GST and the timing of choice to treat a fund-raising event as an input taxed fund-raising event

Is the entity, an endorsed charitable institution, required to make its choice to treat supplies made in connection with a fund-raising event as input taxed under section 40-160 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) prior to making the first supply in connection with the event?

Yes, the entity is required to make its choice to treat supplies made in connection with a fund-raising event as input taxed under section 40-160 of the GST Act prior to making the first supply in connection with the event.

The entity is an endorsed charitable institution.

The entity intends to conduct a fund-raising event. The event will satisfy the meaning of a fund-raising event for the purposes of section 40-165 of the GST Act. The entity will make supplies of goods and services in connection with the fund-raising event which it wishes to treat as input taxed.

Section 40-160 of the GST Act enables a charitable institution, a trustee of a charitable fund, a gift-deductible entity and a government school to choose to treat all supplies it makes in connection with certain fund-raising events as input taxed. Where the entity does not make this choice, the supplies relating to the event will be treated under the general goods and services tax (GST) principles.

Section 40-160 of the GST Act stipulates the conditions that must be satisfied for a supply made in connection with a fund-raising event to be treated as input taxed. One of the conditions that must be satisfied is that 'the supplier chooses to have all supplies that it makes in connection with the event treated as input taxed' (paragraph 40-160(1)(c) of the GST Act).

The GST is a transaction based tax. The operation of the GST Act requires that the supplier determines whether there is a GST liability associated with the supply when that supply occurs. Therefore, where a choice is provided under the GST Act which affects the GST treatment of a particular supply, that choice must be made prior to making the supply.

Consequently, the entity must choose to have all supplies that it makes in connection with the fund-raising event treated as input taxed prior to the first supply being made in connection with the event. Note: Division 19 of the GST Act contains specific provisions that may apply in certain circumstances to adjust the GST liability on a supply after the supply is made. These provisions do not apply to the making of a choice to treat supplies in connection with fund-raising event as input taxed under section 40-160 of the GST Act.