Money received is specifically designated in grant agreement to pay contractors and the GST that they charge and pass back to ATO. We are effectively holding that money, to be passed on and comply with our grant agreement. We are a volunteer organisation and we have a strong minded member who has instructed our treasurer to declare the grant money as "total sales" on a business activity statement and have paid GST to ATO on that money. Now to comply with the grant agreement, we have run out of money, having paid GST to ATO and also GST to the contractors, who would have also paid that component back to ATO. ATO now has two lots of GST on public funds that were designated for environmental work. Also how would we get that GST money back if this is incorrect. Also I need to have some reliable source to convince the strong minded volunteer is adamant that ATO is ripping people off and that's just they way it is and we need to live with it! Any advice appreciated. Our organisation is registered fro GST but I am not sure that we should be. We do not sell any goods and services, just get grants and try and do good things for the environment on the ground with it.
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I got to speak to ATO eventually and I think I have the answer. The reference to put in the search bar is GC 19500. Basically, the money received in the grant to pass on to the contractors, didn't involve our group getting paid for supply. We just hold the money to pass onto contractors and are not paid for that. A good example I was given on the phone was if we had the money to do research, we are supplying something, and GST payable. He also made the point of contractual obligations to deliver supply. There is contractual obligations for us to provide inkind volunteer work, but we are not paid for that requirement. The answer to the other question about what to do, apparently we should do a "private ruin" and provide all the info to the ATO and request return of those funds. Hopefully that doesn't take too long and we get enough money to meet the obligations laid out in the grant. Hope that helps. Any other discussion or clarification welcome.
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I got to speak to ATO eventually and I think I have the answer. The reference to put in the search bar is GC 19500. Basically, the money received in the grant to pass on to the contractors, didn't involve our group getting paid for supply. We just hold the money to pass onto contractors and are not paid for that. A good example I was given on the phone was if we had the money to do research, we are supplying something, and GST payable. He also made the point of contractual obligations to deliver supply. There is contractual obligations for us to provide inkind volunteer work, but we are not paid for that requirement. The answer to the other question about what to do, apparently we should do a "private ruin" and provide all the info to the ATO and request return of those funds. Hopefully that doesn't take too long and we get enough money to meet the obligations laid out in the grant. Hope that helps. Any other discussion or clarification welcome.
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