Private ruling: Required to register for GST
Date of advice: 29 August 2025
Published: 27 October 2025
Ruling period: 1 July 20XX to 30 June 20XX
Date scheme commenced: The date this ruling was issued.

Ruling: Q1: Are you required to register for GST in accordance with section 23-5 of the A New Tax Systems (Goods and Services Tax) Act 1999 (GST Act), having received arts grants totalling over $75,000 during the financial year ending 30 June 20YY? | A1: No. You are not required to register for GST in accordance with section 23-5 of the GST Act. | Q2: If you are required to register for GST, are you only making taxable supplies under section 9-5 of the GST Act for the arts grants received following the date of GST registration? | A2: You are not required to be registered for GST and are, therefore, not making taxable supplies in accordance with section 9-5 of the GST Act.

Relevant facts and circumstances: You formed the partnership in 20XX in order to deliver a biennial festival. You have an Australian Business Number (ABN) but are not registered for GST. This festival is entirely funded by arts grants and does not generate any other income (it is free to attend and you do not sell any products). The vast bulk of the grant funding is spent paying for venues, marketing, and accessibility services (e.g. Auslan interpretation), as well as travel, accommodation and appearance fees for festival guests. You receive some of the funding as a stipend for your organisational efforts, but the festival has no employees. The festival first took place in 20YY. Until 20YY, you applied for the grant funding as individuals. The scope of the festival has grown each year, as has the amount of grant funding you have received. In 20XX, you applied for the grant funding as an organisation in the form of a partnership. You initially received a total of $70,000 in the form of two arts grants from federal and state government arts bodies: Entity A and Entity B. You were then awarded a third grant from local government council, Entity C, for $15,000 and, once these funds are received, your total income from grants will be $85,000 ($10,000 over the $75,000 GST turnover threshold). All three grants are awarded through competitive application processes and, at the time of receiving the first two grants, there was no certainty that you would be successful in receiving the third grant. After being awarded the grants, you must submit an invoice in order to receive the funds. The invoice must state whether or not you are registered for GST. You were awarded an Independent Artists and Groups grant of $20,000 from Entity A on xx xxxx xxxx and acquitted on xx xxxx xxxx. As part of the funding agreement with Entity A you are required to: • use the grant solely for the to achieve the outcomes in the agreement. • at the end of the Funding Period, where you have not expended all of the Grant, you must notify Entity A of the unexpended amount and repay that amount unless the Director, of Entity A agrees otherwise. • acknowledge the Grant Funding by Entity B on any advertising, publicity or promotion material. • submit an acquittal report within three months of the end of funding period on the following: - a description of the actual project undertaken - details of artists involved - an artistic evaluation of the project, including successes and achievements, challenges and difficulties. This evaluation must include an evaluation of the project against the expected outcomes stated in your original grant application, including an explanation of any variations which have occurred. - digital copies of promotional material displaying the Entity A logo or acknowledgement - where applicable, digital copies of published reviews, articles or other press coverage - documentation of your project (such as a small selection of images or footage submitted as a digital file or URL link). - an income an expenditure summary showing how the Grant was spent. You were awarded the Arts Projects for Individuals and Groups grant of $50,000 from Entity B approved on xx xxxx xxxx and acquitted on xx xxxx xxxx. As part of the funding agreement with Entity B you are required to: • submit a Grant Report at its completion. • prominently acknowledge that " the project has been assisted by the Australian Government through Entity B, it's principal arts investment and advisory body" in all of the funded activity promotional material and publications, whether electronic or print or alternatively acknowledge their support on your website or social media account. • if Entity B's logo is used in any public forum, you must adhere to the guidelines set out on Entity A's website. • only use the funding for the purposes of undertaking the activity as set out in your application. If you use any of it for other purposes, Entity B can ask that the full amount is returned. • you must seek our prior written approval to make any changes or variations to any part of the funded activity, including its budget, start or finish dates, change of personnel, planned activities etc. Approval to make a change is at our sole discretion. You must not make any changes and variations until you receive our written approval. • if you do not give us a satisfactory Grant Report or we find you made misleading statements in your application that influenced our decision to fund you, we can ask you to return the funding. • if there is a portion of the grant that remains unspent at the conclusion of the activity for which you were funded, including as a result of a Force Majeure Event, we can ask that portion of the grant is returned to us. You were awarded the Arts & Cultural Grants Major Round grant of $15,000 from the Entity C xx xxxxx xxxx. As part of the funding agreement with Entity C you are required to: • only use the funds only for the purpose in accordance with the terms of the agreement. • if, at the Completion Date, you have not expended the entire amount, then you must notify the Entity C of the unexpended portion of the Amount and must repay that portion of the Amount to the Entity C within 14 days after the Completion Date, unless otherwise agreed by the Entity C. • you must provide any identified Reports and Information within the timeframe specified. • you are required to provide any information and access to your premises upon request by Entity C to assess your financial position, operations and compliance with the agreement. • grant the Entity C a non-exclusive, perpetual, royalty free licence to use any intellectual property created as part of the Purpose.

Relevant legislative provisions: A New Tax System (Goods and Services Tax) Act 1999 section 9-5 | A New Tax System (Goods and Services Tax) Act 1999 section 9-20 | A New Tax System (Goods and Services Tax) Act 1999 section 23-5 | A New Tax System (Goods and Services Tax) Act 1999 section 188-10(1) | A New Tax System (Goods and Services Tax) Act 1999 section 188-15 | A New Tax System (Goods and Services Tax) Act 1999 section 188-20 Question 1 | Are you required to register for GST in accordance with section 23-5 having received arts grants totalling over $75,000 during the financial year ending 30 June 2025? | Summary | No. You are not required to register for GST as you do not meet the GST registration threshold.

