GST treatment of appropriations

The measure ensures that non-commercial activities of government are not subject to goods and services tax (GST). This is achieved by excluding from the definition of consideration certain payments made from one government related entity to another government related entity.

The exception will operate even where the terms of the appropriation do not confine payments to government related entities, either by name or by class.

This measure is in response to the decision of the Full Federal Court in TT-Line Co Pty Ltd v. FCT [2009] FCAFC 178 (TT-Line).

The measure takes effect from 1 July 2012.

Legislation and supporting material

The following legislation received royal assent on 27 June 2012:

• Tax and Superannuation Laws Amendment (2012 Measures No. 1) Act 2012
• Explanatory Memorandum.

More information GST and payments between government related entities - overview Exposure draft legislation and Explanatory Memorandum were released by the government on 23 November 2011.