UTS homeUTS:Tax: E-manual

UTS is registered on the Australian Business Register for GST and ABN purposes. The University’s ABN is 77 257 686 961.

GST is a tax that is charged on the supply of goods and services in Australia and on goods imported into Australia.

To understand how GST works in a broad sense see the flow chart and the following topics:

  1. Basics of GST
  2. Type of transactions
  3. Tax Invoice
  4. GST-free supplies
  5. Suppliers Statement (to be completed by supplier's who do not have an ABN)
  6. GST compliance and record keeping

Basics of GST

From 1 July 2000 the Goods and Services Tax (GST) affects all Australian consumers and enterprises.

The GST was legislated as A New Tax System (Goods & Services Tax) Act 1999, hereafter referred to as the GST Act. Unless specifically mentioned, all references to legislation in this section refer to the GST Act.

The GST legislation is administered by the Australian Taxation Office (ATO).

The definition of "enterprise" for GST purposes includes a business, profession, lease, licence, charity and religious organisations, government and government organisations (including universities).

This summary aims to:

  • give a brief overview of the manner in which the GST affects the University,
  • create an awareness of the implications of the GST, and
  • provide relevant information to staff through responses to Frequently Asked Questions (FAQ).

With the introduction of the GST, Wholesale Sales Tax was abolished and other state indirect taxes were eliminated over a prescribed timeframe.

GST impacts upon:-

  • documentation received and produced (ie, tax invoices),
  • the University’s information and reporting systems,
  • the pricing of goods & services, and
  • specific clauses required for contracts.

The GST applies to taxable goods and services imported into or supplied in Australia.

There are three main types of transactions:

1. Taxable supplies,

2. GST-free supplies, and

3. Input taxed supplies.

A "supplyis (GST) "taxable" if-

  • it includes a supply of goods or services (including the supply of "goods in kind" or a barter arrangement),
  • the provision of advice or information,
  • the creation, grant, transfer, assignment or surrender of any right,
  • the entry into, or release from, an obligation to do anything,
  • it is for consideration,
  • it is the course of furthering an enterprise,
  • it is connected with Australia, and
  • it is conducted by a registered  person.

unless it is a supply which is-

GST-free  - that is, GST not charged to the recipient of a "supply", although the GST credit is claimable by the Supplier, or

Input taxed - that is, GST is not charged to the recipient of a "supply" and the GST credit is not claimable by the Supplier.

Type of Supply

Charge GST?
(On Sales)

Claim Input Tax Credit
(ie GST Paid on Purchases)

Taxable Supplies

Yes

Yes

GST-free supplies

No

Yes

Input Tax Supplies

No

No

As a consequence, UTS:

  • pays GST for most goods and services it acquires;
  • invoices clients and collects GST on applicable taxable goods or services; and
  • is obligated to adhere to the GST legislation.

Registration for GST is required if the turnover of an enterprise exceeds $50,000, ($100,000 for non-profit bodies), with registration being optional if turnover is under $50,000. An enterprise cannot charge customers GST or claim credits for the 10% GST paid on purchases if it is not registered.

Contractors who are not ABN registered may be subject to deduction of tax from payments via the "Pay As You Go" system. However, UTS has a requirement that all suppliers must have an ABN before any work commences.

The "supply" of recognised award education courses or a unit within such a course is "GST-free" to students. Education courses are extensively defined and include pre-school, primary and secondary school, tertiary, special education, English Language, Masters and Doctoral courses.

Short Course Clarification Flow Chart will assist in determining the GST classification on a course. The GST classification of a short course should be made with the assistance of the Tax & Insurance Officer.

Some student costs are taxable including:

  • the sale or hire of goods (eg a computer) relating to an education course (except consumable course materials);
  • text books, printing, stationery, photocopying, computer disks;
  • non-basic food and accommodation as part of an excursion or field trip;
  • hire of sporting facilities;
  • Union entrance fee;
  • Union semester fee; and
  • Students Association fee.

