Dept wants GST on 20c jigsaw hire

Press, 27 September 1988, Page 16

Dept wants GST on 20c jigsaw hire

By

DEBORAH McPHERSON

A puzzle over GST payable on jigsaw use has left the Canterbury Aged People’s Welfare Council perplexed. ' The council has been told in March by the Minister of Inland Revenue, Mr de Cleene, that donations for borrowing jigsaw puzzles would continue to attract GST until October 1. The secretary-manager of the council, Mr Charlie Waters, said at tge weekend, however, that he had been told by Inland Revenue in Christchurch that it knew of no proposed amending legislation to be effective from that date. The council had been aghast at being charged GST on 20 cent donations elderly people make for borrowing jigsaw puzzles, and on afternoon bus outings. Mr Waters said he was unhappy at the way charitable organisations who did a lot of work “rightly the responsibility of central Government” were treated. Mr de Cleene has written to the council explaining the payments made by council members for the hire of jigsaw puzzles and mini-bus rides were correctly subject to GST, as the members were paying for goods and services. The donations did not fall within the definition of an

unconditional gift, he said. Mr de Cleene’s private secretary, Mr Mark Turner, said at the weekend that the amount of money involved in paying for goods and services was irrelevant for GST purposes. “The problem is in distinguishing between an unconditional gift, and something people might call a donation, but which is a payment for goods and services,” he said. Mr Turner said Mr de Cleene might have given an assurance that legislation might be changed in October, but at that stage would not have known to what extent there would be consultations with committees such as the Brash .committee. The question of GST as it related to non-profit bodies was being, considered by that committee which was expected to report back to the Government at the end of this month. Until then there would be no indication on the action the Government would take, he said. If the taxation bill had been drafted in its original form, the council would have been even more disadvantaged because the import tax credit that allowed charitable organisations to claim such goods as new tyres for buses and purchasing jigsaw puzzles would have been wiped, Mr Turner said.