice of $330 ($300 plus $30 GST) and claims
the input tax credits (code G11). The school then invoices the teacher for half the
GST exclusive price ($150) with 10% GST added (code G01) ie for $165 ($150 +
$15 GST).
or
106
·
The teacher has paid the total GST inclusive cost of the invoice ($330) and
requires reimbursement for half of the fee. The school, on receipt of a compliant
tax invoice, reimburses the teacher $165 (code G11) and claims the input tax
credit of $15 (ie 1/11th of $165).
The teacher may be able to claim a tax deduction for professional development costs
as part of their income tax return therefore they will need a copy of the invoice. If the
teacher does not provide a compliant tax invoice when GST has been charged, the
school should only reimburse the GST exclusive amount (ie $150), using code G14,
as the school is unable to claim an input tax credit.
If the organisation providing the course is not GST registered they can not charge
GST, and any payment to them or reimbursement to the teacher for the course cost
is coded G14.
3.41 Student Business Enterprises
A school may be involved in establishing a student-based business enterprise, for
example, to manage the business of growing and selling seed to a local company.
The school pays a grant from its funds to this enterprise for set up costs. As this is a
transfer of funds within a GST group, it is not subject to GST (code G21). The
enterprise may establish its own bank account and accounting system. However, as
the enterprise falls under the school's ABN all financial transactions must be
accounted for on the school's BAS (unless it elects to be treated as a non-profit subentity, refer to Chapter 3.31). The enterprise must record all acquisitions and supplies
each month and keep all necessary records, including compliant tax invoices if input
tax credits are to be claimed. The enterprise will quote the school's ABN as required.
At the close of the business activity, typically the end of the year, any surplus money,
including the initial 'loan', can be transferred to the school's account (code G21). Any
losses or amounts outstanding are covered by the school.
In regard to acquisitions or supplies made by the student enterprise the normal GST
rules apply, irrespective of the activity. GST is charged on all taxable supplies made
by the enterprise (code G01) and any GST paid on expenses is claimed as input tax
credits providing compliant tax invoices are held (code G11). If the supplies made by
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the student enterprise are GST-free, eg sale of fruit or vegetables, no GST is
charged (code G03).
A student enterprise may also involve the raising of capital through the issue of
shares to parents, staff and other community members or by operating a syndicate
that is also available to parents, staff and other community members. The receipt of
the capital is treated as not subject to GST (not on BAS) and the return to the
shareholder or syndicate member is also not recorded on the BAS (code G21 in
EDSAS).
3.41.1 Student Prizes, Scholarships and Subsidies
At times an organisation such as a service club or a local retailer may donate money
to a student as a prize or scholarship. If the organisation presents the cheque or
prize to the student directly eg at an assembly, there are no GST implications for the
school as the transaction is between the donor and the student.
Sometimes the outside body may pay the money directly to the school, on the
understanding that it is to be used for a particular purpose eg a prize for the best year
11 English student. If it is considered that there is a binding agreement or obligation
to use the money in the stipulated way or there is a material gain to the donor eg in
the form of advertising, the payment is considered to be a grant and is taxable (code
G01). For example, the agreement may be that the money is repaid if not used as
requested. If a binding obligation does not exist but there is merely an expectation
that the money be used in a particular way, then the receipt of money by the school
could be seen as a donation (code G21). The creation of expectations between the
parties does not establish a supply. See Chapter 3.20 for more details.
If the school gives a cheque to a student as a prize it is coded G14, as the student is
not GST registered.
If a school/school council makes a payment to a student to help with expenses
incurred as part of a particular activity (eg the cost of representing a sporting team in
a zone or interstate competition), the payment is coded G14 as the student is not
GST registered. A 'Statement by supplier' form is not necessarily required to be
completed by the student, irrespective of the amount of money paid by the school to
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the student, provided the purpose of the payment is documented and recorded as
private in nature. However, the statement form can be used as the documentation.
3.42 Swimming and Aquatic Centre Services
Across DECS, Swimming and Aquatic programs are delivered via Aquatic Centres,
located on school grounds or closely associated with a school, or through DECS
employed swimming instructors, who negotiate with local swimming centres.
3.42.1 Aquatic Centres
Aquatic Centres are considered to be part of their related school's enterprise for GST
purposes.
This means that the Aquatic Centre should quote the relevant school's ABN when
purchasing and is required to charge GST when providing taxable supplies.
In
addition, all transactions associated with the Aquatic Centre, including the claim for
input tax credits, are included in the school's BAS. The Aquatic Centre can continue
to operate its own bank account or a separate accounting system. However
arrangements need to be made so that the required information and documentation
are provided to the school each month.
Charges to students undertaking an approved education course under the school's
enterprise, to which the Aquatic Centre belongs, are GST-free. However, charges to
another school for their participating students, or outside organisations and
individuals are taxable. If a charge is levied (using code G01 by the 'host' school) to
another school, that school requires a compliant tax invoice from which any GST paid
is claimed as an input tax credit and the payment is coded G11. The other school
will then invoice their own students’ GST-free (code G03) providing it is part of an
education course. If there is any charge for food this is invoiced as taxable (code
G01).
If the centre sells second-hand equipment, different treatment can be applied
depending on the circumstances of the acquisition and sale. For example, a secondhand item that is sold for less than 75% of cost or less than 50% of market value is
GST-free (code G03). Alternatively, if the item is sold for $20 or less, where the sale
109
is not part of the site's normal business, the activity may be treated as an input taxed
fundraiser (code G04). The sale of donated second-hand items is GST-free (code
G03).
3.42.2 Swimming Instructors
A swimming instructor can either be considered as part of a school's enterprise or as
an agent between the private swimming centre and the school.
Swimming instructors falling under a school's enterprise are treated in the same way
as those in aquatic centres as already discussed. The swimming instructor is part of
the school for GST purposes.
Swimming instructors who are independent of the school and act, as agents on
behalf of a private swimming centre will negotiate with schools on behalf of the
private swimming centre for the use of facilities and the provision of approved
education courses. The private swimming centre in this situation charges the schools
for use of the centre. If the private swimming centre is registered for GST, it charges
GST and the school requires a compliant tax invoice in order to claim an input tax
credit (code G11). The school will then invoice their own students’ GST-free (code
G03) providing it is part of an education course. If there is any charge for food this is
invoiced as taxable (code G01).
3.43 Text Books
Schools that buy textbooks from a GST registered supplier will pay GST and claim an
input tax credit for GST paid (code G11).
If a school sells the books to students, it will charge GST (code G01). The supply of
books is not considered to be a supply of course materials as textbooks are not
necessarily* transformed or consumed within the delivery of the course.
Through
the Educational Textbook Subsidy Scheme booksellers, eg private companies or
schools that sell textbooks, are able to claim a subsidy (8 % of the retail price of the
*
Refer to page 1 Chapter 3.
110
textbook where the subsidy has been passed on as a discount to the students) for
certain textbooks. This effectively offsets the impact of the GST. See Chapter 1.15
for more details of this scheme. (Note that the sale of Revision Guides to students is
GST-free as the Guides are considered to be 'consumed' due to the fact that the
Guide is only applicable for the current year.)
Hiring of books to students by a school is GST-free (code G03) provided ownership
remains with the school.
If a school allows students to use the textbooks during the year for no consideration,
no GST is payable.
There is no GST payable on book deposits (code G21). However if part of that
deposit is forfeited, that amount is subject to GST (refer to Chapter 3.5).
3.44 Transactions Between Schools
3.44.1 Cluster Type Arrangements
When schools form clusters to share resources, the usual GST rules apply.
Therefore the schools involved must identify which entity makes which taxable
supplies and creditable acquisitions. It may be appropriate that one school meets all
expenses related to the particular arrangements and then invoices other schools for
their contribution.
The school meeting the expenses claims any GST paid on
purchases as an input tax credit (code G11). It then invoices other schools for their
share of the costs and provides them with a tax invoice for an amount including GST
(code G01). The other schools claim the GST paid as an input tax credit (code G11).
3.44.2 Appropriations 'down the line'
DECS funding to schools from appropriation monies does not involve GST and is
coded G21. Such appropriations are for the provision of education services by the
school to that school's community. In a cluster type arrangement a school may
receive an appropriation from DECS on behalf of the cluster and then, at a later date,
may redistribute these funds to other schools.
This is considered to be an
appropriation 'down the line'. It is coded by the school that makes the payment, and
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the school receiving the money, as G21. The hub school is merely passing on an
appropriation and not purchasing goods, services or rights.
Transfer of funds between schools where there is no supply made, such as
transferring surplus SAPSASA funds to a new base school or to a new 'host' school
to handle cluster or project money is not subject to GST (code G21). This includes
the distribution of cluster appropriation funds that are made for a reimbursement of
specific costs related to the grant or project eg for TRT days or other costs incurred
by a school seeking reimbursement from the appropriation funds held by a 'host'
school.
3.44.3 Transfer of student fees
In some cases when students transfer between schools, the school transfers a
portion of that student's fees to the new school. As the payment is for the supply of
an education course, including GST-free supplies related to the provision of that
course, the payment is GST-free. The school making the payment codes the
transaction G14 and the receiving school uses the code G03 (provided the charge
does not include a taxable component). The receiving school does not need to issue
a tax invoice unless the charge includes a taxable component.
Note: This is a change from previous advice for the transfer of student fees as a
result of an update in the interpretation of the ruling.
3.44.4 Excursions and performances
At times one school organises a camp, excursion or performance which is attended
by the students of another school as part of their education course. The school
organising the activity invoices the other school for a total amount that includes GST
(code G01). The other school pays the total amount (code G11) and then invoices
their own students’ GST-free (code G03) providing it is part of an education course.
If there is any charge for food this is invoiced to the students as taxable (code G01).
If the activity is considered to be recreational rather than part of an education course
then it is fully taxable to all of the students attending. In this case it is probably
simplest for the non-organising school to consider themselves to be acting as an
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agent for the host school and collect the money from their own students and forward
it to the host school using the code G21. The host school would then receipt the
cheque from each participating school as taxable (code G01). If the participating
school charges their own students for any additional costs eg transport, they need to
use a code other than G21 for this non-agency component ie G01 in this example
where the activity is not educational.
3.44.5 Training and Development Courses
The supply of a Training and Development activity from one school to another is a
taxable supply and GST must be charged. Refer to Chapter 3.42.
3.44.6 Reimbursement between schools for TRT costs
If a school is charging another school for the cost of employing a TRT (other than
when claiming their share of cluster-type appropriation funding, refer above), this is a
taxable supply between the schools with GST added and a tax invoice supplied.
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Chapter 4 EDSAS ACCOUNTING
4.1 Outline
The GST Solution (V1.18A) developed for EDSAS finance records GST information
and produces a BAS Report (Calculation Sheet) to assist in completing the ATO
BAS. (The BAS Reports from all companies in EDSAS need to be consolidated for
the ATO BAS.)
If it is necessary to enter/edit the ABN in EDSAS press Shift/Ctrl/A while the GST
Application is open and a screen "Enter ABN" will open.
