Non Property Query re GST

[skater]

I am a little confused.

I work casual one day a week for a Charity/Youth Centre. They are the custodian of a small open air skating rink and they have now decided to open up to the public one day a week, which is where I come in.

Anyway, at first they did not want to sell any snacks/drinks, but now they have agreed to sell cans of soft drink, water, tea and coffee. We sold these for $1.50 each and now they have come back to tell us that we can't do this. We have been told that we have to sell the drinks for half price, otherwise they have to pay GST. So now we can only charge $1.00 for a drink when they are wanting to make enough of a profit to make it viable to pay staff to be in attendance.

Are there different rules for Charities than for the general populace? And don't you need a turnover of more than $75k to have to register for GST?

 

[taxguy]

Yes, turnover does need to be than $75k p.a. before you are required to register for GST.

For a "non profit body" the turnover threshold is $150k.

It might need to be considered what else gets turned over by the organisation, it all gets added together.

 

[skater]

Yes, turnover does need to be than $75k p.a. before you are required to register for GST.

For a "non profit body" the turnover threshold is $150k.

It might need to be considered what else gets turned over by the organisation, it all gets added together.

Well, this is the confusing thing. They run a "garage sale" once a month and earn a pretty penny from this, as well as the entry fees from skating. Even so, the turnover would have to be well under $150k. I just don't understand why they are being funny about sales of soft drinks.

 

[PI141]

No you dont have to turnover 75 to be GST reg - you can do it under that amt but you HAVE to be if you are over 75

http://www.ato.gov.au/businesses/content.asp?doc=/content/20724.htm&page=5&H5

 

[Luv2Travel]

Now I'm not entirely sure as I haven't had much to do with non profit organisations, but I think there's something about if they sell products for 50% of the market value then they don't have to charge GST, even if it would normally be a taxable supply. So I'm guessing that is what you're being told.

Now, the issue is, does your organisation have to register for GST? Is the annual turnover in excess of $150K (for non profit organisations, or $75K for a normal business)? Like taxguy said, you probably need to look at the total turnover of the organisation, not just that one part of it.

Like I said, I haven't had much to do with this area of tax, and I don't know the full circumstances of your situation but some of what I said may have something to do with it. The ATO website is a pretty good resource, www.ato.gov.au. Do a search for non profit entities and GST and it will tell you the requirements.

 

[skater]

Now I'm not entirely sure as I haven't had much to do with non profit organisations, but I think there's something about if they sell products for 50% of the market value then they don't have to charge GST, even if it would normally be a taxable supply. So I'm guessing that is what you're being told.

.

Aha, yes, that does sound what the situation is. Thankyou, I've just looked it up and you are correct. I've never heard of this before, so now I understand what they were going on about.