GST Treatment of Payment received to fix Leady Homes

Case: CS 20/5 GST treatment of Leaky Homes FAP (Homes Financial Assistance Package) payment received by a GST registered body corporate from Ministry of Business, Innovation and Employment (MBIE)

Summary: All payments from MBIE under the FAP scheme to a GST registered body corporate are subject to GST.

Legislation: Goods and Services Tax Act 1985 Section 5(6D) – these payments are in the nature of a grant or subsidy from the Crown or by any public authority, therefore are deemed to be consideration for a supply of goods and services.

Exception: 2020 Covid-19 wage subsidy is – by law – not subject to GST. As GST registered receiver will effectively receive less money than non-GST registered person.

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