4.1.1 Accounts Payable
When a compliant tax invoice is received and GST is charged:
·
enter the GST exclusive amount to the expense account(s) with G11 entered in
the "Transaction Ref" boxes
·
enter the GST as a separate line item using the inventory code G11. Use of this
inventory code ensures that the GST liability account is the default account
·
double click in the "Item" box to select the GST code and enter the quantity and
the amount if using the "Detailed Breakdown" type of invoice
·
enter the same GST code (G11) in the "Transaction Reference" boxes. A drop
down menu is available by double clicking in the appropriate boxes
Where an invoice is received and no GST is charged or the acquisition is for an input
taxed activity, the invoice details are entered as appropriate with no GST breakdown
and the user must enter the appropriate GST code (ie G14 or G13) in the
"Transaction Reference" boxes. A drop down menu is available by double clicking in
the appropriate boxes.
Where GST has been charged but the tax invoice is not compliant and is for more
than $50 (GST exclusive), the school should make a request to the supplier to
provide a compliant tax invoice. If this is not received after 28 days the school should
114
pay the GST exclusive amount only and code the transaction G14. EDSAS
processes are as shown above.
If the supplier after 28 days does not provide an ABN on request and is not eligible or
prepared to complete a 'Statement by a supplier' form, the school must withhold
48.5% from the payment. The user selects the inventory code and calculates 48.5%
of the total invoice. This is the amount at W04 to be withheld. The user must enter
the GST code in the 'Transaction Reference' boxes. The balance ie 51.5% would be
entered using the code G14.
Credit Note - the user selects the same inventory code and account as the original
invoice. Entering the amount as a credit reduces the total at this GST code. (Any
refunds of revenue processed in the AP module are entered with the same GST
code(s) and account(s) as used in the original receipt of the payment.)
4.1.2 Purchase Orders
·
For taxable acquisitions the user enters the GST as a separate line item using the
inventory code G11. The user double click in the “Item” box to select the GST
code and also enters the quantity and price. Use of this inventory code ensures
that the GST liability account is the default account. The user must enter the
same GST code (G11) in the 'Transaction Reference' boxes. A drop down menu
is available by double clicking in the appropriate boxes.
·
When generating a purchase order if there is a possibility of receiving the order in
more than one delivery, the user may find it convenient to enter just one GST line
but to put in a "quantity" of 2 or 3 and a cost of zero
4.1.3 Accounts Receivable and Tax Invoices
EDSAS Finance produces a compliant tax invoice including the Australian Business
Number.
·
Calculation of GST - the user needs to manually calculate ie add 10% or, if the
price is GST inclusive, calculate 1/11th as GST payable. (It is recommended that
the GST Calculator, available from the GST website, is downloaded and saved to
Desktop to assist with the GST calculations.)
115
·
When invoicing for taxable supplies, the GST amount is entered as a separate
line item. The user selects the code G01 from the inventory table so the GST
liability account is the default account. The user must enter code G01 in the
'Transaction Reference' boxes.
·
Credit Notes - If for taxable supplies, the GST is entered as a separate line item.
Coding should be the same as on the original invoice and for the GST line (if a
taxable supply) the user selects code G01 from the inventory table to ensure that
the GST liability account is the default account.
·
Bad Debts - the debt is written off using the same GST code as the original
invoice. If for a taxable supply, the GST is entered as a separate line item using
the GST, code G01. The user should select the code from the inventory table to
ensure that the GST liability account is the default account.
·
Refunds - Refunds are entered to the same account code and GST code as the
original transaction (invoice or through CRE). (This is the only legitimate reason
for a receivable GST code to appear in the AP Report as the cheque is processed
through the AP module with a receivable code to reduce the revenue rather than
increase an expense.)
4.1.4 Accounts Payable and Purchase Orders
The flowcharts on the following pages identify the processes to be followed with
Accounts Payable and Accounts Receivable.
116
Accounts Payable Generic
Process Map
1. Invoice received
for acquistion of
supplies
2. Registered
supplier?
7. Are the
acquistions
fully taxable?
Yes
No
No
3. Check invoice to
ensure no GST
added
4. Is there an
ABN on the
invoice?
8. Are the
acquistions
partially
taxable?
Yes
6. Pay invoice
and debit amount
to expense a/c
No
5. After 28 days pay
the invoice
deducting 48.5%
witholding tax from
the invoice total.
Yes
A
No
Yes
11. Separately identify
the taxable, GST free
and input taxed
acquistions
Taxable
component
12. Calculate GST
component on taxable
acquistion
No
9. Check invoice to
ensure no GST added
No
No
When the supplier is
requested for an ABN
do they supply it?
13. Does total
value of the
acquistions
exceed $50?
Yes
Yes
10. Pay tax invoice &
debit amount to
expense account code
G14 or G13 as
appropriate
Non-taxable
component
14. Can GST
component be
determined from
tax invoice?
Yes
B
No
15. Return tax invoice to
supplier requesting
additional information or
pay using code G14, no
GST charged.
117
Accounts Payable Generic
Process Map
18. Is invoice a
compliant tax
invoice?
A
No
19. Return invoice to
supplier & request a
compliant tax invoice or
pay using code G14
Yes
20. Are none of the
acquistions to be
used for an input
taxed activity?
Yes
23. Pay tax invoice &
allocate GST exclusive
amount to expense A/c &
GST component to GST
liability A/c code G11
24. Retain tax invoice
copies for 7
years(DETE Policy)
No
21. Apportion tax
invoice total between
input taxed & creditable
purposes
taxable
component
Input taxed
component
Yes
B
16. Pay tax invoice
and allocate GST
exclusive amount to
expense a/c & GST
component to GST
liability a/c
22. Pay invoice. Debit total
amount relating to input
taxed activity to expense
account. Code G13
17. Retain invoice copies
for 7 years (DETE Policy)
118
Accounts Receivable Generic
Process Map
1. Supply
goods
and/or
services
2. Is supply
an
intra-school
transaction?
Yes
3. Tax invoice not
required.
No GST payable
(code G21)
No
Yes
4. Is supply
fully taxable?
No
5. Is supply
partially
taxable?
Yes
9. Separately
identify taxable
and non-taxable
supplies
Taxable
component
10. Calculate GST
component on taxable
supply
No
Non-taxable
component
6. Issue
invoice/receipt.
No GST payable
7. Credit to
revenue a/c code
G03
8. Retain copy
of invoice/receipt
for 7
years(DETE
Policy)
119
Accounts Receivable Generic
Process Map
11. Is total
value of sale
less than $50?
Yes
12. Issue invoice/receipt
identifying GST component
No
13. Is total price
of sale more than
$1000?
No
Yes
15. If requested by GST
registered customer issue a
tax invoice specifying details
in step 16 plus name,
address or ABN of recipient
and quantity of what was
supplied
16. Credit GST exclusive
price to revenue A/c and
add GST component to
GST liability A/c code G01
17. Retain copy of
invoice/receipt for7 years
(DETE Policy)
14. If requested by GST
registered customer issue a
tax invoice specifying trading
name, ABN, GST-inclusive
price of taxable supply, date
of issue and brief description
of items supplied
120
4.2 Salaries and Wages
When drawing a cheque to pay wages, two entries are made to prepare the cheque
for the employee. In the following example, the gross wage is $535 and the tax
payable under the new rate is $35.
Steps to follow:
·
Raise an AP invoice to the employee for the gross amount ($535) of the wages,
including tax as follows:
·
Net wage
$500 to the Wage Expense A/C
W01
Tax withheld
$ 35 to the Tax Expense A/C
W01
Raise a credit note to the employee for the amount of the tax withheld
Tax
$ 35 to the PAYG Tax Liability A/C
W02
·
Apply the credit note and the invoice in 'Approve To Pay'
·
Generate the cheque for the employee (ie $500 in this example).
The cheque to the ATO (drawn against the PAYG Tax Liability A/C) is generated,
code G21, when the IAS is completed and is forwarded with the IAS.
Most School Councils have been registered for PAYG as most contracts for "local"
employment such as Canteen, OSHC and Grounds Maintenance are through the
School Council. The school does not report the PAYG requirements at items W1 and
W2 on the group BAS. The salaries and wages are reported on the IAS that is
addressed to the School Council. As the IAS is addressed to the school council.
Schools need to ensure a process is in place for this form to be passed on to the
school finance officer as soon as it arrives in the school.
For School Councils who remitted less than $25,000 group tax last financial year, the
IAS will come quarterly. If more than $25,000 group tax was remitted in the last
financial year, the form will come monthly.
121
4.2.1 Correction Journals
When an invoice has been entered with the wrong GST code and the BAS has not
yet been sent, the 'GST Codes-Edit' buttons of the GST solution can be used to
correct it in that period. However if an invoice has been raised where no GST or the
incorrect amount of GST has been entered a journal is required to adjust the account
balances accordingly. A journal is also required to amend an incorrect GST code if
the error relates to a previous period where the BAS has already been submitted to
the ATO.
4.2.1.1 Examples of journal processes to correct coding and GST amounts
Example 1: Stationery items purchased for $160.00 (GST inclusive) have been
entered in EDSAS with code G11 but no GST was entered to L-ZZZ-3515.
Complete the following General Ledger Journal:
DR
GST Liability account
$14.55
G21
CR
Stationery Expense account
$14.55
G21
This will correct the amount in the stationery expense account to $145.45 and enter
the GST amount of $14.55 in the GST Liability Account. This transaction will not
alter the Accounts Payable Report but will show in the General Ledger Report. The
BAS Calculation sheet will not change as the total of the expense had been coded
G11 even though the GST was not against the Liability account.
Example 2: Money was receipted with a single GST code of G03, and end-of- day
has been processed but the transaction should have been for a mixed supply (eg
camp money including food receipted all GST free but the food component should
have been taxable) use the following procedures.
·
Total the amount of money received and calculate how much is GST-free and
taxable.
For example, a total amount of $600 was received for a camp (6 students @ $100
comprising bus $33, food $22, accommodation $45.00) with all revenue coded G03.
The bus and accommodation charge is GST-free. However the food charge is
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taxable (1/11th of the food charge is GST payable ie $2) and should have been
coded G01. The correct totals are:
Total revenue at G03:
6 x ($33+ $45)
= $468
Total revenue at G01:
6 x $20
= $120
Total GST at G01:
6 x $2
= $ 12
To correct the transaction the journal entries are:
DR
Camp Revenue A/C
CR
Camp Revenue A/C
CR
GST Liability A/C
$132 (Food)
G03
(-)
$120
G01
(-)
$ 12
G01
Example 3: A taxable supply is entered using the code G01 but with an incorrect
calculation of GST. For example, uniforms sold for $55 (GST inclusive) were
receipted with $52.50 to the Revenue account and
$2.50 to the GST Liability
account with the codes G01. The entry should have been $50 to the Revenue A/C
and $5 GST to the Liability account. The journal to correct the transaction would be:
DR
Revenue A/C
$2.50
G21
CR
GST Liability A/C
$2.50
G21
Because the total transaction was already coded G01 the journal is coded G21 (not
on BAS), as it is an internal transfer from the Revenue A/C to the Liability A/C. This
transaction does not affect the BAS.
