Edited version of private ruling

Authorisation Number: 1011771750905

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Ruling

Subject: GST and recipient created tax invoices

Questions

1. Are you entitled to issue recipient created tax invoices?

2. If yes to question 1, do you need to notify the Commissioner of Taxation (Commissioner) that you will be issuing recipient created tax invoices?

3. If yes to question 1, does the document you have supplied meet the information requirement to be a recipient created tax invoice?

4. Can a recipient created tax invoice also be used as a tax invoice where you make a corresponding supply back to the supplier for a fee?

5. If yes to question 4, does the document you have supplied meet the information requirement to also be a tax invoice?

Answers

1. Yes.

2. No.

3. Yes.

4. Yes.

5. Yes.

Relevant facts and circumstances

· You are registered for GST.

· You supply (by way of sale) various goods to an organisation.

· You purchase the goods from suppliers (dealers) who then deliver the goods to the organisation on your behalf.

· You make a corresponding supply of services to the dealers for a service fee.

· Your GST turnover exceeds $20 million.

· You have provided a sample document purporting to be both a recipient created tax invoice and tax invoice.

Relevant legislative provisions

A New Tax System (Goods and Services Tax) 1999 (GST Act):

· Subsection 29-70(1)

· Division 188.

Reasons for decision

Summary

You are entitled to issue recipient created tax invoices and are not required to notify the Commission of this decision.

A recipient created tax invoice can also be treated as a tax invoice provided certain requirements are met.

The document you have supplied is a recipient created tax invoice provided you have also met the requirements of paragraph 13 of the public ruling GSTR 2000/10.

The document can also be treated as a tax invoice with respect to your supply of services.

Detailed reasoning

1. Are you entitled to issue recipient created tax invoices?

The ATO view on recipient created tax invoices is provided by the public ruling GSTR 2000/10 (available from the ATO website www.ato.gov.au ). Paragraph 28 of this ruling provides that a tax invoice for a taxable supply made by a GST registered supplier to a GST registered recipient having a GST turnover that meets $20 million is a class of tax invoice that may be issued by the recipient. This class of tax invoice is called a recipient created tax invoice.

Consequently, given your GST turnover exceeds $20 million, you would be entitled to issue recipient created tax invoices as provided by GSTR 2000/10.

Please note that there are several other requirements that must be satisfied before you can issue a recipient created tax invoice and these are explained in paragraph 13 of GSTR 2000/10 as follows:

· you and the dealer must be registered for GST when the invoice is issued and the recipient created tax invoice must show the ABN of the dealer

· you must issue the original or a copy of the recipient created tax invoice to the dealer within 28 days of the making, or determining the value, of the taxable supply and must retain the original or a copy

· you must issue the original or a copy of an adjustment note (if required) to the dealer within 28 days of the adjustment and must retain the original or a copy

· you must reasonably comply with their obligations under the taxation laws

· you must have either:

o a written agreement with the dealer specifying the supplies to which it relates, that is current and effective when the recipient created tax invoice is issued, agreeing that:

§ you can issue tax invoices in respect of the supplies

§ the dealer will not issue tax invoices in respect of the supplies

§ the dealer acknowledges that it is registered for GST when it enters into the agreement and that it will notify you if it ceases to be registered; and

§ you acknowledge that you are registered for GST when you enter into the agreement and that you will notify the dealer if you cease to be registered for GST, or

o an agreement with the dealer embedded in a recipient created tax invoice you issue that contains the following statement:

The recipient and the supplier declare that this agreement applies to supplies to which this tax invoice relates. The recipient can issue tax invoices in respect of these supplies. The supplier will not issue tax invoices in respect of these supplies. The supplier acknowledges that it is registered for GST and that it will notify the recipient if it ceases to be registered. The recipient acknowledges that it is registered for GST and that it will notify the supplier if it ceases to be registered for GST. Acceptance of this recipient created tax invoice constitutes acceptance of the terms of this written agreement.

Both parties to this supply agree that they are parties to a recipient created tax invoice agreement. The supplier agrees to notify the recipient if the supplier does not wish to accept the proposed agreement within 21 days of receiving this document.

1. you must not issue a document that would otherwise be a recipient created tax invoice, on or after the date when you or the dealer has failed to comply with any of the requirements of the determination.

2. If yes to question 1, do you need to notify the Commissioner that you will be issuing recipient created tax invoices?

Paragraph 11 of GSTR 2000/10 provides that you are not required to notify the Commissioner of your intention to issue recipient created tax invoices.

3. If yes to question 1, does the document you have supplied meet the information requirement to be a recipient created tax invoice?

The information requirements for a document to be considered a recipient created tax invoice are given by subsection 29-70(1) of the GST Act. Please note that as a recipient created tax invoice is a class of tax invoice, the document must also meet the information requirements of a tax invoice unless otherwise stated.

Subsection 29-70(1) of the GST Act provides that the document must be:

· issued by the supplier of the supply or supplies to which the document relates, unless it is a recipient created tax invoice (in which case it is issued by the recipient);

· in the approved form

· contain enough information to enable the following to be clearly ascertained:

o the supplier's identity and the supplier's ABN

o if the total price of the supply or supplies is at least $1,000 or such higher amount as the A New Tax System (Goods and Services Tax) Regulations 1999 (Regulations) specify, or if the document was issued by the recipient - the recipient's identity or ABN

o what is supplied, including the quantity (if applicable) and the price of what is supplied

o the extent to which each supply to which the document relates is a taxable supply

o the date the document is issued

o the amount of GST (if any) payable in relation to each supply to which the document relates

o if the document was issued by the recipient and GST is payable in relation to any supply - that the GST is payable by the supplier

o such other matters as the Regulations specify

· it can be clearly ascertained from the document that the document was intended to be a tax invoice or, if it was issued by the recipient, a recipient created tax invoice.

Furthermore subsection 29-70(1) of the GST Act provides that a document issued by an entity to another entity may be treated by the other entity as a tax invoice for the purposes of this Act if:

· it would comply with the requirements for a tax invoice but for the fact that it does not contain certain information; and

· all of that information can be clearly ascertained from other documents given by the entity to the other entity.

In your case, the document you have provided meets the above information requirements to allow it to be treated as a recipient created tax invoice. Note that there are several requirements that must be satisfied before a recipient created tax invoice can be issued and these were detailed in the reasoning in question 1.

4. Can a recipient created tax invoice also be used as a tax invoice where you make a corresponding supply back to the supplier for a fee?

Paragraphs 50 - 52 of GSTR 2000/10 allow a recipient created tax invoice to be a tax invoice for a corresponding supply made by the recipient back to the supplier.

In your case, when you purchase goods from a dealer, you make a corresponding supply of services back to the dealer for a service fee.

In accordance with GSTR 2000/10, you would be entitled to use the recipient created tax invoice as a tax invoice for your supply.

5. If yes to question 4, does the document you have supplied meet the information requirement to also be a tax invoice?

As per the reasoning given in question 3, the document you have provided contains the necessary information for it to be treated as a tax invoice.

Please note that when using a document as both a tax invoice and recipient created tax invoice, paragraph 51 of GSTR 2000/10 does not allow you to reduce the price of one supply against the price of another.

In your case, you have included on the document a calculation showing the net amount payable to the dealer. The document, however, does show clearly the price of both supplies and consequently this calculation can be treated as just extra information useful to both you and the dealer.

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