Private ruling: GST treatment - government program
Date of advice: 14 May 2026
Published: 27 July 2026
Ruling period: XXXX 20YY to XXXX 20YY

Ruling: Q1: Will Division 81 of the A New Tax System (Goods and Services Tax) Act 1999 (the GST Act) apply to the proposed fees to be introduced by B? | A1: No, Division 81 of the GST Act will not apply to the proposed fees. | Q2: If the answer to Question One is no, will the supplies being made by B, for which the proposed fees are to be paid, be GST-free under Division 38 of the GST Act when the applicant is not in Australia when the supply is made? | A2: Yes, the supplies being made by B, for which the proposed fees are to be paid, will be GST-free under Division 38 of the GST Act when the applicant is not in Australia when the supply is made. | Q3: Will the supplies being made by B, for which the proposed fees are to be paid, be GST-free under Division 38 of the GST Act when the applicant is in Australia when the supply is made? | A3: No, the supplies being made by B, for which the proposed fees are to be paid, will not be GST-free under Division 38 of the GST Act when the applicant is in Australia when the supply is made.

Relevant facts and circumstances: B operates the Y Program. B is considering the implementation of a fee for service model for the Y Program. The above services already exist and are being delivered by B. Applications are individually assessed by B's staff, including verification of claims made by the applicant. B intends to implement the proposed fees as a cost recovery mechanism, through a fee-for-service model. The revenue generated by fees will offset the costs of delivering the services. Revenue will not be generated to exceed the costs of delivering the outlined services. Once introduced, the fees will not be refundable. B considers it has the power to impose both fees pursuant to its 'non-statutory executive capacity'. No separate or specific statutory authorisation exists, is required, or will be used, to impose the fees for service. B intends to introduce the fees in 202X.

Relevant legislative provisions: A New Tax System (Goods and Services Tax) Act 1999 sections 9-5 | A New Tax System (Goods and Services Tax) Act 1999 section 9-15 | A New Tax System (Goods and Services Tax) Act 1999 section 9-20 | A New Tax System (Goods and Services Tax) Act 1999 section 38-190 | A New Tax System (Goods and Services Tax) Act 1999 section 81-10 | 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 2019 section 81-15.01 | Income Tax Assessment Act 1997 section 995-1

