Goods and Services Tax Ruling GSTR 2000/10
Date of effect: 10 May 2000

What this ruling is about: This document was published prior to 1 July 2010 and was a public ruling for the purposes of former section 37 of the Taxation Administration Act 1953 and former section 105-60 of Schedule 1 to the Taxation Administration Act 1953 . From 1 July 2010, this document is taken to be a public ruling under Division 358 of Schedule 1 to the Taxation Administration Act 1953 . A public ruling is an expression of the Commissioner's opinion about the way in which a relevant provision applies, or would apply, to entities generally or to a class of entities in relation to a particular scheme or a class of schemes . If you rely on this ruling, the Commissioner must apply the law to you in the way set out in the ruling (unless the Commissioner is satisfied that the ruling is incorrect and disadvantages you, in which case the law may be applied to you in a way that is more favourable for you - provided the Commissioner is not prevented from doing so by a time limit imposed by the law). You will be protected from having to pay any underpaid tax, penalty or interest in respect of the matters covered by this ruling if it turns out that it does not correctly state how the relevant provision applies to you . [Note : This is a consolidated version of this document. Refer to the Legal Database (http://law.ato.gov.au) to check its currency and to view the details of all changes.]


Ruling: 18. An RCTI is a tax invoice that belongs to a class of tax invoices that the Commissioner has determined in writing may be issued by the recipient of a taxable supply. [4A] 19. The determination describes three classes of tax invoices that may be issued by a recipient of a taxable supply. Also, industry associations whose members are registered recipients of taxable supplies can ask the Commissioner to make determinations for other categories of tax invoices not covered by the three broad classes. 20. If you are a registered recipient, you may issue RCTIs for certain types of taxable supplies, provided you satisfy the criteria outlined in this Ruling. If you want to issue RCTIs, you do not have to lodge an application to the Commissioner for approval in relation to tax invoices that belong to any of these three classes of tax invoices. 21. The classes take into account a number of factors including type of industry, type of taxable supply, GST turnover of the recipient, and certain requirements of issuing RCTIs. The factors reflect a balance between facilitating the practical use of RCTIs by businesses and maintaining the integrity of the GST system. | Agricultural products: 22. For the purposes of the determination, 'agricultural products' are products derived from viticulture, horticulture, pasturage, apiculture, poultry farming and dairy farming or other operations connected with the cultivation of the soil, the gathering in of crops and the rearing of livestock. 23. This class includes tax invoices for taxable supplies where the value of agricultural products and by-products has been determined by the recipient. For example, the testing of crushed sugar cane by a mill to establish sugar content. 24. The recipient and supplier must also satisfy the requirements stated at paragraphs 37 to 47 of this Ruling. | Supplies to government related entities: 25. The determination applies to all taxable supplies made by registered suppliers to registered government related entities. The term 'government related entity' means: 26. The term 'government entity' [6A] means: 27. The recipient government related entity and the supplier must also satisfy the requirements at paragraphs 37 to 47 of this Ruling. | GST turnover: 28. Tax invoices for taxable supplies made by registered suppliers to registered recipients who have GST turnovers (including input taxed supplies) of at least $20 million are a class of tax invoice that may be issued by the recipients. Recipients not within a group or joint venture 29. If you are a registered recipient, you may issue RCTIs provided the Commissioner: | Example 1: 30. ABC Pty Ltd is a manufacturing company and has a GST turnover of $20 million. It may issue RCTIs for supplies received from any of its suppliers who agree to the arrangement, provided it satisfies all the requirements for issuing RCTIs listed in paragraphs 37 to 47 of this Ruling. ABC does not need to notify the Commissioner that it is issuing RCTIs. | Example 2: 31. DEF Ltd is a bank and has a GST turnover of $25 million annually, including $10 million of financial supplies. It may issue RCTIs for supplies received from any of its suppliers who agree to the arrangement, provided it satisfies all the requirements for issuing RCTIs listed in paragraphs 37 to 47 of this Ruling. DEF does not need to notify the Commissioner that it is issuing RCTIs. Recipients within a group or joint venture 32. If you are a member of a group or a joint venture operator of a GST joint venture you are also able to issue RCTIs if: 33. The recipient, that is the group member or joint venture operator (but not necessarily the group or joint venture), must satisfy all of the requirements of issuing RCTIs stated at paragraphs 37 to 47 of this Ruling when a tax invoice is issued for the supplies received. 