Private ruling: GST and taxable supplies
Date of advice: 10 January 2017
Published: June 2017

Ruling: Q1: Are you making a taxable supply under section 9-5 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) when you supply insurance related services to Apartment owners? | A1: Yes, therefore when charging an individual Apartment owner for services related to insurance claims, you are required to include GST.

Relevant facts and circumstances: You are a body corporate. You are registered for GST. You manage the day-to-day operations of the Apartments. This includes organising repair and maintenance services to Apartment owners. You acquire goods and services in the course of carrying on your enterprise. As a body corporate, you operate on a break-even basis for these acquisitions. Where appropriate, you submit a claim to your insurer who will reimburse the expense less excess X. You subsequently charge the excess of X to the Apartment owner.

Relevant legislative provisions: A New Tax System (Goods and Services Tax) Act 1999 Section 9-5

Reasons for decision: Summary: Section 9-5 of the GST Act, provides that you make a taxable supply if: (a) you make the supply for consideration (b) the supply is made in the course or furtherance of an enterprise that you carry on (c) the supply is connected with the indirect tax zone (Australia), and (d) 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. You carry on an enterprise of providing management services to Apartment owners. The management services include organising routine maintenance as well as work which will be claimed against your insurance policy (insurance claims). As your supplies of these services satisfy the requirements of section 9-5, they are taxable supplies. In accordance with section 9-40, you are required to pay the GST payable on those taxable supplies. Therefore, when charging an individual Apartment owner for services related to insurance claims, you are required to include GST. As you operate on a break-even basis you charge the GST exclusive value plus GST i.e. Excess of X plus GST to the Apartment owner.