GSTR 2012/2 released Jun 2012

Goods and services tax: financial assistance payments

A new public ruling provides the ATO’s view about the way the GST law applies in relation to financial assistance payments, including government grants, with specific clauses for not-for-profit entities.

This Ruling explains the Commissioner’s views as to when a financial assistance payment is consideration for a supply. Where it is established that there is a taxable supply, the Ruling explains the GST obligations of the payee and the payer’s entitlement to any input tax credit in relation to the arrangement.

The types of payments covered include  payments for rights, advice or information, sponsorships, obligations to do something, obligations not to do something, supplies with insufficient nexus, payments for no supply, and gifts.

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