ATO ID 2007/32: GST and transaction information supplied by an ADI - client's own transaction
Date of decision: 25 October 2006
Business line: Indirect Tax

Issue
Is an entity, an Australian authorised deposit-taking institution (ADI), making a financial supply under subregulation 40-5.09(4) of the A New Tax System (Goods and Services Tax) Regulations 1999 (the GST Regulations) when it provides transaction information, for not more than $1,000, to a client who is not an account holder with the entity and the information relates to the client's own transaction.

Decision
Yes, the entity is making a financial supply under subregulation 40-5.09(4) of the GST Regulations when it provides transaction information, for not more than $1,000, to a client who is not an account holder and the information relates to the client's own transaction.

Facts
The entity is an Australian ADI that carries on a banking business within the meaning of the Banking Act 1959 . The entity provides transaction information to clients, some of whom do not hold accounts with the entity. The applicable fee for each request does not exceed $1,000. The entity is registered for GST.

Reasons for decision
Summary: Under subsection 40-5(1) of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act), a financial supply is input taxed. Subsection 40-5(2) of the GST Act provides that a financial supply has the meaning given by the GST Regulations. Subregulation 40-5.09(1) of the GST Regulations states that the provision, acquisition or disposal of an interest mentioned in subregulation 40-5.09(3) or 40-5.09(4) of the GST Regulations is a financial supply if: Item 1 in the table in subregulation 40-5.09(3) of the GST Regulations lists, as a financial supply, an interest in or under an account made available by an Australian ADI in the course of: In regard to a client that is an account holder, the entity makes a supply of an interest in an account which is a financial supply. Regulation 40-5.11 of the GST Regulations states: Something mentioned in a Part of Schedule 7 that relates to a financial supply mentioned in an item in the table in regulation 40-5.09 . . . is an example of the financial supply mentioned in the item . . . Note 1: The examples are not to be taken as exhaustive. Note 2: If an example in Schedule 7 is inconsistent with the description in this Division of the financial supply to which the example relates, the description prevails. . . Note 3: Something that is within the scope of an item in the table in regulation 40-5.09 will be a financial supply described in that item even if it is not mentioned as an example of the item . . . Part 1 of Schedule 7 to the GST Regulations provides examples of services and products which relate to the supply of an interest in an account made available by an Australian ADI. It follows that each of the services or products mentioned in Part 1 of Schedule 7 is an example of a financial supply - being the supply of an interest in an account under item 1 in the table in subregulation 40-5.09(3) of the GST Regulations. The following listed examples have a similar context to the provision of transaction information, in the way that they relate to the supply of an account by an Australian ADI: The provision of transaction information is consistent with these examples. It is within the scope of a type of product or service relating to the supply of an account by an Australian ADI. It follows that the provision of transaction information for consideration, to a client who is an account holder, would be a financial supply under item 1 in the table in subregulation 40-5.09(3) of the GST Regulations when the information relates to a transaction on the client's account. | Detailed Reasoning - A financial supply to non-account holders: Subregulation 40-5.09(4) of the GST Regulations states that a supply (to which item 1 in the table to subregulation 40-5.09(3) of the GST Regulations does not apply) by an Australian ADI for a fee of not more than $1,000 is a financial supply if: Examples of financial supplies mentioned in subregulation 40-5.09(4) of the GST Regulations are: Further explanation and guidance to the interpretation of subregulation 40-5.09(4) of the GST Regulations is found in the Explanatory Statement to the A New Tax System (Goods and Services Tax) Amendment Regulations 2000 (No.2) (the Explanatory Statement). The Explanatory Statement with regard to subregulation 40-5.09(4) states: ... that where an Australian ADI provides a service and charges a fee of $1,000 or less the supply will be treated as a financial supply if it would have been a financial supply if provided to an account holder. This will make it unnecessary for the provider of the service to determine whether the supply is being made to an account holder or non-account holder. In both cases the supply would be input taxed...However, supplies not made in connection with an account that would be a taxable supply will not become financial supplies even if a fee less than $1,000 is charged. The provision intends for an Australian ADI to treat supplies, for a fee of not more than $1,000, as financial supplies if they are provided to non-account holders and those supplies would have otherwise been financial supplies under item 1 in the table in subregulation 40-5.09(3) of the GST Regulations if made to account holders. A supply of transaction information to a client, where the information relates to a client transaction, will be a financial supply under subregulation 40-5.09(4) of the GST Regulations when made to a recipient who does not hold an account and the fee charged is not more than $1,000. This is because it would have been a supply under subregulation 40-5.09(3) of the GST Regulations if the client held an account.

Legislative references: A New Tax System (Goods and Services Tax) Act 1999 subsection 40-5(1) subsection 40-5(2)
Related ATO interpretative decisions: ATO ID 2007/33
Other references: Explanatory Statement to the A New Tax System (Goods and Services Tax) Amendment Regulations 2000 (No.2)
Subject references: Accounts Goods and services tax GST financial supplies GST regulations GST supply Input taxed supplies