Fundraising events - How do the new provisions work?
Section 40-160 has been introduced into the GST Act. This section provides that a supply will be input taxed if all of the following requirements are satisfied:
Fund-raising event is defined in section 40-165. An organisation that satisfies the above requirements can treat an event as input taxed if it is:
Please note an event that involves the sale of goods as described above cannot involve the sale of alcoholic beverages or tobacco products.
The Commissioner is unable to decide that an event is a fundraising event unless he is satisfied that the organisation is not in the business of conducting such events and the proceeds from conducting the event are for the direct benefit of the supplier's charitable or non-profit purposes.
It is expected that the Commissioner will make a determination in the near future about the frequency with which events can be held without forming any part of a series or regular run of like or similar events.
Where an organisation chooses to apply the provisions in this section they will not be entitled to claim input tax credits for any acquisitions in relation to the event and they will not be required to charge GST on the supplies they make. The organisation will not be entitled to claim input tax credits regardless of whether the supply would have been GST-free had they not made they election.