Private ruling: GST - Australian government agencies
Date of advice: 7 May 2026
Published: 20 July 2026
Ruling period: XXX 20XX to 30 XXX 20XX

Ruling: Q1: Are you making creditable acquisitions under section 11-5 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act), entitling you to the associated input tax credits under section 11-20 of the GST Act? | A1: Yes, you are making creditable acquisitions under section 11-5 of the GST Act, entitling you to the associated input tax credits under section 11-20 of the GST Act. | Q2: Are the Amounts payable by you to the Operator, as contemplated by the Deed, consideration for a supply under paragraph 9-5(a) of the GST Act and therefore a creditable acquisition by you under section 11-5 of the GST Act? | A2: No, the Amounts, payable by you to the Operator, as contemplated by the Deed, are not consideration for a supply under paragraph 9-5(a) of the GST Act and therefore are not for a creditable acquisition by you under section 11-5 of the GST Act. | Q3: Are you making a supply for consideration under paragraph 9-5(a) of the GST Act when you direct that the Payments are payable by the Operator to the Contractor (for and on your behalf)? | A3: No, you are not making a supply for consideration under paragraph 9-5(a) of the GST Act when you direct that the Payments are payable by the Operator to the Contractor (for and on your behalf).

Relevant facts and circumstances: You are registered for goods and services tax (GST) and carry on an enterprise. You are responsible for overseeing planning, procuring and enabling the delivery of major infrastructure projects. You oversee the following major projects: • Project A • Project B and • Project C. Each of these projects involves: • a contractor who designs, constructs finances and maintains the Project Asset (Contractor); and • you who enters into project contracts with the Contractor and is responsible for meeting payment obligations; and • the operator which operates the completed infrastructure Asset (Operator). Notwithstanding that a single defined term is used throughout this ruling for the contractor and operator, the entities comprising the Contractor and the Operator differ for each project.

Relevant legislative provisions: A New Tax System (Goods and Services Tax) Act 1999 paragraph 9-5(a) | A New Tax System (Goods and Services Tax) Act 1999 section 11-5 | A New Tax System (Goods and Services Tax) Act 1999 section 11-20

Reasons for decision: Summary: You make a creditable acquisition under section 11-5 of the GST Act in respect of the supplies made by the Contractor under each of the Project Contracts. For GST purposes, supplies of the Works/Services and other obligations under each of the Project Contracts are treated as supplies to you. Accordingly, you are treated as the recipient of those supplies and is liable to provide the consideration for them, notwithstanding that the Payments are payable by the Operator for and on your behalf under each of the Deed. As all elements of section 11-5 of the GST Act are satisfied, you are entitled to input tac credits under section 11-20 of the GST Act. | Detailed Reasoning - Detailed reasoning: An entitlement to input tax credits under section 11-20 of the GST Act arises where: • an entity makes an acquisition within the meaning of section 11-10 of the GST Act; and • that acquisition satisfies the requirement of a creditable acquisition under section 11-5 of the GST Act. | Detailed Reasoning - Section 11-5 Creditable acquisition: Under section 11-5 you make a creditable if: (a) you acquire anything solely or partly for a creditable purpose (section 11-15 of the GST Act); (b) the supply acquired is a taxable supply to you (section 9-5 of the GST Act); (c) you provide, or is liable to provide, consideration for the supply; and (d) you are registered or required to be registered for GST. Each requirement is considered in turn below. | Detailed Reasoning - Acquisition and identity of the recipient: An acquisition under section 11-10 of the GST Act includes an acquisition of goods or services, an acceptance of a grant of real property or any right, an acquisition of a right to require another person to do anything or any combination of these. The concept of acquisition is the corollary of 'supply' in section 9-10 of the GST Act. Under each of the Project Contracts, the Contractor is obliged to provide: • the Works and Development Activities; and • the ongoing Services. These obligations, Services, Works and Development Activities are capable of satisfying the definition of supply in section 9-10 of the GST Act and correspondingly, acquisitions under section 11-10 of the GST Act. The question of who acquires those supplies is