10.b. Monetary sponsorship
Non-interpretative - other references (see general principles in
GSTR 2001/6External Link - Goods and services tax: non-monetary consideration and
GSTR 2012/2External Link - Goods and services tax: financial assistance payments).
If the entity supplying the service, such as advertising, is registered for GST it will be liable for GST on the supply. The entity paying the sponsorship fee will be entitled to an input tax credit of 1/11th of the payment if it is registered provided they hold a tax invoice. The sponsor may decide to increase the sponsorship to cover the GST liability.