Private ruling: GST and barter transactions
Published: February 2015

Ruling: Q1: Can you attribute the GST payable on your taxable supplies made under the barter scheme at the time you redeem your barter trade credits for goods and services? | A1: No.

Relevant facts and circumstances: You are registered for GST. You account for GST on a cash basis. You stated that you are carrying on an enterprise of providing services to the general public. You joined a barter scheme under which trades are conducted on a 100% barter basis unless consent is obtained from the barter scheme manager to trade in cash or partly in cash. For each member, the barter scheme operator establishes an account (trade account) for recording trades (transactions) entered into by them. Any trade duly entered into by the members is recorded by: • crediting the trade account of the selling member with the trade dollar amount of the transaction; and • debiting the trade account of the buying member with the trade dollar amount of the transaction. The trade dollars recorded in a trade account of a member which has a credit balance do not constitute a liability or a debt payable by the barter scheme operator or the barter scheme manager. Trade dollar is an accounting unit used to record the value of goods and services traded. One trade dollar is equivalent to one Australian dollar and vice versa. The barter scheme operator or the barter scheme manager does not have any obligation to any member to redeem or convert to cash or pay any amount for or in respect of trade dollars.

Relevant legislative provisions: A New Tax System (Goods and Services Tax) Act 1999 section 9-15, | A New Tax System (Goods and Services Tax) Act 1999 section 29-5 and | A New Tax System (Goods and Services Tax) Act 1999 section 195-1.

Reasons for decision: Summary: Subsection 29-5(2) of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) provides that if an entity accounts for GST on a cash basis, the GST payable on a taxable supply is attributable to the tax period in which all or part of the consideration is received (but only to the extent that the consideration is received in that tax period). Consideration can be monetary or non-monetary. 'Money' is defined in section 195-1 of the GST Act to include whatever is supplied as payment by way of crediting or debiting an account. The term 'account' is not defined in the GST Act, thus it will take its ordinary meaning. The definition of 'account' in the Macquarie Dictionary Online includes 'a formal record of the debits and credits relating to the person named (or caption placed) at the head of the ledger account' and 'a statement of pecuniary transactions'. The barter scheme operator establishes a trade account for each member to record transactions by crediting the selling member's trade account with trade dollars and debiting the buying member's trade account with trade dollars. Therefore, in the context of the barter scheme, the consideration for a supply made by a member to another is the crediting of the supplier's trade account. Goods and Services Tax Ruling GSTR 2003/14 gives guidance on when to attribute the GST payable and input tax credit entitlements with respect to supplies and acquisitions between members of barter schemes. For the purpose of attribution, paragraphs 64 and 65 of GSTR 2003/14 provide that: • the consideration for a supply by a member of the barter scheme is both received and provided when the recipient of the supply signs the docket or transaction slip to authorise the exchange to credit the supplier's account and debit its (the recipient's) account; and • if the payment is made remotely (for example, by telephone or through the internet), the consideration is provided and received when the cardholder gives the card number and other required details. According to paragraph 66 of GSTR 2003/14 however, payment will be taken not to have been made in relation to a particular supply if the supplier's account is not credited in relation to that supply (for example, where the recipient has insufficient credit in its account). Therefore, you must attribute the GST on the taxable supplies that you make under the barter scheme to the tax period in which you receive consideration (to the extent that consideration is received in that tax period) and not to the tax period in which you redeem your barter trade credits for goods and services. Note that subsection 255-10(1) of the Taxation Administration Act 1953 does not enable the Commissioner to alter the attribution rules. Rather, it enables the Commissioner to defer the time at which an amount of a tax related liability is, or would become, due and payable. For further information on when the Commissioner will exercise his discretion under subsection 255-10(1) of TAA, please refer to Practice Statement Law Administration PS LA 2011/14.