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Edited version of your written advice
Authorisation Number: 1013027470823
Date of advice: 14 July 2016
Ruling
Subject: Government taxes fees and charges
Question 1
Are the fees you charged for the additional Radio frequency (RF) metering services subject to GST?
Answer 1
No.
Question 2
Is the Electronic tracking system invoicing fee you charge subject to GST?
Answer 2
No.
Relevant facts and circumstances
The entity is a statutory State Owned Corporation. It provides utilities to customers. As part of the current price determination, there have been a number of new charges that the price regulator has allowed.
Additional RF metering service relates to the remote meter reading that the customer has agreed to as part of an inaccessible meter trial. You charge a fee for this additional service. The fee for additional RF metering service is a fee charged pursuant to an Act.
Electronic tracking system invoicing is a quarterly administration fee. It is a management fee to coordinate servicing and monitoring compliance. It is an electronic tracking system you use to monitor the generation, collection, transport and disposal of waste. The fee for Electronic tracking system invoicing is a fee charged pursuant to an Act.
Relevant legislative provisions
A New Tax System (Goods and Services Tax) Act 1999 Section 9-5
A New Tax System (Goods and Services Tax) Act 1999 Section 81-10
A New Tax System (Goods and Services Tax) Act 1999 Section 81-15
A New Tax System (Goods and Services Tax) Act 1999 Section 195-1
A New Tax System (Goods and Services Tax) Regulations 1999 Regulation 81-15.01
Reasons for decision
All legislative references in this Ruling, unless otherwise stated are to A New Tax System (Goods and Services Tax) Act 1999 (GST Act). The relevant legislative provisions are discussed below.
Section 9-5 defines a taxable supply as:
You make a taxable supply if:
(a). you make the supply for *consideration; and
(b). the supply is made in the course or furtherance of an *enterprise you *carry on; and
(c). the supply is *connected with indirect tax zone; and
(d). you are *registered or *required to be registered.
However, the supply is not a *taxable supply to the extent that it is *GST-free or *input taxed.
(* denotes a defined term under section 195-1)
GST-free
Subdivision 38-I makes certain supplies of Water, sewerage and drainage GST-free.
Goods and Services Tax Ruling GSTR 2000/25 GST-free supplies of water, sewerage and sewerage-like services, storm water draining services and emptying of a septic tank explains the Commissioner's view on water meters and at paragraph 24 states:
Activities performed by the supplier of water up to and including the point of supply to the recipient of water are GST-free if they are integral to the physical delivery of water to the recipient. The system for the physical delivery of water to an end recipient may be the responsibility of more than one supplier of water. For example, a supplier of bulk water may supply bulk water to another supplier who makes retail supplies of water to end recipients. The following will be GST-free:
• initial connection, re-connection, disconnection, water meter installation, and tapping and tee insertion ;
• irrigation channel water scheduling and channel attendance (including channeling from natural water courses);
• irrigation channel maintenance up to and including the point of supply (where it is charged to the water supply recipient); and
• water meter reading and testing. (Emphasis added)
RF metering is a form of meter reading which is done remotely. It is accepted as water meter reading as stated in paragraph 24 of GSTR 2000/25. Therefore the supply of additional RF metering fee is GST-free.
Electronic tracking system
Paragraph 81-15.01(1)(f) of the A New Tax System (Goods and Services Tax) Regulations 1999 (GST Regulations) refers to 'a fee or charge for a supply of a regulatory nature made by an Australian government agency.'
The term 'regulatory nature' is not defined in the GST Regulations or the GST Act. The explanatory statement to the A New Tax System (Goods and Services Tax) Amendment Regulation 2012 (No. 2) (ES) states:
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.
Electronic tracking system invoicing fee is charged for a supply of a regulatory nature to coordinate servicing and monitoring compliance water aid. Therefore the fee for Electronic tracking system fee invoicing does not constitute consideration. As there is no consideration the requirements of section 9-5 are not met and therefore the fee is not subject to GST.
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