Four searches, one subject: GST on STC sales by installers, GST when selling to a trader, GST credits on the assignment, and the ATO’s view. This page keeps to the installer side. For the homeowner discount, see GST on the STC point-of-sale discount.
This is general information at the time of writing, not tax advice.
Two separate transactions
A typical solar job has two parts:
- The customer assigns the right to create STCs to you. In return they receive a lower price on the system.
- You sell the resulting STCs to a trader. In return you receive money.
GST treatment is different for each. Mixing them up is where most confusion comes from.
Selling STCs to a trader
When you sell STCs in the course of your business and you are registered for GST, the sale is generally a taxable supply. GST at 10 percent applies. Your trader will normally pay the amount plus GST, and the RCTI will show the GST separately. That GST goes on your BAS as GST collected.
If you are not registered, you do not charge GST, and you should check whether your turnover requires you to register. For structuring questions, see installer structure and GST turnover.
The assignment from the customer
The ATO has published guidance on the Small-scale Renewable Energy Scheme. In outline:
- A household that is not carrying on an enterprise, and is not registered for GST, makes no taxable supply when it assigns its STC rights. Nothing to account for on its side.
- A GST-registered business owner who assigns rights over a system used in the business does make a taxable supply, which is a different situation again.
- An installer who receives the assignment from a customer is generally not entitled to a GST credit on acquiring that right.
Read the ATO’s page rather than relying on a summary, including this one.
Why traders want your details right
GST on a sale only works if your registration status, ABN and legal name are right. A mismatch can hold a payment or lead to a corrected invoice. Our guide to RCTI, GST and ABN for STC payments lists what we check.
What this means for installers
Set up a GST code for STC sales in your accounting software, keep every RCTI, and reconcile to the bank. Do not assume the discount you give a customer is a GST-free event for the invoice you issue on the system. How the discount appears on the customer invoice affects the GST on the sale. See the point-of-sale discount page and ask your accountant to confirm.
For how RCTIs handle the paperwork, read RCTIs for STC sales. To see the rate you would be paid, check pricing, and for how settlement works, the STC trading page.