FBT TrainingGST Training

Anne Harvey

Agenda

• What is GST

• GST liability

• GST Codes

• ABN and GST

• Tax Invoice v Receipt/No receipt and transactions ≤/> $82.50

• No Input Taxed Credit

• Tips and tricks

• Appropriations

• BAS

What is GST

• A Goods and Services Tax – 10%

• If registered for GST, charge GST on taxable supplies

• Can claim GST on purchases if used for Creditable purpose, provided making

• a taxable supply or

• GST free supply

• Creditable purpose – where used in your business

• Cannot claim GST for making an Input Tax Supply

• Input Tax Supply – some student accommodation premises, financial supplies

GST liability – Section 9-5. Taxable Supply

• Supply is made for consideration, and

• Supply is made in the course or furtherance of an enterprise that is carried

on, and

• Supply is connected with Australia, and

• You are registered or required to be registered for GST

• However the supply is not a taxable supply to extent that it is GST-free or

input taxed

GST Codes – Sales

Billings/Accounts Receivable/1STOP/StarRez

• Taxable supply

• Most supplies/services

• 10% GSTSALE

• GST free supplies

• Education, health, basic food, export services

• Most student accommodation

• No GST

FREE

• Input Taxed Supplies

• Cannot claim GST

• Residential rent – some student accommodation

• Financial supplies

ITAX

• Overseas customer

• Export of goods

• No GSTEXPT

• Out of Scope

• Donations

• Some Government grants

• No supply made

EXCL

GST Codes - Acquisitions

Description Capital Non Capital

Taxable

10% GST

AC

Acquisitions Capital

AO

Acquisitions Other

GST Free

no GST

FRAC

Free Acquisitions Capital

FRAO

Free Acquisitions Other

Input Taxed

Cannot claim

GST

ACIT

Input Taxed Acquisitions

Capital

AOIT

Input Taxed Acquisitions

Other

Non deductible

Cannot claim

GST

NIAC

No Income Tax deduction

Acquisitions Capital

NIAO

No Income Tax deduction

Acquisitions Other

Imports

No GST

IMAC

Imports Acquisitions Capital

IMAO

Imports Acquisitions Other

Out of Scope EXCL/EXAD

No Supply

EXCL/EXAD

No Supply

GST Codes – Acquisitions

AP/PO/Concur – Expenses & Credit Card/Travel

• Taxable supply

• Most goods and services

• Claim 10% GSTAO/AC

• GST free supplies

• Basic food

• Consumed /used overseas – international airfare, services

• No GST charged

FRAO/FRAC• Input Taxed Supplies

• Residential rent – some student accommodation

• Financial supplies

• Cannot claim GST

AOIT/ACIT

• Imports/ Customs clearance

• Overseas subscriptions

• No GSTIMAO/IMAC

• Non deductible

• No Tax Invoice

• Entertainment students/others

• Cannot claim GST

NIAO/NIAC• Out of Scope

• Donations/Tips/Taxes/Wages

• No supply made

• Not reported on BAS

EXCL• Out of Scope

• Advances/Travel Allowance

• No supply made

• Not reported on BAS

EXAD

Relationship between ABN & GST

Supplier does not have ABN

No GST should be

charged on labour

No GST to claim

Statement by Supplier form

required

GST code FRAO

Supplier has ABN but not registered

for GST

No GST should be

charged on labour

No GST to claim

Can claim GST on

Expenses

GST code FRAO – labour

AO - expenses

Low Value Items

$82.50 or Less

Tax Invoice not required to

claim GST

Other supporting

documentation required

Can still claim GST if GST

charged

GST code AO

Tax Invoice Missing

Information

Rely on other documentation from supplier –if minor defects

Can still claim GST if GST

charged

GST code AO

Tax Invoice v Receipts ≤/> $82.50

• Can claim GST

• GST code AO/ACTax Invoice

• Can claim GST if includes GST

• Low value and evidence of spend

• GST code AO

Receipt only Total ≤$82.50

• Can claim GST if includes GST

• Missing receipt declaration

• GST code AO

No receipt Total ≤$82.50

• Cannot claim GST

• Evidence of spend/ Request Tax Invoice

• GST code NIAO/NIAC

Receipt only Total >$82.50

• Cannot claim GST

• Missing receipt declaration

• GST code NIAO/NIAC

No receipt Total >$82.50

No Tax Invoice

• Cannot claim GST

• GST code NIAO

