Private ruling: goods and services tax (GST) and taxes, fees and charges
Published: February 2013

Ruling: Q1: Are payments of the specified taxes, fees and charges imposed on or after 1 July 2013 excluded from GST under Division 81 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)? | A1: Yes. The payments of the fees or charges listed in the table below are excluded from GST under Division 81 of the GST Act.

Relevant facts and circumstances: You are a government entity and are registered for GST. You seek a ruling in relation to specified taxes, fees and charges that you impose from 1 July 2013.

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 9-10, | A New Tax System (Goods and Services Tax) Act 1999 Subsection 9-15(1), | A New Tax System (Goods and Services Tax) Act 1999 Section 9-39, | A New Tax System (Goods and Services Tax) Act 1999 Division 38, | A New Tax System (Goods and Services Tax) Act 1999 Division 40, | A New Tax System (Goods and Services Tax) Act 1999 Division 81, | A New Tax System (Goods and Services Tax) Act 1999 Subsection 81-10(1), | A New Tax System (Goods and Services Tax) Act 1999 Subsection 81-10(2), | A New Tax System (Goods and Services Tax) Act 1999 Subsection 81-10(4), | A New Tax System (Goods and Services Tax) Act 1999 Subsection 81-10(5), | A New Tax System (Goods and Services Tax) Act 1999 Section 81-15, | A New Tax System (Goods and Services Tax) Act 1999 Section 195-1, | A New Tax System (Goods and Services Tax) Regulations 1999 Regulation 81-10.01, | A New Tax System (Goods and Services Tax) Regulations 1999 Paragraph 81-10.01(1)(f), | A New Tax System (Goods and Services Tax) Regulations 1999 Paragraph 81-15.01(1)(d), | A New Tax System (Goods and Services Tax) Regulations 1999 Paragraph 81-15.01(1)(f), | A New Tax System (Goods and Services Tax) Regulations 1999 Regulation 81-15.01 and | Income Tax Assessment Act 1997 Section 995-1.

