GST: What the Commissioner Has to Say About Grants of Financial Assistance to Provide Services to Third Parties

Abstract

One of the main areas of funding for charities and other not-for profit organisations are grants of financial and other assistance. The Australian Taxation Office has issued Goods and Services Tax Ruling: Grants of Financial Assistance GSTR 2000/11 which states the ATO’s position on the GST relating to these grants. This article discusses the application of the ATO’s ruling to grants of financial assistance to third parties. In particular, it highlights the changes in the ATO’s position between the final ruling and previous draft ruling (GSTR 1999/D13). It analyses some of the inconsistencies in the final ruling. Finally the author points out difficulties that NFPs may face when accounting for GST, in light of the ATO’s opinion.

Keywords: GST, charities