Private ruling: GST and Tax, Fees and Charges
Published: May 2012

Ruling: Q1: Is the fee charged by you for the supply of a report, which includes a fee for the supply of services from another organisation out of scope for goods and services tax (GST) or a mixed supply? | A1: The fee charged by you is out of scope for GST.



Reasons for decision: Summary: The total fee charged by you for a report is out of scope for GST. | Detailed Reasoning - Detailed reasoning: Division 81 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) provides that GST applies to payments of taxes, fees and charges, except those excluded from GST by a written determination of the Treasurer. From 1 July 2012, a limited self-assessment 'principles-based' approach has been introduced. The GST law has been amended to replace the Division 81 and determination mechanism with specific legislative provisions to ensure that Australian taxes and certain government fees and charges are not subject to GST. The legislation also allows for the making of regulations to treat an Australian tax, or an Australian fee or charge, in a particular way. From 1 July 2013, the self-assessment approach will have full effect in allowing entities to self assess the GST treatment of such payments. Until that time the Determination remains in effect when assessing the treatment of exempt taxes, fees and charges. Under section 9-5 of GST Act you make a taxable supply if: (a) you make a 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 Australia, and (d) you are registered or required to be registered. However, the supply is not a taxable supply to the extent that it is GST-free or input taxed. You are registered for GST. Further, by providing your services within Australia you are making a supply that is connected with Australia, and you are doing so in the course or furtherance of your enterprise. The issue in this case is whether in providing your supply of a report you are making this supply for consideration. Section 9-15 of the GST Act states that consideration includes any payment, act or forbearance in connection with or in response to a supply. However, subsection 81-5(2) of the GST Act (which has since been repealed, but remains in effect until July 2013) provides that the payment of any Australian tax, fee or charge that is specified in a written determination of the Treasurer, or the discharging of a liability to make such a payment, is not the provision of consideration. This has effect despite section 9-15 of the GST Act. The A New Tax System (Goods and Services Tax) (Exempt taxes, fees and charges) Determination 2012 made pursuant to Division 81 of the GST Act, covers the payment to an Australian government agency of exempt taxes fees and charges. Schedule 1, Part 1 of the Determination lists exempt taxes, fees and charges. Further the fee levied for the supply of a report is provided under Schedule 2 of the governing Regulations. As the fee is covered under both sections (1) and (2) of the Regulations the fee includes the amount provided for under the Determination and also any amount payable by you in the course of providing the service, which includes the other organisation's fee. As the fee is covered under both sections (1) and (2) of the relevant legislation the fee includes the amount provided for under the Determination and also any amount payable by you in the course of providing the service, which includes the other organisation's fee that is payable by you. The other organisation's fee is for a service to you. It is an expense of yours that is being included in the amount charged for the supply of the report. In your case, the fee is imposed under an Australian law and you are an Australian government agency. Therefore, it is an Australian fee or charge listed under the current Determination. Hence, the payment for this fee is not the provision of consideration. As a result, you are not making a supply for consideration and the fee is out of scope for GST. Mixed Supply As the supply does not meet all the requirements of section 9-5 of the GST Act there is no need to address whether the supply is a mixed supply.

Please check this edited version to be sure that there are no details remaining that you think may allow you to be identified. If you have any concerns about this ruling you wish to discuss, you will find our contact details in the fact sheet. | You are a Government agency and are registered for GST. | You provide reports for people in a particular state or territory and for Australian Government Departments. | The provision of the report requires the services of another organisation to collect information in jurisdictions other than the particular state or territory. | The other organisation provides a system to coordinate all jurisdictions in Australia to provide the requesting agency with the records recorded in their jurisdiction. | The other organisation charges you for this service for each request processed. The fee includes GST. | You currently charge an amount to Government Departments and members of the public for the provision of the report. This fee includes two components, the other organisation's fee and your fee. | You are governed by Australian legislation. | A section of the governing Regulations provides you with the right to charge for certain services rendered to the public or to an authority of the Commonwealth. | For the provision of report, a section in the Regulations refers to the schedule of fees in the Schedule of the Regulations. In addition section it also provides for the fee to include any amount payable by you in the course of providing the service. | The A New Tax System (Goods and Services Tax) (Exempt Taxes, Fees and Charges) Determination 2011 (the Determination), details the supplies by you which are out of scope of the GST. | This document makes reference to your fees and charges. | The Determination also references the Australian law which imposes the fee | You are not seeking advice on how the amendments to the GST law to replace the Division 81 and determination mechanism with specific legislative provisions to ensure that Australian taxes and certain government fees and charges are not subject to GST will impact on your fees and charges.