Private ruling: GST and automatic teller machines
Published: March 2015

Ruling: Q1: Are you making a financial supply under section 40-5 of the A New Tax System (Goods and Services Tax Act) 1999 under the terms of the agreement? | A1: No, you are not making a financial supply, you are making a taxable supply. | Q2: Are you entitled to input tax credits under section 11-20 of the A New Tax System (Goods and Services Tax) Act 1999 for the purchase of ATMs? | A2: Yes, you are entitled to the input tax credits for your purchase of ATMs.

Relevant facts and circumstances: The relevant facts include all documents and materials provided in the private ruling application including the agreement and other documents. You purchased a number of Automatic Teller Machines (ATMs) from a company and entered into an agreement with the company for the deployment and operation of the ATMs. The company arranges to have the ATMs installed at a retail merchants' premises. The company organises everything in regard to the installation and operation of the ATMs. Under the agreement, each month, you are entitled to receive the greater of: • $X for each transaction for which a fee is payable; or • Y% of the total transaction fees generated by your ATMs; or • $Z per ATM. You are entitled to the minimum payment of $Z per month per ATM even though the ATM may not have been installed at a retail merchant's premises. Additionally, you are entitled to receive A% of any revenue generated by advertising on the ATMs. The ATMs are located in Australia, they are used in your enterprise and you are registered for GST.

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 11-5 | A New Tax System (Goods and Services Tax) Regulations 1999 subregulation 40-5.09(4A)

Reasons for decision: Summary: The supply of an ATM service (withdrawal, deposit, and transfer from an account or a balance enquiry) for a fee of not more than $1000 is a financial supply under subregulation 40-5.09(4A) of the A New Tax System (Goods and Services Tax) Regulations 1999 . The substance of the arrangement between you and the company appears to be that of a rental or leasing arrangement. That is, you appear to be leasing the ATMs to the company and, in return, receive a fee. This is supported by the fact that you receive payment in relation to ATMs which remain in the company's warehouse. As you supply ATMs to the company, you are not making a financial supply of an ATM Service. Consequently, GST is payable on your supplies to the company as they are taxable supplies under section 9-5 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act). Generally, you are entitled to input tax credits on any creditable acquisitions you make in accordance with section 11-5 of the GST Act. However acquisitions which relate to making supplies that are input taxed (eg financial supplies) are not creditable acquisitions. The purchase of the ATMs from the company was a creditable acquisition because the ATMs are used in your enterprise, the supply to you was a taxable supply by the company, you paid $X, for the ATMs are you are registered for GST. Your use of the ATMs is to lease or licence them to the company and, as your supplies of ATMs to the company are taxable supplies, your acquisition of the ATMs was not made in relation to making input taxed supplies. Consequently, you are entitled to the input tax credits for the purchase of the ATMs.