Private ruling: GST and transition of a government scheme to local arrangement
Date of advice: 29 September 2020
Published: November 2020
Ruling period: Starting on the date of issue of the private ruling

Ruling: Q1: Is there a taxable supply made under section 9-5 of the A New Tax System (Goods and Services Tax) Act 1999 (GST) Act in return for the payments made by the entity? | A1: No, the payments made by the entity are not consideration for a taxable supply made. | Q2: Is there a taxable supply (under section 9-5 of the GST Act) or creditable acquisition (under section 11-5 of the GST Act) made where assets/liabilities are transferred? | A2: No, there is no taxable supply (under section 9-5 of the GST Act) or creditable acquisition (under section 11-5 of the GST Act) made where assets/liabilities are transferred.

Relevant facts and circumstances: You are registered for goods and services tax. The assets and liabilities of a scheme were transferred to you. You received a payment from an entity at the time of transition to ensure the scheme was financially viable.

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: Section 9-5 of the GST Act provides that you make a taxable supplyif: · you make the supply for consideration · the supply is made in the course or furtherance of an enterprise that you carry on · the supply is connected with the indirect tax zone (Australia), and · you are 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. Section 11-5 of the GST Act provides that you make a creditable acquisition if, among other requirements, the supply of the thing to you is a taxable supply and you provided or liable to provide consideration for the supply.