Policy

GST - Policy

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1. Purpose and Objectives

This policy outlines how the University complies with the relevant taxation laws in relation to the Goods and Services Tax (GST).

2. Definitions, Terms, Acronyms

Charitable Institution - an institution established and operated to advance or promote a charitable purpose.

Deductible Gift Recipient (DGR) – an entity or fund that can receive tax deductible gifts. The donors can claim deductions for bona fide gifts exceeding $2. 

Goods and Services Tax (GST) - a broad-based tax of 10% (also known as a value-added tax) on the supply of most goods, services and anything else consumed in Australia.

Taxable Supplies – supplies on which GST liability arises and the supplier can claim GST (input tax) credits on acquisition made in making of the taxable supply. Refer to GST - Procedures for more explanation.

Value added tax (VAT) - GST is also referred to as a value added tax.

3. Policy Scope/Coverage

This policy applies to all University staff involved in GST-related transactions. 

4. Policy Statement

The University recognises Goods and Services Tax (GST) in accordance with:

  • A New System (Goods and Services Tax) Act 1999
  • Financial Accountability Act 2009 - Section 61(f)
  • A New System (Australian Business Number) Act 1999
  • A New System (Pay As You Go) Act 1999

The University is required to:

  • Include GST in the price of sales of taxable supplies to customers; and
  • Claim GST or input tax credits (when it is applicable) for the GST included in the price of purchased goods and services.

The UQ GST Guide and GST website have been developed specifically for The University of Queensland which outlines detailed information, instructions and examples for processing and managing GST transactions handled by the University. These are to be used as guidance in the calculation and claiming of GST.

These resources are located on the FBS website.

5. University’s GST Status

Legal Name

The University of Queensland

ABN Status

63 942 912 684

Registered from 1 Nov 1999

GST status

Registered from 1 July 2000

Endorsed to access GST concessions

Charity / Fund type

Charitable Institution

DGR status

Endorsed DGR*

*As an endorsed DGR, the law provides that a donor may be eligible to claim a tax deduction for an amount exceeding $2 provided certain conditions of the gift/donation are met.  A bona fide donation can never be subject to GST.

The University is required to retain GST documentation for five (5) years.

Custodians
Chief Financial Officer
Mr Andrew Betts

Procedures

GST - Procedures

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1. Purpose and Objectives

These procedures outline how the University processes and complies with the relevant taxation laws in relation to the Goods and Services Tax (GST).

2. Definitions, Terms, Acronyms

ATO - Australian Taxation Office

Business Activity Statement (BAS) - the single form filled in to report the entity’s certain tax obligations and entitlements e.g. GST, FBT.

DGST - Deferred GST Scheme

Goods and Services Tax (GST) - a broad-based tax of 10% (also known as a value-added tax) on the supply of most goods, services and anything else consumed in Australia.

GST Free Supplies - supplies on which no GST liability arises, but the supplier remains entitled to claim GST (input tax) credits on acquisition made in making the GST-free supply.   

GST (Input Tax) Credits - the GST that has been paid on any creditable acquisition which can be claimed back as part of the BAS lodgement. 

Input Taxed Supplies - supplies on which no GST liability arises, but the supplier is unable to claim GST (input tax credits) on acquisition made in making the input taxed supply.

PAYG - Pay as you go withholding where an entity is obligated to withhold an amount from payments made to employees, contractors, or other businesses under certain circumstances as prescribed by the ATO.

Recipient Created Tax Invoice (RCTI) - a tax invoice that is issued by the purchase of the goods and/or services rather than the seller, provided the purchaser meets the criteria as prescribed by the ATO.

Taxable Supplies - supplies on which GST liability arises and the supplier can claim GST (input tax) credits on acquisition made in making of the taxable supply.

VAT - Value Added Tax

3. Procedures Scope/Coverage

These procedures apply to all University staff involved in GST-related transactions. 

