If your non-profit organisation makes a purchase for business purposes and the purchase does not relate to making input taxed sales it is considered as being for a ‘creditable purpose’. This means you will generally be able to claim a GST credit for the purchase.
The amount of GST credit you can claim depends on the extent to which your purchase is used for a creditable purpose. The extent to which you use a purchase for a creditable purpose may change over time. That is, you may use the purchase for a creditable purpose to a greater, or lesser, extent than you intended. For example, you used the business purchase for a private or domestic purpose.
The ‘creditable purpose’ of a purchase changes if:
there is a difference between how you planned to use the thing purchased and how you actually used it, or
the way you used the thing purchased changes from adjustment period to adjustment period.
Adjustments are required for these changes in use because the amount of GST credits you have previously claimed on the purchase will either have been too much or too little. You generally need to make these types of adjustments on your June activity statement.
For more information refer to GSTR 2000/24 Goods and services tax: Division 129 – making adjustments for changes in extent of creditable purpose.
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