Reasons for decision: Summary: Section 9-5 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) provides that you make a taxable supply if: (a) you make the supply for consideration (b) the supply is made in the course or furtherance of an enterprise that you carry on (c) the supply is connected with Australia, and (d) you are registered, or required to be registered, for GST. However, the supply is not a taxable supply to the extent that it is GST-free or input taxed. The term 'supply' is defined in section 9-10 of the GST Act as 'any form of supply whatsoever' and includes amongst other things, a supply of goods, a supply of services, a provision of advice or information, an entry into, or release from, an obligation to do anything, to refrain from an act or to tolerate an act or situation. Subsection 9-15(1) of the GST Act provides that consideration includes: (a) any payment, or any act or forbearance, in connection with a supply of anything (b) any payment, or any act or forbearance, in response to or for the inducement of a supply of anything. The circumstances in which a supply is GST-free or input taxed are explained in Division 38 and Division 40 of the GST Act respectively. Section 9-39 of the GST Act provides special rules in relation to making taxable supplies. In particular, item 8 in the table in section 9-39 of the GST Act provides that where there is a payment of taxes, fees and charges, the special rules in Division 81 of the GST Act may apply. | Detailed Reasoning - Taxes, fees and charges: Prior to 1 July 2011 the payment of Australian taxes, fees or charges were treated as consideration for a supply, except to the extent that the Australian tax, fee or charge was listed in the A New Tax System (Goods and Services Tax) (Exempt Taxes, Fees and Charges) Determination 2011 (No. 1) (Treasurer's Determination). Division 81 of the GST Act was amended with effect from 1 July 2011 to allow entities to self assess the GST treatment of a payment of an Australian tax or an Australian fee or charge. As a transitional measure, taxes, fees or charges listed in the Treasurer's Determination as at 30 June 2011 remain exempt where they are imposed before 1 July 2013. Section 81-5 of the GST Act states that a payment, or the discharging of a liability to make a payment, is not the provision of consideration to the extent the payment is an Australian tax. The terms 'Australian tax' and 'Australian fee or charge' are defined in section 195-1 of the GST Act as: · Australian tax means a tax (however described) imposed under an Australian law. · Australian fee or charge means 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 government agency' and 'Australian law' are defined in section 995-1 of the Income Tax Assessment Act 1997 (ITAA 1997) as: Australian law means a Commonwealth law, a State law or a Territory law. Australian government agency means: (a) a Commonwealth, a State or a Territory or (b) an authority of the Commonwealth or of a State or a Territory. 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 the payment is an Australian fee or charge that is of a kind covered by subsections 81-10(4) or (5) of the GST Act. However, under subsection 81-10(2) of the GST Act a payment made by an entity, or the discharge of a liability to make a payment, is treated as the provision of consideration to the extent the payment is an Australian fee or charge that is prescribed by the A New Tax System (Goods and Services Tax) Regulations 1999 (GST Regulations). Pursuant to subsection 81-10(3) of the GST Act, the consideration is taken to be provided to the entity to which the fee or charge is payable, for a supply that the entity makes to the paying entity. Subsection 81-10(4) of the GST Act covers a fee or charge 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). Subsection 81-10(5) of the GST Act applies to fees or charges mainly relating to information and record keeping. A payment is not the provision of consideration to the extent that the fee or charge is paid to an Australian government agency and relates to the agency recording, copying, modifying, allowing access to, receiving, processing or searching for information. Are the items listed in the Table 1 an Australian tax, fee or charge? An Australian tax is a tax (however described) imposed under a Commonwealth law, a State law or a Territory law. Paragraph 4.22 of the Explanatory Memorandum to the Tax Laws Amendment (2011 Measures No.2) Act 2011 provides the following examples of Australian taxes imposed under an Australian law: income tax, stamp duty, fringe benefits tax, payroll tax, the Medicare Levy, local government 'ordinary rates' and various industry levies. The fees specified are not considered to be an Australian Tax. The government agencies satisfy the definition of Australian government agency in section 995-1 of the ITAA 1997. Also, the fees or charges are imposed under an Australian law and are payable to an Australian government agency. As such, the fees or charges are Australian fees or charges. We will consider whether section 81-10 of the GST Act or the relevant Regulations apply to the specified fees or charges. We consider the specified fees relate to recording, copying, modifying, allowing access to, receiving, processing, and searching for information. | Detailed Reasoning - Information and record-keeping: Subsection 81-10(5) of the GST Act applies to fees or charges relating to information and record keeping. A payment is not the provision of consideration to the extent that the fee or charge is paid to an Australian government agency and relates to the agency recording, copying, modifying, allowing access to, receiving, processing or searching for information. Paragraph 4.29 of the Explanatory Memorandum to the Tax Laws Amendment (2011 Measures No.2) Act 2011 provides examples of fees or charges that are covered by subsection 81-10(5) of the GST Act. These examples include, amongst others, searches and extracts from registers and copies of official documents. The fee payable is covered by subsection 81-10(5) of the GST Act as the fee is paid in order for the government agency to allow access to information. Further, we consider that subsection 81-10(2) of the GST Act does not apply because this fee or charge, is not prescribed in subregulation 81-10.01(1) of the GST Regulations, and subregulation 81-10.01(2) of the GST Regulations (which is about a payment by one government related entity to another government related entity), has no application. The