GST – Section 5(6D): Payments in the nature of a grant or subsidy
This interpretation statement considers the application of section 5(6D) of the Goods and Services Tax Act 1985. Section 5(6D) broadly provides that when a payment in the nature of a grant or subsidy is paid on behalf of the Crown or by a public authority to a person in respect of their taxable activity, then that payment is deemed to be consideration for a supply of goods and services in the course or furtherance of the taxable activity.
For more information on grants and subsidies see Tax on grants and subsidies (ird.govt.nz).