Private ruling: GST and water, sewerage and storm water drainage
Published: November 2014

Ruling: Q1: Is the provision of services by the surveyors, architect, engineers and the arborist in relation to water, sewerage and storm water drainage for development approval of a new additional dwelling on the land with existing dwelling GST-free? | A1: No.

Relevant facts and circumstances: You are an entity and you are not registered for GST. You are substantially redeveloping an existing house on a property and also building a new dwelling on the same block separate to the existing house. The property is not being subdivided. As a condition of the Development Application (DA) approval the new dwelling must have separate and new connections to the services including sewerage, storm water, water and gas. If the existing house was the only building work no additional connections would be required and existing connections could be used. An Engineers consultation, report and design diagrams were required for the Construction Certificate and for commencement of work by the builder. These reports and diagrams were provided in association with the Water Company and other local authorities including amendment to the original Development Application. The builder has provided a sewage 'peg out' of the location and depth of the sewage line in the street so that a layout can be developed. You have provided documentations which included information on the services sought from: • Surveyors for levels and detail survey; • Architects for storm water design and documentation; application for redesign of stormwater and road works for approved DA; approval of stormwater connection to water main. • Engineers for engineer and design draftsperson; provision for extension of council drainage to proposed development; design and documentation for council; design documentation services in relation to storm water disposal. • Civil, Drainage and Hydraulic Consultant for consulting services for storm water drainage disposal, civil works, roof water disposal systems and authority approval submissions; storm water drainage documentation and calculations for construction certificate submission to council. • Arborist in relation to a report on the effect of the storm water connects to main on the existing street tree in the relevant street at the property. • Site inspections during construction. • Registered Surveyors & Water Company Licensed Water Servicing Coordinator, to carry out survey and prepare a SWAPR (sewer peg-out) to determine whether the proposed building works will impact on Water Company's asset (sewer main) • Sewer survey to complete a sewer peg out/survey of the mains sewer line in street.

Relevant legislative provisions: A New Tax System (Goods and Services Tax) Act 1999 Section 38-285 | A New Tax System (Goods and Services Tax) Act 1999 Section 38-290 | A New Tax System (Goods and Services Tax) Act 1999 Section 38-300

Reasons for decision: Summary: Subdivision 38-I of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) makes GST-free a supply of : • water • sewerage and sewerage-like services and • a service that consists of: • the emptying of a septic tank; or • draining storm water. | Detailed Reasoning - Water: A supply of water is GST-free. However, if the supply of water is supplied in a container that has a capacity of less than 100 litres it is not GST-free. A 'supply of water' in section 38-285 of the GST Act refers to the delivery or the making available of water, as goods, to the recipient's premises. In an urban environment, the delivery of water may occur through reticulated pipes that provide a continuously available supply of water at adequate pressure. 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. 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. 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. | Detailed Reasoning - Supplies that are separate supplies to a supply of water: Some activities that are performed by suppliers of water may have some connection with a supply of water, but remain separate supplies. These separate supplies include: • selling information, such as plans of water pipe locations; • performing site inspections on request or as required; • granting approvals for building or development as part of a supplier's statutory duties; and • issuing permits In this case, the supplies of the services were not made by the supplier of water but rather by the surveyors, engineers, architects and arborist. They were plans, certificates and other documents including diagrams showing the location of premises in relation to various lines and connection points. As such, these services are not GST-free under subdivision 38-I of the GST Act. | Detailed Reasoning - Sewerage and sewerage like services: A supply of sewerage services is GST-free. The supply of a service that enables an end recipient to discharge waste water, including water containing human waste, into a network of sewer pipes connected to the recipient's premises is the supply of a sewerage service. The supply commences at the point where an end recipient's pipes connect with or feed into the supplier's network. | Detailed Reasoning - Supplies that are not supplies of sewerage services: A supply of sewerage service does not include supplies made to enable the end recipient to collect, direct the flow of, store, or transfer waste water or refuse to the point where it is accepted into a supplier's network. For example, services of installation, maintenance or repair of a building's toilet systems, sullage tanks or water disposal systems are supplies that are not GST-free. In this case, the services were not sewerage and sewerage-like services. They were services provided by the surveyors, engineers, architects and arborist. They were plans, certificates and other documents including diagrams showing the location of premises in relation to various lines and connection points. As such, these services are not GST-free under subdivision 38-I of the GST Act. | Detailed Reasoning - Drainage of storm water: A service that consists of draining storm water is GST-free. A supply of a service of draining storm water is the acceptance by the supplier of excess run-off of water (caused by heavy rainfall) from an end recipient's premises into a network of drains or pipes, sometimes in conjunction with a run-off into a natural water course. The acceptance and the point of supply to the end recipient is at the point where the pipes or drains controlled by the end recipient meet the pipes or drains that for part of the network controlled by the supplier of the service. | Detailed Reasoning - Supplies that are not supplies of services of draining storm water: Supplies of goods and services made to a recipient to enable the recipient to collect, direct the flow of, and store or transfer storm water to a point where it is accepted into a network of pipes is not a supply of a service of draining storm water. Other supplies such as approvals given for building or development applications are also not GST-free supplies. In this case, the supplies of the services were not storm water draining service. They were services provided by the surveyors, engineers, architects and arborist. They include plans, certificates and other documents including diagrams showing the location of premises in relation to various lines and connection points; application for redesign of storm water and road works for DA approval; report in relation to the effect of the storm water connects to main on the existing street tree; storm water drainage documentation and calculations for construction certificate submission to council. As such, these services are not GST-free under subdivision 38-I of the GST Act.