4. Procedures Statement

The University recognises Goods and Services Tax (GST) in accordance to:

  • A New System (Goods and Services Tax) Act 1999
  • Financial Accountability Act 2009 - Section 61(f)
  • A New System (Australian Business Number) Act 1999
  • A New System (Pay As You Go) Act 1999

The University is required to:

  • Include GST in the price of sales of taxable supplies to customers; and
  • Claim GST or input tax credits (when it is applicable) for the GST included in the price of purchased goods and services.

The UQ GST Guide and GST website have been developed specifically for the University of Queensland which outlines detailed information, instructions and examples for processing and managing GST transactions handled by the University. These are to be used as guidance in the calculation and claiming of GST.

The UQ GST Guide is located on the FBS website.

5. Roles and Responsibilities

Any persons recording transactions in UniFi are responsible for applying the correct GST treatment, recording the correct GST amount in the accounting system and keeping appropriate supporting documentations for all supplies and acquisitions made by The University of Queensland.

The Taxation Unit within FBS is responsible for administering the preparation, lodgement, record keeping and payment of the monthly BAS. The monthly BAS includes the reporting of GST, Deferred GST, and quarterly FBT instalments.

The due date for BAS lodgement is 21 days after the end of each month.

Deferred GST Scheme (DGST)

The University participates in the DGST scheme.  This scheme allows the University to defer the payment of GST on all taxable importations into Australia.

The ATO includes the total amount of GST that was deferred during the previous month on the University’s next month BAS as a payable.  As the large majority of the University’s acquisitions are creditable importations, an input tax credit is claimed in the same BAS which effectively offsets the deferred GST liability.

PAYG

The PAYG lodgement and reporting is performed separately from the BAS lodgement by the HR Division.

6. Application of GST in the University

The notion of supply is central to the application of GST. GST is only applicable on taxable supplies (supplying taxable supplies and acquiring taxable supplies).

With regards to the University, there are four types of supplies together with the treatment of GST and the ability to claim GST credits:

Type of Supplies

Is GST charged on the University’s sales of this type of supply?

Is the University able to claim GST (Input Tax) credit on acquisition of this type of supply?

Taxable

Yes

Yes

GST free

No

No

Input taxed

No

No

Out of scope

No

No

GST coding system has been set up in UniFi to reflect all of the above criteria in each transaction applicable to the University. Persons recording transactions in UniFi are responsible for the correct GST code for transactions processed. The applications of the GST coding are outlined in the UQ GST Guide and should be read in conjunction with the procedures in this document.

Some supplies may be a mixture of transaction types and must be separated into identifiable components.

6.1 Taxable Supplies

A taxable supply that is applicable for the University is:

  • any form of supply;
  • made for consideration;
  • made in the course of operating and furtherance of the University’s business;
  • connected with Australia; and
  • not a GST-free, input taxed, or out of scope supplies (see sections below).

The University must charge GST on sales of taxable supplies and can claim GST credits for acquisitions made for the sale of these taxable supplies.

The University is obligated to issue a tax invoice for any taxable supply made.  More information can be found in Section 7 Tax Invoices of these procedures.

6.1.1 Form of Supply

A supply for GST purposes is broadly defined with the exception of money supplied as consideration for a supply.

Forms of supplies applicable to the University are, and not limited to: 

  • the sale of goods (e.g. trading stock and capital equipment);
  • the supply of services (e.g. research assistance services);
  • the hiring out of equipment; and
  • the provision of advice (e.g. legal advice), etc.

 6.1.2 Supplies for Consideration

Consideration is usually monetary, but can be in some other forms, such as:

  • goods and services provided instead of money, as in barter transactions; or
  • in the form of acting or refraining from doing something.

6.1.3 Supplies in the Course of Operating the University’s Business

This will be the case for all transactions and includes the supply of assets.

6.1.4 Supplies Connected with Australia

A supply of:

Is connected with Australia if any of the followings apply:

Goods

  • delivered or made available in Australia to the purchaser;
  • removed from Australia; or
  • brought into Australia, provided the seller either imports the goods into Australia or installs or assembles the goods in Australia.

 

Properties (e.g. land, buildings)

Physically present in Australia.

 

Services / rights

  • performed in Australia;
  • the seller makes the supply through a business they carry on in Australia; or
  • the supply is of a right to purchase or acquire something that would be connected with Australia.

