Private ruling: GST and the supply of real property by a local government
Published: June 2013

Ruling: Q1: Are you, a local government, the "State" for the purposes of applying the GST provisions referred to in paragraph 1 of GSTR 2006/5 (including section 38-445 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)? | A1: Yes

Relevant facts and circumstances: You are a local council within a State in Australia. You are registered for goods and services tax (GST). You were originally established under the earlier State Local Government Act. You have made taxable supplies and remitted GST on supplies of real property. Some or all of the above supplies of real property may relate to sales of land on which there are no improvements.

Relevant legislative provisions: A New Tax System (Goods and Services Tax) Act 1999 Section 9-5 | Division 38 | Division 75

Reasons for decision: Summary: The ATO accepts that you are the 'State' for the purposes of applying the GST provisions referred to in paragraph 1 of GSTR 2006/5 (including section 38-445 of the GST Act). | Detailed Reasoning - Detailed reasoning: Goods and services tax ruling GSTR 2006/5 discusses the meaning of 'Commonwealth, a State or a Territory.' Our view in this ruling is that local governments may be the State, and this position was reflected in an addendum to that ruling which issued on 28 March 2012. Following the issue of the addendum to GSTR 2006/5, the ATO advised local government entities of its administrative position regarding GSTR 2006/5 and local government entities. The ATO accepts that local government bodies established under certain local government legislation, including the current State Local Government Act (LGA), are the 'State' for the purposes of applying the GST provisions referred to in paragraph 1 of GSTR 2006/5 (including section 38-445 of the GST Act). The current State LGA came into operation on 1 January 2000 and the Implementation Act was enacted to assist with the implementation of the current LGA. A section of the Implementation Act provides that all councils, council committees, areas and wards in existence immediately before the relevant day continue under the current LGA (and, for the purposes of that or any other Act, will be taken to have been constituted under that Act). As such, even though you were originally created pursuant to the earlier Local Government Act, it is considered that you are established under the current LGA. Accordingly, we accept that you are the 'State' for the purposes of section 38-445 of the GST Act.