34. In summary, the determination also applies to tax invoices for taxable supplies made by registered suppliers to registered recipients or joint venture operators that do not have a GST turnover of $20 million provided: 35. As a recipient or joint venture operator, you may issue RCTIs even if your group or a participant's group is not approved under section 48-5 as a GST group. You only need to be able to demonstrate, if requested by the Commissioner, that you or the participant could satisfy the 90% test or the requirements under the regulations, and that you and your supplier satisfy the requirements stated at paragraphs 37 to 47 of this Ruling. | Example 3: 36. GHI Pty Ltd is 95% owned by ABC Pty Ltd from Example 1 but only has a GST turnover of $5 million. It may issue RCTIs for supplies received from any of its suppliers who agree to the arrangement, provided it satisfies all the requirements for issuing RCTIs listed at paragraphs 37 to 47 of this Ruling. GHI does not need to notify the Commissioner that it is issuing RCTIs. | Requirements for issuing RCTIs: 37. In addition to the requirements in paragraph 16, certain other requirements must be fulfilled when issuing RCTIs. The descriptions of all three classes of tax invoices, determined under subsection 29-70(3) of the GST Act, that may be issued by recipients include the requirements of issuing RCTIs in paragraph 13 of this Ruling. 38. To issue RCTIs that belong to one or more of the three classes, the recipient and supplier must satisfy all of these requirements. That is, a document is an RCTI only if it is issued by a recipient who satisfies the requirements of the determination when the RCTI is issued. 39. The requirements that recipients and suppliers must satisfy are intended to ensure compliance with the GST law. 40. The recipient and the supplier must be registered for GST purposes when an RCTI is issued. A supplier or recipient who is not registered but is required to be registered does not satisfy the requirements for issuing RCTIs. [10] A recipient cannot issue an RCTI: 41. Each time the recipient issues a document to a supplier that it treats as an RCTI, the recipient must be reasonably satisfied that the supplier is registered for GST, on or after 1 July 2000, when the document issues. If you have a reasonable doubt that your supplier is not registered for GST when you issue an RCTI you can access GST registration information via the Internet at www.abr.business.gov.au . Record keeping and administration 42. The supplier must be aware of its GST liability. The recipient is required to retain the original or a copy of the RCTI and any adjustment note for five years. [11] If you are the supplier, keeping the original or a copy of the RCTI and any adjustment note for five years is one way of showing that you have complied with your obligation to retain sufficient records of all your transactions. 43. To ensure compliance with the GST law (and for the protection of the supplier) permission to issue RCTIs is available only to taxpayers who reasonably comply with the taxation laws (see requirement (d) to paragraph 13 of this Ruling). 44. The agreement between recipient and supplier (see requirement (e) to paragraph 13 of this Ruling) must include agreement on the matters listed and may also include any other terms and conditions that the parties mutually agree. The duration, termination and reinstatement of the agreement, and supplies to be specified as being subject to RCTIs, are examples of matters that may be mutually agreed. 45. If a document is issued mistakenly as a tax invoice by the supplier in respect of supplies specified in the written agreement (contrary to the agreement [12] ), then a document issued by the recipient will be taken to be the RCTI in respect of the supply. In these circumstances, the document issued by the supplier is not taken to be a tax invoice for the purposes of the GST law. This treatment reinforces the effectiveness of the agreement and ensures that both the supplier and the recipient pay GST and attribute input tax credits on the basis of the RCTI. 46. Also, as a recipient, you must not issue a document that purports to be an RCTI if it does not come within the class of invoices covered by this determination (see requirement (f) to paragraph 13 of this Ruling). 47. This requirement, and requirements (e)(iii) and (iv) in paragraph 13 of this Ruling, are intended to ensure that the GST shown on the RCTI is accounted for in the supplier's BAS, and that both the supplier and the recipient comply with the GST law. | What happens if you do not meet the requirements?: 48. If you fail to satisfy all of the requirements when issuing an RCTI, it will not be treated as being within the class of invoices determined as RCTIs. 49. If this happens, you cannot attribute an input tax credit for the supply to a tax period (even though it may be for a creditable acquisition) until you hold a tax invoice issued by your supplier. [13] To obtain the input tax credits, you can request a tax invoice for the supply from your supplier, who must give it to you within 28 days after your request. [14] | Set-off: 50. It is common for a recipient (who has issued an RCTI) to supply services in relation to the goods or services that are the subject of the RCTI, for example, analysing and testing sugar by a mill, and the provision of services required for processing cotton. It is also common for the recipient to deduct the charges for these services from the price payable by it to the supplier, paying the net amount to the supplier. 