A small number of transactions are input taxed. No GST is charged to the purchaser on an input taxed transaction and supplier cannot claim input tax credits from the Taxation Office for the GST paid on the goods and services it has purchased in making the supply.
Residential rent, and
If a church has a residential rental property from which it derives market value rent, the church cannot charge the tenant GST as residential rent is an input taxed transaction. The church is not entitled to claim back the GST on expenses relating to the rental property, such as agent’s commission and repairs.
Input taxed fundraising events
Where the fundraising event involves different activities, it is often difficult to determine what supplies are taxable and
what supplies are GST-free. In order to limit the administrative difficulties of fundraising events, a church may be able to elect to treat a fundraising event as an input taxed supply. This means the church does not need to charge GST on any supply but it cannot claim back any input tax credits. This is particularly attractive where there are numerous different supplies, e.g. fetes, or there is little input tax credit to be claimed, e.g. trivia night. Note that where significant amounts of input tax credits can be claimed, it may be better to treat the fundraising event as a taxable supply.
When can a fundraising event be input taxed?
In determining whether an event can be treated as input taxed, the following needs to be considered: