GST registration - Tax basics for non-profit organisations

Note: This document forms part of our publication Tax basics for non-profit organisations. To view the full publication, click here. The information in this document has been updated for changes that have occurred since the publication was released in June 2007.

What is GST?

Goods and services tax (GST) is a broad based tax of 10% on the sale of most goods, services and anything else consumed in Australia.

GST is a tax on transactions. Where a non-profit organisation is registered or required to be registered for GST, the price of most sales of goods and services and anything else will be inclusive of GST. Similarly, the organisation may be entitled to claim GST credits on the purchases it makes in carrying out its activities.

In this chapter when we say: sales we are referring to the GST term supplies purchases we are referring to the GST term acquisitions, and GST credit we are referring to the GST term input tax credit.

Registering for GST

If your non-profit organisation has a GST turnover of $150,000 or more ($75,000 for organisations that are not non-profit), it must register for GST.

If your organisation has a GST turnover of less than $150,000, it can choose to register for GST. The decision to voluntarily register for GST should be made based on the administrative needs of your organisation.

Generally, an organisation must then stay registered for at least 12 months, even if its GST turnover is less than $150,000.

Calculating your organisation’s GST turnover

An organisation’s GST turnover is its gross income, excluding:

• GST included in sales
• input taxed sales, and
• sales not connected with Australia.

If your organisation is not registered for GST, it will need to look at its GST turnover each month to make sure its turnover is not $150,000 or more. Your organisation’s GST turnover is $150,000 or more if its:

• turnover for the current month and the previous 11 months is $150,000 or more, or
• turnover for the current month and the next 11 months is likely to be $150,000 or more.

Generally, if your organisation’s turnover is $150,000 or more, it must register for GST within 21 days of the GST turnover meeting the $150,000 GST registration threshold.

How to register

To register for GST your organisation needs to complete an application form.

Before your organisation can register for GST it must have an ABN.

If your organisation does not have an ABN you can apply for an ABN and register for GST by completing the Application to register for companies and other organisations (NAT 2939).

If your organisation already has an ABN, it can register for GST by completing the Add a new business account (NAT 2954).

For more information see Registering your organisation.

What does being registered for GST mean?

If your organisation is registered or required to be registered for GST, it generally includes GST in the price of most goods and services and anything else it sells. These sales are called taxable sales. See Taxable sales.

There are other types of sales where your organisation does not include GST in the price. These are called GST-free sales and input taxed sales. See GST-free sales and Input taxed sales.

Being registered for GST means that your organisation:

• must pay the GST it has collected from its sales to the Tax Office
• can claim GST credits for any GST included in the price of its business purchases, and
• must complete an activity statement to report the taxable sales and claim GST credits.

For more information about accounting for GST, see Record keeping, administration and payment. For more information about meeting your GST reporting obligations, refer to GST for small business (NAT 3014). To obtain this publication, see More information.

Taxable sales

If your organisation makes a taxable sale, the price includes GST. Your organisation makes a taxable sale if it is registered or required to be registered for GST and the sale is:

• for consideration
• a part of the organisation’s activities
• connected with Australia, and
• not GST-free or input taxed.

The GST included in the price of a taxable sale is equal to 1/11th of the sale price.

Your organisation can claim a GST credit for the GST in the price of things it buys to make a taxable sale.

GST-free sales

If your organisation makes a GST-free sale, it does not include GST in the price. GST-free sales include:

• basic food items (such as fruit and vegetables, meat, bread and plain milk)
• most education, child care and health services, and
• some exports.

Your organisation can claim a GST credit for the GST in the price of things it buys to make a GST-free sale.

Input taxed sales

If your organisation makes an input taxed sale, it does not include GST in the price. Input taxed sales include:

• the sale of residential property (unless it is new)
• leasing of residential property, and
• financial transactions, such as providing a loan.

Your organisation cannot claim a GST credit for the GST in the price of things it buys to make an input taxed sale.