51. Even though there is a close connection between the supply to the recipient and the supply made by that recipient, each is a separate supply and the GST law does not allow the price for one supply to be reduced by the price of another. The GST included in the price of each supply must be included in the calculation of the net amount by each supplier and each recipient can then claim input tax credits for that tax. 52. However, if the document that is the RCTI includes appropriate details of the separate supply (as required by subsection 29-70(1)) from the recipient to the supplier, it can also be accepted as the tax invoice for that supply. [14A] | Other classes of tax invoices: 53. Industry associations, whose members are registered recipients of taxable supplies not covered by these broad classes, can request that the Commissioner make a determination in respect of other classes of tax invoices. The request will be considered on the basis of the particular circumstances of the industry, including the nature of the taxable supplies, suppliers and recipients. Other registered recipients may also make requests. 54. Your request for a determination should be made in writing or electronically and include the following information and documents: 55. Your applications should be addressed to: 56. [Omitted]. | 90% owned group: 57. Two companies are members of the same 90% owned group if: | Creditable acquisition: 58. You make a creditable acquisition if: | Date of effect of your cancellation: 59. The Commissioner must decide the date on which the cancellation of your *registration under subsection 25-55(1) or (2) or section 25-57 takes effect. That date may be any day occurring before, on or after the day on which the Commissioner makes the decision. [17] | Date of effect of your registration: 60. The Commissioner must decide the date from which your *registration takes effect, or took effect. However: | Entities: 61. Entity means any of the following: | GST exclusive value: 62. GST exclusive value means: | GST group: 63. Two or more entities may form a *GST group if: A group of entities that is so formed is a GST group . [21] | GST joint venture: 64. Two or more entities may become the *participants in a *GST joint venture if: Such a joint venture is a GST joint venture . [22] | Input tax credit: 65. You are entitled to the input tax credit for any *creditable acquisition that you make. [23] | Joint venture operator: 66. Joint venture operator, of a *GST joint venture, is the entity last nominated in relation to the joint venture as mentioned in paragraph 51-5(1)(ea) or 51-70(1)(c), but does not include an entity that does not satisfy the requirements of paragraphs 51-10(c) and (f). [24] | Membership requirements of a GST group: 67. | Net amount: 68. Amounts of GST and amounts of input tax credits are set off against each other to produce a *net amount for a tax period (which may be altered to take account of *adjustments). [26] | Required to be registered: 69. You are required to be registered under the GST Act if: | Tax invoice: 70. A *tax invoice has the meaning given by subsections 29-70(1) and 48-57(1), and includes a document that the Commissioner treats as a tax invoice under subsection 29-70(1B). However, it does not include a document that does not comply with the requirements of section 54-50 (if applicable). [28] 71. Below is a detailed contents list for this Ruling: Commissioner of Taxation 10 May 2000 [Omitted] Previous Draft: GSTR 1999/D5

Examples: Example 1: 30. ABC Pty Ltd is a manufacturing company and has a GST turnover of $20 million. It may issue RCTIs for supplies received from any of its suppliers who agree to the arrangement, provided it satisfies all the requirements for issuing RCTIs listed in paragraphs 37 to 47 of this Ruling. ABC does not need to notify the Commissioner that it is issuing RCTIs. | Example 2: 31. DEF Ltd is a bank and has a GST turnover of $25 million annually, including $10 million of financial supplies. It may issue RCTIs for supplies received from any of its suppliers who agree to the arrangement, provided it satisfies all the requirements for issuing RCTIs listed in paragraphs 37 to 47 of this Ruling. DEF does not need to notify the Commissioner that it is issuing RCTIs. Recipients within a group or joint venture 32. If you are a member of a group or a joint venture operator of a GST joint venture you are also able to issue RCTIs if: 33. The recipient, that is the group member or joint venture operator (but not necessarily the group or joint venture), must satisfy all of the requirements of issuing RCTIs stated at paragraphs 37 to 47 of this Ruling when a tax invoice is issued for the supplies received. 