GST - the new Tax System
Updated 19 October, 2001
Official Sites (Government)
Links to the legislation
for The New Tax System (from SCALEplus http://scaleplus.law.gov.au
at the Australian Attorney General's Department.)
A New Tax System (Commonwealth-State Financial Arrangements) Bill 1999
(EMs not available)
A New Tax System (Commonwealth-State Financial Arrangements) Bill 1999,
A New Tax System (Commonwealth-State Financial Arrangements— Consequential
Provisions) Bill 1999, EM
A New Tax System (Commonwealth-State Financial Arrangements— Consequential
Provisions) Bill 1999, Supplementary
A New Tax System (Taxation Laws Amendment) Bill (No. 1) 1999, EM
A New Tax System (Taxation Laws Amendment) Bill (No. 1) 1999, Supplementary
ALIA and the GST
- advocacy activities by the Australian Library and Information Association
on the proposed goods and services tax and its impact on libraries.
GST and libraries: The bubbles, the salad and the cooked chook.
(ALIA Member Brief)
Services and the GST: Statement by the National Resource Sharing
Working Group (May 2000)
The following questions relate specifically to university library services
in Australia. The answers must not be considered as a legal
opinion. No responsibility is taken for their accuracy or otherwise,
although all care is taken, and reputable persons and organisations have
been consulted in their drafting.
Preamble. The Australian Vice-Chancellors'
Committee (AVCC) employed Ernst
& Young (see also presentations by
E&Y) to provide advice on the implications and implementation of GST
management processes for Australian universities. Ernst & Young
prepared a report, which has been recently updated, and have run a series
of seminars in universities discussing how the implementation can be approached
in each institution. Representatives of the participating universities
were advised how to ensure that this information could be transmitted throughout
their institutions. Some universities chose not to participate in
the seminars (ANU, Bond, CSU, Adelaide).
The AVCC is not intending to issue any guidelines to universities on
a single approach, but it is understood that discussion is being held among
the universities within some States in an attempt to address the issues
collectively. Consequently CAUL members will need to be aware of
the policy and processes within their own institution.
GST-liable: you pay, and reclaim, GST on goods and services
used to produce the good or service and you charge GST on the good or service
to the recipient. This is the standard arrangement for most things.
In these cases the GST charged to the recipient should be higher than the
GST reclaimed on the inputs and hence the ATO collects money in net terms.
GST-free: you pay, and reclaim, GST on goods and services used
to produce the good or service but you do not charge GST on the good or
service to the recipient. This is for some special cases only such as education
courses, health, food. In these cases the ATO is refunding money
(money it received from whoever provided the inputs. Hence ATO neither
gains nor loses).
Input taxed: category you should not have to worry about.
Applies to financial and accommodation services. You pay, but
do not reclaim, GST on goods and services used to produce the financial
or accommodation service but you do not charge GST on the financial or
accommodation service to the recipient.
Frequently Asked Questions.
questions - DOFA GST Unit
Q. Education courses leading to recognised awards are GST-free.
Research is not GST free. How do you determine which purchases of library
books and journals for research and/or teaching are GST-free?
A. There is no requirement to differentiate between research
and teaching for library purchases. GST paid on all such purchases
can be claimed back from the Tax Office (ATO). The difference between GST-free
services and GST-liable services is that GST is charged on the latter but
not the former. In both cases all GST paid on purchases needed to provide
the good or service can be reclaimed.
Q. Summer schools and courses offered on a not-for-award basis eg
continuing education, bridging courses, etc are likely to attract a GST
on their fees. How do you determine which purchases of library books
and journals and which library services are GST-free?
A. Although universities will be required to collect a GST on any
fees for such courses, it is not necessary to differentiate between books
and journals which may or may not be used in those courses. GST paid
on all such purchases can be claimed back from the Tax Office (ATO).
A GST will be applied to all purchases sourced from Australian vendors
or agents. This can be claimed back from the ATO.
Q. Already some invoices for annual subscriptions are showing a pro
rata GST, but there is no mechanism in place to claim it back.
Do I pay the whole invoice now, or pay the GST component only when it is
able to be claimed back?
A. Your university will be establishing its own policy for handling
of invoices for which a part is GST-liable. This policy might be
pay the whole invoice now, but keep track of such invoices for claiming
after July 1, 2000.
pay pro rata until 30 June, 2000 and pay the rest after July
pay the invoice minus the GST component, and pay the rest after July 1,
Q. How will I know if the vendor is passing on the reduced costs
engendered by the removal of the Wholesale Sales Tax (WST)?
A. You should ask the vendor, especially if there appears to be no
reduction in the price, or if the increase in the subscription does not
appear to be less. It may be that the trickle-down effects of the
removal of the WST will not appear until 2001 or even later, but it is
sensible to ask. The Australian
Competition and Consumer Commission (ACCC) will be monitoring the situation.
Q. Which universities are implementing which policy?
Q. The GST is not payable at source on goods and services purchased
directly from foreign vendors. The GST may or may not be levied by
Customs depending on the mode of entry into Australia (post, sea or air
cargo) and on the value of the goods. How do I know which items attract
A. All GST payable on goods and services is claimable from the ATO.
It is simplest to assume that every item (including electronic services)
attracts a GST, which is then claimable. In the case of imports the
purchaser is required to pay GST on the import. At present it is to be
paid when passing customs. However the legislation allows for regulations
to allow payment at the same time as the importer pays or reclaims GST
to or from the ATO. Assuming the regulations are made this means that the
university will simply record the notional amount on both sides of the
reporting ledger (GST paid and GST reclaimed).
Q. Consolidation services will charge a GST on their services as
well as the items they supply. Can this be claimed back?
A. The GST on all goods and services may be claimed back. The
amount payable and claimable is based on the total amount charged on the
invoice, whether goods or services.
Q. How will the GST affect consortium purchases such as those handled
by the CAUL Office?
A. When CAUL purchases a consortium subscription it will be responsible
for the GST payment to the ATO. CAUL will invoice each institution
for its share of the subscription cost, including the GST component.
Each institution will then claim the GST component from the ATO.
The effect is GST-neutral both to CAUL and to the institution.
Q. Will the GST have to be levied on photocopying services, library
fines, library membership fees, services to other libraries, including
inter-library loan and document delivery?
A. It is unlikely that photocopying will be deemed to be an educational
service so a GST must be charged and payable to the ATO.
A. Library fines are subject to a GST.
A. Library membership fees are subject to a GST.
A. Services to other libraries, including inter-library loan and
document delivery are subject to a GST.
Q. Is it necessary to issue an invoice when supplying an inter-library
loan if the charge is less than $50?
A. No invoice is required. The amount of GST charged can still
be reclaimed. The amount is assumed to be 1/11 of the amount paid. Issuing
and receiving an invoice in these cases may ease record keeping.
Q. The standard cost of an inter-library loan is $12 even though
this is understood to be less than the real value of the service.
Does the GST apply to the charge of the service or the value of the service?
A. It is likely to apply to the charge, unless the service has been
deliberately undervalued as a means of avoiding some part of the GST.
Q. Is it necessary for each library to obtain its own ABN (Australian
Business Number) in order to manage its GST transactions?
A. Each university will decide which of its units will need a unique
ABN and which units will use the university's ABN. It is likely that
many will chose to handle GST transactions centrally, except for special
units such as commercial arms, etc.
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This site is written, compiled and maintained by Diane Costello, Executive