 

The UQ GST Guide located on the FBS website contains a more comprehensive explanation and examples of supplies connected with Australia including exports (which are not considered to be connected with Australia and are therefore classed as GST-free).

6.2 GST-free supplies

The University does not include GST in the price of sales of GST-free supplies but can still claim GST credits for acquisitions made for the sale of these GST-free supplies.

Refer to the UQ GST Guide located on the FBS website for more details and examples on the GST treatment of GST-free supplies, including education and education related goods and services that applies to the University.

6.3 Input taxed supplies

The University does not include GST in the price of sales of input taxed supplies and cannot claim GST credits for acquisitions made for the sales of input taxed supplies.

Refer to the UQ GST Guide located in the FBS website for more details and examples on the GST treatment of input taxed supplies such as residential or accommodation.

6.4 Out of scope transactions

An out of scope transaction is one which does not relate to a “supply” where there is a missing element of the supply definition.

Refer to the UQ GST Guide located in the FBS website for more details and examples on transactions which do not constitute a supply that applies to the University.

6.5 Claiming GST (input tax) credits

The University can claim GST credits for the GST paid on a creditable acquisition where the following conditions are met:

  • the purchase is used wholly or mainly in carrying on the University’s business;
  • the price includes GST;
  • the University is liable to provide consideration for the item acquired; and
  • the University receives a valid tax invoice from the supplier for acquisition exceeding $82.50 inclusive GST, or other allowable form in the absence of a tax invoice.

Information about tax invoice and other allowable form can be found in Section 7 Tax Invoices of these procedures.

6.5.1 Exceptions of claiming GST credits

The University cannot claim GST credits on the following situation:

a) Input taxed supplies - GST credit cannot be claimed for any portion of acquisitions made for the sale of input taxed supplies (e.g. for acquisition made by Halls of Residence at Gatton in relation to its provision of residential accommodations)

b) Private use and non-deductible expenses - The University is prohibited from claiming a GST credit for goods and services acquired for private use and certain non-deductible expenses (e.g. entertainment for visitors).  Further information is contained in the UQ GST Guide located on the FBS website.

c) Motor vehicles - If a car is purchased which exceeds the luxury car tax threshold, the University can generally only claim an amount of GST equal to one-eleventh of that limit.

d) Other special rules - Refer to the UQ GST Guide located on the FBS website for other special rules where GST credit cannot be claimed.

7. Tax invoices

The University is required to issue a valid tax invoice for any sales of taxable supplies and to obtain a valid tax invoice on any acquisition made that cost more than $82.50 (including GST if applicable).

7.1 Valid tax invoice

A valid tax invoice is a document that meets all of the following requirements:

  • It is issued by the supplier, unless it is an RCTI (refer to below section).
  • It contains enough information to enable the following to be clearly identified:

o the supplier’s identity

o the supplier’s ABN

o a brief description of what is sold, including the quantity (if applicable) and the price of what is sold

o the extent to which each sale is a taxable sale – this can be shown separately or, if the GST to be paid is exactly one-eleventh of the total price, as a statement such as ‘total price includes GST

o the date the document is issued

o the amount of GST (if any) payable for each sale

o the buyer's identity or ABN (if the total sale price is at least $1,000)

If a document issued by a supplier does not contain all of the required information, the University must obtain further information from the supplier where the missing information can be clearly identified.

If an invoice contains more than one transaction type (e.g. a taxable supply and a GST free supply) then the invoice must also show:

  • each taxable supply;
  • the amount of GST to be paid (for the taxable supplies); and
  • the amount to be paid for the total supply.

7.2 Recipient created tax invoices

RCTI is a tax invoice that is issued by the recipient of the goods and/or services rather than the supplier. The ATO has made legislative determinations about the types of sales of goods or services that can be invoiced using RCTI's. Certain requirements are to be met before an RCTI can be issued or accepted.

One important requirement is that an agreement must be in place between the supplier and the recipient with regards to the issue of RCTIs.  This agreement can be embedded in an RCTI or it can be a separate written agreement.