Processes used to correct a previously submitted (or current) BAS
Example 1: A taxable expense of $220 was incurred several months ago but no tax
invoice was obtained so it was processed using code G14. A compliant tax invoice
has now been received. The correction can be made on any subsequent BAS.
In this case a journal entry (current) is made as follows:
DR
$200 (the GST exclusive amount) to the expense account, code G11
123
DR
$20 to L-ZZZ-3515, code G11
CR
$220 to the expense account, code G14
Example 2: A taxable supply was made over several months earlier in the year that
totalled $1276 but was incorrectly coded G03 instead of G01. The net GST correction
of $116 is under the amount limit and the mistake is within the 18-month time frame
so it can be made on the current BAS. In this case a journal entry (current) is made
as follows:
DR
$1276 to the revenue account, code G03
CR (-) $1160 (the GST exclusive amount) to the revenue A/C, code G01
CR (-) $ 116 to L-ZZZ-3515, code G01
4.3 Other Types of Transactions
4.3.1 Refunds
Refunds for money received (eg camp/excursion paid for but not attended).
For example, payment was received for an educational camp/excursion totalling $97.
Accommodation
$50
R-Camp
G03
Food
$20
R-Camp
G01
GST Food
$ 2
L-ZZZ-3515
G01
Bus
$25
R-Camp
G03
$97
To refund the payment, generate a cheque for
$97 to the appropriate revenue
account using the same GST codes as the original invoice. If there was a GST
component the same amount should be included when creating the AP
invoice/cheque.
124
Accommodation / Bus
$75
R-Camp
(G03)
Food component
$20
R-Camp
(G01)
GST
$ 2
L-ZZZ-3515
(G01)
If the student has been invoiced but has not paid and is now not going then either
cancel the invoice or create a credit note using the same codes as the original
invoice to 'reverse' the transactions, including the GST.
4.3.2 Deposit paid for a camp
Pay the initial deposit by cheque from the Camp Expense Account using the code
G21 (deposits are not recorded on the BAS). No invoice is required.
·
When the camp invoice is received ensure that the invoice shows the total cost
including the deposit and that the GST has been calculated on this total. If the tax
invoice is compliant and correct, create an AP invoice for the total amount
(including the deposit) using code G11.
·
Enter a credit note for the deposit using code G21.
·
Apply the invoice and the credit note in 'Approve To Pay'.
·
Generate a cheque for the total amount less the deposit ie the amount owing.
For example: total camp cost $1000 + $100 GST with $200 deposit to be paid
A cheque has been previously raised for the $200 deposit from the Camp Expense
A/C (code G21).
A compliant tax invoice is received for the camp that shows the total cost less the
deposit.
·
AP Invoice
- Camp Expense account for bus/accom/food$1,000
G11
-
G11
GST Liability account L-ZZZ-3515
$ 100
125
·
Credit Note
- Camp Expenses account (Deposit)
·
Approve both entries in 'Approve To Pay'.
·
Generate the cheque for $900.
$ 200
G21
Students paying for a camp by instalments where there is a mixed supply (ie food is
included)
If the payments are to be received in instalments it is much simpler and less prone to
'entry errors' to invoice the students with the appropriate GST codes using Bulk
Billing in class groups (also makes reporting to staff much simpler). The payment
received is then applied to the invoice.
Example: Camp cost
Accommodation
$20
R-CXC-
G03
Food
$20
R-CXC-
G01
GST
$ 2
L-ZZZ-3515
G01
Total
$42
The GST liability to the ATO occurs when the invoice is generated. It may create
cash flow problems if you are invoicing in March for a camp but are expecting most of
the payments in October. Ensure the first part payment received from the students
covers the deposit required by the camp plus the GST liability. If an invoice is not
used, a breakdown is still required. Each individual payment would need to be
recorded manually to keep track of which component is being paid. This process is
prone to errors, especially if there is more than one operator.
4.3.3 Issuing a Cash Cheque or Petty Cash amount for Camps, OSHC etc.
At the time of raising the cheque, the GST treatment of the acquisitions is not known.
In most cases there may also be an amount of change to receipt.
126
For example, a teacher requires a cheque for $200 to make purchases whilst on a
camp.
·
The cheque is raised to the Camp Expense A/C using code G21.
On returning from the camp the teacher provides tax invoices and receipts. The
taxable expenses total $132 and the GST-free expenses total $54 and there is cash
change of $14.
·
Receipt the cash change in CRE ($14) to the Camp Expense A/C, code G21
A journal is then entered as follows:
-
DR
Camp Expense A/C
$120
G11
-
DR
GST Liability A/C
$ 12
G11
-
DR
Camp Expense A/C
$ 54
G14
- CR
Camp Expense A/C
$186
G21 ($200 - $14)
4.3.4 Journal entry for interest from the SASIF account
Bank interest is input taxed, code G04.
The transaction is as follows:
- DR
A-ZZZ-1210
G21 (Not on BAS)
- CR
Interest Revenue Account
G04 (Input taxed)
4.3.5 Entries via Direct Dr/Cr
Bank interest is input taxed, code G04.
·
In Bank Reconciliation click on the Direct DR/CR button. Complete the relevant
details with the code G04 in the Transaction Reference box. Ensure 'Credit on
Bank Statement' is selected.
127
Any taxable revenue received via a Bank Statement is coded G01. (Currently, to
avoid inconsistencies in the BAS reports as a result of a direct credit to the Liability
A/C, the taxable revenue should be credited with the total amount to a Revenue A/C,
code G01, then a journal entry, code G21, to transfer the GST amount to the L-ZZZ3515 A/C.)
Expenses paid directly from a bank account as a debit are coded according to the
nature of the expense. For example, financial fees for an overdrawn account or
dishonoured cheque are input taxed (G13), whereas bankcard merchant fees (which
is a service fee rather than a financial fee) are taxable (code G11).
4.3.6 Receiving and paying money to the ATO
Money received into the bank account from the ATO should be credited to the GST
Liability Account, code G21. When GST is owed to the ATO the cheque would be
debited from the GST Liability account, code G21.
If the ATO charges or pays any interest to the school this component is input taxed
(code G04 for interest received and G13 for interest charged). For example, a school
has submitted a BAS claiming a refund of $700. The school then receives the refund
for that month of $705.35. The additional $5.35 would be interest paid by the ATO for
taking over 14 days and needs to be credited with $700 to the L-ZZZ-3515 A/C, code
G21, and $5.35 to the interest revenue A/C, code G04. Similarly any charges by the
ATO that have been deducted from a GST refund need to be accounted for. The full
refund, as reported on the BAS, would be credited to the L-ZZZ-3515 A/C, code G21,
with the expenses debited to an expense A/C (code G13 for interest).
Any cheque to the ATO for PAYG tax withheld from wages is debited from the PAYG
Tax Liability account, code G21.
4.4 Completing the Business Activity Statements
·
The user will select the button identifying the BAS report and select the
appropriate period (through a drop down box). BAS returns for previous periods in
the current financial year are also available for viewing, editing and re-printing.
128
·
By clicking on the "View GST Trans" button the system will produce a report on
any transactions that have occurred during the current period that do not have a
GST code. The user will be able to enter the code at this stage by clicking on
"Enter GST Code", double clicking on individual entries, one at a time, and
entering the correct GST code from the selection box. To save the information the
user must click on the "Update EDSAS Records" button before closing the GST
Application. Failure to do this will result in all changes being lost. Once this is
complete the user clicks the BAS button to produce the BAS Calculation Sheet. It
is a requirement that the "View GST Trans" report (headed 'Transactions with
Missing GST Codes') be printed, signed by the Principal and filed with other
Reconciliation Reports.
·
The Monthly Reconciliation Report should be printed so that the user can
reconcile these figures with those on the BAS Calculation Sheet and the other
reconciliation reports produced within EDSAS ie AR, AP, Dr/Cr, GL. All
Reconciliation Reports need be printed and filed with the copy of the signed BAS
·
Consolidate the totals of the BAS Calculation sheets for each different EDSAS
Company. Financial transactions for all groups within the school that are not
recorded in EDSAS must also be consolidated on the ATO BAS. The calculations
showing the consolidation of each company and also any non-consolidated
groups need to be kept for audit purposes. When completing the BAS use a black
pen only.
4.5 Non-Consolidated Accounts
Within the school/school council GST group, only one BAS return will be submitted.
In the event that a school has non-consolidated accounts, the first issue is to ensure
that the separate component is part of the school/school council (or governing
council) group. Questions to consider revolve around who has ultimate responsibility
or liability for the body concerned. For example, is it subject to the authority of the
principal and/or school council (or governing council)?
Having established that the body concerned falls under either the school council's (or
governing council's) or the school's authority, arrangements need to be made
129
between the school officer and representatives of the body to manually incorporate
transactional information into the school's BAS return on a monthly basis. Copies of
the non-consolidated body's financial reports, which have been used for the
consolidation with the school's BAS, need to be filed for audit purposes. Also, upon
receiving payment from the ATO for input tax credits, the school will have to make a
payment of the appropriate portion of input tax credits due to the other body (code
G21). Finally, the school is ultimately liable should the filing of transactions by this
other body be insufficient for audit purposes. The school must ensure that adequate
administrative arrangements are in place (as discussed in Chapters 2.1 and 2.5).
All expenses and all revenue of groups that are considered part of the school must
be reported on the BAS.
130
Chapter 5 APPENDICES
5.1 BAS Reconciliation
The following steps are provided for School Administration and Finance Officers as a
checklist when completing their monthly Business Activity Statement (BAS). It is
intended only as a guide and if schools are unsure or need further clarification they
should contact the Global Budget Unit.
5.1.1 BAS CHECKLIST
1. Process all transactions for the month in EDSAS and close the month.
2. Complete the Bank Reconciliation with all direct debits/credits as prior period.
3. Complete all SASIF journals as Prior Journals.
Check Entries
For each company:
4. Check if any transactions have been entered without a code in 'View GST
Transactions'. Enter the missing codes. Print the 'Transactions with Missing GST
Codes' Report for filing. This must be signed by the Principal.
5. Print each report under the Reconciliation column, namely Accounts Receivable
Report, Accounts Payable Report, Debit/Credit Report, General Ledger Report
and Monthly Reconciliation Report.
- Check each report to see if the correct code has been used for individual
transactions.
- Check the amounts entered are accurate.
For example,
- For transactions coded G11 in the AP Report there should always be an amount
(ie not $0.00) in the GST column (1/11th of Gross Amount).
131
- For transactions coded G13 or G14 there should be zero amounts in the GST
column of the AP Report.
(If it is incorrect, process a Journal entry, using code G21, to transfer the correct
amount to the appropriate account.)
