Does jobkeeper include gst

The following are the key points from the 'Actual drop in turnover test':

Actual turnover drop is now calculated using "current GST turnover" (not "projected GST turnover").

The primary test is the basic test, however other tests are provided when the standard comparison period is insufficient. For group employer labor entities, a modified basic test applies.

Actual turnover test reduction is based on supplies made in the September 2020 quarter (for the first extension) and December 2020 quarter (for the second extension), as compared to the same quarters in 2019.

In LCR 2020/1, you can no longer utilize all of the other allocation techniques. There is now just one technique for allocating supply to test periods. The GST reporting basis - either cash or non-cash - as specified in the new 'Timing of Supplies Made' Determination is that technique.

Supplies made in a period are those attributable to the relevant test period in the same manner that the firm would report taxable supplies in the Business Activity Statement (BAS):

If the entity is not registered, you may choose between a cash accounting basis and an accruals/invoice accounting basis, but you must use the same accounting basis for both periods; if the business is registered, you must use the GST reporting method. If the company was not registered for the whole time or altered its GST accounting base, certain specific regulations apply.

Actual turnover test drop is based on the same percentages used for the original JobKeeper, i.e. a 30% reduction (or 50% decline for a business with aggregated turnover > $1 billion, and 15% decline for ACNC-registered charities). Note: JobKeeper payments are not included in total revenue since they are regular income but not obtained in the usual course of business.

Current GST turnover is defined under Section 188-15 of the GST Act and amended by the JobKeeper Rules (section 8(8)), thus it is roughly the same as before, except that it is now based on actuals rather than predictions. JobKeeper payments are not included in current GST turnover since they are not paid for any supply.

However, two of the most significant policy design flaws originating from the transition to the new real drop in turnover test, which were noted but not addressed during the tax law consultation on these provisions, are:

Financial supplies (such as the issuance of shares) to a non-resident who is not in Australia are GST-free rather than input taxed. This implies that money generated via the issuance of shares to offshore businesses is often included in current GST turnover. However, for borrowings, the value may be less than the whole capital amount. We are seeking clarification on this topic; and disposal of capital assets must be included in current GST turnover (unlike earlier, when 'projected GST turnover' enabled such disposals to be ignored — s188-25).

There are significant discrepancies between JobKeeper GST turnover and BAS turnover.

JobKeeper's current GST turnover may vary significantly from the BAS. For instance, consider JobKeeper's 'current GST turnover':

G1 may be GST-inclusive or GST-exclusive, and the BAS should specify this. does not include GST (it is the GST-exclusive value of supply).

G1 includes input taxable supplies in 'total sales,' but G2 does not.

contains the complete cost of land sold under the margin program, while the BAS only includes the'margin' on which GST is paid.

does not include all GST adjustments – just those that pertain to supplies made during the test/comparison period AND where the value change happens during that time Whereas a normal GST adjustment in a BAS happens in the period, the supply occurred in a previous period, hence this is irrelevant for JK GST turnover.

does not include bad debt adjustments — they have no effect on the supply value (i.e. merely writing off the debt, unless the real debt is compromised/settled).

CAs should keep these instances in mind while comparing or attempting to ascertain current GST turnover for JobKeeper reasons. Current GST turnover in the context of 'real drop in turnover' is a different and unique calculation that must be carefully done to get it properly.