What is a material recovery facility operator
A material recovery facility operator:
- processes mixed recyclables collected from homes and businesses for reuse or recycling
- may participate in a container deposit scheme as part of their business and obtain refunds on eligible beverage containers they recycle or send for recycling.
Each container deposit scheme is unique and may vary depending on specific state or territory arrangements.
Determining if GST applies
If you're a material recovery facility operator, you should determine if you're making taxable supplies when you receive refunds under a container deposit scheme. GST is payable on taxable supplies.
You will be liable for GST if you provide something of value in exchange for receiving refunds under the scheme. Generally, you provide something of value through the recycling activities you perform as part of your participation in the scheme in exchange for the refund. Examples of where something of value is provided in exchange for the refund include:
- agreeing to recycle eligible containers under a particular scheme
- recycling eligible containers in compliance with a particular scheme.
For more information see:
- Goods and Services Tax Ruling GSTR 2006/9 Goods and services tax: supplies
- Goods and Services Tax Ruling GSTR 2012/2 Goods and services tax: financial assistance payments.
What material recovery facility operators should do
You are required to pay GST on taxable supplies you make under a container deposit scheme.
We encourage you to consider the GST implications of your participation in a scheme and approach us for help early if you are uncertain whether GST applies.
We are aware that some material recovery facility operators have adopted a position that no GST is payable in these situations and have sought to claim GST refunds from us. Any material recovery facility operator in this situation should engage with us by requesting an early engagement discussion. You should also consider the rules which restrict the ability to claim a GST refund. For more information see Incorrectly charged GST.
If you need further help to understand your GST obligations under container deposit schemes, you can apply for a private ruling. You will need to include all relevant information in your application in relation to the scheme and any specific arrangements you have entered into in order for us to assist you.