Spring Primary School
Company 1
Period: 3
5.1.1.1.1 Example: GST Accounts Payable Report
G11 - GST- OTHER ACQUISITIONS
Date
Supplier
Invoice
No.
Gross
Amount
Net
Amount
GST
25/01/2001
Site Book
6738A
$375.00
$340.91
$34.09 4correct
5/01/2001
Tech. Co.
P1764
$1320.00
$1320.00
$0.00 6 not correct
G14 - GST FREE ACQUISITIONS
Date
Supplier
Invoice
No.
Gross
Amount
Net
Amount
GST
3/01/2001
Vals Gdn.
2067
$9.50
$9.50
$0.00 4 correct
- Similarly for transactions coded G01 in the AR Report an amount of 1/11th of the
Gross Amount should appear in the GST column and there should be zero
amounts in the GST column for transactions coded G03 or G04.
Spring Primary School
Company 1
Period: 3
5.1.1.1.2 Example: GST Accounts Receivable Report
G01 - GST - SALES/INCOME
Date
Item Code
Invoice
No.
Gross
Amount
Net
Amount
GST
7/01/2001
FHire
0034
$38.50
$35.00
$3.50 4 correct
25/01/2001
Advertis.
1764
$12.00
$12.00
$0.00 6 not correct
132
G04 - INPUT TAXED
Date
Item Code
Invoice
No.
Gross
Amount
Net
Amount
GST
3/01/2001
Interest
2067
$19.50
$19.50
$0.00 4correct
5.1.1.1.3 Example: GST General Ledger Report
- Check that the Bank Interest has been entered with the entry to the Revenue
account coded G04 and the entry to the Asset account coded G21.
G04
Date
Description
GL Account
Gross
Amount
Net
Amount
GST
31/01/2001
Interest
R-ZZZ-6850
$685.40
$685.40
$0.00 4 correct
G21 - NOT ON BAS
Date
Description
Invoice No.
Gross
Amount
Net
Amount
GST
31/01/2001
Interest
A-ZZZ-1210
$685.40
$685.40
$0.00
- Check the other Reconciliation Reports similarly
6. Reprint the corrected monthly Reconciliation Report if you have made changes.
7. Print the BAS Report from EDSAS.
8. Reconcile the BAS Report (Calculation Sheet) to the Monthly Reconciliation
Report in EDSAS or this process can also be done manually from the other
Reconciliation
Reports
(ie
Accounts
Receivable,
Accounts
Payable,
Debits/Credits, General Ledger ) using the following process:
- Add the totals of the Gross Amount column for each code from the Reconciliation
Reports, for example, total G01, total G03 etc.
- The totals for each code from the Reconciliation Reports should equate with the
amount for that code in the EDSAS BAS Calculation Sheet (except that G01
correlates to G06 on the EDSAS BAS Calculation Sheet and G11 to G17 on the
EDSAS BAS Calculation Sheet as described below).
133
5.1.2 Supplies
Total of G01 from Reports = G06 on the EDSAS BAS Calculation Sheet
Total of G03 from Reports = G03 on the EDSAS BAS Calculation Sheet
Total of G04 from Reports = G04 on the EDSAS BAS Calculation Sheet
G01 + G02 + G03 + G04 from Reports = G1 on the EDSAS BAS Calculation Sheet
(G1 on BAS is the total of all sales)
5.1.3 Acquisitions:
Total of G11 from Reports = G17 on the EDSAS BAS Calculation Sheet
Total of G13 from Reports = G13 on the EDSAS BAS Calculation Sheet
Total of G14 from Reports = G14 on the EDSAS BAS Calculation Sheet
G11 + G13 + G14 from Reports = G11 on the EDSAS BAS Calculation Sheet
(G11 on BAS is the total of all non-capital acquisitions)
If the BAS Report (Calculation Sheet) does not reconcile with the Reconciliation
Reports it is necessary to determine the reason for the differences and correct
accordingly. Usually corrections are made within EDSAS by editing codes or as
journals. However, if manual corrections are required it will be necessary to
recalculate G08, G09, G19 and G20 as shown below.
Supplies:
Acquisitions:
G08 = G06 + G07
G19 = G17 + G18
G09 = G08 ÷ 11
G20 = G19 ÷ 11
- Repeat the process for other companies.
If the school has already sent the BAS to the ATO and now realises it is incorrect,
refer to Chapter 2.4, or contact the Global Budget Unit for further advice.
134
9. Consolidating
The Finance Officer will need to combine the BAS Report for each company from
EDSAS and any school activities run outside EDSAS as one consolidated BAS. The
calculations showing the consolidation of each company and also any nonconsolidated groups need to be kept for audit purposes.
10. Complete the ATO's BAS
If the school has any other groups that are part of the GST registered grouping that
are not accounted for in EDSAS (perhaps the Parents' Club, Student Enterprises,
Canteen or a Sport Club) the Finance officer will also need to consolidate their
monthly transactional information on to the ATO's BAS. For example, if the school's
Canteen is not a company on EDSAS, and is input taxed, the Finance Officer will
need to include total input taxed sales at code G04 and add it to G01 on the BAS
Calculation Sheet. Similarly, total input taxed acquisitions (expenditure) made by the
canteen need to be included at code G13 and added to G11on the BAS Calculation
Sheet.
Copy the amounts at G01, G03 and G11 from the final consolidated BAS Report
(Calculation Sheet) on to the ATO's BAS and also complete page 2 of the BAS. The
amounts are entered in whole dollars only (without rounding) and in black pen.
Do not enter the amounts at W1 and W2 from the EDSAS BAS Report on to the
ATO's BAS. Schools process Wages and Salaries in EDSAS using W01 and W02
but the PAYG amounts are reported quarterly via the Instalment Activity Statement
(IAS) with the School Council's ABN.
11. Principal signs the BAS.
12. Photocopy both sides of the ATO's BAS for your records.
13. Send the BAS to the ATO to arrive by the due date.
14. File Records
In a monthly BAS Folder or similar, the Finance Officer will need to file the
Reconciliation Reports, Monthly Reconciliation Report, the BAS Report (Calculation
135
Sheet), the 'Transactions with Missing Codes' Report signed by the Principal, any
consolidation calculations, the copy of the signed ATO's BAS and any supporting
documentation ie the 'Statement by a supplier' forms (no ABN), treatment elected for
fundraising, food breakdown for camps, "part of an education course" justification,
and any adjustment notes.
5.2 Negative entries on the BAS
The BAS should not include any negative signs indicating a negative amount.
Negative signs are likely to be ignored by the ATO resulting in the amount being
treated as positive. This will lead to an incorrect GST payable or GST credit amount
being calculated by the ATO. Negative amounts may arise at a particular BAS cell
due to the processing of credit notes. In this case follow the steps as outlined below.
If the negative is not a result of excessive credits contact the Global Budget Unit for
assistance.
When negative amounts occur as a result of excess credits at cells detailing GSTfree or input taxed supplies and acquisitions, namely G03 or G04, a zero should be
entered on the BAS at this cell rather than the negative amount. This will require
manual recalculating of G01 (Total Sales & Income) as the negative amount will need
to be added as a positive to G01. The amount at G09 will not change.
If a negative amount occurs at a cell detailing taxable supplies as a result of excess
credits, ie at G06, a zero should be entered on the BAS at G06 and this amount
added, as a positive, to G01. The same amount is added manually, as a positive, to
the 'Acquisition you have made' cells G11, G12 and G17. Cells G19 and G20 then
need to be manually recalculated according to the amended amount at G17. In this
way, the net amount of GST payable and GST credits will be correct.
136
The following table summarises the previous information.
BAS Cell - if negative BAS Reporting Treatment
amount
G03 or G04
Enter zero at the cell (G03 or G04) and add this amount, as a
positive, to G01
G06
Add the amount shown as a negative at G06 (but add as a
positive) to G11, G12 and G17. Recalculate G19, G20. Add the
negative amount (as a positive) to G01, G06 ie enter G06 as
zero, and G08. Recalculate G09.
5.3 GST-free Supplies
·
Basic food
·
Health
·
Education
·
Childcare
·
Non-commercial activities of charities and government schools
·
Raffles and bingo conducted by charities and government schools
·
Council rates, water, sewerage and drainage services
·
Religious services
·
Exports
·
International mail
5.4 Input Taxed Supplies
·
Financial services eg.
- borrowing or lending money
- savings or cheque accounts
137
- debt and credit securities
- life insurance
·
Supplies of food and beverages by school canteens / tuckshops (where such an
election is made)
·
Fundraising events conducted by charitable institutions and schools as defined in
the legislation
·
Residential accommodation
·
Sale of existing residential premises (new residential and commercial residential
premises are taxed)
·
Precious metals
5.5 Education Course Definition
The term 'education course' is defined in the GST Legislation. This definition lists the
types of courses which are GST-free.
They are:
·
All recognised pre-school and primary school courses
·
Special education courses for children with disabilities
·
Courses covered under a determination by the Education Minister. This covers
most accredited secondary and tertiary courses, such as English as a second
language, TAFE courses, certain vocational and training courses etc
·
Masters and doctoral courses
·
Certain adult and community education courses as determined by the Education
Minister
·
First aid and life saving courses provided by an approved / registered body and
138
·
Professional or trade courses where they are an essential prerequisite to
employment in a trade, profession or occupation (but not a course for a
qualification which may be required by a particular employer or group of
employers, for example, a fork lift driver's licence).
It should be noted that the GST treatment of these courses does not depend on how
the qualification is subsequently used or whether the student is an Australian resident
or an overseas student. The course will be GST-free provided all the relevant
conditions are satisfied.
5.5.1 GST-free supplies (related to the provision of an education course and
provided by the school)
5.5.1.1 Course materials
The following list gives some examples of course materials:
·
Photocopied or printed educational materials relating to the course
·
Course notes for a particular course
·
Unexposed film and developing chemicals
·
Batteries
·
Art supplies
·
Ingredients used in a cooking class, chemicals used in a chemistry class
·
Wood, plastic, metals and other materials used in technology studies
·
Exercise and work books
·
Student planners/diaries
·
Consumable stationery items (pens, pencils & erasers etc that are necessary for
the course)
139
·
Taped lectures specifically relating to the course (considered to be the provision
of tuition rather than course materials as such).
5.5.1.2 Lease or hire of curriculum related goods
Lease or hire of curriculum related goods to a student by a pre-school, primary or
secondary school provided that the supplier of the course retains ownership of those
goods.
For example, musical instrument hire to students where the school owns (or leases)
the instruments is GST-free.
If the instrument is hired from an external supplier they will charge GST providing
they are a registered entity. If the school is hiring the instrument they are entitled to
claim the input tax credits. If the student/parent/caregiver is hiring the instrument
directly from the external provider they pay the GST inclusive price.
5.5.1.3 Excursions
Excursions or field trips (excluding food) providing that they are curriculum related
and
not
predominantly recreational.
Curriculum
related
excursions
include
representation at school sporting events.
