ATO Interpretative Decision
ATO ID 2002/15
Goods and Services Tax
GST and joint ventures - passenger bus serviceFOI status: may be released
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This document incorporates revisions made since original publication. View its history and amending notices, if applicable.
This ATOID provides you with the following level of protection:
If you reasonably apply this decision in good faith to your own circumstances (which are not materially different from those described in the decision), and the decision is later found to be incorrect you will not be liable to pay any penalty or interest. However, you will be required to pay any underpaid tax (or repay any over-claimed credit, grant or benefit), provided the time limits under the law allow it. If you do intend to apply this decision to your own circumstances, you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed. You may wish to obtain further advice from the Tax Office or from a professional adviser.
Issue
Do the entities, participants in a joint venture, meet the requirements for approval as participants in a GST joint venture under subsection 51-5(1) of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act), where the purpose of the joint venture is to operate passenger bus services?
Decision
No, the entities do not meet the requirements for approval as participants in a GST joint venture under subsection 51-5(1) of the GST Act where the purpose of the joint venture is to operate passenger bus services.
Facts
The entities are two companies that are individually registered for goods and services tax (GST). The entities have entered into a joint venture arrangement to operate passenger bus services. The entities have jointly applied, in the approved form, for approval of the joint venture as a GST joint venture.
Reasons for Decision
Subsection 51-5(1) of the GST Act sets out the requirements that need to be satisfied for the Commissioner to approve 2 or more entities as participants in a GST joint venture.
Paragraph 51-5(1)(a) of the GST Act provides that the joint venture must be for the exploration or exploitation of mineral deposits, or for a purpose specified in the A New Tax System (Goods and Services Tax) Regulations 1999 (GST Regulations).
As the purpose of the joint venture is not for the exploration or exploitation of mineral deposits, it is necessary to determine whether the operation of passenger bus services is a purpose specified in the GST Regulations.
Subregulation 51-5.01(1) of the GST Regulations lists the various activities that are specified purposes for a GST joint venture. These activities are:
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- research and development;
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- the provision of insurance, other than life insurance;
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- fishing;
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- agriculture;
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- cultivation, or exploitation, of timber;
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- design, or building, or maintenance, of residential or commercial premises;
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- civil engineering, including the design, construction and maintenance of roads, railways, bridges, canals, dams, ports, harbours, airports and similar installations;
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- generation, or transmission, or distribution, of electricity;
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- transmission, or distribution, of water;
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- receipt, or storage, or distribution, of oil and gas products;
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- refining, or processing, of oil and gas products;
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- beneficiation of minerals and primary metal production, including alloy production;
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- charitable activities.
A joint venture for the operation of passenger bus services is not a joint venture for a purpose specified in subregulation 51-5.01(1) of the GST Regulations.
As the joint venture is not a joint venture for the exploration or exploitation of mineral deposits or for a purpose specified in the GST Regulations, the requirements of paragraph 51-5(1)(a) of the GST Act are not met.
Accordingly, the entities do not meet the requirements for approval as participants in a GST joint venture under subsection 51-5(1) of the GST Act where the purpose of the joint venture is to operate passenger bus services.
Legislative References:
A New Tax System (Goods and Services Tax) Act 1999
subsection 51-5(1)
paragraph 51-5(1)(a)
subregulation 51-5.01(1) Related ATO Interpretative Decisions
ATO ID 2001/263
ATO ID 2001/267
ATO ID 2001/447
Keywords
Goods & services tax
GST joint ventures
ISSN: 1445-2782
| Date: | Version: | |
| You are here → | 16 November 2001 | Original statement |
| 18 May 2007 | Archived |