determined by reference to the contractual arrangements. As explained in Goods and Services Tax Ruling GSTR 2006/9 Goods and services tax: supplies (GSTR 2006/9) the agreement is the logical starting point for identifying the entity making the supply and the recipient of that supply (Recipient). Under each of the Project Contracts: • you are the contracting party with the Contractor, and that contract grants you the rights to the Works, Development Activities and Services the Contractor is obligated to provide; and • you bear the contractual liability and obligation to pay the Contractor the amounts payable under the Project Documents (Payments). Consistent with the third-party principles in GSTR 2006/9 (proposition 14 at paragraphs 177 to 183), the Operator's role under each the Deed is limited to discharging your payment obligation as a third party payer. That role does not of itself alter who is the recipient of the Contractor's supplies. Accordingly, for the purposes of section 11-5 of the GST Act, you are the entity who acquires the supplies from the Contractor and are the recipient of those supplies for GST purposes. | Detailed Reasoning - Creditable purpose: Under subsection 11-15(1) of the GST Act, an acquisition is for a creditable purpose to the extent it is made in carrying on an enterprise and is not of a private or domestic nature, nor related to making input taxed supplies. You acquire the Contractor's supplies (Works, Development Activities and Services) in carrying on your enterprise of delivering infrastructure assets. Those acquisitions are neither acquired for private or domestic purposes or related to making input taxed supplies. Accordingly, paragraph 11-5 (a) of the GST Act is satisfied. | Detailed Reasoning - Paragraph 11-5(b): Taxable Supply: Paragraph 11-5(b) of the GST Act requires that the supplies acquired have the character of a taxable supply as defined in section 9-5 of the GST Act. For this purpose, it is necessary to consider whether the supply made under the Project Contracts satisfy the elements of section 9-5 of the GST Act, without determining the supplier's ultimate GST liability. | Detailed Reasoning - Supply for consideration: As set out above, under each Project Contract, the Contractor undertakes obligations that meet the statutory definition of a supply within section 9-10 of the GST Act including carrying out the Works, Development Activities and Services. Each Project Contract also provides that amounts are payable to the Contractor in consideration for those supplies (Payments). Under subsection 9-15(1) of the GST Act, consideration includes any payment, or any act or forbearance, in connection with, in response to or for the inducement of a supply of anything. A sufficient nexus must exist between the payment and the supply made (paragraph 15 Goods and Services Tax Ruling GSTR 2012/2 Goods and services tax: financial assistance payments (GSTR 2012/2 ) ). In AP Group Limited v Commissioner of Taxation [2013] FCAFC 105, the Court observed at [33] that 'The consideration must be 'in connection with' the supply but the supply must also be 'for' the consideration. 'For', in this context, means 'in order to obtain' ... The word 'for' ... ensures that not every connection between the giving of consideration and the provision satisfy the first condition of making a taxable supply.' Further, at [35], the Court stated that 'It is apparent that the context set by s 9-15 is that the supply must be made for the consideration (s 9-5), albeit that the consideration need not be given by the recipient of the supply (s 9-15(2)).' In this case the supplies made by the Contractor under each of the Project Contracts are made for the Payments (which include amounts obliged to be paid under the Project Contract). There is a sufficient nexus between the Payments and the supplies for those payments to constitute consideration. That the Operator has agreed to pay the Payments 'for and on your behalf' under the relevant Deed does not alter the existence of consideration or the nexus between the Payments and the Contractor's supplies. Accordingly, the supplies are treated as being made to you for consideration for the purposes of paragraph 9-5(a) of the GST Act. The other requirements of section 9-5 of the GST Act are also satisfied: • the Contractor makes the contracted supplies under each Project Contract in the course or furtherance of its enterprise (paragraph 9.5(b)); • the performance of the Works, Development Activities and Services etc are physically performed in Australia connecting the supplies with the indirect tax zone (paragraph 9-5(c)); • the contractor is registered for GST (paragraph 9-5(d)); and • nothing in the Project Contracts or