• Receipt only/ evidence of spend or

• Missing Receipt declaration>$82.50

• Can claim GST if GST charged

• GST code AO

• Receipt only/evidence of spend or

• Missing Receipt Declaration

• Record – supplier name/ABN, date, amount, description of items purchased

≤$82.50

Input Tax Credit (GST) Denied

• Input Taxed Supply

• Residential rent

• Some student accommodation premises - Mulwaree, High St

• Financial supply

• Non-deductible for Income Tax

• Entertainment if no FBT paid, e.g. students, externals/others

• Fines, penalties

• No Tax Invoice > $82.50

Tips and Tricks

• Imports and GST

• Supplier not registered for GST

• Supplier does not have ABN

• Invoice in USD/Foreign currency but vendor registered GST

• Mixed Supply

• Advances/Deposits/part payments

• Uber

Imports and GST

• UNSW registered under Deferral scheme for Imports

• Do not pay GST directly to Customs Agent

• GST on imports charged directly by ATO, can claim GST. GST accounted for on BAS.

• Advise Custom Agent (Felton Global Logistics – UNSW Supplier) of UNSW name and

ABN and Deferral scheme registration

• If receive GST only invoice - Need to gross up and enter on 2 lines

• Original purchase Invoice already entered as GST free supply

Excl GST GST Total GST code

GST on imports Invoice

– GST only

$1,000 $1,000

Line 1 10,000 1,000 11,000 AC

Line 2 -10,000 0 -10,000 FRAC

Total to pay 0 1,000 1,000

Supplier Not registered for GST

• If supplier not registered for GST cannot charge GST

• If charge labour + Expenses can still claim GST for Expenses if Tax Invoices provided

• No GST to claim on labour cost

• GST to claim on expenses

• If not registered for GST, but charges GST should query why charge GST

• After initial vendor set up, supplier may later register for GST

• If charges GST on Tax Invoice, check on ABN lookup if registered for GST

https://abr.business.gov.au/

• If vendor registered GST, need to update vendor record in NSF

• Ask AP to update

• Vendor Change

Supplier Not registered for GST

Example – GST on expenses

Excl GST GST Total GST code

Labour cost/ Consultancy fee 1,000 $0 1,000

Expenses – Domestic airfare

(with supporting Tax invoice)

330 330

Total as per Invoice $1,330 $0 $1,330

To be entered as

Line 1 - Labour 1,000 0 1,000 FRAO

Line 2 - Expenses 300 30 330 AO

Total – to pay $1,300 $30 $1,330

Supplier not have ABN

• If supplier does not have ABN, and >$75 excl GST, ($82.50 with GST) for goods or

services, required to withhold 47% from invoice

• 47% is top marginal tax rate

• Certain suppliers not required to provide ABN

• Supplier can provide Statement by Supplier form, giving reason why no ABN

• Statement by Supplier form means UNSW not required to withhold tax

• Keep Statement by Supplier form with Payment voucher

Invoice in USD with GST

• Tax invoice does not need to be in AUD to claim GST

• Invoice may be in USD or another currency and vendor has ABN and registered for

GST

• Can still claim GST

• Usual GST codes, e.g. AO/AC

Mixed Supplies

• Mixed supply is

• Some Taxable items – GST charged

• some GST free items

• GST not 1/11th of total

• Need to enter on separate lines, with GST code for each item

• Can only claim GST charged

• In Concur, itemise and show as separate lines

• Groceries with GST

• Groceries with no GST

Advances/Deposit

• Advance payments can come in the form of

• security deposits or

• part payments

• Security deposits and deposits used as part payments are treated differently for GST

purposes.

• A security deposit is held as security until completion of an obligation and is returned

upon the successful completion of the obligation. The initial payment of the security

deposit and the return of the security deposit are not subject to GST.

• Many hotels treat the security deposit as a credit to be offset against the final settlement

invoice.

• The initial deposit receipt is not in a Tax Invoice format, e.g. pro-forma invoice

• The final settlement invoice is in the Tax Invoice format and includes GST on the full

contract value.