5.5.1.4 Curriculum related activities and instruction
Curriculum related activities and instruction that are part of the supply of an
education course, which includes any external instruction (eg. tutors), engaged by
the school to deliver part of the curriculum (including remedial teaching).
5.5.1.5 Use of Facilities
Use of Facilities such as libraries, computers and science laboratories. This category
also includes use of grounds, access to the school's Internet, use of classroom sets
of textbooks, use of school-owned sporting and musical equipment, laboratory coats
and any other curriculum related items.
140
5.5.1.6 Administrative Services
Administrative Services directly related to the supply of an education course. These
include:
·
Enrolment processing
·
Issue of ID cards
·
Assessment of students
·
Processing academic and sporting results
·
Preparation and printing of student progress reports
·
Arrangement of meetings with students, parents, guardians
·
Record-keeping
·
Administration of speech days and other similar school activities
·
Administration of the school library (library fees)
·
Administration of the sale, lease or hire of school equipment
·
Administration of the supply of course materials.
5.5.1.7 Other Itemised Charges
Other Itemised Charges cover:
·
tuition - not charged to students
·
the supply of student accommodation if the accommodation is provided in a
hostel in which the primary purpose is the provision of accommodation to
students from rural or remote locations who are undertaking a primary, secondary
or special education course
·
cleaning, maintenance, electricity, gas, air-conditioning or heating, television,
radio or other similar things as part of the provision of student accommodation
141
5.5.1.8 Textbook deposits
Textbook deposits while not GST-free, fall outside the scope of GST. They are not
reported on the BAS unless the student subsequently forfeits the amount through
loss or damage of the textbooks. At that time the amount forfeited becomes a taxable
supply.
5.6 Taxable Supplies
The ATO has ruled that items such as those listed below do not fall within the
definition of course materials and therefore GST is charged when there is a cost to
the student for these items and/or they become the property of the student:
·
Textbooks sold to students (Offset by the Education Textbook Subsidy Scheme
rebate of 8%)
·
Musical instruments
·
Calculators
·
Sporting equipment and sports clothes
·
School bags and uniforms (unless sold by the school as donated second hand
goods)
·
Insignia patches and honour blazers
·
Other non-consumable stationery items such as rulers, compasses, protractors,
geoliners, scissors, floppy disks
·
School magazine
·
Food component of camps and excursions
·
Food provided as part of student accommodation
·
Portion of book or equipment hire deposit forfeited due to loss or damage
142
·
School products or goods produced and sold by the school (paintings, crafts,
wood work and similar goods)
5.7 Education Related Supplies
Materials supplied by the provider of an education course that are necessarily*
consumed or transformed in relation to the education course are GST-free. All other
supplies are taxable.
The following table details some typical education related supplies provided by
schools and classifies them in terms of GST-free and taxable. This list is not
exhaustive but gives a guide as to the type of items in each category.
GST-FREE
Adhesive tape
4
4
Backpack
Batteries
TAXABLE
4
4
Calculator
Chemicals
4
Coloured Pencils
4
Correction Fluid
4
Correction Tape
4
Crayons
4
Diary / Planner
4
Disk - blank
4
Disk box / wallet
4
Document Wallets
4
Erasers
4
Exercise Books
4
*
Refer to page 1 Chapter 3.
143
4
Geoliner /
Protractor/Compass
Glue Sticks
4
Hi-lite pens
4
Ingredients for Home
Economics
4
Lined / Graph Pads
4
Magazine
4
Manila Folders / Ring Folders
4
Markers
4
Paints
4
4
Pencil Sharpeners
Pencils
4
Pens
4
Photocopied course
materials
4
Reader covers
4
Ruler
4
SACE Revision Guides
4
Scissors
4
Sheet protectors
4
Sketch Pads
4
4
Stapler
Taped course material
4
Unexposed film
4
Wood for Technology
Studies
4
144
5.8 Schedule of School Charges
Categories and details
Compulsory
Materials School
Council
Approved
and Services Charge
Voluntary Contribution
$GST-free only
$ Taxable
$GST-free
1. Course Materials
2. Lease or hire of
curriculum related goods
3. Excursions,
performances and
presentations
4. Curriculum Related
Activities & Instruction
5. Facilities
6. Administrative
Services
7. Other Itemised
Charges
TOTAL
SUMMARY OF CHARGES
$
Compulsory Materials and Services Charge
School Council Approved Voluntary Contribution
Text book deposit
Donation to approved building or library fund
TOTAL
Fixed by Principal
----------------------------- /
School Council Resolution date
/
School Council Chairperson
/
/
---------------------------- /
/
145
5.9 EDSAS GST Codes for Financial Transactions
5.9.1 Expenditure
Schools will be able to claim input tax credits for all GST paid on taxable supplies,
except for input taxed activities eg the canteen and input taxed fundraising, and any
other non-creditable acquisitions such as those acquired for private use or those that
are not deductible for income tax purposes (eg entertainment expenses - refer to
Chapter 3.1).
Suppliers may or may not be GST registered.
Only suppliers who are GST
registered charge the GST. The tax invoice provided by the supplier will indicate if
GST has been charged.
When entering transactions for input taxed activities eg. the canteen, the total of the
expense, including the GST, is recorded to the Expense account. Input tax credits
cannot be claimed for input taxed activities so the GST paid cannot be entered
against the GST Liability account.
Type of Transaction
Examples
EDSAS Code
GST charged on
supply
All taxable acquisitions from GST registered
suppliers (unless for an input taxed activity)
G11
(unless for an input
taxed activity)
No GST charged
Acquisitions from businesses that are not
GST registered or for GST-free supplies (eg
health services)
G14
Input taxed
Canteen supplies if treated as input taxed,
input taxed fundraiser, bank fees (excluding
merchant fees), loan repayments including
interest charge
G13
Not reported on the
BAS
DECS Grants that are part of appropriations,
refunds from the ATO (excluding interest),
deposits for camp bookings, acquisitions
received prior to 1 July 2000, cash floats,
depreciation, transfer of Investment Funds,
compulsory superannuation and donations
made by the school
G21
Salary and wages
Canteen manager, OSHC director
W1 (total salaries
and wages)
W2 (tax withheld)
146
5.10 Revenue
If unsure of how to treat a transaction for GST purposes, or for more clarification,
contact the Global Budget Unit.
Code description
EDSAS Code
Taxable supplies
G01
GST-free supplies
G03
Input taxed activities
G04
Activities not reported on the BAS eg. when
acting as an agent, for donations and
appropriations
G21
The following examples cover a range of transactions undertaken by schools. The
list is indicative only and not exhaustive.
Transaction
Examples
GST Status
EDSAS Code
Advertising
Advertising in school newsletter
Taxable
G01
Agency Transactions
Money held for outside agencies
ie. Book sellers, Photographer
Not on BAS
G21
A-thons run by the
school
Read-a-thon, Spell-a-thon.
The donor does not receive a
service or supply in return
Not on BAS
G21
ATO refund
(excluding interest)
Not on BAS
G21
Interest paid by the
ATO
Input taxed
G04
Bank Interest
Input taxed
G04
Book deposits
Not on BAS
G21 (unless
forfeited)
Text books
Taxable
G01
Exercise books
GST-free
G03
Book Sales
Note: Continued next page.
147
Transaction
Examples
GST Status
EDSAS Code
Camps
Money received from students
for camp cost (excluding food).
GST-free
G03
Food component
(All student charges are taxable
if the camp is not predominantly
educational)
Taxable
G01
All components
GST-free
G03
If treated as input taxed
Input taxed
G04
If treated as taxable
Taxable
G01
Child Care Fees
OSHC, Vacation Care
GST-free
G03
Commissions
School Photographs, Book Club
Taxable
G01
Computer rental
Computers rented to staff
Taxable
G01
Course Revision
Materials
SACE revision guides, tapes,
photocopied notes, workbooks
with space provided for written
answers
GST-free
G03
Deposits eg. book
deposit, camps
From students
Not on BAS
G21
If forfeited
Taxable
G01
To other entities eg. camp
venue (if forfeited, then subject
to GST)
Not on BAS
G21
Must be unconditional.
Not on BAS
G21
(where predominantly
educational)
Camps
(non-commercial refer to p. 72)
Canteen sales
Donations
A donor can donate for a
purpose but the donor doesn't
expect a service or supply in
return and there is no material
gain to the donor
Note: Continued next page.
148
Transaction
Examples
Equipment Hire
To students if for an education
GST-free
course eg. musical instrument (if
not for an education course,
taxable)
G03
To parents, teachers, outside
groups
Taxable
G01
Student charges eg.
Accommodation, transport,
entrance fees
GST-free
G03
Food component
Taxable
G01
Excursions predominantly
recreational
All components
Taxable
G01
Excursions - non
commercial
All components
GST-free
G03
Fundraising
Fetes, Sausage Sizzle, Casual
days, Food Stalls,
Performances, Auctions
Input taxed (if
so elected,
otherwise
taxable)
G04
Raffles, bingo, sale of donated
second-hand goods, noncommercial activities
GST-free
G03
Grants from DECS
(part of
appropriations)
Global budgets, cleaning
contracts, Basic Skills, Country
Areas Program, DECStech,
Early Years Intervention, School
Card, Furniture, Pool
Operations, Bottled gas, Non
Instructional Time,
Reimbursements, T & D, Waste
Disposal, C/Wealth Literacy.
Not on BAS
G21
Grants from Outside
DECS
Unconditional / Untied
(Donation)
Not on BAS
G21
Conditional
Taxable
G01
Appropriations from other
government related entities
Not on BAS
G21
Taxable
G01
Excursions predominantly
educational
Hall hire
GST Status
EDSAS Code
Note: Continued next page.
149
Transaction
Examples
GST Status
EDSAS Code
Hostel Fees
If provided by the school or the
hostel is primarily for student
accommodation for students
from rural or remote locations
GST-free
G03
Food component
Taxable
G01
Levies
Technology Levy, Library Levy,
Subject Levy
GST-free
G03
Materials & Services
Charge
Compulsory Charge
GST-free
(cannot
include items
which are
taxable)
G03
Music hire to students, levies,
subject charges, and stationery
items necessarily* consumed or
transformed
GST-free
G03
Taxable supplies eg. hats,
school magazine, stationery
items not necessarily*
consumed or transformed
Taxable
G01
Music Instrument Hire
By the school to students
(related to an education course)
GST-free
G03
Music Tuition Fee
By the school to students
GST-free
G03
Phone use
For calls paid for by staff,
students
Taxable
G01
Photocopying
From photocopiers, student
photocopying cards, revenue
from 'tins' for community use
Taxable
G01
Reimbursements
from DECS
For example, replacement of
stolen goods, fire damage, lice
lotion
Not on BAS
G21
(form of an
appropriation)
Note: Continued next page.
*
Refer to page 1 Chapter 3.
