Tax landscape

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• What is GST?
• Does your community organisation have to register for GST purposes?
• If your organisation registers for GST, do you always have to pay GST or are there some concessions?
• Which community organisations are eligible for these GST concessions?

What is GST?

GST is a tax imposed on the sale (supply) of a wide range of goods and services consumed in Australia.  

In general, an organisation that is required by law to ‘register’ for GST or that has voluntarily registered for GST: 

• is required to pay GST to the Australian Taxation Office (ATO) if it makes a 'taxable supply' - for example, if it sells something (goods or services) that satisfies specific criteria, and 
• can claim ‘input tax credits’ (effectively a GST refund) from the ATO for the amount of GST included in the price of goods and services it purchases 

GST is generally payable by a supplier at a flat rate of 10% of the value of a taxable supply unless special rules apply. In practice, a supplier usually passes on the GST cost to purchasers (recipients) by charging an additional 10% on the GST-exclusive price of its supply. This ensures that a supplier is not out of pocket for the GST payable to the ATO on its taxable supplies. 

Does your community organisation have to register for GST purposes?

An organisation will be required to register for GST where it is carrying on an enterprise and exceeds or expects to exceed the GST turnover threshold in either the last or next 12 months.

That is, if an organisation has made or expects to make 'supplies' for a turnover of more than $75,000 (where it is not a not-for-profit organisation) or $150,000 (where it is a not-for-profit organisation) in a rolling 12 month period, it may be required to register for GST.

The ATO has specific requirements for working out an organisation’s GST turnover based on the 'value' of all supplies that an organisation has made or are likely to make.  

Your community organisation has an annual turnover under $150,000

Even if you are not 'required' to be registered, your organisation may decide to voluntarily register for GST if it is carrying on an enterprise.

Before registering voluntarily, you need to decide whether the administrative burden of complying with GST reporting obligations outweighs the benefits.

Organisations may choose to register on the basis it may enable them to claim 'input tax credits' (ie. GST refunds) on qualifying acquisitions. However, by the same token, if an organisation registers for GST (whether or not voluntarily), it will also be liable to pay GST to the ATO where it makes any ‘taxable’ supplies.

Conversely, if an organisation is not registered nor required to be registered for GST, the organisation doesn’t need to include GST in the price of any goods and services it sells, but is also unable to claim 'input tax credits' for the GST component incurred on goods or services it acquires while carrying on its activities.

To register your organisation for GST purposes, you will need to have an Australian Business Number (ABN). Once you have an ABN, you can start the process for registration for GST through the ATO's online services for business, by phone or seek assistance from your accountant or lawyer.

Your community organisation has an annual turnover of $150,000 or more

If your community organisation is a not-for-profit organisation and it has an annual turnover of $150,000 or more it will be required to register for GST (which will give rise to corresponding GST obligations).

Where an organisation is required by law to register for GST, the organisation will:

• be liable to pay GST to the ATO where it makes any ‘taxable’ supplies (even if it has not yet registered for GST), and

• once registered for GST, be able to claim ‘input tax credits’ from the ATO for the amount of GST included in the price of qualifying acquisitions of goods and services (requiring certain requirements be met)

Importantly, input tax credits can normally only be claimed once a valid tax invoice is produced for the relevant expense.

To register your organisation for GST purposes, you will need to have an ABN. Once you have an ABN, you can start the process for registration for GST through the ATO's online services for business, by phone or seek assistance from your accountant or lawyer.

If your organisation registers for GST, do you always have to pay GST or are there some concessions?

If your organisation registers for (or is required to be registered for) GST, your organisation will be required to pay GST to the ATO on the taxable supplies it makes.

A supply is generally a taxable supply if all of the following requirements are met:

• the supply is made for consideration

• the supply is made in the course or furtherance of an enterprise the supplier carries on

• the supply is connected with the indirect tax zone (ie. Australia, but excluding certain external territories and offshore areas), and

• the supplier is registered or required to be registered for GST

However, suppliers will not be liable to pay GST where they make a supply that qualifies as either ‘GST-free’ or 'input taxed'. The GST law sets out specific categories of supplies that qualify as GST-free or input taxed (such as supplies of healthcare or residential premises).

There are a number of GST-free concessions available for certain not-for-profit community organisations. These concessions further require 'registered charity' status with the Australian Charities and Not-for-profits Commission (ACNC) and usually relate to particular activities (such as sales relating to raffles, bingo, fundraising events, sales of second-hand goods or non-commercial transactions and volunteer expenses).

Which community organisations are eligible for these GST concessions?

If your organisation is registered for GST purposes, there are a number of GST concessions which are available for:

• not-for-profit organisations that are registered with the ACNC and have been endorsed by the ATO for charity tax concessions, and

• not-for-profit organisations that have been endorsed by the ATO as deductible gift recipients (DGR) 

There are also some limited ‘concessions’ available for not-for-profit community organisations who are not endorsed for charity tax concessions or DGR status. For example, the laws relating to whether related organisations form a GST group (and therefore may 'ignore' GST on transactions between group members) are more generous for not-for-profit organisations than they are for ‘for-profit’ businesses.

The content on this webpage was last updated in April 2024 and is not legal advice. See full disclaimer and copyright notice.

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