Receiving grants

Key requirements

A grant without direct goods or services for the grantor does not attract GST. If the recipient supplies direct benefits in return, the grant can be consideration for a taxable supply. Free or subsidised activities funded by non-business receipts require input-tax attribution or apportionment; receiving an outright grant therefore does not automatically permit full input recovery. A commercial business making wholly taxable, unsubsidised supplies need not apportion merely because it receives a wage-credit or efficiency incentive. The source separately cautions against claiming renovation GST funded by a GST-inclusive renovation grant. Where a grant belongs to the trainee but is paid to the provider, training GST remains on the gross fee. Limited input recovery can also create reverse-charge obligations for imported services and covered low-value goods.