The non-commercial activities of some non-profit organisations are GST-free. These non-profit organisations include:
endorsed charitable institutions
endorsed trustees of charitable funds
gift deductible entities, and
government schools.
As one of these organisations, your non-commercial activities may include selling goods or services for less than cost or less than market value. Your sale is GST-free if the amount charged is less than:
50% of the GST-inclusive market value of the goods or service, or
75% of the amount the organisation paid to purchase the things used to make the good or service that you then sell.
When the sale is a supply of accommodation by any of these organisations, the sale is GST-free if the amount charged is:
less than 75% of the GST-inclusive market value of the accommodation, or
less than 75% of the cost of providing the accommodation.
You may also be able to claim GST credits for the GST included in the price of things purchased to make these sales.
GST applies to most of the commercial activities of these non-profit organisations. GST may not apply to some activities for other reasons. For example, many health and education sales are GST-free and some fund-raising events conducted by charities are input taxed.
For more information about non-commercial activities and how to work out whether your non-commercial supplies are GST-free, refer to:
There can be problems with arrangements where related or associated non-profit organisations have claimed GST credits for input taxed supplies of accommodation.
We have released a Determination detailing the GST consequences of these types of transactions GSTD 2007/2 Goods and services tax: what are the results for GST purposes of a charitable institution engaging with an associated endorsed charitable institution in an arrangement described in Taxpayer Alert TA 2007/1.
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