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Edited version of your written advice
Authorisation Number: 1013072257572
Date of advice: 24 August 2016
Ruling
Subject: GST and Australian Fees or Charges
Questions
1. Can the Commissioner confirm that a Licence Fee payable to a Government Department (the State) pursuant to a particular act is not consideration for a supply pursuant to Division 9 and Division 81 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)?
2. If the Commissioner confirms that the Licence Fee is consideration for a supply, then, is the Licence Fee payable to the State consideration for a taxable supply pursuant to section 9-5 of the GST Act?
3. If the Commissioner confirms that the Licence Fee is consideration for a taxable supply then:
3.1. is the Licence Fee, as calculated by the formula set out in a particular section of a particular act a GST inclusive price pursuant to section 177-12 of the GST Act?
3.2. is GST payable on the taxable supply (where an upfront payment of the Licence Fee is required to be paid for a number of years) attributed to the tax period in which the upfront payment is received or the invoice (which relates to the prepayment) is issued pursuant to Division 29 and Division 156 of GST Act?
3.3. can the Commissioner exercise its powers of administration as set out in Practice Statement PS LA 2011/21 to offset the refundable amount owed as an input tax credit to the recipient of that supply against the tax debt of the State with respect of any upfront payment of the Licence Fee?
Answers
Question – 1
Yes, the Commissioner can confirm that the Licence Fee is a fee that is covered by subsection 81-10(4) of the GST Act and as such falls under subsection 81-10(1) of the GST Act.
GST does not apply to payments of taxes, fees and charges that are excluded under Division 81 of the GST Act. Accordingly GST is not payable on the payment of the Licence fee (whether paid upfront or annually).
Questions 2-3
Not applicable.
Relevant facts and circumstances
You are required to pay a Licence Fee under a particular act to a Government Department (State).
The State may request you to pay an upfront payment of the Licence Fee that is payable for a certain number of years upfront.
Relevant legislative provisions
Section 9-5 of the A New Tax System (Goods and Services Tax) Act 1999
Division 81 of the A New Tax System (Goods and Services Tax) Act 1999
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