A sum of money received (i.e.grant)attracts GST if a supply exists. Generally, a supply exists when the recipient has done something for the grantor in return for a sum of money.
Grants that are outright payments with no benefit in return to the grantor do not attract GST. However, if you (the recipient) provide benefits in return to the grantor in the form of goods or services, you are treated as making a supply to the grantor.
You will have to account for output tax at the prevailing tax rate on the open market value (OMV) of the benefits. However, if the OMV is not available, you should account for GST at 7/107 of the grant amount.
For more information, please refer to the GST Guide for Charities and Non-Profit Organisations (148KB).
Accounting for the GST depends on whether the grant is given directly to you or your customers.
If the grant is given to your company and you choose to subsequently pass this grant on to your customers, it is treated as a discount on the value of your supply. In this instance, you should charge GST on the net amount of your supply (i.e. amount after deducting the grant).
If the grant is given directly to your customers, it is separate from your supply to your customers. Hence, you should charge GST on the full value of your supply (i.e. gross amount).
As the grant serves as a payment on behalf of the trainee for part of the course fee, the grant payment being made to you instead of directly to the trainee is merely a payment arrangement. Hence, you need to charge and account for GST on the gross fee. However, if the grant is awarded to you to subsidise your cost of training so that you are able to charge the course fee at a reduced rate, GST is chargeable on the net fee.