Accounting for gambling supplies on your activity statement
Gambling supplies are taxable sales that you make that involve the supply of either:
- a ticket in a lottery, raffle or similar activity
- taking bets on gambling events such as racing, gaming or sporting events.
Gambling supplies also include:
- casino gambling operations
- operating gaming machines in clubs and hotels
- conducting bingo activities.
Completing your activity statement
You may use either the calculation worksheet method or the accounts method to complete the relevant boxes on your activity statement for the reporting period.
The amounts you report on your activity statement will depend on the accounting basis you have chosen or are otherwise required or permitted to use. You can account on a cash basis or a non-cash basis.
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If you pay only cash prizes, report your margin from gambling supplies for the reporting period at G1 (total sales). To calculate the margin, deduct the following amounts from the gross proceeds of your gambling supplies conducted as part of your business in the reporting period:
- the total amount of cash prizes you are liable to pay during the reporting period (which relate to your gambling supplies)
- any amounts of money you have agreed to pay to customers during the reporting period to repay a proportion of their losses (that relate to your gambling supplies).
If you calculate an amount that is less than zero, do not include anything at G1 for your gambling supplies. You take the excess amount away from the gross proceeds of your gambling supplies on your next activity statement.
If you use the accounts method, report the amount of GST calculated on the margin from your gambling supplies at 1A (GST on sales). If using the calculation worksheet method, use the calculation worksheet to work out the amount to include at 1A.
Any bets made by entities outside Australia and monetary prizes paid to entities outside Australia should not be included in the gross proceeds calculations for the reporting period.
If you are a charitable institution, a trustee of a charitable fund, a gift deductible entity or a government school that conducts raffles or bingo, do not include any proceeds or cash prizes that relate to these activities in the calculation above, provided they are in keeping with state or territory laws.
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However, you must report the proceeds you receive from these activities separately at G1 (total sales) and G3 (GST-free supplies).
If you only provide non-cash prizes for your gambling supplies:
- do not deduct the value of these prizes from the gross proceeds of your gambling sales
- include the gross proceeds from your gambling supplies at G1 (total sales).
If you use the accounts method, you should report:
- the amount of GST on the gross proceeds from your gambling supplies at 1A (GST on sales)
- the amounts you paid to purchase the prizes at G10 (capital purchases) or G11 (non-capital purchases) in the relevant reporting period
- the amount of GST credit you are entitled to claim for the purchase of non-cash prizes at 1B (GST on purchases).
If you are using the calculation worksheet method, use the worksheet to calculate the amount to include at 1B.
Cash and non-cash prizes
If you provide cash and non-cash prizes, report your margin at G1 (worked out as shown under 'cash prizes'). When working this out, do not deduct the value of the non-cash prizes you provide from the gross gambling proceeds.
If using the accounts method, report at 1A (GST on sales):
- the GST on your gambling supplies excluding the non-cash prizes, or
- zero if your margin on gambling supplies is less than zero.
If you are using the calculation worksheet method, use the worksheet to work out the amount to include at 1A (GST on sales).
Include the purchase of non-cash prizes on your activity statement in the same way as described under 'Non-cash prizes'.
A publican operating gaming machines is registered for GST and reports on a monthly activity statement. In October 2009, the publican had gross proceeds of $100,000 but paid out $80,000 in cash prizes.
He includes the net proceeds of $20,000 at G1 (total sales) on his October activity statement for gambling supplies.
Using the accounts method the publican would include the amount of GST of $1,818 at 1A (GST on sales) on his activity statement. The amount of $1,818 is one-eleventh of the net profit on his gambling supplies of $20,000.
If he had used the calculation worksheet method, he would use the worksheet to work out how much to include at 1A.
If the publican had paid non-cash prizes instead of paying cash prizes, he would account for the GST on his gambling supplies differently on his activity statement.
If he paid $80,000 for non-cash prizes for October, he would include his gross gambling sales of $100,000 at G1 (total sales) on his October activity statement.
He would then include the $80,000 he paid for non-cash prizes at G10 (capital purchases) or G11 (non-capital purchases), depending on whether the prizes were capital or non-capital items.
Using the accounts method, the publican would include $9,090 at 1A (GST on sales), which is the GST he is liable to pay on his $100,000 gambling sales.
The publican would claim GST credits of $7,272 at 1B (GST credits on purchases), which is the amount of GST he paid in the price of the purchases of the non-cash prizes.
If he had used the calculation sheet method, he would use the worksheet to work out how much to include at 1A and 1B.
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Abstract: How to account for and report goods and services tax (GST) on cash and non-cash prizes you provide NAT 10672-07.2006. This information supplements the activity statement instructions (NAT 7392).