Terms we use
When we say:
- you – we mean an Australian government agency
- tax – we mean an Australian tax
- fee or charge – we mean an Australian fee or charge
- GST-exempt – we mean not consideration for a supply
- not GST-exempt – we mean consideration for a supply, which may be subject to GST if the requirements of a taxable supply are met
- GST Act – we mean A New Tax System (Goods and Services Tax) Act 1999
- GST regulations – we mean A New Tax System (Goods and Services Tax) Regulations 2019
- Division 81 – we mean Division 81 of the GST Act that applies to taxes, fees or charges that are payable to Australian government agencies
Division 81
Not all taxes, fees or charges imposed by government agencies are GST-exempt.
Division 81 enables a government agency to self-assess the GST treatment of taxes, fees or charges that they impose.
GST regulations also apply to make certain fees or charges either:
- not GST-exempt (that is, consideration for a supply)
- GST-exempt (that is, not consideration for a supply).
Where a fee or charge is not GST-exempt, the normal GST rules apply.
Operation of Division 81
The following apply for taxes, fees and charges imposed by government agencies.
- Taxes are GST-exempt.
- You can self-assess the GST treatment of fees and charges that your government agency imposes in accordance with Division 81 and the GST regulations.
Fees or charges are not GST-exempt if all of the following statements apply. The fees or changes:
- don't fall within the exemptions provided under Division 81 and GST regulations
- satisfy the requirements of a taxable supply.
How to self-assess if GST applies to a tax, fee or charge
The following assessment process will help you work out if a tax, fee or charge imposed by your government agency is GST-exempt.
GST assessment process: government taxes, fees and charges
- Is the item an Australian tax?
- Yes - treat the item as GST exempt
- No- go to question 2
- Has the fee or charge been imposed by an Australian government agency?
- Yes - go to question 3
- No - the item is not a GST- exempt government fee or charge; you will need to apply the normal GST rules
- Is the item in the list of items that are GST-exempt under the GST Act?
- Yes - go to question 4
- No - go to question 5
- Is the item in the list of items that are not GST-exempt under the GST regulations?
- Yes - go to question 5
- No- treat the item as GST exempt
- Is the item in the list of items that are GST-exempt under the GST regulations?
- Yes - go to question 6
- No - the item is not a GST exempt government fee or charge; you will need to apply the normal GST rules
- Is the item in both the list of items that are
- not GST-exempt under the GST regulations
- the list of items that are GST-exempt under the GST regulations?
- Yes - go to question 7
- No - If the item is in the list of items that are not GST-exempt under the GST regulations, the item is not a GST-exempt government fee or charge, you will need to apply the normal GST rules
- No - if the item is in the list of items that are GST-exempt under the GST regulations treat the item as GST exempt
- Is the item a fee or charge in the list of items that are not GST-exempt under the GST regulations other than a fee or charge for a supply of a non-regulatory nature?
- Yes - the item is not a GST exempt government fee or charge; you will need to apply the normal GST rules
- No - treat the item as GST exempt
Australian tax
An Australian tax is a tax (however described) imposed under an Australian law.
Examples of Australian taxes imposed under an Australian law include:
- stamp duty
- payroll tax
- local government rates
- various levies including industry levies.
Division 81 allows a regulation to be made to treat certain Australian taxes as being subject to GST. Currently, no regulations have been made to treat any Australian taxes as being subject to GST.
Australian government agency
Each of the following is an Australian government agency:
- the Commonwealth, a state or a territory
- a Commonwealth, state or territory government department
- a body (whether or not it is an entity) established by the Commonwealth, a state or a territory to carry on activities
- a body (whether or not it is an entity) established for a public purpose by an Australian law
- a local governing body established by a state or territory law (such as a local municipal council).
GST-exempt under the GST Act
GST is not payable for government charges if they are for providing, retaining, or amending:
- a permission, for example
- a permit for a restaurant allowing patrons to occupy and be served on the footpath
- a compulsory inspection fee for the retention of a permit
- an exemption, for example, an exemption from
- registration under the Australian Maritime Safety Authority Act 1990
- payment of annual charges payable under the Therapeutic Goods (Charges) Act 1989
- an authority, for example
- an authority to place an identification plate on a road trailer
- a petroleum special prospecting authority
- a greenhouse gas special authority
- a licence, including
- for the practice of a profession
- a vehicle drivers licence
- a pilot’s licence.
