GST

Preamble

The Goods and Services Tax (GST) was introduced in Australia from 1 July 2000. The GST is a broad based consumption tax of 10% on most goods and services sold or consumed in Australia.

2.1 Taxable supply: a sale where GST is included in the price.

2.2 GST free supply: a sale where GST is not included in the price.

2.3 Tax invoice: a document that records sales of goods or services in a manner which complies with GST legislation. Information which must be included on a tax invoice can be found here.

2.4 Australian Business Number (ABN): a single identifier for all business dealings with the Australian Taxation Office (ATO) and other government agencies.

2.5 Input tax credits: the GST credit that may be claimed from the ATO for GST paid on purchases.

3.1 The University will establish and maintain procedures to ensure compliance with Commonwealth legislation relating to the GST.

3.2 Compliance checks will be undertaken to ensure that procedures relating to GST are being properly implemented.

3.3 The Director, Financial Services will be responsible for ensuring compliance with GST related requirements.

Procedures

4.1 University Purchases

4.1.1 When GST is charged to the University, a tax invoice must be provided by suppliers for all purchases exceeding $82.50 (inclusive of GST) to enable the University to claim input tax credits. (For purchases under this amount, an invoice or other appropriate documentation is required by the University for substantiation purposes but not for GST purposes).

4.1.2 If a tax invoice is not provided, the staff member responsible for the purchase must request that a tax invoice be provided within 28 days of the date of the request.

4.1.3 If a supplier fails to provide a tax invoice to the University the following will apply:

• If the supplier has not yet been paid, only the GST exclusive amount will be paid
• If the supplier has already been paid, the full GST inclusive amount will be charged to the relevant general ledger account and no claim for input tax credits for that purchase will be lodged with the ATO until a tax invoice has been received.

4.1.4 In accordance with Commonwealth legislation, the University will reduce payments to entities without an ABN by Pay As You Go (PAYG) withholding tax.

4.1.5 For purchases of taxable supplies, where the GST paid can be claimed back from the ATO, the GST component will be debited to a central University account and the charge net of GST will be debited to the relevant general ledger account.

4.2 University Supplies

4.2.1 The University will ensure that its ABN is included on invoices issued for supplies it provides, to ensure that PAYG withholding tax is not deducted from payments made to it.

4.2.2 The University will only issue invoices which have been raised on the University’s finance system. Where it is necessary to issue an invoice, staff must use the appropriate Financial Services Division form to request that a tax invoice be raised.

4.2.2 Staff who request that a tax invoice be raised will be responsible for determining the tax treatment of supplies made by the University. The University’s Taxation Accountant should be asked to make this determination in cases where the tax status of a supply is not clear.

4.2.3 In some instances a recipient created tax invoice (RCTI) may be prepared on behalf of the University for services it provides. In such instances, this will be done in accordance with a RCTI agreement. The Taxation Accountant’s approval is required before an RCTI can be issued.

4.3 Reporting and Compliance Checks

4.3.1 The University is required to lodge a Business Activity Statement (BAS) to the ATO on a monthly basis. The BAS reports the total sales and purchases made by the University during the previous month, the total amount of GST collected on sales, and the total amount of GST paid on purchases. BAS reports will be prepared using the accruals method.

4.3.2 The University aims to correctly classify all income and expenditure transactions with respect to their tax treatment. Appropriate documentation will be held to support this classification and substantiate the information provided to the ATO in the monthly BAS. The University will retain this supporting documentation for the period of time prescribed in relevant legislation.

4.3.3 Each monthly BAS must be reconciled with the relevant general ledger accounts by the Taxation Accountant. All reports generated from the finance system will be reviewed and checked for anomalies by the Taxation Accountant.

4.3.4 The Taxation Accountant will conduct compliance checks on a regular basis to ensure that data has been correctly captured.

4.3.5 The Director, Financial Services (or nominee) is authorised to submit the BAS to the ATO. The BAS must be returned to the ATO by the 21st day of the month following the end of the reporting period.

4.3.6 The Director, Financial Services is responsible for authorising nominated staff in the Financial Services Division to be given electronic access to the ATO and for ensuring that this access is updated to reflect staff changes.

4.3.7 In the event that an amendment to a BAS is required, the Taxation Accountant is authorised to make the necessary amendment, and ensure resubmission of the BAS to the ATO.

4.3.8 In cases where a GST refund is owed to the University, this amount will be credited by the ATO to the University’s bank account. In cases where the University owes money to the ATO, payment must be forwarded to the ATO by the due date shown on the BAS.