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Annual GST Certificate for 2015-16

Department of Infrastructure, Local Government and Planning

Purpose

This bulletin is to remind councils that they must, no later than 15 September 2016, give the Director-General of the Department of Infrastructure, Local Government and Planning an official certificate stating that the local government has paid notional Goods and Services Tax (GST) for the most recently completed financial year.

The Annual GST Certificate is required:

  • under section 215 of the Local Government Regulation 2012
  • under section 205 of the City of Brisbane Regulation 2012 for Brisbane City Council.

Background

The Local Government Act 2009 and the City of Brisbane Act 2010 defines the GST amount that a council may pay, under section 5 of the GST and Related Matters Act 2000, ‘notional GST.’

In order to ensure councils pay the notional GST, the Commonwealth, in section 15(aa) of the Local Government (Financial Assistance) Act 1995, has legislated to require the state to withhold, from the Financial Assistance Grant payments to councils, amounts equivalent to the notional GST which the local governments have not paid.

This Commonwealth requirement is reflected in section 228(6) of the Local Government Act 2009 and section 213(2) of the City of Brisbane Act 2010 which requires the minister not to distribute to a council an amount equal to notional GST if the council has not paid the notional GST.

Confirmation process

In order that the state can meet its obligations under this legislation, it needs to ensure that a council 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 council has paid notional GST is to require a certificate of confirmation to be supplied to the responsible department’s chief executive officer by each council. Whilst the certificate is seen as evidence that a council 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 council is to pay under the GST act has been paid. If the GST had not all been paid by a council, the amount would need to be quantified before the Financial Assistance Grant could be paid to that council. Otherwise the state could be in breach of the Commonwealth legislation.

Annual GST advice

The chief executive officer of the Department of Infrastructure, Local Government and Planning seeks advice by 15 September 2016 on notational GST payments by local government bodies for the period 1 July 2015 to 30 June 2016.

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.

Director-General
Department of Infrastructure, Local Government and Planning
PO Box 15009
CITY EAST Queensland 4002

Annual Certificate about payment of notional GST

To assist compliance with Section 215 of the Local Government Regulation 2012 for the financial year ending 30 June 2016, we certify that notional GST has been paid by (name of Council) for the period 1 July 2015 to 30 June 2016.

Mayor
(signed)
Dated: (before 15 September 2016)

Chief Executive Officer
(signed)

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

Director-General
Department of Infrastructure, Local Government and Planning
PO Box 15009
CITY EAST Queensland 4002

Annual Certificate about payment of notional GST

To assist compliance with Section 205 of the City of Brisbane Regulation 2012 for the financial year ending 30 June 2015, we certify that notional GST has been paid by Brisbane City Council for the period 1 July 2015 to 30 June 2016.

Lord Mayor
(signed)
Dated: (before 15 September 2016)

Chief Executive Officer
(signed)

Further information

Any further enquiries on this matter should be addressed to:

Mr Bill Gilmore
Director
Department of Infrastructure, Local Government and Planning
PO Box 15009
City East
Brisbane QLD 4002