It is the University’s policy that such agreements can only be entered into following advice from:

  • the Contract and Grants Section within FBS;
  • the Taxation Unit within FBS; or
  • the Legal Office.

Refer to the UQ GST Guide for more information about circumstances that are applicable for the University to issue RCTI.

A valid RCTI must contain sufficient information to enable the following to be clearly identified:

o the words “Recipient Created Tax Invoice” displayed prominently

o the supplier’s identity

o the supplier’s ABN

o the date of issue

o the buyer’s identity

o the buyer’s ABN

o a brief description of what is sold,

o for each description includes the quantity (if applicable) and the price

o the amount of GST (if any) payable for each sale

o the extent to which each sale is a taxable sale

o if GST is payable for any sale – that the GST is payable by the supplier

The recipient must:

  • issue the original or a copy of the RCTI to the supplier within 28 days of when the sale is made or when the value of the sale is determine;
  • retain the original or a copy of the RCTI;
  • reasonably comply with its obligations under the taxation laws; and
  • not issue a document that would otherwise be an RCTI, on or after the date when they or the supplier has failed to comply with any of the requirements of RCTIs.

7.3 No suppliers tax invoice provided

It is mandatory for the supplier to provide the buyer with a tax invoice within 28 days after the buyer requests one.

If a tax invoice is not received from a supplier, the University must wait until it is received before the invoice is entered into UniFi for an acquisition of more than $82.50 (inclusive GST), so that GST credit can be claimed.

The University can receive one of the following alternative documents to claim a GST credit for acquisitions that cost $82.50 or less (including GST):

  • a cash register docket;
  • a receipt; or
  • an invoice.

A statutory declaration that is not accompanied by one of the alternative documents listed above is not sufficient for the University to claim GST.  These transactions must be processed as GST Free in UniFi.

7.4 Tax invoice with no ABN - withholding tax

The University must withhold 46.5% of the payment and remit to the ATO if a supplier does not quote a valid ABN where the total payment for the goods or services is more than $82.50 (including GST) and none of the no-ABN exceptions apply.

This withholding tax will be submitted to the ATO as part of the monthly BAS. The remaining 53.5% will be paid to the supplier and they will be provided with an original and a copy of an ATO payment summary. This process, including the issue of a payment summary, is handled by FBS.

An ABN is not required if any of the following exceptions apply:

  • The supply is made in the supplier’s private capacity, or as their hobby;
  • The payment is exempt income for the supplier (for example, the supplier is a non-profit body);
  • The payment is to a non-resident who is not carrying on a business in Australia or through an agent in Australia; or
  • The supplier is not an enterprise because they have no reasonable expectation of profit or gain.

When an exception applies to providing a valid tax invoice, the supplier must complete a "Statement by Supplier" form which is available from the ATO website and provide this form to the Accounts Payable section before payment can occur.

8. Adjusting Event

An adjusting event in GST can occur in relation to supplies in the following instances:

  • When the price of a purchase changes after the tax invoice has been received;
  • When a purchase for which GST credit can be claimed is cancelled;
  • When the actual use of a purchase for private purposes or to make input taxed supplies differs from the intended use (this only applies if the GST-exclusive value of the purchase is more than $1,000).

When an adjusting event occurs, this may result in an increase or decrease in the GST liability of the University and care should be taken by Finance Officers (or equivalents), Account Payable and Receivable Officers to ensure that the GST is correctly accounted for.

The Taxation Unit within FBS division should be consulted for correction or recording of out of the ordinary GST adjusting events at tax@fbs.uq.edu.au.

Custodians
Chief Financial Officer
Mr Andrew Betts

Forms

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UQ GST Guide - Form

UQ GST Guide - Form

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Description: 

Transactions are classified as either revenue or expenditure items. Each transaction entered into UniFi will fit into either of these two categories. These categories have pre-defined GST codes and transaction types. 

Please refer to the UQ GST Guide, which details information about GST issues that are applicable to the University.

Custodians
Chief Financial Officer
Mr Andrew Betts
Custodians
Chief Financial Officer
Mr Andrew Betts
Custodians
Chief Financial Officer
Mr Andrew Betts