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Muru01(Newbie)Newbie
29 Aug 2024

If you are either a profit based or not for profit organisation can you claim reimbursement for GST as part of a grant application. Are the rules different for different types of organsiations and/or grants.


For example, if I submit an application for a grant from a State Government organisation to deliver a service to the community, or buy something for the community can I claim GST as part of the grant, or do I claim the GST back at Tax Time and the grant itself therefore does not contain any GST reimbursement.


If for example I buy equipment with the Grant, there will be a GST component associated with the purchase. When applying for the grant do I include this? I assume as a business I can't (I can claim the GST later and getting it reimbursed as part of the grant (which is GST free) would therefore be double dipping), but as a not for profit I can as I can't claim it back against profit. Are there any clear policy rules on State governments providing GST reimbursement as part of a grant (specifically interested in NSW)

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631 views
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Most helpful reply

Matt_ATO(Community Support)Community Support
30 Aug 2024

Howdy @Muru01,


If your business is registered for GST, you generally do not include GST in your grant application. The grant amount should be exclusive of GST. And you can claim GST credits for any GST paid on purchases related to the grant.


You can claim GST credits for the GST included in the price of goods and services you purchase for your business, including those funded by the grant. This is done through your Business Activity Statement (BAS).


If your NFP is registered for GST, the treatment is similar to that of a profit-based business. You do not include GST in your grant application, and you can claim GST credits for the GST paid on purchases.


NFP organizations have a higher GST registration threshold of $150,000. If your turnover is below this threshold, you may not need to register for GST.


NFPs may be eligible for additional GST concessions. Such as treating certain fundraising events as input taxed.

Which means you do not charge GST on sales but cannot claim GST credits on purchases related to those events.


When applying for the grant, you should not include the GST component in the grant amount. You can claim the GST paid on the equipment as a GST credit in your BAS.


If your NFP is registered for GST:

  • you should not include the GST component in the grant amount and can claim the GST credit.

If your NFP is not registered for GST:

  • you would include the GST component in the grant application since you cannot claim GST credits.


All replies

Most helpful reply

Matt_ATO(Community Support)Community Support
30 Aug 2024

Howdy @Muru01,


If your business is registered for GST, you generally do not include GST in your grant application. The grant amount should be exclusive of GST. And you can claim GST credits for any GST paid on purchases related to the grant.


You can claim GST credits for the GST included in the price of goods and services you purchase for your business, including those funded by the grant. This is done through your Business Activity Statement (BAS).


If your NFP is registered for GST, the treatment is similar to that of a profit-based business. You do not include GST in your grant application, and you can claim GST credits for the GST paid on purchases.


NFP organizations have a higher GST registration threshold of $150,000. If your turnover is below this threshold, you may not need to register for GST.


NFPs may be eligible for additional GST concessions. Such as treating certain fundraising events as input taxed.

Which means you do not charge GST on sales but cannot claim GST credits on purchases related to those events.


When applying for the grant, you should not include the GST component in the grant amount. You can claim the GST paid on the equipment as a GST credit in your BAS.


If your NFP is registered for GST:

  • you should not include the GST component in the grant amount and can claim the GST credit.

If your NFP is not registered for GST:

  • you would include the GST component in the grant application since you cannot claim GST credits.


Muru01(Newbie)Newbie
30 Aug 2024

Thanks Matt

What about where there are restrictions around the grant beyond eligibility criteria. For example you must buy this, or produce this or spend the grant on a specific outcome by a set date and provide receipts and return unspent grant funds. Does the grant then attract Supply and GST is payable on the grant money, and also GST can't be claimed for purchases (even if the NFP is not registered for GST). Can you claim the GST as part of the grant application or reimbursement where the grant is so specific Regional Skills Relocation Grant Frequently Asked Questions | NSW Government, Grants and sponsorships for not-for-profits | Australian Taxation Office (ato.gov.au) or does the advice you provided only relate to a grant that has broad non specific eligibility criteria

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