surrounding circumstances indicates the supplies are GST-free under Division 38 or input taxed under Division 40 of the GST Act. Accordingly, supplies are acquired that are taxable supplies satisfying paragraph 11-5(b) of the GST Act. | Detailed Reasoning - Paragraph 11-5(c): Liability to provide consideration: Under each Project Contract you are contractually liable to provide consideration to the Contractor. That contractual liability arises under each of the Project Contracts and is not altered by the operation and effect of each of the Deed. While clauses in each Deed provides for the Operator to make payments (and for set off against Amounts otherwise payable by you, the Operator does so expressly 'for and on your behalf'.The Deed does not novate, assign or otherwise transfer legal rights, obligations or liabilities to the Operator. As explained in GSTR 2006/9, a third-party payer may discharge another entity's payment obligation without becoming the recipient of the supply or assuming the contractual liability to provide consideration. The Operator's payments under each Deed merely discharge the existing obligation as a third-party payer and does not alter the identity of the entity liable to provide consideration. Accordingly, you are liable to provide consideration for the supplies made to you by the Contractor satisfying paragraph 11-5(c) of the GST Act. | Detailed Reasoning - Paragraph 11-5(d) GST registration: You are registered for GST in carrying on your enterprise satisfying paragraph 11-5(d) of the GST Act. | Detailed Reasoning - Question 1 Conclusion: All of the requirements of section 11-5 of the GST Act are satisfied. You are therefore making creditable acquisitions of the supplies made to you by the Contractors under each of the Project Contracts. As you acquire supplies that have the character of taxable supplies, you are entitled to input tax credits under section 11-20 of the GST Act. | Detailed Reasoning - Question 2: Are the Amounts payable by you to the Operator, as contemplated by the respective Deeds, consideration for a supply under paragraph 9-5(a) of the GST Act and therefore a creditable acquisition is made by you under section 11-5 of the GST Act? | Summary: There is no supply acquired by you for which the Amounts are consideration. Accordingly, paragraph 9-5(a) of the GST Act is not satisfied in relation to any supply acquired by you; and the Amounts are not consideration for any supply acquired by you and consequently you do not make a creditable acquisition under section 11-5 of the GST Act. Regardless of the above, if any obligations (or any other supplies) were characterised as supplies acquired by you 'for' which the Amounts were consideration, subsection 9-17(3) of the GST Act would apply to treat those amounts as not consideration. This is because: • the payments (Amounts) are made between Government Related Entity (GRE) for making a supply; • the payments are covered by appropriations made under Australian law; and • the payments are calculated on a cost-recovery basis that does not exceed the Operator's anticipated or actual costs of making the supplies. Accordingly, under either characterisation, you do not acquire a taxable supply, do not make a creditable acquisition under section 11-5 of the GST Act, and are not entitled to input tax credits. | Detailed Reasoning - Detailed reasoning: As discussed above you make a creditable acquisition under section 11-5 of the GST Act if, amongst other things, you acquire anything for a creditable purpose the supply of which is a taxable supply under section 9-5 of the GST Act. | Detailed Reasoning - Step 1 Identification of supplies: The first element of a taxable supply in paragraph 9-5(a) of the GST Act requires that a supply is made for consideration to you. Consideration therefore is given to identifying whether under the arrangements, you acquire anything that constitutes a supply. | Detailed Reasoning - (a) services: Services provided by the Operator fall within the meaning of supply under subsection 9-10(2) of the GST Act. However, these services are not supplied to you. You are neither the recipient of these services nor acquires any right to direct their provision or obtains any benefit, right or advantage associated with those activities. Accordingly, while services are supplies, they are not supplies acquired by you and cannot be supplies 'for' which the Amounts are consideration. | Detailed Reasoning - (b) Performance, reporting and governance obligations: Obligations imposed on the Operator under the agreements including performance, reporting, governance undertakings and related administrative obligations fall within subsection 9-10(2) of the GST Act as they involve 