Change in use of goods and services

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 that the purchase is used for a creditable purpose. The extent that 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 subsequently use a business purchase partly in making input taxed sales.

The creditable purpose of a purchase changes if one of the following applies:

  • there is a difference between how you planned to use the purchase and how you actually used it
  • the way you used the purchase 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.

Further information

For more information, refer to External Link Goods and services tax: Division 129 – making adjustments for changes in extent of creditable purpose.

End of further information
    Last modified: 07 Jun 2013QC 21235