fee payable is covered by subsection 81-10(5) of the GST Act as the fee is paid in order for the government agency to allow access to information. Further, we consider that subsection 81-10(2) of the GST Act does not apply because this fee or charge is not prescribed in subregulation 81-10.01(1) of the GST Regulations. The fee payable is covered by subsection 81-10(5) of the GST Act as the fee is paid in order for the government agency to allow access to information. Further, we consider that subsection 81-10(2) of the GST Act does not apply because this fee or charge is not prescribed in subregulation 81-10.01(1) of the GST Regulations. The fee payable is covered by subsection 81-10(5) of the GST Act as the fee is paid to the government agency to allow access to information required to be kept under an Australian law. However, subsection 81-10(2) of the GST Act narrows the operation of subsection 81-10(1) by treating fees or charges that are prescribed in subregulation 81-10.01(1) of the GST Regulations as the provision of consideration for a supply. Subregulation 81-10.01(1) of the GST Regulations makes fees or charges that would otherwise be exempt from GST under the operation of subsections 81-10(4) and (5) of the GST Act, potentially made for consideration and may give rise to taxable supplies. It is relevant to consider paragraph 81-10.01(1)(f) of the GST Regulations, which provides that payment of a fee or charge will be consideration where the provision of information by a government agency is of a non-regulatory nature. In this case, we consider that the fee payable is not captured under paragraph 81-10.01(1)(f) of the GST Regulations. In summary, all of the fees or charges specified are covered by subsection 81-10(5) of the GST Act and subsection 81-10(2) of the GST Act does not apply. Therefore the payment of the fees is not the provision of consideration under subsection 81-10(1) of the GST Act and will not give rise to taxable supplies. | Detailed Reasoning - Other fees and charges that do no constitute consideration: Section 81-15 of the GST Act provides that the GST Regulations may prescribe that the payment of an Australian fee or charge is not the provision of consideration. Regulation 81-15.01 of the GST Regulations prescribes fees and charges for the purposes of section 81-15 of the GST Act. This regulation adds to the kinds of fees and charges that are already made exempt from GST under subsections 81-10(4) and (5) of the GST Act. We consider the specified fees are covered by section 81-15 of the GST as other fees and charges that do not constitute consideration. | Detailed Reasoning - A supply of a regulatory nature made by an Australian government agency: Paragraph 81-15.01(1)(f) of the GST Regulations provides that payment of a fee or charge will not be consideration where the fee or charge is of a regulatory nature made by an Australian government agency. The Explanatory Statement to the A New Tax System (Goods and Services Tax) Amendment Regulation 2012 (No.2) discusses paragraph 81-15.01(1)(f) of the GST Regulations and states: This paragraph ensures that fee or charges that relate to activities of government that are regulatory in nature are not treated as the provision of consideration and therefore do not give rise to taxable supplies. The fee payable is covered by paragraph 81-15.01(1)(f) of the GST regulations as the fee paid to the government agency relates to regulation. As such, payment of this fee will not be for the provision of consideration under section 81-15 of the GST Act and therefore will not give rise to a taxable supply. In this case, the fee is not considered to be captured under subsection 81-10(5) of the GST Act as it relates to more than the government agency recording, copying, modifying, allowing access to, receiving, processing or searching for information. However, the fee payable is covered under paragraph 81-15.01(1)(f) of the GST Regulations as the fee paid to the government agency relates to regulation. As such, payment of this fee will not be consideration under section 81-15 of the GST Act and therefore will not give rise to a taxable supply. | Detailed Reasoning - Compensate an Australian government agency for costs of regulatory activities: Paragraph 81-15.01(1)(d) of the GST Regulations provides that payment of a fee or charge will not be for consideration where the fee or charge is to compensate a government agency for costs incurred by the agency in undertaking regulatory activities. The Explanatory Statement to the A New Tax System (Goods and Services Tax) Amendment Regulation 2012 (No.2) discusses paragraph 81-15.01(1)(d) of the GST Regulations and states: This paragraph ensures that fees and charges which are for services provided on a cost recovery basis by government agencies, and relate to activities that are regulatory in nature, are not treated as the provision of consideration and therefore do not give rise to a taxable supply. The fee payable is covered by paragraph 81-15.01(1)(d) of the GST regulations as the fee is paid to cover the government agency cost, in undertaking its activity of regulating. As such, payment of this fee will not be for the provision of consideration under section 81-15 of the GST Act and therefore will not give rise to a taxable supply. In summary, payment of all of the fees or charges specified are not the provision of consideration under section 81-15 of the GST Act and will not give rise to taxable supplies. | Detailed Reasoning - Conclusion: The payments of fees that are specified are covered by subsection 81-10(5) of the GST Act. Accordingly, subsection 81-10(1) of the GST Act applies to treat these payments as not the provision of consideration. Therefore, the payments of these fees are excluded from GST under Division 81 of the GST Act. The payments of fees and charges specified are covered by subsection 81-15.01(1) of the GST Regulations. Accordingly section 81-15 of the GST Act applies to treat these payments as not constituting consideration. Therefore, the payments of these fees are excluded from GST under Division 81 of the GST Act. As the payment of these fees are not consideration for a supply, the supplies for these payments will not be a taxable supply because section 9-5 of the GST Act requires that the 'supply is for consideration'. Accordingly, GST does not apply to payment of these fees or charges as they are excluded from GST under Division 81 of the GST Act.

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