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This edited version has been archived due to the length of time since original publication. It should not be regarded as indicative of the ATO's current views. The law may have changed since original publication, and views in the edited version may also be affected by subsequent precedents and new approaches to the application of the law.

You cannot rely on this record in your tax affairs. It is not binding and provides you with no protection (including from any underpaid tax, penalty or interest). In addition, this record is not an authority for the purposes of establishing a reasonably arguable position for you to apply to your own circumstances. For more information on the status of edited versions of private advice and reasons we publish them, see PS LA 2008/4.

Edited version of your private ruling

Authorisation Number: 1012404485330

Ruling

Subject: Taxable supply and overpayment of GST

Question 1

Does entity B make a taxable supply to you under the Scheme for which the payments made by you are consideration for this supply?

Answer

No. There is no taxable supply made by entity B to you under the Scheme. The payments from you to entity B are not related to making creditable acquisitions by you and therefore you are not entitled to claim GST input tax credits.

We cannot comment on whether your payments constitute consideration received by entity B by virtue of Division 355 of the Taxation Administration Act 1953 in relation to confidentiality of taxpayer information.

Question 2

If the answer to Question 1 is 'no', has entity B overpaid GST on payments received from you under the Scheme?

Answer

This question does not relate to any of your GST obligations. Consequently, we are unable to respond to you by virtue of Division 355 of the Taxation Administration Act 1953 in relation to confidentiality of taxpayer information.

This ruling applies for the following periods:

The scheme commences on:

Relevant facts and circumstances

The facts and circumstances supplied in a previous application for private binding ruling, which you have made reference to, have also been considered in this ruling as well as additional facts provided as follows:

In the previous application for private binding, ruling details and agreements under a concession scheme were supplied and for the purposes of this ruling are also included and referred to as the 'Scheme'

The facts describing the scheme and circumstances for this private binding ruling application are the same as those outlined in the previous private binding ruling application

As a consequence of government changes, you make payments to entity B in relation to the Scheme outlined in the previous application for private binding ruling

Relevant legislative provisions

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

Section 9-15.

Section 9-17.

Section 11-5.

Taxation Administration Act 1953: Division 355

Reasons for decision

Question 1

Summary

As your payments to entity B are not made in relation to any taxable supplies by entity B to you, they are not related to making any creditable acquisitions by you. Therefore you are not entitled to claim GST input tax credits.

Detailed reasoning

The reasons for decision, in our previous correspondence, in which you were not an applicant but have made reference to, are still relevant in the current circumstances. In addition to the previous ruling we provide further clarification in relation to your questions.

You pay entity B amounts related to their supplies to other entities, however, you are not a party to any agreement between you and entity B in relation to those supplies.

From all of the evidence previously supplied, there are no binding obligations, and no pre-existing framework of a relevant nature between you and entity B in respect of any supply by entity B to you.

The payments you make to entity B are not for a liability owed by you, within the context of a pre-existing arrangement entered into between entity B and you, with respect to any supply by entity B to you.

The Commissioner's view on the meaning of supply and whether a supply has been made in similar circumstances was discussed in previous correspondence, which you have made reference to, and is also discussed further in Goods and Services Tax Ruling GSTR 2006/9 Goods and services tax: supplies. We advise that the agreements made under the Scheme confirm there is no taxable supply between you and entity B in relation to the payments made by you to entity B.

As entity B does not make any supplies to you, you cannot acquire anything for a creditable purpose, as required by paragraph 11-5(a) of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act), in relation to those payments to entity B. Making an acquisition of something is the first element to be considered in determining whether you make a creditable acquisition under section 11-5 of the GST Act. The meaning of acquisition is given in section 11-10 of the GST Act. The second element is the requirement in paragraph 11-5(b) of the GST Act that the supply of the thing to you is a taxable supply. Neither element is present in relation to the payments made by you to entity B and as a consequence you are not entitled to claim GST input tax credits.

Please note that from 1 July 2012, whether payments between government related entities constitute consideration, subsection 9-17(3) of the GST Act must be considered. Prior to 1 July 2012, paragraph 9-15(3)(c) of the GST Act applied.

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