Certain organisations can choose to have all supplies they make in connection with a fundraising event treated as input taxed for goods and services tax purposes.
This applies to organisations that are:
- endorsed charitable institutions
- endorsed trustees of charitable funds
- gift-deductible entities
- government schools.
An organisation needs to make this choice before the event takes place and keep a record of their choice for each fundraising event. The organisation will not be required to charge GST on the fundraising event and cannot claim GST credits for any purchases or acquisitions they make in relation to the fundraising event.
For GST purposes, a fundraising event is one of the following:
- a fete, ball, gala show, dinner, performance or similar event
- other events where goods other than alcoholic beverages or tobacco products are sold – provided that each sale is for payment that is $20 or less and the sales are not a normal part of the organisationâ€™s business
- an event that has been approved by us as a fundraising event.
This concession may be of benefit to these organisations in structuring supplies they make in connection with infrequent fundraising activities to assist in relieving distress caused by natural disasters such as the recent Haitian earthquake.
The way the surplus funds are used does not affect the GST treatment of the supplies that generated those funds.
If an organisation does not choose to treat a fundraising event as input taxed and still holds the event, supplies made in connection with the event will be subject to GST.
If an organisation conducts non-commercial activities, or raffles or bingo, in accordance with a state or territory law, any related supplies they make will be GST-free if they have not treated those supplies as input taxed under the fundraising event concession.