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Edited version of your written advice
Authorisation Number: 1012761330925
Ruling
Subject: GST and fees for use of valuations and in respect of the servicing of the valuations
Question 1
Are the payments received by you for supplies involving the use of valuations and in respect of the servicing of the valuations to a rating authority consideration for taxable supplies under section 9-5 of the A New Tax System (Goods and Services Tax) Act (GST Act)?
Answer
No, the payments received are not consideration for taxable supplies.
Relevant facts and circumstances
You are a local government.
You are registered for goods and services tax (GST).
Relevant legislative provisions
A New Tax System (Goods and Services Tax) Act 1999 Subsection 81-10(1)
A New Tax System (Goods and Services Tax) Act 1999 Subsection 81-10(5)
A New Tax System (Goods and Services Tax) Act 1999 Section 81-15
A New Tax System (Goods and Services Tax) Regulations 1999 Regulation 81-10.01
A New Tax System (Goods and Services Tax) Regulations 1999 Regulation 81-15.01
Reasons for decision
Division 81 of the GST Act
Subsection 81-10(1) of the GST Act provides that a payment, or the discharging of a liability to make a payment, is not the provision of consideration the extent the payment is an Australian fee or charge that is of a kind covered by subsection 81-10(4) or (5) of the GST Act.
An Australian fee or charge is defined in section 195-1 of the GST Act as a fee or charge (however described), other than an Australian tax, imposed under an Australian law and payable to an Australian government agency.
For the purposes of this ruling we consider that you are an Australian government agency.
Subsection 81-10(5) of the GST relevantly covers a fee or charge paid to an Australian government agency if the fee or charge relates to the agency doing any of the following:
• recording information
• copying information
• modifying information
• allowing access to information
• receiving information
• processing information, and
• searching for information
Fee for use of valuations
We consider that the fees and charges paid to you for supplies involving the use of valuations come under subsection 81-10(5) of the GST Act and do not constitute consideration under subsection 81-10(1) of the GS T Act.
Subsection 81-10(2) of the GST Act provides that although a fee or charge comes under subsection 81-10(5) of the GST Act, the GST Regulations may provide for exceptions.
We do not consider the fee for the use of the valuations is covered by the regulation 81-10.01 of the GST Regulations and therefore is not the provision of consideration.
Therefore, the payments received by you for supplies involving the use of valuations are not consideration for taxable supplies under section 9-5 of the GST Act. As such you are not liable for GST in relation to these supplies.
Fee for servicing of the valuation
If the fee in respect of the servicing of the valuations relates to you recording, copying, modifying receiving, processing searching or allowing the rating authority access to information it will also be covered by subsection 81-10(5) of the GST Act.
However, it may be the fee in respect of the servicing of the valuations is not covered by subsection 81-10(5) of the GST Act. Section 81-15 of the GST Act provides that other fees that are not covered by subsections 81-10(4) or (5) of the GST Act do not constitute consideration if the fee or charge is covered by the GST Regulations for section 81-15 of the GST Act.
Paragraphs 81-15.01(1)(d) and (f) of the GST Regulations provide that a fee or charge to compensate an Australian agency for costs incurred by the agency in undertaking regulatory activities or for a supply of a regulatory nature made by an Australian government agency does not constitute consideration.
The explanatory statement to the A New Tax System (Goods and Service Tax) Amendment Regulation 2012 (No. 2) (ES) explains that:
The term 'regulatory' captures those supplies made by a government agency, where that agency is legislatively empowered to make the relevant supply and the supply is to satisfy a regulatory purpose.
On the facts provided, it is considered that the fee in respect of the servicing of the valuation (not covered by subsection 81-10(5) of the GST Act) is covered by paragraphs 81-15.01(1)(d) or (f) of the GST Regulations and therefore does not constitute consideration.
If the fee in respect of the servicing of the valuation includes dealing with valuation objections then the fee paid will also be covered by these GST Regulations.
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