(1) The purpose of this Procedure is to establish a framework in which staff can confidently apply the Goods and Services Tax (GST) legislative requirements to University operations to ensure the University complies with its obligations arising from A New Tax System (Goods and Services Tax) Act 1999. (2) La Trobe University can incur a GST liability when it makes a supply for consideration. Consideration will usually be money, but it can include non-monetary forms of payment such as found in "barter" transactions or transactions where "in-kind" contributions are made. (3) Refer to the GST (Goods and Services Tax) Policy. (4) Refer to the GST (Goods and Services Tax) Policy. (5) The GST liability occurs on either the issue of an invoice or payment of the consideration. Hence when La Trobe receives the supply that comprises its part of a barter or in-kind transaction, this is deemed to be ‘payment of the consideration' for the supply provided by the University, and a GST liability arises. La Trobe must remit 1/11th of the value of the supply it provided to the ATO. (6) Where the value of the two supplies is the same (i.e. has the same dollar amount, GST amount and GST status), swapping complying tax invoices in the same month ensures that the GST liability and the input tax credit to be claimed back from the ATO offset each other and this negates the need for any funds to be transferred between the two entities. (7) There may be some cases where one supply is worth more than the other. Where this occurs the two invoices will not completely offset each other and a payment for the balance will be required by one of the entities. (8) The portfolio/school negotiating the deal with the other external entity should ensure that Corporate Finance is made aware of the transaction up front as well as the relevant Strategic Business Partner. (9) Corporate Finance will work with the school staff member and the external entity to determine the best approach to take with regards to the invoicing. One of the following three approaches may be selected: (10) An RCTI agreement must be in place before the transactions are processed. This should be generated by the external party creating the invoice and the RCTIs but if they do not have a standard agreement, one must be created by La Trobe University. (11) The RCTI agreement must be signed by the Associate Director, Corporate and Reporting. (12) It must be communicated to the external party that both the invoice and RCTI must be sent directly to the Financial and Tax Accountant who will arrange processing. (13) The tax invoice received by the Financial and Tax Accountant must be coded to an appropriate General Ledger expense account and cost centre. (14) The RCTI received by Corporate Finance, must be coded to an appropriate General Ledger income account, cost centre. (15) Corporate Finance will advise Account Receivables of the transaction and an RCTI will be processed in SAP ensuring that the posting date is in the same month as the posting date which will be used to process the tax invoice. (16) The tax invoice and a copy of the RCTI are to be provided to the Accounts Receivables Team. (17) The tax invoice is processed in SAP by Accounts Payable (posted in the same month as the RCTI) and the vendor account is offset against the RCTI. (18) An RCTI agreement must be created and signed by both organisations. (19) The RCTI agreement must be signed by Associate Director, Corporate and Reporting. (20) A tax invoice for the barter transaction must be created in SAP using an appropriate general ledger income account, cost centre and the original invoice is to be provided to Corporate Finance, who will ensure it is sent together with the RCTI produced by La Trobe. (21) An RCTI must be created, which contains all the information required. (22) The RCTI La Trobe is paying on, must be sent to the Accounts Payable Team along with a copy of the tax invoice issued by La Trobe. (23) The RCTI is processed in SAP by Accounts Payable (posted in the same month as the RCTI) and the vendor account is offset against the invoice raised by La Trobe. (24) Where both the RCTI and the tax invoice are for the same amounts, no transfer of funds is required by either entity. (25) Where the supply to La Trobe is for an amount greater than the supply to the other entity, the RCTI and the tax invoice will still be offset against each other, but La Trobe will owe an additional amount and the balance will be paid. (26) Where the supply to the other entity is for an amount greater than the supply to La Trobe, the RCTI and tax invoice will still be offset against each other but the customer will be required to pay La Trobe the balance. (27) The original tax invoice and the RCTI must be sent to the external organisation together, within 28 days of the RCTI being raised. (28) It must be communicated to the external entity that the tax invoice they raise must be sent to the Financial and Tax Accountant to ensure it is processed in the same month as the invoice to be raised by La Trobe University. (29) The tax invoice which La Trobe University receives from the other entity must be coded to an appropriate general ledger expense account, cost centre. (30) The tax invoice which La Trobe University issues must be raised and coded to an appropriate general ledger income account. The posting date should be in the same month as the date of the tax invoice received from the other entity so that a transfer of funds can be avoided and so that the GST is both paid and collected in the same month. (31) The invoice should be sent to the customer and a copy provided to Corporate Finance. (32) Corporate Finance will instruct Accounts Payable to process the invoice from the external entity and offset it against the tax invoice created by the Strategic Business Partner. (33) For the purpose of this Procedure:GST Procedure - Barter and In-Kind Transactions
Section 1 - Background and Purpose
Section 2 - Scope
Section 3 - Policy Statement
Section 4 - Procedures
Part A - How is the GST Liability Incurred?
Part B - Barter and In-Kind Transactions
Determining Who Will take Responsibility for the Invoices for the Two Transactions
RCTI Arrangements Where the External Party Creates the Invoice and the RCTI
RCTI Arrangements Where La Trobe Creates Both the Tax Invoice and the RCTI
Responsibilities
Strategic Business Partner
Arrangements Where Each Entity Issues a Tax Invoice for the Supply it is Providing
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