Private ruling: GST - grants
Date of advice: 7 May 2026
Published: 20 July 2026

Ruling: Q1: Are the payments made by you under the written agreements consideration for creditable acquisitions under section 11-5 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)? | A1: Yes.

Relevant facts and circumstances: You carry an enterprise and are registered for goods and services tax (GST). You entered into written agreements (Agreements) with the Grantee. The Grantee is registered for GST. Each of the X Agreements are materially the same, with differences limited to the location and scope of the activities to be undertaken. The Agreements set out, amongst other things, the activities to be undertaken by the Grantee, the associated project milestones, the payment schedule and the reporting requirements. Under the terms of the Agreements, the Grantee must, amongst other things: • commence and complete the activities by the specified dates; • carry out the activities in accordance with the Agreements; • meet each milestone by the relevant completion date; • provide required reports and information to you; • provide any required recipient contribution; and • comply with the terms and conditions, applicable laws, professional standards and you reasonable requests, directions and requirements. You agree to pay the instalments in accordance with the payment schedule but may withhold payment of an instalment until you are reasonably satisfied that: • relevant milestones have been met; • required reports have been submitted; and • the Grantee is not otherwise in breach of the Agreements. The Grantee must use the funds solely for the purposes of the approved activities and in accordance with the terms of the Agreements, and any unspent funds must be repaid to you. Suspension and Termination Under the terms of the Agreements you may suspend part or all of the payments if, in your reasonable opinion, the Grantee fails to carry out the activities, expend the funds otherwise than in accordance with the Agreements, not provided any information or reports as required, otherwise fail to comply with an obligation under the Agreements. Further, you may terminate the Agreements if the Grantee is unable or unwilling to commence or continue with the activities or fails to carry out the activities in accordance with the Agreements.