GST is also not payable for charges paid to you for providing information and for record keeping, including charges for:
- copies of official documents
- searches and extracts from registers
- requests for information from you under freedom of information legislation.
However, the GST regulations may specify that a fee or charge is not GST-exempt.
Not GST-exempt under the GST regulations
The following fees or charges are not GST-exempt under the GST regulations:
- fee for parking a motor vehicle in a ticketed or metered parking space
- toll for driving a motor vehicle on a road
- fee for hiring, using or entry to a facility, other than an entry fee to a national park
- fee for the use of a waste disposal facility
- fee for pre-lodgment advice relating to a permission, exemption, authority or licence under an Australian law where it is not compulsory to seek the advice
- fee or charge for provision of information by an Australian government agency if the provision of the information is of a non-regulatory nature
- fee or charge for a supply by an Australian government agency, where the supply may also be made by a supplier that is not an Australian government agency
- fee or charge for any other supply of a non-regulatory nature.
GST-exempt under the GST regulations
The following fees or charges are GST-exempt under the GST regulations:
- fee or charge for kerbside collection of waste or the supply, exchange or removal of bins or crates used with kerbside collection of waste
- royalties charged in relation to natural resources
- fee or charge imposed on an industry to finance regulatory or other activities of government connected with the industry
- fee or charge to compensate an Australian government agency for costs incurred by the agency in undertaking regulatory activities
- fee or charge imposed in relation to a court, tribunal, commission of inquiry or sheriff’s office
- fee or charge for a supply of a regulatory nature made by an Australian government agency
- fee or charge for entry to a national park.
Fees or charges covered by both a GST-exempt regulation and a not GST-exempt regulation
GST regulations contain tie-breaker rules for situations when a fee or charge is covered by both a GST-exempt and a not GST-exempt regulation. These rules determine whether the GST-exempt or not GST-exempt regulation would apply in specific circumstances depending on the type of fee or charge.
The fee or charge is GST-exempt if the item is:
- in the list of items that are GST-exempt under the GST regulations; and
- a fee or charge for a supply of a non-regulatory nature under the list of items that are not GST-exempt under the GST regulations.
In any other case, the fee or charge is not GST-exempt.
See the assessment process in how to self-assess if GST applies to a tax, fee or charge which demonstrates how the tie-breaker rules apply.
If you make an error
If you have made an error with the GST treatment of a particular tax, fee or charge, you can correct GST errors on your current activity statement if you meet the time and debit error value limits. If you can't make the correction on your current activity statement you either have to revise the original activity statement or write to us. For tax periods starting on or after 1 July 2012, revising your activity statement or writing to us will be treated as an application to amend an assessment.
If an amount of GST has been overpaid, you may need to meet other conditions, such as refunding your clients the GST component included in the tax, fee or charge before you are entitled to a refund of overpaid GST.
For more information see Object to a decision.
Questions and answers
1. Is a tax, fee or charge imposed under an Australian law and paid through an authorised payment agent (such as Australia Post) paid to you?
Yes.
A tax, fee or charge must be ‘imposed under an Australian law’ and ‘payable to an Australian government agency’.
If a tax, fee or charge is paid to an authorised payment agent under an arrangement between the Australian government agency and the agent for the collection of those charges, the tax, fee or charge is ‘paid to’ the Australian government agency by the applicant.
The tax, fee or charge is a debt payable to the Australian government agency and not the authorised payment agent.
2. Is a regulation made under a State or Territory Government Act an Australian law?
Yes.
A regulation is a law made by a person or body with the authority of parliament.
3. What is the treatment of a fee or charge that is regulatory?
Most non-commercial activities of government agencies are outside the scope of GST. The term regulatory captures those supplies made by a government agency if that agency is legislatively empowered to make the relevant supply and the supply is to satisfy a regulatory purpose.
Examples of fees or charges that have a regulatory character include a:
- charge for providing a copy of a birth, death or marriage certificate
- compulsory inspection fee for checking that the foundations of a building comply with a building code
- fee for reviewing a film to give it an appropriate audience rating before it can be exhibited at a public cinema
- fee for land registry services such as titling, valuation or surveying undertaken by a government agency in providing those services
- fee for towing and impounding a vehicle, if a traffic offence has been committed
- fee for impounding animals
- fee for releasing seized abandoned shopping trolleys.
For more information on managing GST in your government entity and understanding the GST treatment of payments, see GST for government.