34. In summary, the determination also applies to tax invoices for taxable supplies made by registered suppliers to registered recipients or joint venture operators that do not have a GST turnover of $20 million provided: 35. As a recipient or joint venture operator, you may issue RCTIs even if your group or a participant's group is not approved under section 48-5 as a GST group. You only need to be able to demonstrate, if requested by the Commissioner, that you or the participant could satisfy the 90% test or the requirements under the regulations, and that you and your supplier satisfy the requirements stated at paragraphs 37 to 47 of this Ruling. | Example 1: Requirements for issuing RCTIs 37. In addition to the requirements in paragraph 16, certain other requirements must be fulfilled when issuing RCTIs. The descriptions of all three classes of tax invoices, determined under subsection 29-70(3) of the GST Act, that may be issued by recipients include the requirements of issuing RCTIs in paragraph 13 of this Ruling. 38. To issue RCTIs that belong to one or more of the three classes, the recipient and supplier must satisfy all of these requirements. That is, a document is an RCTI only if it is issued by a recipient who satisfies the requirements of the determination when the RCTI is issued. 39. The requirements that recipients and suppliers must satisfy are intended to ensure compliance with the GST law. 40. The recipient and the supplier must be registered for GST purposes when an RCTI is issued. A supplier or recipient who is not registered but is required to be registered does not satisfy the requirements for issuing RCTIs. [10] A recipient cannot issue an RCTI: 41. Each time the recipient issues a document to a supplier that it treats as an RCTI, the recipient must be reasonably satisfied that the supplier is registered for GST, on or after 1 July 2000, when the document issues. If you have a reasonable doubt that your supplier is not registered for GST when you issue an RCTI you can access GST registration information via the Internet at www.abr.business.gov.au . Record keeping and administration 42. The supplier must be aware of its GST liability. The recipient is required to retain the original or a copy of the RCTI and any adjustment note for five years. [11] If you are the supplier, keeping the original or a copy of the RCTI and any adjustment note for five years is one way of showing that you have complied with your obligation to retain sufficient records of all your transactions. 43. To ensure compliance with the GST law (and for the protection of the supplier) permission to issue RCTIs is available only to taxpayers who reasonably comply with the taxation laws (see requirement (d) to paragraph 13 of this Ruling). 44. The agreement between recipient and supplier (see requirement (e) to paragraph 13 of this Ruling) must include agreement on the matters listed and may also include any other terms and conditions that the parties mutually agree. The duration, termination and reinstatement of the agreement, and supplies to be specified as being subject to RCTIs, are examples of matters that may be mutually agreed. 45. If a document is issued mistakenly as a tax invoice by the supplier in respect of supplies specified in the written agreement (contrary to the agreement [12] ), then a document issued by the recipient will be taken to be the RCTI in respect of the supply. In these circumstances, the document issued by the supplier is not taken to be a tax invoice for the purposes of the GST law. This treatment reinforces the effectiveness of the agreement and ensures that both the supplier and the recipient pay GST and attribute input tax credits on the basis of the RCTI. 46. Also, as a recipient, you must not issue a document that purports to be an RCTI if it does not come within the class of invoices covered by this determination (see requirement (f) to paragraph 13 of this Ruling). 47. This requirement, and requirements (e)(iii) and (iv) in paragraph 13 of this Ruling, are intended to ensure that the GST shown on the RCTI is accounted for in the supplier's BAS, and that both the supplier and the recipient comply with the GST law. What happens if you do not meet the requirements? 48. If you fail to satisfy all of the requirements when issuing an RCTI, it will not be treated as being within the class of invoices determined as RCTIs. 49. If this happens, you cannot attribute an input tax credit for the supply to a tax period (even though it may be for a creditable acquisition) until you hold a tax invoice issued by your supplier. [13] To obtain the input tax credits, you can request a tax invoice for the supply from your supplier, who must give it to you within 28 days after your request. [14] Set-off 50. It is common for a recipient (who has issued an RCTI) to supply services in relation to the goods or services that are the subject of the RCTI, for example, analysing and testing sugar by a mill, and the provision of services required for processing cotton. It is also common for the recipient to deduct the charges for these services from the price payable by it to the supplier, paying the net amount to the supplier. 