ATO Interpretative Decision
ATO ID 2004/324 (Withdrawn)
Goods and Services Tax
GST and EFTPOS facilities used by two businessesFOI status: may be released
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This ATO ID is withdrawn and replaced by ATO ID 2004/820This document incorporates revisions made since original publication.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you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed.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 service provider, making an input taxed supply under subsection 40-5(1) of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act), when it allows another business to use its EFTPOS facilities for a fee?
Decision
No, the entity is not making an input taxed supply under subsection 40-5(1) of the GST Act when it allows another business to use its EFTPOS facilities for a fee.
The entity is making a taxable supply under section 9-5 of the GST Act.
Facts
The entity is a service provider. The entity subleases part of its business premises to another business. The entity allows the other business to use its EFTPOS facilities. The entity charges this business a fee for each transaction.
The entity is registered for goods and services tax (GST) and the supply satisfies the other positive limbs of section 9-5 of the GST Act.
Reasons for Decision
Under subsection 40-5(1) of the GST Act, a financial supply is input taxed. Subsection 40-5(2) of the GST Act defines a financial supply as having the meaning given by the A New Tax System (Goods and Services Tax) Regulations 1999 (GST Regulations).
Regulation 40-5.12 of the GST Regulations provides that a supply is not a financial supply if it is the supply of something, or an interest in something, that is mentioned in the table in the Regulation. Item 4 in the table in Regulation 40-5.12 of the GST Regulations (Item 4) lists 'a payment system'.
Part 2 of Schedule 8 to the GST Regulations (Part 2) provides examples for Item 4. One of the examples is 'access to a payment system, and supply of other related services by a participant in the system to a third party'.
The entity is allowing the other business, a third party, to use its EFTPOS system. This supply is covered by Item 4 and is not a financial supply.
The entity is registered for GST and the supply satisfies the other positive limbs 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 any other provision of Division 40 of the GST Act. Therefore, the entity is making a taxable supply under section 9-5 of the GST Act when it allows another business to use its EFTPOS facilities for a fee.
Date of decision: 9 July 2002
Legislative References:
A New Tax System (Goods and Services Tax) Act 1999
section 9-5
Division 38
Division 40
subsection 40-5(1)
subsection 40-5(2)
regulation 40-5.12
regulation 40-5.12 table item 4
Schedule 8 Part 2
Schedule 8 Part 2 table item 2
Keywords
Goods and services tax
Input taxed supplies
GST financial supplies
GST non financial supplies
GST supplies & acquisitions
Taxable supply
ISSN: 1445-2782
| Date: | Version: | |
| 9 July 2002 | Original statement | |
| You are here | 15 October 2004 | Archived |