ATO Interpretative Decision

ATO ID 2001/148 (Withdrawn)

Goods and Services Tax

GST and sharing costs between entities
FOI status: may be released

This ATO ID is a straight application of the law and does not contain an interpretative decision.

This document incorporates revisions made since original publication. View its history and amending notices, if applicable.

CAUTION: This is an edited and summarised record of a Tax Office decision. This record is not published as a form of advice. It is being made available for your inspection to meet FOI requirements, because it may be used by an officer in making another decision.

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you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed.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 entity A, a business operator, making a taxable supply under section 9-5 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) when it charges entity B for using its (entity A's) photocopier?

Decision

Yes, entity A is making a taxable supply under section 9-5 of the GST Act when it charges entity B for using its (entity A's) photocopier.

Facts

Entity A and entity B share office premises and share some office costs, including the use of a photocopier.

Entity A owns the photocopier and any invoices pertaining to the photocopier are sent to entity A. Entity B's share of the photocopying expenses is determined by the number of copies it makes in relation to the total number of copies made on the photocopier. Entity B pays entity A for its share of the photocopier expenses.

Both entities are registered for goods and services tax (GST), but do not form a GST group. The transaction satisfies the other positive limbs of section 9-5 of the GST Act.

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 existence of a 'supply' itself is an essential element in determining whether the 'transaction' is a taxable supply under section 9-5 of the GST Act.

Section 9-10 of the GST Act discusses the meaning of the word 'supply' for GST purposes. Paragraphs 9-10(2)(a) and (b) of the GST Act states that a supply includes:

•: a supply of goods; and
•: a supply of services.

In this case, entity B pays for the actual use of the photocopy machine, and the photocopies. Accordingly, the supply entity A is making to entity B is a combination of goods (the photocopies) and services (the use of the machine).

Entity A is registered for GST and the transaction is a 'supply' that fulfils 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 Division 40 of the GST Act. Therefore, entity A is making a taxable supply under section 9-5 of the GST Act.

[NOTE: Entity B is entitled to claim an input tax credit for the GST component included in the supply, provided that it is making a creditable acquisition under section 11-5 of the GST Act.]

Date of decision: 31 May 2001

Legislative References:
A New Tax System (Goods and Services Tax) Act 1999
   section 9-5
   section 9-10
   section 9-10(2)(a)
   section 9-10(2)(b)
   section 11-5
   Division 38
   Division 40

Keywords
Goods & services tax
Taxable supply

Business Line: GST

Date of publication: 1 August 2001

ISSN: 1445-2782

history

	Date:	Version:
	31 May 2001	Original statement
You are here	9 December 2005	Archived

Copyright notice

You are free to copy, adapt, modify, transmit and distribute material on this website as you wish (but not in any way that suggests the ATO or the Commonwealth endorses you or any of your services or products).