'entering into obligations to do something'. These obligations: • are directed toward you; and • confer accountability and governance benefits on you. Accordingly, these obligations are activities that could potentially constitute supplies acquired by you. | Detailed Reasoning - (c) Pass-through of Payments to the Contractor: The agreement by the Operator to pay the Payments 'for and on your behalf' under the Deed is a conduit/agency function, and does not involve you acquiring any service, right, benefit or forbearance from the Operator. While the Operator undertakes an act (which is broadly a 'supply'), you do not receive anything in return in your own right. Accordingly, the payment direction mechanism does not constitute a supply acquired by you. That conclusion is not altered where the Payments are affected by set-off against amounts otherwise payable to the Operator, rather than by a physical transfer of funds by the Operator. | Detailed Reasoning - Step 2 Is the Operator Funding Amount 'for' any supply acquired you.: As only Operator's performance and reporting obligations potentially constitute supplies acquired by you, the analysis below focuses on whether the Amounts are 'for' those obligations for the purposes of paragraph 9-5(a) of the GST Act. For the Amounts to constitute consideration for the Operator's performance and reporting obligations, there must be a sufficient nexus such that the Amounts are provided for, in response to, or to induce the performance of those obligations. Merely having any form of connection of any character (mere factual or structural connection) is insufficient (GSTR 2012/2, AP Group ). GSTR 2012/2 (paragraphs 15, 16, 15A) stresses that not every connection between payment and activities is sufficient. There must be a sufficient nexus between the payment made and the supply. The question is what the payment is for (as merely having any form of connection is insufficient). In the present arrangement: • the obligations are governance conditions attaching to funding, not supplies acquired by you. • those obligations are imposed by funding frameworks, independently of, and not in response to the payment of the Amounts. You provide the Amounts to satisfy your statutory obligation to fund services. Objectively, the Amounts are statutory/system based funding to support the Operator's functions, not payment for supplies acquired by you. Accordingly, the required nexus between the Obligations and the Amounts is not satisfied. | Detailed Reasoning - Step 3 Application of subsection 9-17(3) of the GST Act: As stated above, obligations or any other activities are not supplies acquired by you for which the Amounts were made. As requested, we have also provided reasoning why section 9-17(3) of the GST Act would make the payments not the provision of consideration, even if those obligations and activities were provided for the Amounts. That subsection operates to treat certain payments between GREs for making a supply as not consideration, notwithstanding section 9-15 of the GST Act. Subsection 9-17(3) of the GST Act provides that a payment is not the provision of consideration if: (a) the payment is made by a GRE to another GRE for making a supply; (b) the payment is covered by an appropriation under an Australian law (or made under the National Health Reform Agreement or an agreement implementing it); and (c) the payment is calculated on the basis that the total amount relating to the supply does not exceed the supplier's anticipated or actual costs of making the supply. Each element is considered below. | Detailed Reasoning - Paragraph 9-17(3)(a) Payment between GREs for making a supply: A GRE for the purposes of section 195-1 of the GST Act includes a government entity within the meaning of section 41 of the A New Tax System (Australian Business Number) Act 1999 (ABN Act), including a Department of State or a statutory body established by a State for a public purpose and separately identifiable by reference to its activities or location. Accordingly, both you and the Operator are government entities and therefore GREs for the purposes of subsection 9-17(3) of the GST Act. | Detailed Reasoning - Treatment of the Amounts as 'payment': Amounts transferred between GREs under a statutory funding arrangement (including the Amounts) are treated as 'payments' for the purposes of applying subsection 9-17(3) of the GST Act. If supplies were otherwise taken to be acquired by you and the Amounts characterised as paid 'for' those supplies, the payments would be made by one GRE (you) to another GRE (Operator) for making those supplies, satisfying paragraph 9-17(3)(a) of the GST Act. | Detailed Reasoning - Paragraph 9-17(3)(b) Payment covered by an