DPCD and the Goods and Services Tax (GST)
The Federal Government introduced the Goods and Services Tax on July 1 2000. The following information will provide you with important information when applying for a grant or managing a grant from DPCD:
ABN registration
The Australian Business Number, or ABN, has been introduced to facilitate the administration of the New Tax System. The Victorian government prefers organisations applying for a grant to have an ABN. If you do not have an ABN DPCD may require you to nominate an organisation with an ABN to manage the funds on your behalf (Auspice Organisation) or ask you to provide a Certificate of Incorporation. Where a grant is provided to an individual there is no requirement to supply an ABN. Organisations that apply for a DPCD grant and do not have an ABN or Certificate of Incorporation and fail to nominate an Auspice organisation will not be eligible to receive funding.
Tax Invoices
Successful grant applicants with an ABN will be required to issue DPCD with a tax invoice in accordance with the Australian Taxation Office (ATO) requirements. Grant payments to GST registered recipients will not be made without a valid tax invoice. A sample of a Tax Invoice is available here (Word 36kb).
Recipient Created Tax Invoice
In some instances the Department will offer the option of entering into an agreement that allows the Department to raise a Tax Invoice on an Organisations behalf. This is called a Recipient Created Tax Invoice (RCTI). To do this, organisations must be registered for GST by the Australian Tax Office. An RCTI agreement means that organisations that enter into an RCTI agreement will not have to provide a Tax Invoice to receive payment of their grant. The Department will notify your organisation once payment has been made against an RCTI. RCTIs may not be suitable for all grants.
Grossing up of grant payments
The Victorian government has stated that all payments to registered suppliers of goods and services will be 'grossed-up' for GST. This means that any grant payments made to you will include 10% GST which you will be required to remit to the ATO. As stated above, grant payments (including GST) to GST registered recipients will not be made without a tax invoice. If you are registered for GST, when applying for a grant, please do not gross up the total grant request.
GST and tax advice
If you require specific assistance or further information about GST registration, ABN's and Pay-As-You-Go, please contact the Australian Taxation Office via the "Business Tax Reform Infoline" (13 24 78) or Web-site www.ato.gov.au.
Resources
For information and advice on the New Tax System, please contact the Australian Taxation Office on 13 27 88. The ATO web site also has a range of useful publications including a booklet on the New Tax System and the Arts. Information can be downloaded at www.ato.gov.au.
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