Reasons for decision: Summary: You are not required to be registered for GST and are, therefore, not making taxable supplies. Under section 9-5, you make a ' taxable supply ' if all of the following conditions are satisfied: (a) you make the supply for consideration; and (b) the supply is made in the course or furtherance of an enterprise that you carry on; and (c) the supply is connected with the indirect tax zone, and (d) you are registered or required to be registered for GST. However, the supply is not a taxable supply to the extent that it is GST-free or input taxed. As determined above in Question 1, the grants you received are not consideration for any supply you made. As, the first condition in section 9-5 is not satisfied i.e. that you make the supply for consideration, you are not making a taxable supply and therefore as a result, you are not liable to pay GST on the grants you received.

Reasons for decision: Section 23-5 states that you are required to be registered for GST if: | (a) you are carrying on an enterprise; and | (b) your GST turnover meets the registration turnover threshold (currently $75,000 unless you are a non-profit body). | The term 'enterprise' is defined in section 9-20 and includes an activity, or series of activities, done on a regular or continuous basis, in the form of a lease, licence or other grant of an interest in property. | In your case, we consider your activity falls within the scope of an 'enterprise' for GST purposes and as such paragraph 23-5(a) is satisfied. | We now need to consider is whether your GST turnover meets the registration turnover. | Subsection 188-10(1) provides that your GST turnover will meet the registration turnover threshold if: | (a) your current GST turnover is at or above $75,000 and the Commissioner is not satisfied that your projected GST turnover is less than $75,000; or | (b) your projected GST turnover is at or above $75,000. | Your 'current GST turnover' is defined in section 188-15 as the sum of the values of all of your supplies made in a particular month and the preceding 11 months. | Your 'projected GST turnover' is defined in section 188-20 as the sum of the values of all of your supplies made in a particular month and the next 11 months, other than: | (a) supplies that are input taxed; | (b) supplies made for no consideration, other than to your associates who are not registered for GST or who are registered but who do not acquire the thing from you solely for a creditable purpose; | (c) supplies that are not made in connection with an enterprise that your carry on. | Goods and Services Tax Ruling GSTR 2012/2 Goods and services tax: financial assistance payments (GSTR 2012/2), provides guidance on when a financial assistance payment, such as a grant, is consideration for a supply. | Paragraph 15 of GSTR 2012/2 explains that for a financial assistance payment to be consideration for a supply there must be a sufficient nexus between the payment made by the payer and a supply (if any) made by the payee. | In establishing if there is a sufficient nexus between a payment and a supply, paragraphs 15A and 16 of GSTR 2012/2 explain that not every connection between supply and consideration meets the requirements for a taxable supply. Reference is to be made to all of the surrounding circumstances of the arrangement, in particular any written documentation. The circumstances may include the statutory purpose of the payer in providing the financial assistance, the activities which are to be undertaken by the payee and any other terms and conditions attached to the payment. However, none of these factors will be determinative on their own and the arrangement must be considered as a whole. | Taking into consideration the key conditions attaching to the grants from entity A, entity B and entity C, the following parts of GSTR 2012/2 are considered relevant in the current circumstances: | • Using the grant for the specified purpose | Whether using grant money for a specific purpose will amount to a supply will depend on whether there is a binding obligation created or only a mere expectation. In this regard, paragraph 119 of GSTR 2012/2 notes: | ...Where the financial assistance payment is made in circumstances where a party expects that something will be done, and it does not involve a binding obligation or the supply of goods, services or some other thing, there is no supply. The mere expectation that an act or event will happen is not sufficient to establish a supply. | • Requirement to report on how the grant money was used | Paragraph 132 of GSTR 2012/2 states: | Things are often supplied by the payee to the payer that are merely part of the mechanism of making or accounting for the financial assistance payment. These things are considered to form part of the circumstance in which a supply is made but are not of themselves the supplies for which the consideration is provided. | • Acknowledgment of grant | Paragraph 32 of GSTR 2012/2 explains that: | Where, in return for a grant, the payee promoted the payer's business through promotional material, programs or uniforms or advertises the business at events and in the media, the payment will have a sufficient nexus with the supply of the promotion and advertising. That is, the grant is in return for the promotion or advertising. | However, paragraph 38 of GSTR 2012/2 notes that 't he mere acknowledgement of the financial assistance payment is not an act which has the character of advertising, or promoting the company'. | Although the obligation to repay funding in certain circumstances meets the statutory definition of supply, paragraphs 134 and 135 GSTR 2012/2 state that: | ... The existence of a repayment clause is not determinative in establishing whether a financial assistance payment is consideration for a supply. This is because it cannot be said in such circumstances that the payment was made in connection with, in response to or for the inducement of the entry into the repayment obligation. | However, the repayment obligation is to be taken into account in the broader context of the arrangement as a whole and may be relevant in determining whether the financial assistance payment is consideration for a supply made by the payee. | Applying the guidance provided by GSTR 2012/2 to the current circumstances, it is considered that the conditions imposed on as part of the agreements with Entity A, Entity B and Entity C and in particular: | • those restricting the use of funds provided | • acknowledging the grant, | • the requirement to prepare and provide a final report primarily accounting for the use of the funds, and | • repayment of the funding | do not amount to supplies that are made 'for' the receipt of the grants totalling $85,000. | Viewing the arrangement as a whole, it is considered that there is an insufficient nexus between the grant provided and any supply made by you 'for' the grants. | As the grants are not consideration for a supply, they are excluded from the calculation of your current and projected GST turnovers because of paragraphs 188-15(1)(b) and 188-20(1)(b). Therefore, you do not need to include them when determining whether you meet the registration threshold in accordance with section 188-10. | As you do not meet the registration threshold, you are not required to be registered for GST.