51. Even though there is a close connection between the supply to the recipient and the supply made by that recipient, each is a separate supply and the GST law does not allow the price for one supply to be reduced by the price of another. The GST included in the price of each supply must be included in the calculation of the net amount by each supplier and each recipient can then claim input tax credits for that tax. 52. However, if the document that is the RCTI includes appropriate details of the separate supply (as required by subsection 29-70(1)) from the recipient to the supplier, it can also be accepted as the tax invoice for that supply. [14A] Other classes of tax invoices 53. Industry associations, whose members are registered recipients of taxable supplies not covered by these broad classes, can request that the Commissioner make a determination in respect of other classes of tax invoices. The request will be considered on the basis of the particular circumstances of the industry, including the nature of the taxable supplies, suppliers and recipients. Other registered recipients may also make requests. 54. Your request for a determination should be made in writing or electronically and include the following information and documents: 55. Your applications should be addressed to: 56. [Omitted]. 90% owned group 57. Two companies are members of the same 90% owned group if: Creditable acquisition 58. You make a creditable acquisition if: Date of effect of your cancellation 59. The Commissioner must decide the date on which the cancellation of your *registration under subsection 25-55(1) or (2) or section 25-57 takes effect. That date may be any day occurring before, on or after the day on which the Commissioner makes the decision. [17] Date of effect of your registration 60. The Commissioner must decide the date from which your *registration takes effect, or took effect. However: Entities 61. Entity means any of the following: GST exclusive value 62. GST exclusive value means: GST group 63. Two or more entities may form a *GST group if: A group of entities that is so formed is a GST group . [21] GST joint venture 64. Two or more entities may become the *participants in a *GST joint venture if: Such a joint venture is a GST joint venture . [22] Input tax credit 65. You are entitled to the input tax credit for any *creditable acquisition that you make. [23] Joint venture operator 66. Joint venture operator, of a *GST joint venture, is the entity last nominated in relation to the joint venture as mentioned in paragraph 51-5(1)(ea) or 51-70(1)(c), but does not include an entity that does not satisfy the requirements of paragraphs 51-10(c) and (f). [24] Membership requirements of a GST group 67. Net amount 68. Amounts of GST and amounts of input tax credits are set off against each other to produce a *net amount for a tax period (which may be altered to take account of *adjustments). [26] Required to be registered 69. You are required to be registered under the GST Act if: Tax invoice 70. A *tax invoice has the meaning given by subsections 29-70(1) and 48-57(1), and includes a document that the Commissioner treats as a tax invoice under subsection 29-70(1B). However, it does not include a document that does not comply with the requirements of section 54-50 (if applicable). [28] 71. Below is a detailed contents list for this Ruling: Commissioner of Taxation 10 May 2000 [Omitted] Previous Draft: GSTR 1999/D5

Appendix: 18. An RCTI is a tax invoice that belongs to a class of tax invoices that the Commissioner has determined in writing may be issued by the recipient of a taxable supply. [4A] 19. The determination describes three classes of tax invoices that may be issued by a recipient of a taxable supply. Also, industry associations whose members are registered recipients of taxable supplies can ask the Commissioner to make determinations for other categories of tax invoices not covered by the three broad classes. 20. If you are a registered recipient, you may issue RCTIs for certain types of taxable supplies, provided you satisfy the criteria outlined in this Ruling. If you want to issue RCTIs, you do not have to lodge an application to the Commissioner for approval in relation to tax invoices that belong to any of these three classes of tax invoices. 21. The classes take into account a number of factors including type of industry, type of taxable supply, GST turnover of the recipient, and certain requirements of issuing RCTIs. The factors reflect a balance between facilitating the practical use of RCTIs by businesses and maintaining the integrity of the GST system. | Agricultural products: 22. For the purposes of the determination, 'agricultural products' are products derived from viticulture, horticulture, pasturage, apiculture, poultry farming and dairy farming or other operations connected with the cultivation of the soil, the gathering in of crops and the rearing of livestock. 23. This class includes tax invoices for taxable supplies where the value of agricultural products and by-products has been determined by the recipient. For example, the testing of crushed sugar cane by a mill to establish sugar content. 