• A part payment is treated as a normal taxable supply

GST on forfeited security deposit

The payment of a security deposit does not constitute consideration for a supply and is not subject to

GST unless either

• the deposit is forfeited or

• is applied towards the consideration for the supply.

The following are not security deposits:

• A part payment

• A pre-contract deposit and

• Consideration for a covenant (agreement, promise to do or refrain from an action)

If deposit forfeited

• GST accounted for at that time

• If $110 security deposit forfeited,

– $100 is consideration of right to receive supply - expense

– GST of $10, if taxable supply. Need journal to account for GST and Tax Invoice to claim GST

GST on Advance/Deposit – Example

Total Cost GST Excl GST Code GST

Deposit paid $1000 ¹ $1000 EXCL – Out of

Scope0

Final Bill $1200 ² $1000 $200

Total cost $2200 $2000 $200

Final Bill shows as To be entered as

Total cost Includes

$200 GST

$2200 2000 AO - Taxable $200

Less Deposit -$1000 ¹ -$1000¹ EXCL – Out of

Scope0

Balance Due

Net payment

Includes

$200 GST

$1200 ² $1000 $200

GST on Part Payments

• Total GST exclusive contract $10,000

• GST $1000

• Total including GST $11,000

10% on signing

• $1000

• GST $100 – AC Total $1100

50% on Phase 1

• $5000

• GST $500 – AC Total $5500

30% on completion

• $3000

• GST $300 – AC Total $3300

10% on testing and acceptance

• $1000

• GST $100 – AC Total $1100

Uber Drivers

• Ride-sourcing is subject to GST

• Ride-sourcing driver must have ABN and register for GST regardless of Income

• Suppling a service

• Uber driver charges GST on fare

• Must provide Tax invoice for fare over $82.50 if one requested

• UNSW can claim 1/11th of fare as GST

Appropriations

• GST Act paragraph 9-17(3) and (4)

Not consideration (No GST) if

• payment from Government Related Entity (GRE) to GRE for making a supply

• covered by appropriation under Australian law

• satisfies non commercial test - No Profit margin/only to cover expected costs

• If payment to GRE for commercial supply (not under appropriation) - GST

• If margin above cost of supply – GST

Appropriations Example

Appropriation Funding $5m

(terms state purpose funds are

appropriated)

GRE Department (DoHA) $5m

UNSW $5m

• Covered by Appropriation

• GRE to GRE

• Non Commercial test satisfied

(Anticipated cost $5m)

GST EXCL

Appropriation Funding $5m

(terms state purpose)

GRE Department (DoHA) $5m

Another GRE Department

UNSW $5m

• Covered by Appropriation

• GRE to GRE

• Non Commercial test satisfied

(Anticipated cost $6m, UNSW

funds extra $1m shortfall)

GST EXCL

Supply

Supply

Business Activity Statement

BAS Statement

Sales Purchases

Total Sales

- Taxable sales (SALE) 44,000 SALE - GST goes to 8505 Capital Purchases (AC) 110,000 AC - GST goes to 3505

- Export sales (EXPT) 2,000 Non Capital Purchases (AO) 220,000 AO - GST goes to 3505

- GST free sales (FREE) 5,000 Input Tax, Free, Non deductible 35,000

- Input taxed sales (ITAX) 4,000 365,000

55,000

- Export sales (EXPT) 2,000 EXPT - No GST goes to 8505 Input tax Purchases (AOIT/ACIT) 10,000 No GST goes to 3505

- GST free sales (FREE) 5,000 FREE - No GST goes to 8505 GST Free Purchases (FRAO/FRAC) 20,000 No GST goes to 3505

- Input taxed sales (ITAX) 4,000 ITAX - No GST goes to 8505 Non deductible purchases (NIAO/NIAC) 5,000 No GST goes to 3505

Export, Free, Input Taxed 11,000 35,000

Total sales subject to GST 44,000 Total Purchases subject to GST 330,000

GST on Sales (divide by 11) 4,000 GST on Purchases (divide by 11) 30,000

GST should agree to 8505 a/c 4,000 GST should agree to 3505 a/c 30,000

GST Payment or REFUND 26,000

GST on Purchases 30,000 - GST on Sales 4,000

More information

• Tax section of Finance website

• GST

• GST Manual

• Template of Revenue Streams

• Tax FAQs

• Tax Tools - Grants

Questions