Reasons for decision: Detailed Reasoning - Question One: Will Division 81 of the A New Tax System (Goods and Services Tax) Act 1999 (the GST Act) apply to the proposed fees to be introduced by B? | Detailed Reasoning - Detailed reasoning: The purpose of Division 81 of the GST Act is to exclude certain fees and charges from being 'consideration', thereby taking any related supplies out of the GST system. Subsection 81-10(1) of the GST Act provides that A payment, or the discharge of a liability to make a payment, is not the provision of *consideration to the extent the payment is an *Australian fee or charge that is of a kind covered by subsection (4) or (5). Whilst the term 'consideration' is defined by section 9-15, that definition is inclusive, not exhaustive, and, in any event, is not relevant to payments coming within the terms of subsection 81-10(1). That is, the purpose of the provision is to exclude certain payments from being 'consideration' and to thus fall outside the GST system. There are exclusions to the positive operation of subsection 81-10(1), but first the question of whether the proposed fees will come within its ambit needs to be considered. That question is answered in the positive to the extent each of the two proposed fees is an Australian fee or charge that is of a kind covered by subsection 81-10(4) or (5). | Detailed Reasoning - An Australian fee or charge?: For that purpose, an Australian fee or charge is defined by section 195-1 of the GST Act 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 . The terms Australian law and Australian government agency are both ultimately defined by section 995-1 of the Income Tax Assessment Act 1997 (the ITAA 1997). Thus, to relevantly paraphrase those definitions: • Australian law includes a law of state X. • Australian government agency includes the State X and an authority of the State X. Although B is an Australian government agency, it has the power to impose both fees pursuant to its 'non-statutory executive capacity'. Specifically, no separate or specific statutory authorisation exists, is required, or will be used, to impose the fee for service. Given that understanding, we are of the view that the stated mechanism for introducing the proposed fees do not meet the test of being 'imposed under an Australian law'. Accordingly, this means the proposed fees will not satisfy the requirements of subsection 81-10(1) of the GST Act. For the same reason that section 81-10 will not apply to the proposed fees, section 81-15 will also not apply, therefore precluding the operation of Division 81 to the proposed fees. | Detailed Reasoning - Question 2: If the answer to Question One is no, will the supplies being made by B, for which the proposed fees are to be paid, be GST-free under Division 38 of the GST Act when the applicant is not in Australia when the supply is made? | Detailed Reasoning - Detailed reasoning: Division 38 of the GST Act treats certain supplies as GST-free. One of the categories of GST-free supplies is contained in Subdivision 38-E of the GST Act, which deals with exports and cross-border supplies. Section 38-190 of the GST Act treats the supply of certain things other than goods or property as being GST-free if they are listed in the table to subsection 38-190(1) of the GST Act. Item 2 of the table in subsection 38-190(1) of the GST Act provides that the following type of supply will be GST-free: a supply that is made to a *non-resident who is not in Australia when the thing supplied is done, and: a) the supply is neither a supply of work physically performed on goods situated in Australia when the work is done nor a supply directly connected with real property situated in Australia; or b) the non-resident acquires the thing in carrying on the non-resident's enterprise, but is not registered (for GST) or required to be registered (for GST). Paragraph (a) of Item 2 in the table in subsection 38-190(1) of the GST Act will be satisfied in respect of any person, not being a resident of Australia, who is not in Australia when lodging either a P or Q under the Y Program. This is because B is supplying a service to the applicant whilst they are located outside of Australia. There are certain provisions which provide exclusions to the operation of Item 2 in the table in subsection 38-190(1) of the GST Act. They are, in turn, subsections 38-190(2), (2A), and (3). However, in our view, none of them apply to the supplies made under the Y Program, for the following reasons. Subsection 38-190(2) of the GST Act applies to the supply of a right or option to acquire something, the acquisition of which would be connected with Australia and would not be GST-free. The Y Program does not involve the supply of a right or option to acquire anything. Subsection 38-190(2A) of the GST Act applies if the acquisition of the supply covered by Item 2 in the table in subsection 38-190(1) of the GST Act relates in some way to the making of a supply of real property. The Y Program does not involve such supplies. Subsection 38-190(3) of the GST Act applies to a supply covered by Item 2 in the table in subsection 38-190(1) of the GST Act if, among other things, it is a supply under an agreement entered into with a non-resident and the supply is provided to another entity in Australia. This is not the case with the Y Program. Accordingly, it is our view that the supply or supplies that B makes when receiving a form under the Y Program from a person not in Australia when the form is lodged is GST-free under subsection 38-190(1) of the GST Act. For the sake of completeness, the following points should be noted: • The use of an agent to lodge a person's Y does not change the above outcome, regardless of whether the agent is in Australia when making the lodgment. This is because the supplies being made by B under the Y Program are not being made to any agent. • The place or source of any payment of the proposed fees is similarly irrelevant to the above outcome. This is because section 38-190 is focused on the nature of certain supplies and is silent on the consideration, if any, for such supplies. | Detailed Reasoning - Question 3: Will the supplies being made by B, for which the proposed fees are to be paid, be GST-free under Division 38 of the GST Act when the applicant is in Australia when the supply is made? | Detailed Reasoning - Detailed Reasoning: Subsection 38-190(1) of the GST Act does not apply to making supplies GST-free when the applicant is in Australia when the service is provided to them. This is regardless of the fact that they are a non-resident. The supply of the service is being made to a non-resident who is in Australia when the service is made. There are no other provisions in Division 38 of the GST Act that apply to this supply. As such, the supply of the services will not be GST-free under Division 38 of the GST Act. The supply will be a taxable supply under section 9-5 of the GST Act where all the positive elements are satisfied, such that the supply: a) is made for consideration; b) is made in the course or furtherance of an enterprise being carried on by the supplier; c) is connected with Australia; and d) you are registered for GST or is required to be registered for GST. In respect of a) above, section 9-15 of the GST Act provides an inclusive definition of 'consideration'. Relevantly, the term includes any payment in connection with a supply of anything . Our long-established view is that identifying a connection between a payment and a supply requires a sufficient nexus to exist between them. Whilst the relevant supplies are already being made by B 'free of charge', it is our view that the proposed fees, when introduced, will have a sufficient nexus to those supplies as to satisfy a) above. This is because, as a material fact, once the proposed fees are applied to the Y Program, B will not be making any supplies in the absence of the proposed fees being paid. In respect of b) above, paragraph 9-20(1)(g) makes it clear that any activity, or series of activities, done by Z, among other entities, is an enterprise. Both c) and d) above are also satisfied as matters of fact. Accordingly, it is our view that the supply or supplies that B makes when receiving a form under the Y Program from a personin Australia when the form is lodged will be a taxable supply or taxable supplies under section 9-5 of the GST Act. Again, for the sake of completeness, the following points should be noted: • The use of an agent to lodge a person's form under the Y Program does not change the above outcome, regardless of whether the agent is in Australia when making the lodgment. This is because the supplies being made by B under the Y Program are not being made to any agent. • The place or source of any payment of the proposed fees is similarly irrelevant to the above outcome. This is because sections 9-5 and 9-15 are focused on whether consideration is paid or payable and whether it is connected with a supply, and are silent on source.