Private ruling: GST and payment of a levy
Date of advice: 27 June 2016
Published: August 2016

Ruling: Q1: Is the payment of the levy a payment of an Australian fee or charge that is of a kind covered by subsection 81-10(4) of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)? | A1: Yes

Relevant facts and circumstances: • You are an Australian government agency • Pursuant to a State law, you administer an insurance scheme which provides support care for persons who suffer catastrophic injuries • The State law imposes an insurance scheme levy • The levy is a fee that relates to the provision or retention of a permission or authority granted by the State to the payer.

Relevant legislative provisions: Sections 81-10 and 195-1 of the A New Tax System (Goods and Services Tax) Act 1999 | Section 995-1 of the Income Tax Assessment Act 1997

Reasons for decision: Summary: Subsection 81-10(1) of the GST Act provides that a payment, or the discharging of a liability to make a payment, is not the provision of consideration to the extent that the payment is an Australian fee or charge that is of a kind covered by subsection 81-10(4). The term Australian fee or charge is defined in section 195-1 of the GST Act to mean a fee or charge (however described), other than an Australian tax, imposed under an Australian law and payable to an Australian government agency. The terms Australian law and Australian government agency are defined in section 995-1 of the Income Tax Assessment Act 1997 (ITAA 1997) to include a law of a State and an agency of a State, respectively. As the levy is imposed under a State law and payable to an Australian government agency, it is an Australian fee or charge as defined. A fee or charge is of a kind covered by subsection 81-10(4) of the GST Act if the fee or charge relates to, or relates to an application for, the provision, retention, or amendment, under an Australian law, of a permission, exemption, authority or licence (however described). As the levy relates to the provision or retention of a permission or authority granted by the State to the payer, the levy is of a kind covered by subsection 81-10(4) of the GST Act. Conclusion The payment of the levy is not the provision of consideration for a supply, but is a payment of an Australian fee or charge that is of a kind covered by subsection 81-10(4) of the GST Act.