*Refer to page 1 Chapter 3
150
Transaction
Examples
GST Status
EDSAS Code
Sale of Second Hand
Goods
For example, sale of equipment,
and furniture
If donated to school
GST-free
G03
If non-commercial sale
GST-free
G03
If an input taxed fundraising
event (only applicable if the
items are sold for $20 or less)
Input taxed
G04
If not donated, not an input
taxed fundraiser, and is a
commercial transaction
Taxable
G01
School Magazine
Taxable
G01
School video
Taxable
G01
Shared Facilities
Payment from other schools /
groups for shared facilities to
contribute to costs eg. gym,
school bus
Taxable
G01
Sponsorship
For example, advertising in
newsletter, displaying
advertising sign
Taxable
G01
Stationery Sales
Necessarily* consumed or
transformed as part of the
education course eg. exercise
books, pencils
GST-free
G03
Not consumed or transformed
eg. rulers, scissors
Taxable
G01
Student Competitions
Student charge by the school for GST-free
entering competitions eg. Maths
as part of the education course
G03
Student Enterprises
Sale of goods or services if
taxable supplies
Taxable
G01
Sale of basic GST-free foods
GST Free
G03
Issuing of 'shares' to parents
etc. for redistribution (incl. profit
/ loss ) at 'close of business'
Not on BAS
G21
Note: Continued next page.
151
Transaction
Examples
GST Status
EDSAS Code
Ticket Sales by the
school
For example drama production,
school social
- part of an education course
GST-free
G03
- not part of an education
course
Taxable
G01
- Sales to parents, 'outsiders'
Taxable
G01
If a fundraiser and elect to be
input taxed
Input taxed
G04
Training &
Development
Courses (where charged) to
teachers
Taxable
G01
Transfers
Within the GST group eg. school Not on BAS
council to school, canteen
surplus to school
Journal entry
G21
School fees to another school
GST-free
G03
Outside the school eg. to other
schools (other than school fees)
Taxable
G01
New
Taxable
G01
Second hand:
GST-free
G03
If purchased by the school
Taxable
G01
Sale of uniform
Not on BAS
G21
Commission received on sale
Taxable
G01
If to students as:
Uniform Sales
If donated to the school
Uniforms sold as an
agent
152
5.11 Fundraising Flowchart
Is the event a fete, gala show, dinner,
performance or similar event, sale of
goods for $20 or less (per item) which
are not part of the usual business,
conducted for a fundraising purpose?
YES
Does the event form part of a series or
regular run of like or similar events (ie
more than 15 a year)?
For example, a Disco held every
Friday night.
YES
The supply is taxable (code
G01):
th
remit 1/11 of revenue
NO
Choose to treat the event as:
A
Taxable
claim input tax credits on
acquisitions
A: Taxable; or
B: Input Taxed
(Treat event as taxable only if input
tax credits claimable are greater
th
than 1/11 of revenue)
B Input
Taxed
The supply is input taxed (code
G04):
no GST is charged on supply
th
do not remit 1/11 of revenue
no input tax credits can be
claimed on acquisitions.
153
5.12 Sale of Goods (excluding alcohol products) Flowchart
Are the Goods:
1. Second Hand
2. Donated to the School
YES
The supply is GST-Free (code
as G03)
Note: no GST is charged ie do
th
not remit 1/11 of revenue
NO
Is the supply for nominal
consideration? This is , is it
1. Less than 50% of the
market value of
2.Less than 75% of the GST
Inclusive cost?
YES
The supply is GST-Free (code
as G03)
Note: Can claim input tax credit
on acquisitions
NO
NO
Are the goods:
1. Sold for less than $20
and
2. Not in the ordinary course of
the school’s business?
YES
The supply is taxable (code as
G01)
th
1. Remit 1/11 of revenue
2. Claim input tax credits on
acquisitions
YES
Is the event part of a regular run
or series of like/similar events
(ie more than 15 a year?)
For example, a garage sale
held every Saturday.
NO
Choose to treat the event as:
A: Taxable; or
B: Input Taxed
A:
Taxable
B: Input
Taxed
The supply is input taxed (code as
G04)
1. No GST is charged on supply
th
2. Do not remit 1/11 of revenue
3. No Input tax credits can be
claimed on acquisitions
154
5.13 Excursion Proforma
Proposal For School Camp/Excursion
Classes/Year Level(s) Involved:______________________________________________
No. Of Students: ______F ______M Faculty/Curriculum Area:_____________________
Venue:_________________________________________________________________
Day(s) and Date(s): From:________________________To:_______________________
or On:______________________
Departure Time: ______________am/pm Return Time: _____________am/pm
Mode of Transport: _______________________________________________________
Supervision:
Teacher-in-charge
Teachers Attending
Other Supervisors
School-based Contact Person
Breakdown of Costs and Charges
If the camp/excursion is:
- predominantly educational, GST must be added to the food charge, but all other charges to
students are GST-free
- not predominantly educational, ie predominantly recreational, GST must be added to all
student charges.
GST exclusive cost 10%
GST
(only Charge to student
per student
where applicable)
Food
Transport
Accommodation
Entrance Fee(s)
Total charge to student
155
Summary of Itinerary / Program of Activities
Curriculum Link / Outcomes
I certify that this camp/excursion is predominantly educational.
YES/NO
Signature of Principal
Date
156
5.14 Camp and Excursion Budget / Costing by Teacher-In-Charge
5.14.1 Example 1 - Table using 'total costs'
GST
inclusive
cost
GST
GST
exclusiv
e cost
Cost per student Subsidy
GST exclusive 10%
(by
no.
of (eg CAP Cost less the GST
students)
fundsubsidy
raising
etc)
Transport
*
Accommodation
*
Food
Charge to Student
**
*
*
Total Student Charge
** GST is always charged on food unless the camp/excursion is non-commercial refer to Chapter 3.16).
* If the camp/excursion is not predominantly educational, GST must be charged on all costs (not just food) unless the camp/excursion is noncommercial (refer to Chapter 3.16).
Note: Costs for staff members/parent volunteers attending or to cover possible non-attendees can be incorporated in to the overall charge to
students with no GST impact.
157
5.14.2 Example: Predominantly educational camp
School is self-catering, 25 students attending. As stated on invoices, the total GST inclusive costs are $550 for transport, $880 for
accommodation, $310 for food docket and $275 for entrance fees.
GST
inclusiv
e cost
GST
GST
exclusiv
e cost
GST exclusive 10%
Cost per student ¸ Subsidy(eg
fund- Cost, less the GST
by no. of students) CAP,
raising etc)
subsidy
Charge to Student
Transport
550
50
500
20
20
*
20
Accommodation
880
80
800
32
32
*
32
Entrance fees
275
25
250
10
10
*
10
Food
310
10
300
12
12
1.20
13.20
Total
Student
Charge
75.20
No subsidy
Notes:
The GST paid on the food cost is not 1/11th of the total as some goods purchased were GST-free however GST must be charged on the total
GST-exclusive price.
If the site decides to round down the food cost to $13 then the GST payable would be 1/11th of the $13 ie $1.18c.
If the school estimates the food cost, based on previous camps etc., the GST is payable on what the students are charged for food, not what it
will actually cost the school once the shopping is done.
158
5.14.3 Example 2 - Table using 'per student' costs
GST
GST
inclusive
cost
per
student
GST exclusive cost Subsidy (eg Cost
less 10% GST
per student
CAP,
the subsidy
fundraising
etc)
Transport
*
Accommodation
*
Food
**
Charge to Student
*
*
Total
Student
Charge
** GST is always charged on food unless the camp/excursion is non-commercial (refer to Chapter 3.16).
* If the camp/excursion is not predominantly educational, GST must be charged on all costs, not just food (unless the camp/excursion is noncommercial - refer to Chapter 3.16).
159
5.14.4 Example: Predominantly educational camp
Campsite charging $132 per student (GST inclusive) with breakdown of $77 for accommodation and program and $55 for food.
Transport cost of $440 (GST inclusive) so for 40 students attending, $11 (GST inclusive) per student. Subsidy of $20 per student.
GST
inclusive GST
cost per student
GST exclusive Subsidy (eg CAP, Cost
less 10% GST
cost per student fundraising etc)
the subsidy
Charge
Student
Transport
11
1
10
2
8
*
8
Accommodation
77
7
70
10
60
*
60
Food
55
5
50
8
42
4.20
46.20
*
*
143
130
20
Total
Student
Charge
114.20
Notes:
The school decides to round the total student charge to $115 with a food component of $47 and the remaining components totalling $68. The
GST payable on the food charge would then be 1/11th of the $47 ie $4.27
In the example $20 was available as a subsidy and was apportioned over the taxable and GST-free costs ie (15% (20/130 X 100) of each GST
exclusive cost. If all components of the student charge are GST-free supplies this apportionment is not necessary. The provision of a subsidy is
entirely optional.
Re non-commercial status: The GST inclusive cost is $143 per student ($132 + $11). To be non-commercial ie all components GST-free, the
charge per student would need to be less then 75% of this cost ie less than $107.25. As the total student charge is calculated to be $115 per
student the excursion is not considered non-commercial (refer to Chapter 3.16).
160
to
5.14.5 Example: NOT predominantly educational
End-of-year excursion to the movies and the beach.
GST inclusive cost (expense) per student
Charge to Student(GST inclusive)
Transport
2.50
2.50
Movie admission
8.00
8.00
Pizza
3.85
3.85
Fruit Box
1.65
1.65
Total Student Charge
$16.00
Note: The school claims input tax credits on all expenses, but must charge GST for all costs to students.
161
5.15 Key Terms and Definitions Associated with GST
Acquisition
Acquisition is a very broad term which includes everything an entity
purchases (goods and services) for their enterprise. It also includes
many other transactions, such as getting advice or information,
taking out a lease of business premises or hiring business
equipment.
Adjustments
Adjustments are the changes an entity may need to make on its
Business Activity Statement to increase or decrease its net GST
amount payable or refundable for a tax period.
Adjustment Note
(also known as Credit
Notes)
Adjustment notes are generally issued by suppliers. They detail
changes to consideration for a supply. Entities will need adjustment
notes from suppliers before they can claim additional input tax
credits for an acquisition for which they have been required to pay
more.
Adjustment Period
Adjustments arise when an entity needs to claim more or pay back
some input tax credits because the planned use of an acquisition or
importation by the enterprise has changed. The adjustment period is
the tax period in which an entity is required to make any adjustment
as a result of the changed use of the acquisition or importation.
Australian Business
Number (ABN)
The ABN is the identifier for dealings with the ATO and for future
dealings with other departments and agencies.
Business Activity
Statement (BAS)
This is the form entities use to account for GST and some other
taxes. A BAS must be lodged by a registered entity for each tax
period.
Consideration
Any form of payment (in money or anything else) in return for a
supply.
Creditable
acquisitions
A creditable acquisition is a taxable acquisition that is acquired for
carrying out the enterprise. Anything acquired for private use,
acquisitions that are not deductible for income tax purposes (eg
entertainment expenses) or acquisitions for use in making input
taxed supplies are not creditable acquisitions.
Enterprise
An enterprise includes an activity or series of activities done in the
form of a business or in the form of a venture or concern in the
nature of trade.
