Certain organisations can form a GST group if they satisfy the 90% ownership test. The ownership test requires that each group member share substantially the same (at least 90%) ownership.
The 90% ownership requirement for a GST group does not apply to non-profit organisations.
Non-profit organisations that are members of the same non-profit association may find it useful to form a GST group if they regularly make sales and purchases between each other.
A GST group is treated as a single entity for GST purposes. This means no GST is payable and no GST credits can be claimed on transactions between group members.
One of the group members manages the affairs of the group and is responsible for accounting for the GST transactions of the whole group. This group member is known as the representative member. However, each group member must be individually registered for GST to form part of a GST group.
When GST group members make sales outside the group, the representative member is responsible for accounting for GST on the sales.
Similarly when GST group members make purchases from outside the group, the representative member claims the GST credits on the purchases on behalf of the group.
For more information refer to GST groups(NAT 3089).
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