appropriation: The Amounts are paid out of funds appropriated you under Australian laws for the purposes of subsection 9-17(3) of the GST Act. The payment of the Amounts to the Operator are funded from appropriated amounts. Accordingly, paragraph 9-17(3)(b) is satisfied. | Detailed Reasoning - Paragraph 9-17(3)(c) Payment does not exceed anticipated or actual costs: The funding framework is not intended to exceed the Operator's anticipated or actual costs of performing its functions and associated obligations. Accordingly, the total amount of the Amounts relating to any such supply does not exceed the Operator's anticipated or actual costs of making that supply. On the facts, the requirements of paragraph 9-17(3)(c) of the GST Act are satisfied. As all the requirements of subsection 9-17(3) of the GST Act are satisfied the Amounts are treated as not consideration, notwithstanding section 9-15 of the GST Act. Accordingly, paragraph 9-5(a) of the GST Act is not satisfied in relation to any supply made by the Operator to you, and as a result no taxable supply is made to you. Consequently, you do not make a creditable acquisition under section 11-5 of the GST Act and has no entitlement to ITCs. | Detailed Reasoning - Question 2 Conclusion: For the reasons set out above, the Amounts are not consideration for any supply acquired by you. Services are not supplied to you, meaning there is no supply acquired by you for which the Amounts can have a nexus to. The payment direction mechanism under the Deed does not involve you acquiring any supply from the Operator, and the obligations operate as governance and accountability conditions attaching to statutory funding rather than obligations undertaken 'for' or in order to obtain the Amounts. Accordingly, paragraph 9-5(a) of the GST Act is not satisfied, and no taxable supply is acquired by you from the Operator. Consequently, you are not making a creditable acquisition under section 11-5 of the GST Act. | Detailed Reasoning - Question 3: Are you making a supply for consideration under paragraph 9-5(a) of the GST Act when you direct that the Payments are payable by the Operator to the Contractor (for and on your behalf) under each of the respective Deed? | Summary: The Payments payable by the Operator to the Contractor 'for and on your behalf' under the Deeds are not consideration for any supply made by you to the Operator under paragraph 9-5(a) of the GST Act. While you makes a supply to the Operator by granting rights of occupation in the form of leasehold rights under the Lease and licence rights under the Licence (each being a supply of real property within paragraph 9-10(2)(d) of the GST Act), the Payments do not have the required nexus to those supplies to constitute consideration. Objectively, the Payments are not made 'for', 'in response to' or 'in connection with' the grant of the leasehold or licence rights as required by section 9-15(1) of the GST Act. Because you do not make any supply to the Operator for which the Payments are consideration, paragraph 9-5(a) of the GST Act is not satisfied. | Detailed Reasoning - Taxable supplies: GST is payable on taxable supplies. An essential requirement of a taxable supply is that a supply is made for consideration (paragraph 9-5(a) of the GST Act). | Detailed Reasoning - Nexus principle: The Commissioner explains in GSTR 2006/9 that: • a payment will be consideration only where there is a sufficient nexus between the payment and the supply; and • the enquiry is objective, focusing on the true character of the transaction rather than labels used by the parties. GSTR 2012/2 emphasises that 'in identifying the character of the connection, the word 'for' ensures that not every connection between supply and consideration is sufficient. That is, merely having any form of connection of any character between a supply and a payment is insufficient to constitute a taxable supply. Regard must be had to all of the surrounding circumstances of the arrangement, in particular any written documentation. While the Payments clearly operate as consideration for the supply of infrastructure and services made by the Contractor to you under each Project Contract, the question here is whether those same Payments have the required nexus to any supply made by you to the Operator. | Detailed Reasoning - Lease/Licence: The only identifiable supplies made by you to the Operator arise under the relevant occupancy arrangement, namely: • the grant of a leasehold rights under Lease A; and • the grant of licence rights under the Licence B. Each constitutes a supply of real property within paragraph 9-10(2)(d) of the GST Act. For convenience, reference below to the leasehold/licence supply are to those supplies