Private ruling: Goods and services tax and funding payments
Date of advice: 10 January 2020
Published: March 2020
Ruling period: 2018 - 2022
Date scheme commenced: 2018

Ruling: Q1: Are payments made by one government authority to another under a funding agreement subject to GST? | A1: No, the payments are not subject to GST. There is an insufficient nexus between the supply of services and the payments received under the funding agreement.

Relevant facts and circumstances: Funding Agreement · In order to increase efficiencies a Funding Agreement was entered into. A copy of this agreement was provided; · Liabilities under the Act can be discharged through such agreements by making payments on a collective rather than individual basis; · The terms of the Funding Agreement set out the way in which the entities will manage and administer the funding of services; · The Funding Agreement provides the cost basis for which the funding provided has been calculated. A copy of this schedule was provided with the Funding Agreement.

Relevant legislative provisions: A New Tax System (Goods and Services Tax) Act 1999 section 9-5 | A New Tax System (Goods and Services Tax) Act 1999 section 9-17 | A New Tax System (Goods and Services Tax) Act 1999 Division 11