Private ruling: GST supplies and acquisitions
Date of advice: 14 December 2017
Published: May 2018

Ruling: Q1: Is the entity liable to remit GST on the monies collected from a player for their share of training camp costs? | A1: No. The monies collected are not consideration for a taxable supply made by the entity to the player. | Q2: Is the entity entitled to claim input tax credits for GST paid in relation to training camp costs incurred? | A2: No. The training camp costs incurred were not creditable acquisitions made by the entity.

Relevant facts and circumstances: The entity is a sports organisation that is registered for GST. The entity is a non-profit body but is not an endorsed charity or a gift-deductible entity Part of the entity’s role is to organise teams to attend competitions and championships overseas. Participation in these overseas tournaments is mainly self-funded by the team members. The entity also organises training camps for each squad throughout the year and are attended by squad players who may or may not submit an expression of interest to be considered for selection for an overseas tour. Some players may not be able to participate in a particular tour due to work or study commitments but want to remain part of the squad for future tours. A number of training camps may be held before the selection process occurs. The costs of the training camps (which include airfares, accommodation, ground transport, court hire costs) are generally paid for by the volunteer manager or coach out of the entity's bank account for the relevant squad. Deposits to this account are monies from the players for training camps and tours, fundraising monies, and other grants and sponsorships. Each player will then pay their share of the overall camp costs to the entity including their share of the travel costs of the volunteer coach and/or manager. Some of the costs of the training camp(s) may be covered by grant funding. The costs are shared equally among the team members so that each team member pays the same share of the overall costs of the training camp regardless of whether or not the player has to travel to another State or Territory for the camp. If a player is not selected for an overseas tournament, the player does not receive a refund of the monies the player has paid for a training camp that the player attended leading up to the selection process. The money that the player has paid to the entity will have been used by the manager to defray part of the costs of the training camp.

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 11-5

Reasons for decision: Summary: 1. GST is payable on a taxable supply. Section 9-5 of the A New Tax System (Goods and Services tax) Act 1999 (GST Act) states: You make a taxable supply if: (a) you make the supply for *consideration; and (b) the supply is made in the course or furtherance of an *enterprise that you *carry on; and (c) the supply is *connected with the indirect tax zone; and (d) you are *registered, or *required to be registered. However, the supply is not a *taxable supply to the extent that it is *GST-free or *input taxed. (* denotes a term defined under section 195-1 of the GST Act) For the purpose of paragraph 9-5(a) of the GST Act, there must be a supply and a payment and a sufficient nexus between the supply and the payment. Training camps are mostly funded by the players. The monies that the entity collects from the players are for their share of the costs associated with the training camps which they are required to pay. The entity does not charge the players any fee for organising the training camps. Based on the facts provided, the payment made by the players for their share of the training camp costs is not consideration for a supply that the entity makes. The entity merely collects the monies and holds them on behalf of the players. Paragraph 9-5(a) of the GST Act is not satisfied. Therefore, the entity does not make a taxable supply when it collects the players’ share of the costs associated with the training camps. Accordingly, the entity is not liable to remit GST on the monies collected. 2. Creditable acquisitions give rise to entitlement to input tax credits. Section 11-5 of the GST Act states: You make a creditable acquisition if: (a) you acquire anything solely or partly for a *creditable purpose; and (b) the supply of the thing to you is a *taxable supply; and (c) you provide, or are liable to provide, *consideration for the supply; and (d) you are *registered, or *required to be registered. Making an acquisition of something is the first element to be considered in determining whether an entity makes a creditable acquisition. To make an acquisition, the entity must be the recipient of the supply; that is, the supply is made to the entity. Based on the information provided, the entity is merely organising the training camps. Therefore, the costs associated with the training camps are usually incurred on behalf of the players or the teams who are liable to pay their share of the costs. Accordingly, the entity does not make the acquisitions and is not entitled to claim input tax credits.