24. The recipient and supplier must also satisfy the requirements stated at paragraphs 37 to 47 of this Ruling. | Supplies to government related entities: 25. The determination applies to all taxable supplies made by registered suppliers to registered government related entities. The term 'government related entity' means: 26. The term 'government entity' [6A] means: 27. The recipient government related entity and the supplier must also satisfy the requirements at paragraphs 37 to 47 of this Ruling. | GST turnover: 28. Tax invoices for taxable supplies made by registered suppliers to registered recipients who have GST turnovers (including input taxed supplies) of at least $20 million are a class of tax invoice that may be issued by the recipients. Recipients not within a group or joint venture 29. If you are a registered recipient, you may issue RCTIs provided the Commissioner: | Example 1: 30. ABC Pty Ltd is a manufacturing company and has a GST turnover of $20 million. It may issue RCTIs for supplies received from any of its suppliers who agree to the arrangement, provided it satisfies all the requirements for issuing RCTIs listed in paragraphs 37 to 47 of this Ruling. ABC does not need to notify the Commissioner that it is issuing RCTIs. | Example 2: 31. DEF Ltd is a bank and has a GST turnover of $25 million annually, including $10 million of financial supplies. It may issue RCTIs for supplies received from any of its suppliers who agree to the arrangement, provided it satisfies all the requirements for issuing RCTIs listed in paragraphs 37 to 47 of this Ruling. DEF does not need to notify the Commissioner that it is issuing RCTIs. Recipients within a group or joint venture 32. If you are a member of a group or a joint venture operator of a GST joint venture you are also able to issue RCTIs if: 33. The recipient, that is the group member or joint venture operator (but not necessarily the group or joint venture), must satisfy all of the requirements of issuing RCTIs stated at paragraphs 37 to 47 of this Ruling when a tax invoice is issued for the supplies received. 34. In summary, the determination also applies to tax invoices for taxable supplies made by registered suppliers to registered recipients or joint venture operators that do not have a GST turnover of $20 million provided: 35. As a recipient or joint venture operator, you may issue RCTIs even if your group or a participant's group is not approved under section 48-5 as a GST group. You only need to be able to demonstrate, if requested by the Commissioner, that you or the participant could satisfy the 90% test or the requirements under the regulations, and that you and your supplier satisfy the requirements stated at paragraphs 37 to 47 of this Ruling. | Example 3: 36. GHI Pty Ltd is 95% owned by ABC Pty Ltd from Example 1 but only has a GST turnover of $5 million. It may issue RCTIs for supplies received from any of its suppliers who agree to the arrangement, provided it satisfies all the requirements for issuing RCTIs listed at paragraphs 37 to 47 of this Ruling. GHI does not need to notify the Commissioner that it is issuing RCTIs. | Requirements for issuing RCTIs: 37. In addition to the requirements in paragraph 16, certain other requirements must be fulfilled when issuing RCTIs. The descriptions of all three classes of tax invoices, determined under subsection 29-70(3) of the GST Act, that may be issued by recipients include the requirements of issuing RCTIs in paragraph 13 of this Ruling. 38. To issue RCTIs that belong to one or more of the three classes, the recipient and supplier must satisfy all of these requirements. That is, a document is an RCTI only if it is issued by a recipient who satisfies the requirements of the determination when the RCTI is issued. 39. The requirements that recipients and suppliers must satisfy are intended to ensure compliance with the GST law. 40. The recipient and the supplier must be registered for GST purposes when an RCTI is issued. A supplier or recipient who is not registered but is required to be registered does not satisfy the requirements for issuing RCTIs. [10] A recipient cannot issue an RCTI: 41. Each time the recipient issues a document to a supplier that it treats as an RCTI, the recipient must be reasonably satisfied that the supplier is registered for GST, on or after 1 July 2000, when the document issues. If you have a reasonable doubt that your supplier is not registered for GST when you issue an RCTI you can access GST registration information via the Internet at www.abr.business.gov.au . Record keeping and administration 42. The supplier must be aware of its GST liability. The recipient is required to retain the original or a copy of the RCTI and any adjustment note for five years. [11] If you are the supplier, keeping the original or a copy of the RCTI and any adjustment note for five years is one way of showing that you have complied with your obligation to retain sufficient records of all your transactions. 43. To ensure compliance with the GST law (and for the protection of the supplier) permission to issue RCTIs is available only to taxpayers who reasonably comply with the taxation laws (see requirement (d) to paragraph 13 of this Ruling). 44. The agreement between recipient and supplier (see requirement (e) to paragraph 13 of this Ruling) must include agreement on the matters listed and may also include any other terms and conditions that the parties mutually agree. The duration, termination and reinstatement of the agreement, and supplies to be specified as being subject to RCTIs, are examples of matters that may be mutually agreed. 