Private ruling: GST and Solar powered electricity generation enterprise
Published: October 2014

Ruling: Q1: Will your supply of solar generated electricity be a taxable supply? | A1: Yes, your supply of solar generated electricity to an electricity retailer (utility) is a taxable supply for GST purpose as it meets all the requirements of section 9-5 of the A New Tax System (Goods and Services Tax) Act 1999 (GST ACT). That is: • you make the supply for consideration • it is in the course of an enterprise that you carry on in Australia, and • you are registered for GST. Furthermore the supply of the electricity is not GST free or input taxed, it will be a taxable supply.

Relevant facts and circumstances: You, are registered for GST You installed a solar electricity generation system on top of your workshop in Australia. Your system generates $X,000 of excess electricity per quarter and cost you $XX,000. The panels have a 25 year warranty. You installed the system to generate income. Electricity that is excess to your daily needs is sold into the grid owned by a Utility. The Utility advised you in a statement that they pay XX cents per kW to GST registered entities and X0 cents per kW to entities that are not registered for GST for electricity sold into their grid. Your accountant advised you that you are required to remit GST to the ATO on your supplies and you have been reporting GST in your Business Activity Statements (BAS) since installation.

Relevant legislative provisions: A New Tax System (Goods and Services Tax) Act 1999 Section 7-1 | A New Tax System (Goods and Services Tax) Act 1999 Section 9-5, and | A New Tax System (Goods and Services Tax) Act 1999 Section 9-20.