Entity
An entity is an individual (for example a sole trader), a body
corporate (a company), a corporation sole (an ongoing paid office), a
body politic, a partnership, an unincorporated association or body of
persons, a trust, or a superannuation fund.
GST-free supply
If a supply is GST-free, a registered entity does not charge GST on
the supply but is entitled to input tax credits for anything acquired or
imported for the purpose of making that supply. GST-free supplies
are defined in the GST Legislation (refer to Appendix).
162
GST group
Entities, including partnerships, trusts and companies with common
ownership, often operate as a group. The effect of forming a group
is that transactions between entities within the group are not treated
as taxable supplies, that is, are not subject to GST.
Input tax credit
Registered entities are entitled to an input tax credit for the GST
included in the price paid for creditable acquisitions or the GST paid
on an importation if it is for the use of the enterprise. Entities will
need a compliant tax invoice to claim an input tax credit (except for
purchases of $50 or less, GST exclusive).
Input taxed supply
If a supply is input taxed, a registered entity does not charge GST on
the supply and is not entitled to input tax credits for anything
acquired or imported for the purpose of making that supply. Input
taxed supplies are defined in the GST Legislation (refer to
Appendix).
Instalment Activity
Statement (IAS)
This is the form entities use to account for salaries and wages paid
by the school council or governing council.
Supplies
Supplies include goods and services sold by an enterprise. Supplies
also include the provision of advice or information, the lease of
commercial premises or the provision of hire equipment. Not all
supplies are taxable supplies.
Taxable importations
GST is payable on imported goods unless they qualify for certain
custom duty concessions or would be GST-free or input taxed if they
had been purchased in Australia.
Taxable supply
Any supply that is not GST-free or input taxed.
163
5.16 Sample Tax Invoices
TAX INVOICE
School Supply
GPO Box 452
ADELAIDE SA 5001
Invoice Number: 327
ABN: 32 123 555 XX9
Date: 23 August 2001
To:
Southport School
Main Road
GAWLER SA 5118
Qty
Description of supply
Price
Total
2
Cooking Oil
$2.00
$4.00
3
*Crayons
$1.00
$3.00
1
Flour
$1.50
$1.50
GST
$0.30
TOTAL AMOUNT PAYABLE
$8.80
* Indicates taxable supply
TAX INVOICE
Supply SA
PO Box 549
Adelaide SA 5001
Invoice Number: A6473
ABN: 32 123 XX6 789
Date: 19 August 2001
To:
Qty
3
Southport School
Main Road
GAWLER SA 5118
Description of supply
Price
Total
2 litre paints – red, yellow, blue
$7.70
$23.10
TOTAL AMOUNT PAYABLE
$23.10
Total price includes GST.
164
5.17 Example of an Adjustment Note
Note: The refund is GST inclusive.
-
the words ‘Adjustment Note’ in a prominent place (the words ‘credit’ or ‘debit’ may also
be included
or
-
the words ‘Tax Invoice’ if the adjustment is shown as a negative or credit amount to the
recipient (eg a refund)
-
the name and ABN of the supplier
-
the name of the recipient
-
the address or ABN of the recipient
-
the issue date of the adjustment note
-
the difference between the price of the supply before the adjustment event and the new
price of the supply
- 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 that the difference in the
price of the taxable supply includes GST
165
5.18 Example of an RCTI and Agreement Letter
Spring
Smith
SA
High
School
Street
ABN xx xxx xxx x11
RECIPIENT CREATED TAX INVOICE
Invoice to:
Dolphin Aquatic Centre
ABN xx xxx xxx x22
Qty
Description of Supply
Date:
Invoice No:
GST
Exclusive Price
GST
GST
Inclusive Price
SAMPLE ONLY
Total
The total includes GST
This RCTI was created by Spring High School
The GST shown is payable by the Supplier
166
5.18.1 Agreement Letter for an RCTI
SPRING
Spring
HIGH
Street,
SCHOOL
ADELAIDE
ABN xx xxx xxx x22
Administration
Dolphin
Officer
Aquatic
Centre
The Esplanade, SA
Dear _____________________
RE: Recipient Created Tax Invoice
We refer to the current practice of Spring High School calculating the amount payable for the aquatic classes (“
the suppliers”) on your behalf, for which we pay you on a weekly basis.
To comply with GST documentation requirements in relation to issuing a Recipient Created Tax Invoice (RCTI),
the recipient of the supply (Spring High School) and the supplier (dolphin Aquatic Centre) must agree on several
matters. We are also required to show both the supplier’s and the recipient’s ABN.
We confirm the following:
Spring High School will issue recipient created tax invoices in respect of the supplies and Dolphin Aquatic Centre
will not issue a tax invoice in respect of the stated supplies;
Dolphin Aquatic Centre acknowledges that it is currently registered for GST when it enters into this agreement
and that it will notify Spring High School if it ceases to be registered;
Spring High School is currently registered for GST and will notify Dolphin Aquatic Centre if it ceases to be
registered;
Please acknowledge your acceptance of the above, and confirm you will comply with the following matters, by
signing the copy of this letter:
Yours sincerely,
(Principal)
I confirm agreement with the content of this letter.
Signed: __________________________
ABN: ____________________
Dolphin
Aquatic
Centre
Authorised Representative
167
5.19 Reconciling the GST Liability (L-ZZZ-3515) Account
At the end of the month the L-ZZZ-3515 should be reconciled with the
refund/payment amount expected from/to the ATO as reported on the BAS. (Wages
should be credited to a separate PAYG Tax Liability A/C.)
The process for a monthly reconciliation is as follows:
·
After the Bank Reconciliation has been completed, the SASIF Statement entered
and any corrections made (ie. of GST codes, GST amounts posted to the GST
Liability A/C) as required, print the Account Movement Report for the L-ZZZ-3515
A/C as well as the corrected BAS Reports for the relevant period.
·
Deduct any previous month's ATO refund from the total of the Credit column.
·
Calculate the difference between the totals of the Debit and Credit columns.
·
Compare the amount you have calculated with the amount of refund/payment
reported on the BAS Report (Calculation Sheet) ie. the difference between G09
and G20. They should be equal (other than variances due to rounding the GST
amounts).
In addition, an ongoing reconciliation, using the Account Movement Report for the LZZZ-3515 A/C for the relevant period, is as follows:
·
The total at the end of the C/F column should equal the amount of GST refund (or
payment) reported on the BAS submitted (other than variances due to rounding
the GST amounts) for the period unless previous refunds are outstanding.
If the amounts do not reconcile, other than as a result of rounding variances,
corrections should be made. In particular, the GST amounts in the GST column of
the AR and AP Reconciliation Reports for the relevant period should be checked.
Journals may be required to correct the GST amounts (refer to Chapter 4.5). (If the
correction relates to a period where the BAS has already been submitted or to the
current period, it needs to be current journal; if to the previous month but the BAS
has not been submitted it is a prior journal to the previous period.) The Account
Movement Report for the L-ZZZ-3515 should be kept and filed for audit purposes.
168
5.20 BAS Report from EDSAS (Calculation Sheet)
5.20.1 Supplies you have made - Right Hand Column of Calculation Sheet
Item
Title
Definition
G01
Total sales & income G01 includes all business receipts for the current tax
etc.
period excluding appropriations, donations, gifts, bequests
and insurance settlement proceeds which fall outside of
the legislation.
G02
Exports
G02 is the value of export sales made in the course of
business.
G03
GST-free supplies
G03 is the value of GST-free supplies made, other than
export sales, as defined in the legislation
G04
Input taxed sales &
income
G04 is the value of supplies made which were input taxed.
G05
Total of GST-free &
input taxed supplies
G05 = G02+G03+G04
G06
Total of taxable
supplies
G06 = G01 minus G05. This is the value of taxable
supplies made.
G07
Adjustments
Adjustments may be required if too much or too little GST
has been paid on a previous BAS. It is not used for
correction of mistakes.
Note: Most adjustments for schools are done as credits in
EDSAS, and not by using G07.
G08
Total of taxable
supplies after
adjustments
G08 = G06+G07. This takes the adjustments, into
account in determining the total of taxable supplies.
G09
Amount of GST
payable
G09 = G08 divided by 11 This calculates the total GST
payable.
169
5.20.2 Acquisitions you have made - Right Hand Column of Calculation Sheet
Item
Title
Definition
G10
Capital acquisitions
G10 is the value of all capital acquisitions made during the
period. Note that capital expenditure is not distinguished
from other expenditure items in school accounts and
hence this item will be left blank until instructed by DECS
to do otherwise.
G11
Other acquisitions
G11 is the value of all other acquisitions made during the
current tax period (ie acquisitions that are taxable, have
no GST in the price or input taxed).
G12
Total acquisitions
G12 = G10 + G11 Note that for schools G11 will be the
same as G12.
G13
Acquisitions for input
taxed sales
G13 is the value of acquisitions related to making input
taxed supplies.
G14
Acquisitions with no
GST in price
G14 is the amount for acquisitions that are not taxable
supplies and therefore the supplier has charged no GST in
the price. These include acquisitions from unregistered
persons/entities and acquisitions that are GST-free.
G15
Acquisitions for
private use
G15 relates to the value of an acquisition that is intended
for full or part private or domestic use. Audit requirements
exclude schools from purchasing for private use.
G16
Non-creditable
acquisitions
G16 = G13+G14+G15
Acquisitions with GST
in the price
G17 = G12 minus G16
Adjustments
Adjustments may be required if too much or too little GST
has been paid on a previous BAS. It is not used for
correction of mistakes.
G17
G18
This is the total of the acquisitions for which there is no
entitlement to claim GST credits
This is the total of the creditable acquisitions.
Note: Most adjustments for schools are done as credits in
EDSAS and not using G18.
G19
G20
Creditable
acquisitions after
adjustments
G19 = G17+G18
Credit for GST paid
G20 = G19 divided by eleven This calculates the total
GST credit
This takes the adjustments, into account in determining
the total of creditable acquisitions
170
The only Pay As You Go Withholding reported by the school on the BAS is at 4 for
suppliers with no ABN. Salaries and Wages paid by School Council are reported on
the Instalment Activity Statement.
Item
Title
Definition
W01
Total of salaries, wages and
other payments
W01 is the total of salary and wage payments
made which are not part of DECS central payroll
system. Note: schools report this on the IAS.
W02
Amounts withheld from
salaries, wages and other
payments
W02 is determined by referring to the Taxation
Commissioner's published tax tables. Note:
schools report this on the IAS.
W03
Amounts withheld from
investment distributions
where no TFN is quoted
W03 applies only to payments made for interest;
dividends or unit trust distributions so will not
apply to schools. Note: this is not applicable to
schools.
W04
Amounts withheld from
payment of invoices where
no ABN is quoted
W04 is the total amount withheld from all
payments where an ABN was not quoted. This
applies where a business supplies goods or
services but does not provide an ABN on its
invoice. An amount equal to 48.5% of the invoice
value must be withheld from payment in these
circumstances.