45. If a document is issued mistakenly as a tax invoice by the supplier in respect of supplies specified in the written agreement (contrary to the agreement [12] ), then a document issued by the recipient will be taken to be the RCTI in respect of the supply. In these circumstances, the document issued by the supplier is not taken to be a tax invoice for the purposes of the GST law. This treatment reinforces the effectiveness of the agreement and ensures that both the supplier and the recipient pay GST and attribute input tax credits on the basis of the RCTI. 46. Also, as a recipient, you must not issue a document that purports to be an RCTI if it does not come within the class of invoices covered by this determination (see requirement (f) to paragraph 13 of this Ruling). 47. This requirement, and requirements (e)(iii) and (iv) in paragraph 13 of this Ruling, are intended to ensure that the GST shown on the RCTI is accounted for in the supplier's BAS, and that both the supplier and the recipient comply with the GST law. | What happens if you do not meet the requirements?: 48. If you fail to satisfy all of the requirements when issuing an RCTI, it will not be treated as being within the class of invoices determined as RCTIs. 49. If this happens, you cannot attribute an input tax credit for the supply to a tax period (even though it may be for a creditable acquisition) until you hold a tax invoice issued by your supplier. [13] To obtain the input tax credits, you can request a tax invoice for the supply from your supplier, who must give it to you within 28 days after your request. [14] | Set-off: 50. It is common for a recipient (who has issued an RCTI) to supply services in relation to the goods or services that are the subject of the RCTI, for example, analysing and testing sugar by a mill, and the provision of services required for processing cotton. It is also common for the recipient to deduct the charges for these services from the price payable by it to the supplier, paying the net amount to the supplier. 51. Even though there is a close connection between the supply to the recipient and the supply made by that recipient, each is a separate supply and the GST law does not allow the price for one supply to be reduced by the price of another. The GST included in the price of each supply must be included in the calculation of the net amount by each supplier and each recipient can then claim input tax credits for that tax. 52. However, if the document that is the RCTI includes appropriate details of the separate supply (as required by subsection 29-70(1)) from the recipient to the supplier, it can also be accepted as the tax invoice for that supply. [14A] | Other classes of tax invoices: 53. Industry associations, whose members are registered recipients of taxable supplies not covered by these broad classes, can request that the Commissioner make a determination in respect of other classes of tax invoices. The request will be considered on the basis of the particular circumstances of the industry, including the nature of the taxable supplies, suppliers and recipients. Other registered recipients may also make requests. 54. Your request for a determination should be made in writing or electronically and include the following information and documents: 55. Your applications should be addressed to: 56. [Omitted]. | 90% owned group: 57. Two companies are members of the same 90% owned group if: | Creditable acquisition: 58. You make a creditable acquisition if: | Date of effect of your cancellation: 59. The Commissioner must decide the date on which the cancellation of your *registration under subsection 25-55(1) or (2) or section 25-57 takes effect. That date may be any day occurring before, on or after the day on which the Commissioner makes the decision. [17] | Date of effect of your registration: 60. The Commissioner must decide the date from which your *registration takes effect, or took effect. However: | Entities: 61. Entity means any of the following: | GST exclusive value: 62. GST exclusive value means: | GST group: 63. Two or more entities may form a *GST group if: A group of entities that is so formed is a GST group . [21] | GST joint venture: 64. Two or more entities may become the *participants in a *GST joint venture if: Such a joint venture is a GST joint venture . [22] | Input tax credit: 65. You are entitled to the input tax credit for any *creditable acquisition that you make. [23] | Joint venture operator: 66. Joint venture operator, of a *GST joint venture, is the entity last nominated in relation to the joint venture as mentioned in paragraph 51-5(1)(ea) or 51-70(1)(c), but does not include an entity that does not satisfy the requirements of paragraphs 51-10(c) and (f). [24] | Membership requirements of a GST group: 67. | Net amount: 68. Amounts of GST and amounts of input tax credits are set off against each other to produce a *net amount for a tax period (which may be altered to take account of *adjustments). [26] | Required to be registered: 69. You are required to be registered under the GST Act if: | Tax invoice: 70. A *tax invoice has the meaning given by subsections 29-70(1) and 48-57(1), and includes a document that the Commissioner treats as a tax invoice under subsection 29-70(1B). However, it does not include a document that does not comply with the requirements of section 54-50 (if applicable). [28]


