Private ruling: GST and recipient created tax invoice
Published: December 2013
Date scheme commenced: You intend to sell gift vouchers through the use of applications for technological devices.

Ruling: Q1: Will the Commissioner of Taxation (Commissioner) permit you to issue recipient created tax invoices (RCTIs) to the Retailer? | A1: No.

Relevant facts and circumstances: You intend to sell gift vouchers through the use of applications for technological devices. You have initiated the process of developing an application whereby you will sell gift vouchers to consumers. The consumers in turn can either redeem the gift vouchers at a Retailer you have accredited to accept your gift vouchers. The Retailer in turn will receive the sales value from you for the gift vouchers redeemed. You have a plan to accredit a number of Retailers where the gift vouchers can be redeemed thereby increasing the choice and reach for the consumers in different suburbs. You provided a graphical flow of transactions which shows that you will sell the gift vouchers. Buyers can redeem the gift voucher at an accredited Retailer. The Retailer will seek the sales price from you. You are introducing a unique niche product which is currently not available in the market. Currently, there is no industry association set up to look after the interest of the players of this specific segment to which you can become a member. You have applied for registration for GST.

Relevant legislative provisions: A New Tax System (Goods and Services Tax) Act 1999 paragraph 29-70(1)(a) | A New Tax System (Goods and Services Tax) Act 1999 subsection 29-70(2) | A New Tax System (Goods and Services Tax) Act 1999 subsection 29-70(3)

Reasons for decision: Summary: Under paragraph 29-70(1)(a) of the GST Act, a tax invoice must be issued for a taxable supply by the supplier unless it is an RCTI (in which case it must be issued by the recipient). Subsection 29-70(3) of the GST Act defines an RCTI as a tax invoice belonging to a class of tax invoices that the Commissioner has determined in writing may be issued by the recipient of a taxable supply. Goods and Services Tax Ruling GSTR 2000/10 outlines the circumstances in which a recipient can issue an RCTI. The three broad classes of tax invoices that may be issued by a recipient of a taxable supply are: · tax invoices for taxable supplies of agricultural products made to registered recipients · tax invoices for taxable supplies made to registered government related entities, and · tax invoices for taxable supplies made to registered recipients that have a turnover of at least $20 million annually; or are members of a group of companies, partnerships or trusts, or a joint venture operator, in which one or more other members of that group or participants in that joint venture have such a turnover. Based on the information provided, you do not fall within any of these three classes outlined in GSTR 2000/10. The Commissioner has also made a number of legislative determinations under subsection 29-70(3) of the GST Act for certain classes of tax invoices that may be issued by a recipient of a taxable supply. Based on the information provided, your circumstances do not meet the requirements of any of the legislative determinations that the Commissioner has made under section 29-70(3) of the GST Act. Therefore, you are not able to issue RCTIs to the specific retailers. Where an entity's particular circumstances do not fall properly under any of the issued legislative determinations, the entity's industry association may apply to the Commissioner to issue a new legislative determination. The procedures for making these requests are explained in paragraphs 53 and 54 of GSTR 2000/10 which state: 53. Industry associations, whose members are registered recipients of taxable supplies not covered by these broad classes, can request that the Commissioner make a determination in respect of other classes of tax invoices. The request will be considered on the basis of the particular circumstances of the industry, including the nature of the taxable supplies, suppliers and recipients. Other registered recipients may also make requests. 54. Your request for a determination should be made in writing or electronically and include the following information and documents: (a) name of the industry association or registered recipient; (b) type of industry in which the recipient operates; (c) details of the supply and related transaction(s), including a description of the thing(s) supplied and current invoicing and payment practices; (d) a statement acknowledging that the recipient(s) will enter into written agreements with suppliers in accordance with paragraph 13, requirement (e); and (e) an explanation as to why the determination is requested. Paragraph 53 of GSTR 2000/10 makes mention of industry associations making requests. This reflects the concept of there being an identified need in a particular industry group for a legislative determination. Although the paragraph was added to in the Addendum of 27 September 2000 to include the sentence 'Other registered recipients may also make requests', legislative determinations will only be made for broad classes rather than particular entities. As you are not an industry association, the Commissioner will not make a legislative determination specifically for you. Therefore, the Commissioner will not permit you to issue RCTIs to the Retailer.