8Decline in turnover test

#### 8 Decline in turnover test Basic test (1) An entity satisfies the decline in turnover test at a time (the test time) if: (a) the entity’s projected GST turnover for a turnover test period in which the test time occurs falls short of the entity’s current GST turnover for a relevant comparison period (the comparison turnover); and (b) the shortfall, expressed as a percentage of the comparison turnover, equals or exceeds the specified percentage for the entity (see subsection (2)). > Note 1: See subsection (7) for the meanings of turnover test period and relevant comparison period. > Note 2: Current GST turnover and projected GST turnover are modified for the purposes of this section and section 8A: see subsection (8). > Note 3: For provisions about contrived schemes, see section 19 of the Act. > Note: Example: Patrick Enterprises assesses its eligibility for jobkeeper payments on 6 April 2020 based on a projected GST turnover for April 2020 of $6 million. It considers that the comparable period is the month of April 2019 for which it had a current GST turnover of $10 million. The April 2020 turnover falls short of the April 2019 turnover by $4 million, which is 40% of the April 2019 turnover. This exceeds the specified percentage, so the decline in turnover test is satisfied. (2) The specified percentage for an entity is: (a) if the lower threshold applies to the entity (see subsection (3))—15%; or (b) if the higher threshold applies to the entity (see subsection (4))—50%; or (c) otherwise—30%. (3) For the purposes of paragraph (2)(a), the lower threshold applies to an entity if the entity is an ACNC‑registered charity other than: (a) an entity that is a Table A provider or a Table B provider; or (b) a school. > Note: Paragraph (b) affects only non‑government schools, as government schools do not qualify for the jobkeeper scheme because of paragraphs 7(2)(b) to (d). (4) For the purposes of paragraph (2)(b), the higher threshold applies to an entity if: (a) the lower threshold does not apply to the entity (see subsection (3)); and (b) either: (i) the entity’s aggregated turnover for the income year in which the test time referred to in subsection (1) occurs is likely to exceed $1 billion; or (ii) the entity’s aggregated turnover for the previous income year exceeds $1 billion. Alternative test determined by Commissioner (5) An entity also satisfies the decline in turnover test if: (a) an alternative decline in turnover test determined by the Commissioner under subsection (6) applies to the entity; and (b) the entity satisfies the alternative test. (6) The Commissioner may, by legislative instrument, determine that an alternative decline in turnover test applies to a class of entities, if the Commissioner is satisfied that there is not an appropriate relevant comparison period for the purpose of an entity in the class of entities satisfying the decline in turnover test under subsection (1). Meaning of turnover test period and relevant comparison period (7) For the purposes of this section and sections 8A and 8B: (a) unless paragraph (aa) applies—the turnover test period must be: (i) a calendar month that ends after 30 March 2020 and before 1 January 2021; or (ii) a quarter that ends on 30 June 2020, 30 September 2020 or 31 December 2020; and (aa) if the entity is a Table A provider—the turnover test period must be a period of 6 months starting on 1 January 2020; and (b) the relevant comparison period must be the period in 2019 that corresponds to the turnover test period. > Note: When applying this subsection for the purposes of the actual decline in turnover test there is a different turnover test period: see paragraph 8B(1)(a). Modifications relating to GST turnover (8) In calculating an entity’s current GST turnover, and projected GST turnover, for a period for the purposes of this section and sections 8A, 8B and 16 the following apply: (a) sections 188‑15 and 188‑20 of the GST Act apply as if a reference to a month were a reference to the period; (b) subsections 188‑15(2) and 188‑20(2) of that Act (about members of GST groups) are to be disregarded; (c) for calculating current GST turnover: (i) subsection 188‑15(1) of that Act is to be applied at the end of the period; and (ii) subsection 188‑15(1) of that Act has effect as if the reference in that subsection to “, or are likely to make, during the 12 months ending at the end of that month,” were instead a reference to “during that period”; (d) for calculating projected GST turnover—subsection 188‑20(1) of that Act has effect as if the reference in that subsection to “during that month and the next 11 months” were instead a reference to “during that period”; (e) each external Territory is treated as forming part of the indirect tax zone (within the meaning of that Act); (ea) for an entity that is a Table A provider or a Table B provider—subsection 9‑17(3) of the GST Act is to be disregarded in its application to a payment covered by an appropriation under the Higher Education Support Act 2003 or the Australian Research Council Act 2001; (f) for an entity that is a deductible gift recipient—each gift described in an applicable item of the table in section 30‑15 of the Income Tax Assessment Act 1997 and received, or likely to be received, by the entity in the period (other than from an associate) results in the following treatment: (i) the entity is treated as making, or as likely to make (as the case requires), a supply in the period for consideration; (ii) the value (within the meaning of the GST Act) of the supply is treated as being equal to the amount of the gift (if the gift is money) or the market value of the gift (if the gift is not money); (g) for an entity that is an ACNC‑registered charity (other than a deductible gift recipient)—each gift received, or likely to be received, by the entity in the period (other than from an associate) also results in the treatment set out in paragraph (f) if the gift is: (i) a gift of money; or (ii) a gift of property with a market value of more than $5,000; or (iii) a gift of listed Australian shares; (h) for an entity that is an ACNC‑registered charity (other than a Table A provider, a Table B provider, or a school)—a supply made by the entity is to be disregarded, if: (i) the consideration for the supply is provided by an Australian government agency, a local governing body, the United Nations, or an agency of the United Nations; and (ii) the ACNC‑registered charity elects, in accordance with subsection (9), for this paragraph to apply. (9) The election referred to in subparagraph (8)(h)(ii) must be: (a) in the approved form; and (b) given to the Commissioner within 7 days of notifying the Commissioner of the entity’s election to participate in the jobkeeper scheme (see paragraph 6(1)(e) and 12A(1)(f)), or such later time as the Commissioner allows. The election cannot be revoked.