Private ruling: GST - supplies of bulk water
Date of advice: 6 January 2026
Published: 2 March 2026
Ruling period: XX/XX/XXXX to XX/XX/XXXX
Date scheme commenced: XX/XX/XXXX

Ruling: Q1: Are you making a GST-free supply of water under section 38-285 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) under scenario 1, where you provide temporary water supply to your customers? | A1: Yes. | Q2: Are you making a GST-free supply of water under section 38-285 of the GST Act under scenario 2, where you make a bulk supply of water for use in connection with pipeline construction, pipeline maintenance, pipeline repair and pipeline testing? | A2: Yes.

Relevant facts and circumstances: You are registered for GST. You carry on a business of delivering water. You required advice on scenario 1 and 2. Scenario 1 involves the following arrangement: You buy bulk water and provide a temporary supply of water to construction, civil works, commercial and domestic in various ways. You are sub-contracted by civil works contractors who are doing work for a mains water supplier . Under this arrangement, you provide a temporary water supply to businesses, schools, aged care facilities, etc while the contractor does repair / maintenance work on the mains water pipeline. Hence they 'shut' the mains line and need a temporary water supply to these establishments so that these establishments can continue operating. You deliver the water supply and all required equipment to enable a supply of water to the business, home or other via the current plumping system or makeshift system depending on the maintenance or repair work being done by a contractor. You bring the truck and/or tanks to the locations that are being 'shut' of normal water supply. You hook up the hosing, pumps, generators, and fill the truck or other tanks with water. You then monitor the water supply for a period of time - ranging from an hour or so through to several hours - depending on how quickly the contractor completes the task. You just keep the temporary water supply consistently available to the business / school / facility / etc that you have your tanks and hoses connected into. You provided a sample invoice that you issued to a customer under scenario 1. The invoice breaks up the total price into two items. The first item is titled 'provide temporary water supply', and the second item is titled 'water usage'. The first charge is worked out by multiplying an hourly rate by a number of hours. The second charge is worked out by multiplying a rate per kilolitre of water by the number of kilolitres of water. The first charge makes up the overwhelming majority of the total price by far. You only supply water and machinery, equipment and labour required to be able to supply water. You provide no other unrelated labour or equipment. All water containers involved have in each case a storage capacity of over X litres. Scenario 2 involves the following arrangement: You buy bulk water and supply to civil contractors working on pipeline systems. The water is for use in connection with pipeline construction, pipeline maintenance, pipeline repair and pipeline testing. In this scenario, the water is delivered to the site by water truck and is pumped into piping systems being installed, maintained or repaired by a contractor or other who has commissioned you. You don't install, maintain or repair the piping systems, neither do you test pipes and/or repair faulty pipes. You bring the water and use your pump and hoses to hook into their hoses/pipes and you pump the water - this provides pressurising and/or flushing of the newly laid pipelines (the purpose of pressurising and flushing the newly laid pipelines is to test for leaks and faults in these pipelines and to flush out any debris from them). This may be for an hour or several at a session and your employee needs to be at the site during that time. You provided a sample invoice that you issued to a customer under scenario 2. The invoice breaks up the total price into two items. The first item is titled 'water delivery - hourly', and the second item is titled 'water delivery - kl'. The first charge is worked out by multiplying an hourly rate by a number of hours. The second charge is worked out by multiplying a rate per kilolitre of water by the number of kilolitres of water. The first charge makes up the overwhelming majority of the total price by far. You only supply water and machinery and labour required to be able to supply water. You provide no other unrelated labour or equipment. All water containers involved have in each case a storage capacity of over X litres.

Relevant legislative provisions: A New Tax System (Goods and Services Tax) Act 1999 section 38-285

