Private ruling: GST and additional waste collections
Published: July 2014

Ruling: Q1: Are supplies of waste management services of additional pickups of kerbside waste, including in relation to event bins, to residential and commercial customers by Entity A subject to GST? | A1: No, supplies of waste management services of additional pickups of kerbside waste, including in relation to event bins, to residential and commercial customers by Entity A are not subject to GST. On the basis of the information provided, we consider the amounts Entity A charges residential and commercial customers for supplies of these services are Australian fees or charges to which section 81-15 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) and regulation 81-15.01 of the A New Tax System (Goods and Services Tax) Regulations 1999 (GST Regulations) apply from 1 July 2013. Therefore, as these supplies are not subject to GST, the invoices Entity A issues to customers do not need to include GST in the amounts charged for these services.

Relevant facts and circumstances: Entity A is registered for GST. Entity A was established to provide services under a relevant State Act and conducts its affairs in accordance with that relevant State Act and other documents. The objects of Entity A include facilitating and co-ordinating the management of waste which includes the collection, treatment, disposal and recycling. Residents and small businesses are charged for the respective collection of waste services. This charge covers a weekly collection of general waste and a four weekly collection of both recycling and green waste (if applicable) and does not include GST as payment of the charges is treated as a payment of a fee or charge to which Division 81 of the GST Act applies. Customers such as residents, small commercial operators and sporting clubs can request an additional kerbside collection of either general waste, recyclables or green waste which is generally done at the same time as the normal collection. In addition, Entity A provides event bins for activities on a fee for service basis which includes the delivery, pickup and disposal of such bins. All additional kerbside waste collections and services are invoiced by Entity A directly to the customer and all enquires for additional waste collections are dealt with by Entity A. The application form which customers complete to access the additional kerbside waste collection service, contains a notation that the fee payable on application is based on the current financial year fees and charges. As shown on a copy of an invoice issued by Entity A, Entity A currently includes GST in the fees charged for the supply of additional kerbside waste collection services. The relevant State Act also contains provisions relating to the following relevant matters: • the provision of services and facilities such as waste collection, control or disposal services. • the right to impose service rates and service charges on a prescribed service which includes the collection, treatment or disposal (including by recycling) of waste. • may impose fees and charges for services supplied to a person at his or her request and that these fees and charges need not be fixed by reference to the cost to the council. We have been advised that the ruling request only relates to supplies of waste management services made after 1 July 2013. We have been provided with copies of relevant documents.

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 9-40 | A New Tax System (Goods and Services Tax) Act 1999 Division 81 | A New Tax System (Goods and Services Tax) Act 1999 section 81-10 | 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 81-15.01 | Income Tax Assessment Act 1997 section 995-1

Reasons for decision: Summary: All legislative references are to the GST Act unless otherwise stated. Section 9-40 provides that an entity must pay GST on any taxable supply that it makes. Section 9-5 provides that an entity makes a taxable supply if: • the entity makes the supply for consideration • the supply is made in the course or furtherance of an enterprise that the entity carries on • the supply is connected with Australia, and • the entity is 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. It is necessary to examine if all the requirements of section 9-5 are satisfied to determine if Entity A makes taxable supplies of additional waste collections, including in relation to event bins, for which Entity A charges fees. The first requirement of section 9-5 is that there is a supply for consideration. In examining if the fees charged by Entity A are consideration for a supply, Division 81 is relevant. Division 81 applies to the payment (or the discharging of the liability to make a payment) of Australian taxes or Australian fees or charges, to an Australian government agency, by an entity which is liable for the tax, fee or charge under the provisions of the applicable Australian law. The payment of fees or charges to which Division 81 applies is treated as not being the provision of consideration and the supply is not subject to GST. Of particular relevance in Entity A's case, is whether Entity A is an Australian government agency for the purposes of Division 81. The term 'Australian government agency' is not limited to departments, agencies or organisations of the Commonwealth, a State or a Territory and may include a corporation which is not a 'government entity' as defined in section 195-1. The fundamental principle, discussed at paragraphs 8 to 11 of Goods and Services Tax Ruling GSTR 2006/5, is that if a corporation is discharging governmental functions for the State - that is, the State is carrying on the relevant business or other function through the corporation - the corporation is the State. In view of the information provided, we accept that Entity A is an Australian government agency for the purposes of Division 81. As such, it is now necessary to examine if the fees charged by Entity A are Australian fees or charges to which Division 81 applies so as to treat the payment of the fee or charge as not being the provision of consideration for a supply. Sections 81-10 and 81-15 deal with the effect of payment of Australian fees and charges. The term 'Australian fee or charge' is defined in section 195-1 as: 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 term 'Australian law' is defined in section 995-1 of the Income Tax Assessment Act 1997 and includes a State law. It also includes acts and law making powers which are delegated by parliaments, such as regulations, by-laws, proclamations and orders made under Acts. Therefore, the relevant State Act is an Australian law. Under the relevant State Act, has the right to impose service rates and service charges on a prescribed service which includes the collection, treatment or disposal (including by recycling) of waste. The relevant State Act also provides that may impose fees and charges for services supplied to a person at his or her request and that these fees and charges need not be fixed by reference to the cost. In Entity A's case, Entity A provides waste management services. Residents and small businesses are charged for a weekly collection of general waste and a four weekly collection of both recycling and green waste (if applicable). Customers such as residents, small commercial operators and sporting clubs can request an additional kerbside collection of either general waste, recyclables or green waste which is generally done at the same time as the normal collection. In addition, Entity A provides event bins for activities on a fee for service basis which includes the delivery, pickup and disposal of such bins. All additional kerbside waste collections and services are invoiced by Entity A directly to the customer and all enquires for additional waste collections are dealt with by Entity A. The application form which customers complete to access the additional kerbside waste collection service, contains a notation that the fee payable on application is based on the current financial year fees and charges. Under section 81-15 and by virtue of regulation 81-15.01 of the GST Regulations, certain fees and charges are treated as not being the provision of consideration for a supply and, therefore, the supply is not subject to GST. These include fees and charges for supplies of: • the kerbside collection of waste or the supply, exchange or removal of bins or crates used in connection with the kerbside collection of waste, and • a regulatory nature made by an Australian government agency. On the basis of the information provided, we consider the amounts Entity A charges residential and commercial customers for supplies of additional waste collections, including in relation to event bins, are Australian fees or charges to which section 81-15 and regulation 81-15.01 of the GST Regulations apply from 1 July 2013. Accordingly, as the fees Entity A charges are treated as not being the provision of consideration for a supply, the requirement of section 9-5 that you make a supply for consideration is not satisfied and Entity A is not making a taxable supply in relation to supplies of additional waste collections, including in relation to event bins. Therefore, as these supplies are not subject to GST, the invoices Entity A issues to customers do not need to include GST in the amounts charged for these services.