Disclaimer
This edited version has been archived due to the length of time since original publication.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 1012429022979

Ruling

Subject: GST and organising a delegation to an overseas meeting

Question 1

Do you make a taxable supply to an institution in return for their payment?

Answer

No

Relevant facts and circumstances

You are a not-for-profit organisation and are registered for goods and services tax (GST)

KEY ACTIVITIES

THE PROCESS

Research essay

Funding

Relevant legislative provisions

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

Section 9-5

Section 9-10

Subsection 9-17(2)

Section 9-15

Reasons for decision

Question 1

Summary

No, your do not make to an institution a supply in return for their payment.

Detailed reasoning

However, the supply is not a *taxable supply to the extent that it is *GST-free or *input taxed.

(The asterisks in this ruling indicate terms defined under section 195-1 of the GST Act)

You advise that you select, fund, prepare and coordinate groups to attend a variety of major international events. In order to undertake these activities you have sought financial assistance (funding) from institutions.

Goods and services tax ruling GSTR 2012/2 explains the Commissioner's view on when a financial assistance is consideration for a supply.

In the Ruling, the term 'financial assistance payment' is intended to encompass a wide range of payments. This includes payments made to provide support or aid to the payee.

An entity that receives a financial assistance payment is liable for GST in respect of that payment if the payment is consideration for a supply and all the other requirements for a taxable supply in section 9-5 of the GST Act are met

In your circumstances, we need to consider firstly whether you make a supply for consideration when you receive a payment from a university in respect of a particular delegation for the purposes of paragraph 9-5(a) of the GST Act.

Is there a supply

Subsection 9-10(1) of the GST Act defines supply as any form of supply whatsoever.

The intended scope of subsection 9-10(1) of the GST Act is more fully illustrated in subsection 9-10(2) of the GST which states that without limiting subsection 9-10(1) of the GST Act, supply includes any of these:

A supply is something that passes from one entity to another. The supply may be one of particular goods, services or something else that is reflected in an agreement by one party to do something for another. This view is contained in Goods and Services Tax Ruling GSTR 2006/9 titled 'supplies' which sets out a number of propositions for characterising and analysing supplies.

Despite the breadth of the definition, it should not be automatically assumed that a supply exists in a transaction and that GST liabilities arise where a payment is made in the transaction.

Paragraph 116 of GSTR 2012/2 states:

In the context of financial assistance payments where the payment is made for the purpose of support or aid, there may be circumstances where no supply is made by the payee. This may be the case where the payee has done nothing in return for or in relation to the payment.

Rather, it is necessary in any case where a payment is made to determine whether anything is supplied and, if so, whether the payment has a sufficient nexus with the thing supplied.

GSTR 2006/9 examines the meaning of 'supply' in the GST Act. Part II of the Ruling looks at how to identify and characterise supplies in the context of the transactions in which they are made.

The Ruling uses ten propositions to assist in analysing a transaction to identify the supply or supplies made in that transaction. The propositions are not universal as they may have exceptions or be qualified either by the operation of particular provisions of the GST Act, or by the facts and circumstances of a transaction.

Of relevance to your circumstances is Proposition 9 - creation of expectations alone does not establish a supply.

Paragraph 28 of GSTR 2012/2 states:

Payment for the entry into an obligation to do or refrain from doing something

Where a supply is constituted by the payee entering into an obligation with the payer to do or refrain from doing something and the payment is made to secure that obligation, there is a sufficient nexus between the payment and the obligation. This is because the financial assistance payment is made in connection with, in response to, or for the inducement of the entry into the obligation.

From the information you have provided, we consider that you have not entered into any binding obligation to organise delegations for the following reasons:

Further we consider that you have not provided any goods or services or some other things to the institution in relation to the payment. This is so notwithstanding you provide the following information to the institution.

Therefore, we consider that when you organise the group, you make no supply to the institution which has provided the financial assistance payment to you.

In other words, as you do not make any taxable supply upon receiving a payment from an institution (which you use in organising a group) you have no GST liability.


Copyright notice

© Australian Taxation Office for the Commonwealth of Australia

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).