Nature of the arrangement
The amendments to vouchers provisions clarify that prepaid phone cards are eligible Division 100 vouchers and are not subject to GST at the time the phone cards are issued.
Telephone cards are typically sold through retail outlets. The retailer will usually provide an invoice or tax invoice when the phone card is supplied. However, the taxable supply is the supply of domestic phone calls by the telco. Accordingly the tax invoice should be issued by the telco that makes the telecommunication supplies. Due to the way in which phone cards are distributed, the telco may not have sufficient reasonable way of knowing the details of the recipient of the telecommunication supplies in order to issue them with a tax invoice. Further, in many instances the price of the telecommunication supplies (each individual phone call, for example) will be less than $82.50(GST inclusive) and so the telco would not have a legal obligation to issue a tax invoice.