The provision of research services by the University to business or Government will be classified as a taxable supply, if there is an obligation on the part of the University to provide research findings in return for the research funds received. One eleventh of the gross amount will be the amount of GST payable if the GST is not separately itemised.

All contracts entered into after 1 July 2000 should include a GST specific clause. An illustrative clause covering this aspect of GST liability would be-

"In the event that any goods and services tax becomes payable in respect of supplies made under this contract, the consideration payable hereunder shall be increased by the amount of tax imposed and the supplier shall be entitled to recover the increased amount from the recipient."

Tax Invoices

All ABN registered businesses with GST registration must issue a tax invoice when charging GST. Electronic version (eg, a faxed or pdf version) of tax invoice is acceptable to claim input tax credits.  The legislative reference is s.29-70 of the relevant GST Act, confirmed by GSTR ruling 2000/17, paragraph 24.

The tax invoice details the nature of the transaction, and if GST is charged, is required for the purchaser to claim back the GST. Different requirements apply to different invoices.

Requirements

Non-Tax Invoice

Invoice (less than $1,000)

Tax Invoice ($1,000+)

"Tax Invoice" stated prominently

-

X

X

Date of issue

X

X

X

Name of supplier

X

X

X

ABN of supplier

-

X

X

Name of recipient

X

-

X

Address or ABN of recipient

-

-

X

Brief description of each thing supplied

-

X

X

For each description - the quantity of the goods or the extent of the services supplied

-

-

X

The GST inclusive price of the taxable supply (GST is usually separately itemised)

-

-

X

If GST is 1/11th of the total price either:(a) a statement like "the total price includes GST" or(b) the total amount of GST

-

X

X

* It is expected that an ABN will be provided on all invoices.

Sample of a tax invoice is attached.

What is GST-free?

  • basic food
  • most typical medical services, including all services covered by Medicare
  • hospital services
  • private health insurance premiums
  • a wide range of commonly used health services (such as physiotherapy, chiropractic, podiatry and dental services)
  • medical aids and appliances designed specifically for people with disabilities or illnesses, and many pharmaceutical products and residential care services provided in nursing homes and hostels
  • most childcare services
  • exports
  • religious services
  • non-commercial activities of charitable institutions, charitable funds and gift deductible entities
  • local government rates and charges
  • farmland supplied for farming
  • sale of a business as a going concern, and
  • supplies through inward duty-free shops

What food will be GST-free?  Most food, including meat, fruit and vegetables, will be GST-free. This means it should become less costly. However, some food will be subject to GST, for example, prepared food, takeaway food, restaurant meals and confectionery

This table shows examples of food that is GST-free and food that is subject to GST.

Food that is GST-free

Food that is subject to GST

Meat
Processed meat products, eg sausages
Vegetables (fresh, frozen and canned)
Fresh fish and seafood
Fruit (fresh, dried, frozen and canned)
Eggs
Bread (without sweet filling or coating)
Cheese
Soup (tinned, dried and prepared)
Seeds and nuts (raw and unprocessed)
Flour
Sugar
Milk, soy and rice milk - but not including flavoured beverages
Tea, coffee and malt preparations
Fruit and vegetable juices (90% minimum by volume of juice)
Dry preparations marketed for flavouring milk
Infant and invalid formula
Breakfast cereals
Cake mixes
Cold meats, bacon and small goods
Canned food
Sauces, gravy mixes and condiments
 

Hamburgers, hot dogs, pizzas and quiches
Sandwiches and rolls
*Confectionery, including muesli bars and health bars
*Chips, crisps and salted nuts
Caviar
Pies, pasties and sausage rolls
Donuts, pastries and tarts
Ice cream and frozen yoghurt
Biscuits, cookies, crackers and pretzels
Soft drinks, flavoured milk and cordial
 

 

GST compliance and record keeping

For UTS to claim input tax credit, a original "Tax Invoice" is required for transactions involving a price (GST exclusive) of $75 or more.

For acquisitions less than $75 (GST exclusive), a receipt or docket will suffice in supporting a claim for an input tax credit.

UTS is registered for GST and must issue "Tax Invoice" for all taxable supplies it makes.