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 11-5

Reasons for decision: Summary: All legislative references are to the A New Tax System (Goods and Services Tax) Act 1999 (GST Act), unless otherwise stated. Under section 11-5 you make a creditable acquisition if: (a) you acquire anything solely or partly for a creditable purpose, and (b) the supply of the thing to you is a taxable supply, and (c) you provide, or is liable to provide, consideration for the supply, and (d) you are registered or required to be registered for GST. Each of these requirements is considered in turn below. | Detailed Reasoning - Acquisition: An acquisition under section 11-10 includes an acquisition of goods or services, a receipt of advice or information, an acceptance of a grant, transfer or assignment of any right, an acquisition of a right to require another person to do anything or any combination of these. The concept of acquisition is the corollary of 'supply' in section 9-10. Under each of the Agreements the Grantee is obliged, amongst other things, to: • perform the activities • carry out the activities in accordance with the Agreements; • meet each milestone by the relevant completion date; • provide required reports and information to you; and • comply with the terms and conditions, applicable laws, professional standards and your reasonable requests, directions and requirements. Those undertakings and their performance are capable of constituting services and obligations within the definition of supply in section 9-10 and correspondingly, acquisitions under section 11-10. Accordingly, for the purposes of section 11-5, you as the contracting party under the Agreements with the Grantee acquire the supplies from the Grantee. | Detailed Reasoning - Creditable purpose: Under subsection 11-15(1), an acquisition is for a creditable purpose to the extent it is made in carrying on an enterprise and is not of a private or domestic nature, nor related to making input taxed supplies. You acquire the Grantee's supplies (activities and related obligations) under the Agreements in carrying on your enterprise of administering and supporting the Program. Those acquisitions are neither acquired for private or domestic purposes or related to making input taxed supplies. Accordingly, paragraph 11-5 (a) is satisfied. | Detailed Reasoning - Paragraph 11-5(b): Taxable Supply: Paragraph 11-5(b) requires that the supply to you be a taxable supply. For this purpose, it is necessary to consider whether the supply made under the Agreements satisfies the elements of section 9-5, without determining the Grantee's ultimate GST liability. Under section 9-5, a supply is a taxable supply on which GST is payable if: (a) the supply is made for consideration; and (b) the supply is made in the course or furtherance of an enterprise carried on by the supplier; and (c) the supply is connected with the indirect tax zone; and (d) the supplier is 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. | Detailed Reasoning - Supply made for consideration: For the first element in paragraph 9-5(a) to be satisfied there must be: • a supply (within section 9-10) • consideration for that supply (within section 9-15) and • a sufficient nexus As set out above, the Grantee's undertakings and their performance under the Agreements constitute services and obligations made to you and fall within the statutory definition of a supply in section 9-10, including the entry into and performance of an obligation to do something. Whether the Payments constitute consideration for that supply is considered in Goods and Services Tax Ruling GSTR 2012/2 Goods and services tax: financial assistance payments (GSTR 2012/2 ) ) which explains when a financial assistance payment is consideration for a supply. GSTR 2012/2 explains that a financial assistance payment may be consideration for a supply where there is a sufficient nexus between the payment and the supply. A payment will constitute consideration under subsection 9-15(1) where it is made 'in connection with', 'in response to', or 'for the inducement of' a supply. In identifying the character of the connection, the word 'for' ensures that not every connection between supply and consideration meets the requirements for a taxable supply. That is, merely having any form of connection of any character between a supply and payment is insufficient to constitute consideration. The existence of a sufficient nexus is assessed objectively, having regard to all surrounding circumstances of the arrangement, including the terms of the relevant agreement. Paragraph 28 of GSTR 2012/2 makes clear that where a payment is made to secure the entry into, or performance of, an obligation, there is a sufficient nexus between the payment and the supply constituted by that obligation. The example at paragraphs 29 to 31 illustrates that where there is a binding obligation undertaken in return for funding there is a sufficient nexus between the entry into the obligation and the financial assistance payment such that the financial assistance payment is consideration for that supply. This principle aligns with judicial authority. In AP Group Limited v Commissioner of Taxation [2013] FCAFC 105 at [33], the Full Federal Court confirmed that, for consideration to exist, the payment must be made 'for' the supply, meaning in order to obtain that supply, and not merely be connected in a peripheral sense. Under the Agreements, the Grantee enters into binding obligations to: • undertake the defined activities in accordance with the terms of the Agreements; • achieve specified milestones; • provide progress, financial and final reports; and • comply with governance, accountability and performance requirements. Under the Agreements, payments are made by instalment and are expressly linked to the achievement of milestones and the submission of reports. You may withhold, suspend or terminate payments where the Grantee fails to perform the activities or comply with the terms of the Agreements. These features demonstrate that the Agreements do not merely reflect an expectation or hope that the activities will be performed. Rather they create a reciprocal and enforceable arrangement under which your payments are made to secure both the entry into, and the performance of, the Grantee's obligations These provisions demonstrate that the payments are made to secure both the entry into, and the performance of, the Grantee's obligations, rather than merely imposing conditions on an otherwise unconditional payment. While the activities may deliver broader environmental and public benefits, the payments are objectively made in order to obtain the performance of the agreed activities and other obligations, and not merely to provide general assistance. Accordingly, having regard to the arrangement as a whole (including the link between the performance of the activities and the milestone achievement, reporting and instalment payments) there is a sufficient nexus between the payments and the supply constituted by the Grantee's undertakings and performance of the activities and other obligations, such that the supply is made for the payment (that is, the payment is made in order to obtain that supply). Accordingly, the requirement of paragraph 9-5(a) is satisfied. | Detailed Reasoning - Other elements of section 9-5: The remaining elements of section 9-5 are also satisfied for the purposes of paragraph 11-5(b): • the supplies made under each Agreements are made in the course of the Grantee's activities of the kind contemplated by the Grant Agreements (paragraph 9.5(b); • the activities and associated works, services and obligations are physically performed in Australia connecting the supplies with the indirect tax zone (paragraph 9-5(c)); • publicly available information indicates the Grantee is registered for GST (paragraph 9-5(d)); and • nothing in the Agreements or surrounding circumstances indicates the supplies are GST-free under Division 38 or input taxed under Division 40. Accordingly, the supplies made to you under the Agreements are taxable supplies satisfying paragraph 11-5(b). | Detailed Reasoning - Paragraph 11-5(c): Liability to provide consideration: Under the Agreements you provide and is liable to provide the payments in instalments (if any) on the dates specified subject to the Grantee's performance of the activities and satisfaction of other contractual obligations. These payments are made in return for the Grantee undertaking and performing the activities and other obligations and complying with the Grant Agreements. Accordingly, paragraph 11-5(c) is satisfied. | Detailed Reasoning - Paragraph 11-5(d) GST registration: You are registered for GST in carrying on your enterprise. Accordingly, the requirement in paragraph 11-5(d) is satisfied. | Detailed Reasoning - Conclusion: As each of the requirements in section 11-5 is satisfied you make a creditable acquisition of the supplies made to you by the Grantee under each of the Agreements.