171
5.21 'Statement by a Supplier' form
172
5.22 'Payment Summary - Withholding where ABN not Quoted' form
173
5.23 GST Rulings (selection of)
The following rulings are a selection of GST Rulings that have relevance to schools
and can be found at the ATO website, www.taxreform.ato.gov.au .
1. GSTR 2001/6 - Goods and services tax: non-monetary consideration.
Please note that this ruling was previously released as draft ruling GSTR 2001/D5
2. GSTR 2001/4 - Goods and Services Tax: GST consequences of court orders and
out-of-court
settlements.
Please note that this ruling was previously released as draft ruling GSTR 2000/D23
3. GSTR 2001/3 - Goods and Services Tax: GST and how it applies to supplies of
fringe
benefits.
Please note that this ruling was previously released as draft ruling GSTR 2000/D17, which has been
removed.
4. GSTR 2001/2 - Goods and Services Tax: foreign exchange conversions.
Please note that this ruling was previously released as draft ruling GSTR 2000/D15 that has been
removed.
5. GSTR 2001/1 - Goods and services tax: supplies that are GST-free for tertiary
education courses.
Note: This ruling was previously released as draft ruling GSTR 2000/D21, which has been removed.
6. GSTR 2000/37 - Goods and services tax: agency relationships and the application
of the law.
7. GSTR 2000/35 - Goods and services tax: Division 156 - supplies and acquisitions
made on a progressive or periodic basis Please note that an erratum has been
issued for this document.
8. GSTR 2000/34 - Goods and services tax: what is an invoice for the purposes of
the New Tax System (Goods and Services Tax) Act 1999 ('GST Act')?
Please note that an erratum has been issued for this document.
9. GSTR 2000/31 - Goods and Services Tax: supplies connected with Australia.
174
10. GSTR 2000/30 - Goods and Services Tax: supplies that are GST-free for preschool, primary and secondary education courses.
11. GSTR 2000/29 - Goods and Services Tax: attributing GST payable, input tax
credits and adjustments.
12. GSTR 2000/27 - Goods and Services Tax: adult and community education
courses; meaning of "likely to add to employment related skills" .
13. GSTR 2000/26 - Goods and Services Tax: corporate card statements entitlement to an input tax credit without a tax invoice.
14. GSTR 2000/24 - Goods and Services Tax: Division 129 - making adjustments for
changes in extent of creditable purpose.
15. GSTR 2000/19 - Goods and Services Tax: making adjustments under Division 19
for adjustment events.
16. GSTR 2000/17 - Goods and services tax: tax invoices.
17. GSTR 2000/16 - transitional arrangements - GST free supplies under
agreements spanning 1 July 2000.
18. GSTR 2000/15 - Determining the extent of creditable purpose for claiming input
tax credits and for making adjustments for changes in extent of creditable purpose.
19. GSTR 2000/13 - Goods and Services Tax - accounting on a cash basis.
20. GSTR 2000/11 - Goods and Services Tax: Grants of Financial Assistance.
21. GSTR 2000/10 - Goods and Services Tax: recipient created tax invoices.
Please note that an erratum and an addendum have been issued for this document.
22. GSTR 2000/7 - Goods and services tax: transitional arrangements - supplies,
including supplies of rights, made before 1 July 2000 and the extent to which such
supplies are taken to be made on or after 1 July 2000.
175
23. GSTR 2000/6 - Goods and services tax: special credit for sales tax paid on
alcoholic beverages.
Please note that an addendum has been issued for this document.
24. GSTR 2000/4 - Goods and Services Tax: appropriations
Please note that an erratum has been issued for this document.
25. GSTR 2000/2 - Goods and Services Tax: adjustments for bad debts.
26. GSTR 2000/1 - Goods and Services Tax: adjustment notes.
Please note that an addendum has been issued for this document.
27. GSTR 1999/1 - Goods and Services Tax: the GST rulings system.
Please note that an addendum has been issued for this document.
176
Chapter 6
Index
A
Book Club………………………52, 148
Accommodation…………..50-52, 124-126
Book Deposits…………55, 82, 111, 147
Accounting for GST……………………..5
Book Fair………………….….52, 60-61
Accrual accounting……………………..36
Building Funds……………….….37, 56
Acquisition…..6, 12, 90, 91, 114 -115, 162
Business Activity Statement (BAS)….3,
Adjustment Note……….…….12, 162, 165
17, 21-25, 128-129, 131-137, 162-163
Adjustments…………….5, 12, 19-20, 165
Administrative services……………..80-82
Advertising…………...65, 76-77, 105, 151
Agency Transactions………………….152
Alcoholic Beverages……………………72
American Express International………..65
Apportionment…………………………..6
Appropriation………53-54, 74-75, 89, 111
Appropriation ‘down the line’………...111
Aquatic Centre……………...109, 168, 169
ASSPA……………………………...53-54
A-Thons………………………………..73
ATO……...…12, 14-15, 23-27, 35, 39, 45,
128-129, 136
C
Cab Charges………………..…….….56
Camp Deposits………………………57
Compulsory Materials and Services
Charge…………………..82, 145, 150
Contracts………….…8, 97-98, 121, 149
Course Materials….…..46, 139-141, 144
Credit Card Statements…..…………..64
Credit Note………….………………116
Creditable acquisitions……...………162
Cropping supplies…………..………..94
D
Dairy supplies………………………96
Auctions……………….…………..71, 98
Declaration………………………….23
Audit………………….34, 40-42, 83, 130
Deductable Gift Recipient (DGR).…37
Australian Business Number (ABN)…..4,
Deposit………………..……….125-126
16, 162
B
Bad debts…………………………12, 175
Barter…..…………………………...….87
BAS Réconciliation Reports…….…….40
Diesel Fuel Rebate Scheme..…….25-26
Documentation…..10, 34-35, 41-42, 67,
70, 80
Donated second-hand goods..71-72, 149
Donation………..65-66, 73, 76-77, 105,
108, 145-149, 169
Bingo……………………………….71-72
Boarding School……………………..…4
E
Bonus Points…………………..60-61, 88
ED169…………………………..41, 68
Education Course….………………138
177
Education Textbook Subsidy
Scheme…………………...…27-28, 142
Electronic Commerce Interface
Library Fines……………………………81
Library Fund…………………..…..37, 145
Live animals……………………………92
(ECI)…………………………......42-45
Livestock supplies….…………………..95
Excursions...…..66-70, 112, 140, 145, 149
Locker Hire……………………………..78
Expenditure…………….……47, 146, 170
Lost Books……………………………..55
Exports………………….20, 71, 137, 169
M
Magazine…………………….82, 142, 151
Mark-up…………………………...7-8, 98
F
Fetes………………………………….149
Food….….71, 92, 122-124, 142, 148-150,
155
Fundraising…….41, 71-75, 138, 146, 149,
151, 153
G
Grains………………………………….92
Gross up…………..……60, 63-64, 76-77
GST exclusive………………………..3, 5
GST inclusive…………………3, 122-124
GST Liability Account….47, 60, 114, 123,
125, 128, 146
I
Importations…………...……..5-6, 10, 163
Input tax credit.……...………1-6, 161-163
Input taxed………….…4, 73,146-149, 163
Instalment Activity Statement
(IAS)………………………..…..18, 163
International Students……….…..52, 78-80
Intra-School Transfers………………….80
L
Levies………………………..81, 102, 150
Library……………….…….56, 63-64, 141
MasterCard International………………65
Materials and Services Charge...81-83, 145
Membership Fees……...……………….83
Mistakes………….………….….12, 39-40
Mixed Supplies………...….10, 48-50, 122
Multi-Campus sites…………..…..101-102
N
No ABN…………………….15, 17, 21, 25
Non-commercial activities…….70-71, 149
Non-profit sub-entity……………….85-87
O
OSHC……………….84-85, 121, 146, 148
Outdoor Schools………………………..84
P
Packaging……………………………….97
Parents’ Club……….…………...37, 85-86
PAYG Withholding……...……...17, 18-19
Payments in Kind………...…………87-88
Performances………..….71, 112, 145, 149
Photocopy cards………….………90, 150
Photocopy charges……….…………….90
Plants…………………………….. ..92-93
Predominantly educational..41, 66-69, 102103, 155-161
178
Pricing……………………..…………….7
Second-hand Goods………….…99-100
Principals…………………...34-36, 41, 67
Second-hand Uniforms………..…98-99
Professional Development………106-107
Selling price…………………..………7
R
Share Farming……………...………..92
Raffles………………….…....71, 137, 149
Shared Facilities………… 101-102, 151
Recipient Created Tax Invoice
Shares…………………..…107-108, 151
(RCTI)………….…10-11, 97, 166-167
Small withholders……………………15
Record keeping……..…………40-42, 141
Sponsorship…………….…104-105, 151
Re-entry courses………………...……..46
Staff Training………….…………….106
Refund……..…5, 12, 22-23, 32, 35-36, 38
Statement by a Supplier….…..14-15, 173
Register as a withholder………...……..17
Stolen goods……………….…….91, 150
Registration…………………………4, 37
Student Business Enterprises…….….107
Reimbursement…………….....90-91, 113
Student Prizes………………….……108
Reporting……………………...5, 19, 136
Swimming Centres…………….…….109
Retailer…………….…..…27, 31, 93, 108
Swimming Instructors…..……….…..110
Return of Goods………………………13
Syndicate………………..…………...108
Revenue……….31, 35-36, 46-47, 54, 147
T
Revision statement…………………39-40
Tax periods….………………………….5
Risk Management………………….34-36
Taxable………..…1, 46-50, 142-143, 146
Rulers……………………….82, 142, 151
Taxable importations…….…………..163
S
Taxable supply…....64-68, 81-82, 88, 103
sa.edu.au………………………………89
Technology levy……....……………….81
Salaries and Wages….16, 23, 121
Telephones…………………………….90
Salary Recharge………………………89
Textbooks……..27-28, 110-111, 140, 142
Sales of Farming Produce…………….92
Transactions between schools………..111
Sausage sizzles………………………..71
Transfer of student fees………………112
Scholarship……………...…………..108
Tuckshops………………….….………73
School bag………………...……….…82
Tutors………………….…….…...82, 140
School Council...16, 19, 82, 85, 121, 145
U
School Council Approved……………82
Uniforms……………………….....98, 152
School formal…………………………68
V
School Magazine………..…142, 150-151
Vacation Care……………...…..84-85, 148
Scissors…………….….82, 142, 144, 151
Vending Machines……………………..90
179
VET in Schools…………………………75
VISA International……………………..65
Voluntary agreement…………………...16
Voluntary Contribution……………82, 145
Volunteer helpers………………….……78
Voucher……………………..56, 60, 62-63
W
Wages……………..…1, 16, 19, 21, 23-25,
37, 121, 128, 146, 163
Wholesaler…………………....2, 32, 93-96
Wine……………………..21-22, 28, 30-34
Wine Equalisation Tax (WET)….21-22, 28
Withholding Tax……………………16-18
180