Private ruling: GST and claiming input tax credits
Date of advice: 16 November 2016
Published: March 2017

Ruling: Q4: Where there is no Agreement in place, can you claim back the GST paid on the tax invoice issued in the name of the Sponsor on the basis that you are effectively acting as intermediary for the Sponsor by virtue of the draft Agreement with the third party? Advice The information in the draft Agreement indicates that you are acting as a 'paying agent' for the Sponsor when you make the payment to the third party on receipt of the tax invoice issued to the Sponsor. In this instance, you cannot claim back the GST paid on the tax invoice issued in the name of the Sponsor as under the general agency rules in subdivision 153-A of the GST Act, the Sponsor as the principal is the one who will be able to claim back the GST paid on the acquisition from the third party.




Question 1: Under the letter of Agreement that you have with the Sponsor, are you entitled to claim back the goods and services tax (GST) paid on the tax invoice issued in the name of the Sponsor? | Yes. Under the letter of Agreement that you have with the Sponsor you are entitled under sections 11-20 and 153-5 of the A New Tax System (Goods and Services Tax) 1999 Act (GST Act) to claim back the GST paid on the tax invoice issued in the name of the Sponsor as there is an agency relationship between you and the Sponsor under the letter of Agreement. | Question 2: Where a 153-B Agreement is entered with you acting as principal and the Sponsor as intermediary, will you be entitled to claim back the GST paid on the tax invoice issued in the name of the Sponsor? | No. Where a 153-B Agreement is entered with you acting as principal and the Sponsor as intermediary, the Sponsor and you will be treated as acting as principal to principal under sections 153-50 and 153-60 of the GST Act. The Sponsor will be treated to have made a creditable acquisition in its own right from the third party and also treated to have made a taxable supply to you. | In this instance you cannot use the tax invoice issued to the Sponsor to claim an input tax credit because the tax invoice will not satisfy the requirements in paragraph 29-70(1)(c) of the GST Act when it is under the Sponsor's name. You will be able to claim an input tax credit for the creditable acquisition it makes from the Sponsor only upon receipt of a tax invoice issued under your name from the Sponsor. | Question 3: Based on the information given, where a 153-B agreement is entered with you acting as intermediary and the Sponsor as the principal, will you be entitled to claim back the GST paid on the invoice issue in the name of the Sponsor? | The information received indicates that the requirements for a 153-B agreement in section 153-50 of the GST Act will not be satisfied where you act as the intermediary, the Sponsor as the principal and the principal is to enter into the contract with the third party for the acquisition of the third party's services. This is because you and the third party will be making supplies to the Sponsor and you will not be the acquirer of the services made by the third party since it is the Sponsor that has contracted the third party for its services and you are acting as a paying agent when paying the invoice issued to the Sponsor. | Further where a 153-B Agreement is entered under section 153-50 of the GST Act with you acting as intermediary, the Sponsor as principal and the tax invoice is issued under the name of the Sponsor, you and the Sponsor will be treated as acting as principal to principal. You will be treated to have made a creditable acquisition in your own right from the third party and also treated to have made a taxable supply to the Sponsor. | In this instance, you will not be entitled to claim back the GST paid on the tax invoice issued in the name of the Sponsor because the tax invoice will not satisfy the requirements in paragraph 29-70(1)(c) of the GST Act when it is under the Sponsor's name. You will be able to claim an input tax credit for the creditable acquisition you make from the third party upon receipt of a tax invoice issued under your name from the third party.