| Disclaimer This edited version has been archived due to the length of time since original publication.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 written advice
Authorisation Number: 1051215421192
Date of advice: 19 April 2017
Ruling
Subject: GST and compensation
Question 1
Are you making a taxable supply under section 9-5 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) when you enter into an Agreement in relation to the Land.
Answer
No
The holder of a relevant authority intending to access private land to undertake authorised activities must execute an Agreement with an eligible claimant (land owner).
The right to access the land and carry out the authorised activities is granted by the relevant Minister under the relevant legislation, rather than as a consequence of anything (such as a licence granted by you) that is furnished or provided by you.
You do not take any action to cause your interest in the Land to be transferred or surrendered to Entity B. Rather you are being compensated for the effects caused as a result of obligations imposed on you by Statute.
As you do not transfer or surrender your rights to the land and do not take any form of action to cause anything else to be supplied to Entity B, it follows that you are not making a supply and hence are not making a taxable supply under section 9-5 of the GST Act.
Relevant facts and circumstances
You are the sole owner of the Land purchased prior to 20 September 1985.
Entity A carries out business operations on the land and is the sole occupier of the Land.
You and Entity A are the sole eligible claimants of the Land under the relevant legislation.
You have entered into an Agreement with Entity B, the holder of a Relevant Authority over the land.
Entity B acts as agent for and on behalf of Entity C.
Compensation is being paid in accordance with the relevant legislation.
The current purpose of the Land is to run a Primary Production business which is carried on by Entity A.
There is currently no lease in place between you and Entity A.
You are not registered for GST.
You have provided a copy of the executed Agreement and relevant clauses are extracted below: xxxx
Reference has been made to a website which states that: xxxx
Relevant provisions of the Legislation include: xxxx
Relevant legislative provisions
A New Tax System (Goods and Services Tax) Act 1999 section 9-5 and
A New Tax System (Goods and Services Tax) Act 1999 section 9-10
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).
