Goods and Services Tax (GST) for researchers
UOM Australian Business Number (ABN) = 84 002 705 224
The Goods and Services Tax (GST) is payable (at a rate of 10%) on taxable supplies, including goods, services, information, grants, transfers, or assignments of rights. As a GST-registered body the University of Melbourne is required to collect GST on taxable supplies which it makes to external persons or bodies. It is also required to record GST paid on University purchases. Failure to charge GST on a taxable supply may result in legal penalties, the majority being financial penalties incurred by non-compliant departments.
External research grants
Research funded by external bodies is generally a taxable supply, with the University remitting to the Australian Tax Office (ATO) 1/11th of the funds received. The University charge for the research must include the additional 10% for GST or the real value of the grant is reduced. There are exceptions to this liability:
- ARC grants
ARC awards are NOT GST liable. Payments from a government related entity to another government related entity do not attract GST if they are specifically covered by an appropriation under an Australian law. ARC payments fall into this category.
- Overseas grants
Research supplied to non-resident Australian persons or an organisation not based in Australia is regarded as an 'export' and is generally GST-free. Where the funding body is an Australian organisation and the research is provided overseas, this is not an export and therefore attracts GST.
- Gifts and donations
Gifts or donations are GST-free where they are unconditional (obligation-free). Donations to the University must be receipted by the Advancement Office. Contact the Advancement Office for advice on whether a particular receipt would constitute a donation.
- Scholarships
APAs, and ARC APAIs are not liable to GST. Other scholarships need assessment on a case by case basis, according to issues of 'consideration.' Generally, if the University is not supplying a service to the scholarship sponsor, the funds are not GST liable. If the sponsor requires monthly reports, access to intellectual property, or sets the research agenda for the student, this would be GST liable.
Internal research grants
Internal UoM research grants are not affected by GST unless the internal grant is to be matched by a grant from an external body. The partner grant to the University would normally be subject to GST.
Intellectual property rights
The transfer or assignment of intellectual property arising out of research activity will usually be GST liable. This must be reflected in the research price charged.
Representing GST in budgets
- Show the cost of individual items excluding GST
- Calculate a sub-total of the cost of all items sought from the sponsor without GST
- Calculate the cost recovery to be charged for overheads (where applicable under the University Costing and Pricing Policy for Research). Calculate this on the amount sought without including GST
- Show GST payable on a separate line
Recouping GST
The University must provide a Tax Invoice to the research sponsor or contracting party to enable it to claim back GST as an Input Tax Credit. The University may enter into an agreement to receive a 'recipient created tax invoice' that will be produced by the sponsor along with payment of the funds.
When the University purchases supplies or goods (e.g. travel, printing, equipment) GST will generally be charged and claimed back from ATO. Where the GST can be claimed as an input credit (the majority of cases), there will be no impact on departmental or project budgets as this will be handled via centrally controlled suspense accounts.