Private ruling: Application of GST to a charge
Date of advice: 27 February 2019
Published: May 2019

Ruling: Q1: Are the payments made to you for the Charge you levy treated as not being the provision of consideration under section 81-15 of the A New Tax System (Goods and Services Tax) Act 1999 (the GST Act)? | A1: Yes, the payments made to you for the Charge you levy are treated as not being the provision of consideration under section 81-15 of the GST Act. The payments are of a kind prescribed by paragraph 81-15.01(1)(d) of the A New Tax System (Goods and Services Tax) Regulations 1999 (GST Regulations) and the supplies to which the payments relate are not subject to GST.

Relevant facts and circumstances: 1. You levy a Charge. 2. You have provided relevant information about your entity’s operations. 3. You have provided relevant legislation and regulations governing the Charge.

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 section 81-15 | A New Tax System (Goods and Services Tax) Act 1999 section 195-1 | A New Tax System (Goods and Services Tax) Regulations 1999 regulation 81-15.01 | Income Tax Assessment Act 1997 section 995-1

Reasons for decision: Summary: All legislative references are to the GST Act unless otherwise stated. Section 81-15 states 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. Australian fee or charge is defined in section 195-1 to mean a fee or charge (however described), other than an Australian tax, imposed under an Australian law and payable to an Australian government agency. Therefore, for the payment of the Charge you levy to not be consideration for a supply it must be: 1. imposed under an Australian Law 2. payable to an Australian government agency 3. of a kind prescribed by the GST Regulations. 1. Is the payment of the Charge imposed under an Australian law? Australian law is defined in section 195-1 to have the meaning given by section 995-1 of the Income Tax Assessment Act 1997 (ITAA 1997). Section 995-1 of the ITAA 1997 provides an Australian law means a Commonwealth law, a State law or a Territory law. The liability for payment of the Charge is imposed under an Australian law. 2. Is the payment of the Charge payable to an ‘Australian government agency’? Australian government agency is defined in section 195-1 to have the meaning given by section 995-1 of the ITAA 1997. Australian government agency means: (a) the Commonwealth, a State or a Territory, or (b) an authority of the Commonwealth, a State or a Territory. For the purposes of this Ruling, it is accepted that you come within the definition of an Australian government agency. 3. Is the payment of the Charge a kind of charge prescribed by the GST Regulations? Paragraph 81-15.01(1)(d)).of the GST Regulations provides that for section 81-15 an Australian fee or charge of the kind that is to compensate an Australian government agency for costs incurred by the agency in undertaking regulatory activities is prescribed. It is considered that the payment of the Charge is covered by paragraph 81-15.01(1)(d) of the GST Regulations. Conclusion The payment of the Charge satisfies the conditions in section 81-15 and is not consideration for a supply. As such, GST is not payable in relation to the payment of Charge.