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Edited version of private advice

Authorisation Number: 1052124622000

Date of advice: 1 June 2023

Ruling

Subject: GST - insurance assessment services

Question 1

Is your supply of services in assessing the damage to a motor vehicle (MV) as part of an insurance settlement arrangement a taxable supply under section 9-5 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)?

Answer 1

Yes, your supply of assessing the damage to a MV as part of an insurance settlement arrangement is a taxable supply under section 9-5 of the GST Act on which GST is payable.

Question 2

If the supply is a taxable supply in question 1, when do you attribute the GST payable under section 29-5 of the GST Act?

Answer 2

As you account on a cash basis, you attribute the GST in the tax period in which you receive all or any of the consideration but only to the extent of the consideration is received.

Relevant facts and circumstances

You carry on an enterprise which involves providing services as part of insurance settlement arrangements.

You are registered for goods and services tax (GST) and account for GST on a cash basis.

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 9-15

A New Tax System (Goods and Services Tax) Act 1999 subsection 29-5(2)

Reasons for decision

Taxable supply

Section 9-40 of the GST Act provides that you must pay the GST payable on any taxable supply you make. You make a taxable supply under section 9-5 of the GST Act if:

•                     you make a supply for consideration

•                     the supply is made in the course of an enterprise you carry on

•                     the supply is connected with the indirect tax zone and

•                     you are registered or required to be registered for GST.

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

With regards to the requirements of section 9-5 of the GST:

•                     you have made a supply (assessment service) for consideration (the service fee)

•                     the supply (assessment service) is made in the course of an enterprise you carry on as a loss assessor

•                     the supply of your assessment service is connected with the indirect tax zone being provided in Australia

•                     you are registered for GST and

•                     the supply of your service is a neither a GST-free nor an input taxed supply.

It follows, that the supply of your assessment service meets the requirements of a taxable supply made by you on which GST is payable.

Attributing the GST payable on taxable supplies:

Subsection 29-5(1) of the GST Act provides that if you account for GST on a non cash basis the GST payable by you on a taxable supply is attributed to the earlier of:

•                     the tax period in which any of the consideration is received for the supply or

•                     the tax period in which an invoice is issued

As you account on a cash basis, subsection 29-5(2) of the GST Act relevantly provides that the GST payable by you on the taxable supply of your services is attributable to:

•                     the tax period you received all of the consideration for that taxable supply or

•                     the tax period you received part of the consideration but only to the extent that the consideration is received in that tax period or

•                     if in a tax period none of the consideration is received none of the GST on the supply is attribute to that tax period.

This means, that you correctly included 1/11th of the consideration you received (being the GST exclusive invoiced fee) for your service in an assessment (activity statement) for the tax period to which that GST payable was attributable.

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