Bulletins

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Details

Annual GST certificates for 2010-11

Purpose

To remind councils to submit an official certificate detailing payment of notional GST for the previous financial year to the Deputy Premier and Minister for Local Government by no later than Thursday, 15 September, 2011.

The Annual GST certificate is required under:

• section 164 of the Local Government (Finance, Plans and Reporting) Regulation 2010
• section 159 of the City of Brisbane (Finance, Plans and Reporting) Regulation 2010 for Brisbane City Council.

Background

Section 5 of the GST and Related Matters Act 2000 defines the amount of ‘notional GST’ a local government may pay for the purpose of the Local Government Act 2009 (the Act).

To ensure compliance, section 15(aa) of the Commonwealth’s Local Government (Financial Assistance) Act 1995 requires states to withhold amounts equivalent to notional GST from financial assistance grant payments if local governments have not paid notional GST.

This Commonwealth requirement is reflected in section 228(6) of the Act which requires the Minister for Local Government to withhold an amount equal to a local council’s unpaid notional GST.

Confirmation process

To ensure its obligations under the legislation, the state government needs to ensure a local government has paid its notional GST. The term ‘has paid notional GST’ is interpreted as meaning ‘has paid all notional GST due,’ or in other words ‘voluntary GST payments.’

Please note the term ‘paid all notional GST due’ goes hand in hand with the ability to claim GST input tax credits. That is, while government bodies may in fact receive net GST credits, this can only occur after accounting properly for all gross GST input tax credits and gross GST payments.

The primary method the state uses to ensure a local government has paid notional GST is to require a certificate of confirmation to be supplied to the responsible Minister by each local government. Whilst the certificate is seen as evidence that a local government has paid notional GST, it could be displaced by evidence to the contrary. This might be provided by auditors or may come from other sources.

If no certificate is provided, the state would need to ascertain by other means that the GST which the local government is to pay under the GST Act has been paid. If the GST had not all been paid by a local government, the amount would need to be quantified before the Financial Assistance Grant could be paid to that local government, otherwise the state could be in breach of Commonwealth legislation.

Annual GST advice

The Deputy Premier, through the Department of Local Government and Planning, seeks advice by Thursday, 15 September, 2011 on voluntary GST payments by local government bodies for the period 1 July 2010 to 30 June 2011. This advice will then be provided to Queensland Treasury for confirmation with the Commonwealth.

Form of annual GST certificate

The form of the annual certificate is not prescribed. The following form will meet the requirements for this year.

The following form will meet the annual requirements for Brisbane City Council:

Further information

Local government bulletins issued by the department are available online.

Last updated on Tuesday, 07 August 2012