Private ruling: GST and apportioning the consideration for a supply
Date of advice: 13 July 2022
Published: October 2022

Ruling: Q1: Is your proposed methodology for apportioning the consideration that you receive for your mixed supplies fair and reasonable for the purposes of determining the taxable portion pursuant to section 9-80 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)? | A1: Yes

Relevant facts and circumstances: You are registered for GST carrying on an enterprise of supplying goods. Customers can purchase the goods individually or a bundle of goods (bundle). When a customer purchases a bundle, a discount is given on the total price. You make a mixed supply if the bundle consists of taxable and GST-free goods. You are proposing a methodology for apportioning the consideration that you receive for a mixed supply of a bundle. Under the methodology, you will apply the discount across all goods included in the bundle. The apportioned price of an item in the bundle = regular price of the item divided by the total regular price of all the items in the bundle multiplied by the discounted price of the bundle. Table 1 : Apportioned discount bundle price example Item Regular price ($) Apportioned discounted bundle price ($) Item 1 15.00 11.54 Item 2 13.00 10.00 Item 3 14.00 10.77 Item 4 12.00 9.23 Item 5 11.00 8.46 Total regular price 65.00 Bundle price 50.00 Discount given 15.00 Where item 1 in the above example is taxable, the GST payable on the item is $1.05 ($11.54 ÷ 11). The GST payable on the supply of the bundle is the aggregate of the GST amount payable on the taxable items in the bundle.

Relevant legislative provisions: A New Tax System (Goods and Services Tax) Act 1999 section 9-80