ATO Interpretative Decision
ATO ID 2001/104 (Withdrawn)
Goods and Services Tax
GST and Prize money - Participant's PerspectiveFOI status: may be released
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The ATO view for this issue is covered in Goods and Services Tax Ruling GSTR 2002/3 (in particular paragraphs 36-54).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you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed.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
Is the entity, a prizewinning participant in a competition, making a taxable supply under section 9-5 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) when it receives a monetary prize?
Decision
Yes, the entity is making a taxable supply under section 9-5 of the GST Act when it receives a monetary prize.
Facts
The entity is carrying on an enterprise in Australia and is registered for goods and services tax (GST).
The entity pays an entry fee to the show organiser for the right to participate in a competition held in Australia. The participation may take many forms including the exhibition of animals and produce.
The entity wins a monetary prize as a result of participating in the competition.
Reasons For Decision
Section 9-5 of the GST Act sets out the requirements that must be met for an entity to make a taxable supply. The requirement that the supply must be for consideration is of particular relevance.
'Supply' is defined in section 9-10 of the GST Act to include a supply of services. The exhibition of the animal or produce is a supply of a service by the entity.
'Consideration' is defined in paragraph 9-15(1)(a) of the GST Act to include a payment or any act or forbearance in connection with a supply of anything. The payment of prize money is consideration for the supply of the entity's services.
Therefore, the exhibition of the animal or produce is a supply of a service for which the consideration is the payment of the prize money.
The entity is registered for GST and the supply meets all the requirements of section 9-5 of the GST Act. Furthermore, the supply is neither GST-free under Division 38 of the GST Act nor input taxed under Division 40 of the GST Act. Therefore, the entity is making a taxable supply under section 9-5 of the GST Act.
Date of decision: 26 September 2000
Legislative References:
A New Tax System (Goods and Services Tax) Act 1999
section 9-5
section 9-10
paragraph 9-15(1)(a)
Division 38
Division 40
ATO ID 2001/103 ATO ID 2001/105
Other References:
GST Primary Production-Newsletter No.5 - 04 July 2000
Keywords
Goods and Services Tax
GST primary production
GST consideration
GST supply
Taxable supply
ISSN: 1445-2782
| Date: | Version: | |
| 26 September 2000 | Original statement | |
| You are here | 18 November 2005 | Archived |