Private ruling: GST and fees and charges
Date of advice: 28 February 2020
Published: April 2020

Ruling: Q1: Is payment of the fees made to you treated as not being the provision of consideration under Division 81 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)? | A1: No, Division 81 of the GST Act does not apply to treat payment of the fees made to you as not being the provision of consideration. Payment of the fees is consideration for a taxable supply under section 9-5 of the GST Act.

Relevant facts and circumstances: You are a government agency. You have provided relevant information about your operations. You charge the relevant fees under the relevant Australian law.

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 Division 81 | A New Tax System (Goods and services tax) Regulations 1999 Regulation 81-10.01

Reasons for decision: Summary: All legislative references in this ruling are to the GST Act unless otherwise stated. Division 81 deals with the payment of taxes, fees and charges to an Australian government agency. GST does not apply to payment of taxes, fees and charges that are excluded from GST by Division 81 or by the A New Tax System (Goods and Services Tax) Regulations 2019(GST Regulations). They are treated as not being the provision of consideration and are not taxable. Under subsection 81-10(1), a payment or the discharging of a liability to make a payment, is not the provision of consideration if an Australian fee or charge is of a kind covered by subsection 81-10(4). Subsection 81-10(4) covers a fee or charge if it relates to, or relates to an application for, the provision, retention, or amendment, under an Australian law, of a permission, exemption, authority or licence (however described). However, subsection 81-10(2) provides a payment or the discharging of a liability to make a payment is treated as the provision of consideration to the extent the payment is an Australian fee or charge that is, or is of a kind, prescribed by the GST Regulations. To ascertain if the fees are not to be treated as consideration for the supply, we have to consider if subsection 81-10(2) applies by considering the relevant requirements and the GST Regulations. Section 81-10.01 of the GST Regulations lists the prescribed kinds of Australian fees and charges that constitute consideration. Of relevance to this fee is paragraph 81-10.01(1)(c) of the GST Regulations, where it provides that a fee for hire, use of, or entry to a facility, except for an entry fee to a national park. Paragraph 81-10.01(1)(c) is a narrower provision and will essentially make some of the fees covered by subsection 81-10(4) consideration for a supply. When applying paragraph 81-10.01(1)(c), it is important to consider that it is not what the permission, authority or licence is for that is relevant. Rather, it is what the fee is being paid for that is relevant. Therefore, while the permission, authority or licence may allow for hire, for use of or entry to a facility, except for an entry fee to a national park, if the fee paid is not a hire, use or entry fee, then the fee will not be covered by paragraph 81-10.01(1)(c). It is considered that the relevant fees you charge under the relevant Australian law are fees prescribed under paragraph 81-10.01(1)(c) of the GST Regulations where the fee is for hire, use of or entry to a facility as constituting consideration. Does section 81-15 apply? Section 81-15 provides that the GST Regulations may provide that the payment of a prescribed Australian fee or charge, or of an Australian fee or charge of a prescribed kind, or the discharging of a liability to make such a payment, is not the provision of consideration. There are no Australian fees or charges prescribed or of a prescribed kind that apply in your case. Conclusion: Therefore, as the fees paid to you are of a kind prescribed by the GST Regulations as constituting consideration for the purposes of subsection 81-10(2), they are consideration for a taxable supply as the supply meets all of the requirements of section 9-5.

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