What this Ruling is about | What this Ruling is about: 1. This Ruling explains A New Tax System (Goods and Services Tax) Act 1999 Classes of Recipient Created Tax Invoice Determination (No. 1) 2000 (the determination). [1] In the Ruling these invoices are referred to as recipient created tax invoices (RCTIs). The Ruling also explains how you may ask the Commissioner to make a further determination for other classes of invoices. | 3. The Ruling does not consider what other documents may be treated as tax invoices for the purposes of Subdivision 29-C. | 4. Certain terms used in this Ruling are defined or explained in the Definitions section of the Ruling. These terms, when first mentioned elsewhere in the body of the Ruling, appear in bold type. | 5. Unless otherwise stated, all references in this Ruling are to the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) or, as indicated, to the A New Tax System (Goods and Services Tax) Regulations 1999 (GST Regulations). | 6. This Ruling applies both before and after its date of issue. However, this Ruling will not apply to taxpayers to the extent that it conflicts with the terms of a settlement of a dispute agreed to before the date of issue of this Ruling (see paragraphs 75 and 76 of Taxation Ruling TR 2006/10). | 6A. Changes made to this Ruling by Addenda that issued on 27 September 2000, 15 August 2007, 14 January 2009, 6 May 2009, 31 October 2012 and 30 October 2013 have been incorporated into this version of the Ruling. [1A] | Background: 7. To be entitled to claim an input tax credit for a creditable acquisition when you are registered for GST, you must hold a tax invoice when you lodge your Business Activity Statement ('BAS') unless the GST - exclusive value of the acquisition is $75 or less. | 8. Usually, the supplier of a taxable supply gives the recipient a tax invoice for the supply. However, commercially, invoices are also currently created by recipients of supplies, particularly where: | 9. The determination will enable many recipients to claim input tax credits without significantly altering their current invoicing practices. | Three broad classes of RCTIs: 10. The determination describes three classes of tax invoices that may be issued by a recipient of a taxable supply. These classes are: | (The criteria for inclusion in this class of invoices are explained at paragraphs 28 to 36 of this Ruling.) | 11. Tax invoices that come within any of these three classes can be issued by recipients without notifying or applying to the Commissioner. | Applications for determinations in respect of other classes of invoices: 12. Industry associations, whose members are registered recipients of taxable supplies that are not covered by these broad classes, can ask the Commissioner to make a determination for other classes of tax invoices. Other registered recipients may also make requests. The procedures to be followed when making these requests are explained in paragraphs 53 to 55 of this Ruling. | 13. The determination lists the requirements that are integral to the classes of invoices that recipients may issue. The requirements must be respectively satisfied by recipients and suppliers: [3] | 14. An invoice issued by a recipient that fails to satisfy all of the requirements of paragraph 13 of this Ruling will not be treated as being a tax invoice [4] . | 15. These requirements, and what happens if you fail to satisfy them, are explained in paragraphs 37 to 49 of this Ruling. | What information must an RCTI contain?: 16. An RCTI must satisfy the information requirements under subsection 29-70(1) including: | Three broad classes of RCTIs | Application for determinations in respect of other classes of invoices | What information must an RCTI contain?


Related rulings: TR 2006/10 GSTR 2013/1
Legislative references: ANTS(ABN)A99 41 ANTS(GST)A99 ANTS(GST)A99 7-5 ANTS(GST)A99 11-5 ANTS(GST)A99 11-20 ANTS(GST)A99 23-5 ANTS(GST)A99 25-10(1) ANTS(GST)A99 25-55(1) ANTS(GST)A99 25-55(2) ANTS(GST)A99 25-60 ANTS(GST)A99 27-15(1)(a) ANTS(GST)A99 29-10(3) ANTS(GST)A99 29-70 ANTS(GST)A99 29-70(1) ANTS(GST)A99 29-70(1)(a) ANTS(GST)A99 29-70(1B) ANTS(GST)A99 29-70(2) ANTS(GST)A99 29-70(3) ANTS(GST)A99 48-5 ANTS(GST)A99 48-5(1) ANTS(GST)A99 48-10 ANTS(GST)A99 48-57(1) ANTS(GST)A99 51-5 ANTS(GST)A99 51-5(ea) ANTS(GST)A99 51-10 ANTS(GST)A99 51-10(c) ANTS(GST)A99 51-10(f) ANTS(GST)A99 51-70(1)(c) ANTS(GST)A99 54-50 ANTS(GST)A99 184-1 ANTS(GST)A99 184-1(1) ANTS(GST)A99 188-15(1)(a) ANTS(GST)A99 188-20(1)(a) ANTS(GST)A99 190-1 ANTS(GST)A99 195-1 ANTS(GST)AR00(No1) 48-10.02 ANTS(GST)AR00(No1) 48-10.03 TAA 1953 Sch 1 284-75(1) TAA 1953 Sch 1 284-75(4) TAA 1953 Sch 1 Div 358 TAA 1953 Sch 1 382-5 Public Service Act 1999
Subject references: adjustment events agricultural products Australian Business Number business Activity Statement classes of tax invoices creditable acquisitions date of effect of cancellation date of effect of registration determinations entities GST group GST joint venture GST turnover Government entities input tax credit input taxed supplies joint venture operator net amount other classes of tax invoices recipients recipient created tax invoices tax invoice registered recipients registered suppliers suppliers supplies to government entities taxable supply
Other references: A New Tax System (Goods and Services Tax) Act 1999 Classes of Recipient Created Tax Invoice Determination (No. 1) 2000