Reasons for decision: Summary: Section 38-285 of the GST Act states: (1) A supply of water is GST-free . (2) However, a supply of water is not GST-free under this section if it is: (a) supplied in a container; or (b) transferred into a container; that has a capacity of less than 100 litres or such other quantity as the regulations specify. (3) It does not matter whether or not the amount of water supplied or transferred fills the container. Goods and Services Tax RulingGSTR 2000/25 Goods and services tax: GST-free supplies of water, sewerage and sewerage like services, storm water drainage services and emptying of a septic tank (GSTR 2000/25) provides guidance on the term 'supply of water' for the purposes of section of section 38-285 of the GST Act and the types of activities that would be considered to fall within the scope of this concept. Paragraph 20 of GSTR 2000/25 explains what is 'a supply of water' for the purposes of section 38-285 of the GST Act. Paragraphs 20 to 24 of GSTR 2000/25 state: 20. 'A supply of water,' in section 38-285, refers to the delivery or the making available of water, as goods, to a recipient's premises. In State Electricity Commission of Victoria & Anor v. FC of T, (the SECV case) Heerey and Merkel JJ found that electricity and electrical power were 'goods' for the purposes of the Sales Tax Assessment Act 1992 , being tangible personal property capable of being bought and sold in quantifiable amounts. Evidence given equated voltage with the pressure under which water flows through a pipe and current with the rate of flow of water in a pipe. 21. Appropriate analogies can be drawn between the system for the distribution of electricity discussed in the SECV case and the 'supply of water' referred to in section 38-285. A 'supply of water' is the provision of tangible personal property - that is, goods. In other words, the supply of water means the change in ownership or control and transfer of physical possession of water from a supplier to a recipient. In this Ruling, we refer to this as a delivery of water. 22. In an urban environment, the delivery of water may occur through reticulated pipes that provide a continuously available supply of water at adequate pressure. It may also occur through other means, such as by access to natural watercourses and aquifers, access to canal and channel systems, or by delivery by road vehicle to the storage facility of recipients not serviced by reticulated pipes. Access to water systems can be provided by the opening of an outlet to obtain irrigation water or by pumping water from a dam directly into a recipient's premises. 23. A supply of water to an end recipient through reticulated pipes is made at that part of the recipient's premises where the supplier's responsibility for the supply ceases. This is the point of supply to end recipients. In an urban environment, a supplier's responsibility for the supply of water usually ceases at the water meter, a property boundary or a point close to a property boundary. For end recipients receiving water through a canal and channel system, a supplier's responsibility usually ceases at that part of the system where the flow of water is physically regulated or timed by the supplier, for example, at an irrigation outlet. Appendix 1 shows a schematic view of how water may be delivered. 24. Activities performed by the supplier of water up to and including the point of supply to the recipient of water are GST-free if they are integral to the physical delivery of water to the recipient. The system for the physical delivery of water to an end recipient may be the responsibility of more than one supplier of water. For example, a supplier of bulk water may supply bulk water to another supplier who makes retail supplies of water to end recipients. The following will be GST-free: • initial connection, re-connection, disconnection, water meter installation, and tapping and tee insertion ; • irrigation channel water scheduling and channel attendance (including channeling from natural water courses); • irrigation channel maintenance up to and including the point of supply (where it is charged to the water supply recipient); and • water meter reading and testing. The examples at the four dot points in paragraph 24 of GSTR 2000/25 are non-exhaustive. Under scenario 1, you buy bulk water to resell to your customers. You deliver the water supply and all required equipment to enable a supply of water to the business, home or other via the current plumping system or makeshift system depending on the maintenance or repair work being done by a contractor. You bring the truck and/or tanks to the locations that are being 'shut' of normal water supply, You hook up the hosing, pumps, generators, and fill the truck or other tanks with water. You then monitor the water supply for a period of time - ranging from an hour or so through to several hours - depending on how quickly the contractor completes the task. You just keep the temporary water supply consistently available to the business / school / facility / etc that you have your tanks and hoses connected into. You only supply water and machinery, equipment and labour required to be able to supply water. You provide no other unrelated labour or equipment. In accordance with paragraph 24 of GSTR 2000/25, as your use of machinery, equipment and labour under scenario 1 are activities performed by you, as the supplier of water, up to and including the point of supply of the water to the recipient of the water that are integral to the physical delivery of water to the recipient and you do not supply the water in a container with a storage capacity of less than 100 litres and you do not transfer the water into such a container, you are making a GST-free supply of water under section 38-285 of the GST Act under scenario 1. All of the activities you do up to and including the point of supply of the water to the recipient are the 'delivery of water' as goods to a place specified by the recipient. Therefore, in accordance with paragraph 20 of GSTR 2000/25, the entirety of the arrangement you enter into under scenario 1 is correctly classed as being a GST-free supply of water, for the purposes of section 38-285 the GST Act. Under scenario 2, you buy bulk water to resell to civil contractors working on pipeline systems. The water is for use in connection with pipeline construction, pipeline maintenance, pipeline repair and pipeline testing. The water is delivered to the site by water truck and is pumped into piping systems being installed, maintained or repaired by a contractor or other who has commissioned you. You don't install, maintain or repair the piping systems, neither do you test pipes and/or repair faulty pipes. You only supply water and machinery and labour required to be able to supply water. You provide no other unrelated labour or equipment. In accordance with paragraph 24 of GSTR 2000/25, as your use of machinery, equipment and labour under scenario 2 are activities performed by you, as the supplier of water, up to and including the point of supply of the water to the recipient of the water that are integral to the physical delivery of water to the recipient and you do not supply the water in a container with a storage capacity of less than 100 litres and you do not transfer the water into such a container, you are making a GST-free supply of water under section 38-285 of the GST Act under this scenario. All of the activities you do up to and including the point of supply of the water to the recipient are the 'delivery of water' as goods to a place specified by the recipient. Therefore, in accordance with paragraph 20 of GSTR 2000/25, the entirety of the arrangement you enter into under scenario 2 is correctly classed as being a GST-free supply of water, for the purposes of section 38-285 of the GST Act.