Edited version of private advice

Authorisation Number: 1052244765157

Date of advice: 4 June 2024

Ruling

Subject: GST - input taxed

Question 1

Are supplies made in connection with the Event input taxed under subsection 40-160(1) of the A New Tax System (Goods and Services Tax) Act 1991 (GST Act)?

Answer

No. Supplies made in connection with the Event are not input taxed under subsection 40-160(1) of the GST Act.

Question 2

Is your supply of tickets in a raffle to raise money for the Event GST-free under section 38-270 of the GST Act?

Answer

Yes. Your supply of tickets in a raffle to raise money for the Event is GST-free under section 38-270 of the GST Act.

Relevant facts and circumstances

You are registered for goods and services tax (GST) and endorsed as a charity for GST purposes.

You hold the Event once a year.

The primary purpose of the Event was specified and is in line with your charitable purpose.

The Event comprises the sale of attendance tickets.

The price of the attendance tickets are $xx per day, $xx for all days, or $xx for a dinner dance function.

Some memorabilia will be sold at the Event for the specified prices.

Proceeds from the Event are to the direct benefit of your charitable purpose.

You are not in the business of conducting such events.

The ticket sales do not include any alcohol or tobacco, however the Event is being held in a licensed venue which will have these items for sale. Tea and coffee may be sold by the organiser at the venue.

You would like to choose to have all supplies that you make in connection with the Event treated as input taxed.

The Event will be recorded in your business records as an Event that is treated as input taxed and will continue to be recorded thus for future Events.

Prior to the Event, you will sell raffle tickets to raise funds for the Event and the raffle tickets will have various prices.

Relevant legislative provisions

A New Tax System (Goods and Services Tax) Act 1999 section 9-5

A New Tax System (Goods and Services Tax) Act 1999 section 9-10

A New Tax System (Goods and Services Tax) Act 1999 section 38-270

A New Tax System (Goods and Services Tax) Act 1999 section 40-160

A New Tax System (Goods and Services Tax) Act 1999 section 40-165

Reasons for decision

Summary

The Event you are planning on holding, is not a fund-raising event as defined in subsection 40-165(1) of the GST Act. Therefore, supplies made in connection with the Event are not input taxed under subsection 40-160(1) of the GST Act.

However, your supply of tickets in a raffle to raise money for the Event is GST-free under section 38-270 of the GST Act.

Detailed reasoning

Under section 9-40 of the GST Act, an entity is liable to pay GST on any taxable supply that it makes.

Section 9-5 of the GST Act states that an entity makes a taxable supply if it makes the supply for consideration; the supply is made in the course or furtherance of an enterprise that it carries on; the supply is connected with the indirect tax zone (Australia) and the entity is registered or required to be registered for GST. However, the supply is not a taxable supply to the extent that it is GST-free or input taxed.

Section 40-160 of the GST Act enables an endorsed charity, a gift-deductible entity and a government school to choose to treat all supplies it makes in connection with certain fund-raising events as input taxed.

Subsection 40-160(1) of the GST Act provides that a supply is input taxedif:

a)    the supplier is an endorsed charity, a gift deductible entity or a government school; and

b)    the supply is made in connection with a fund-raising event; and

c)    the supplier chooses to have all supplies that it makes in connection with the event treated as input taxed; and

d)    the event is referred to in the supplier's records as an event that is treated as input taxed.

You are an endorsed charity for GST purposes, you want to choose to have all supplies you make in connection with the Event, treated as input taxed and the Event will be referred to in your records as input taxed. What needs to be determined is whether the Event is a fund-raising event and, if so, whether the supplies are made in connection with the fund-raising event.

Meaning of fund-raising event

Subsection 40-165(1) of the GST Act gives the meaning of a fund-raising event and states:

1)    Any of these is a fund-raising event if it is conducted for the purpose of fund-raising and it does not form any part of a series or regular run of like or similar events:

(a)  a fete, ball, gala show, dinner, performance or similar event;

(b)  an event comprising the sale of goods if:

(i)    each sale is for a consideration that does not exceed $20or such other amount as the regulations specify; and

(ii)   selling such goods is not a normal part of the supplier's business;

(c)   an event that the Commissioner decides, on an application by the supplier in writing, to be a fund-raising event.

Based on the information provided, the primary purpose of your Event is as specified. Since the purpose of your Event is something other than fund-raising, the Event is not a fund-raising Event within the meaning of subsection 40-165(1) of the GST Act. Therefore, supplies made in connection with the Event, are not input taxed under subsection 40-160(1) of the GST Act.

A dinner can be a fund-raising event where it is marketed and held for the purposes of fund-raising. However, in this case, the dinner is not being conducted for fund-raising purposes. Therefore, the sale of tickets to the dinner cannot be treated as input taxed under subsection 40-160(1) of the GST Act.

Raffle to raise money for the Event

Under section 38-270 of the GST Act the supply of a ticket in a raffle by a charitable institution is GST-free.

This section states that a supply is GST-free if:

(a)  the supplier is an endorsed charity, a gift-deductible entity or a government school; and

(b)  the supply is:

(i)    a supply of a ticket in a raffle; or

(ii)   an acceptance of a person's participation in a game of bingo; or

(iii)  a gambling supply of a kind specified in the regulations; and

(c)   the supply does not contravene a State law or a Territory law.

Based on the information provided, you will sell raffle tickets to raise funds for the Event and the raffle tickets will have various prices. You hold the necessary State or Territory gaming permits to conduct the raffle.

Therefore, as you satisfy the rules of section 38-270 of the GST Act, the supply of a raffle ticket to raise money for the Event, separate to the Event itself, is GST-free. You do not have to remit GST on the money you receive from the sale of these raffle tickets, but you will be entitled to claim input tax credits for any creditable acquisitions you have made in connection with the raffle. You must ensure that you hold a tax invoice where the GST inclusive price of the acquisition exceeds $82.50.