under Lease A and Licence B respectively. The issue is therefore whether the Payments payable by the Operator for and on your behalf have a sufficient nexus to the leasehold/licence supply to constitute consideration 'for' that supply for the purposes of paragraph 9-5(a) of the GST Act. | Detailed Reasoning - Absence of nexus between the Payments and the lease/licence: Objectively assessed, the Payments lack the required nexus because: • Lease A and Licence B do not require the Operator to make the Payments as rent, a premium, outgoings or any other form of consideration; • the Operator's rights of occupation are not conditional on the Payments being made; • neither document refers to the Deed or links leasehold/licence rights to those payments; and • the Operator receives the same leasehold/licence interest whether or not the Payments are made. Accordingly, the Payments are not made 'for' the leasehold/licence supply and therefore are not consideration for that supply (GSTR 2006/9 and GSTR 2012/2). This reflects not an absence of nexus in the arrangement as a whole, but an absence of nexus between the Payments and any supply made by you to the Operator. | Detailed Reasoning - Deed: Each Deed does not itself give rise to any independent supply made by you to the Operator within the meaning of section 9-10 of the GST Act. It functions as a payment direction and funding mechanism. Clauses of the Deeds operate, as a matter of legal form between you and the Operator. The Clause records that, as between those parties, the Operator accepts economic responsibility for the Payments. The clause makes clear that you remain legally obliged to the Contractor under the Project Contracts, and that the Operator satisfies its obligation by directing or agreeing to set-off amounts otherwise payable by you to the Operator. This contractual set-off mechanism concerns the internal allocation and satisfaction of payment obligations only and does not give rise to consideration for a supply made by you to the Operator. The fact that the Operator pays, or authorises payment of, the Payments 'for and on your behalf of' does not of itself establish consideration for a supply made by you. The payment direction does not involve any payment, act or forbearance for, in response to or to induce a supply made by you. This mechanism governs the manner in which funding otherwise payable to the Operator is applied to discharge your existing liability to the Contractor. In practical terms: • the Payments are always made to satisfy your existing liability to the Contractor; • the Operator does not pay you to obtain anything from you; instead, the Operator facilitates how your existing liability to the Contractor is discharged; and • no right, benefit, service or forbearance flows from you to the Operator as a result of this payment direction. Accordingly, this payment mechanism does not involve you providing something to the Operator and therefore does not constitute a supply under section 9-10 of the GST Act nor does it change the character of the underlying payment. | Detailed Reasoning - Nexus: Even if it were assumed (contrary to the above) that you made some supply in connection with the payment direction, section 9-15 of the GST Act would still not be satisfied. Consistent with GSTR 2006/9 and GSTR 2012/2 and the principles confirmed by the courts, a payment constitutes consideration only where it is made 'for' or to obtain or induce the supply. That nexus is absent here: • you do not make any supply to the Operator in exchange for the Operator agreeing to pay the Payments; and • the Payments relate to your acquisition of services from the Contractor under the Project Deeds, not to any supply by you. | Detailed Reasoning - Question 3 Conclusion: The Payments payable by the Operator to the Contractor 'for and on your behalf' • are not consideration for the leasehold or licence supply made by you to the Operator under Lease A or Licence B; • do not relate to, and are not consideration for, any separate or additional supply made by you to the Operator under the Deed; and • do not have the necessary nexus required by paragraph 9-5(a) of the GST Act with any supply made by you to the Operator, notwithstanding that those same payments have a sufficient nexus to the supply made by the Contractor to you under the Project Contracts. Accordingly, as paragraph 9-5(a) of the GST Act is not satisfied and no taxable supply is made by you on which GST is payable in relation to the Payments .

Are you making creditable acquisitions of the Works/Services and other obligations from the Contractor under section 11-5 of the GST Act, entitling you to the associated input tax credits under section 11-20 of the GST Act?