Edited version of private ruling

Authorisation Number: 1011475941535

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Ruling

Subject: GST and the treatment of additional waste collection charges

Question

Is goods and services tax (GST) payable on the optional waste collection services which are additional to the standard services for which the fees are included in the rate notice?

Answer

No. GST is not payable on the optional waste collection services which are additional to the standard services for which the fees are included in the rate notice.

Relevant facts and circumstances

You are a local government body.

You are registered for GST.

You provide waste collection service to ratepayers and the fees for this service are included in the rate notice.

The service is a compulsory waste management service and is levied under a specific legislation.

All dwellings are required to have at least one compulsory weekly waste collection.

There are additional services which may be requested by the ratepayers, these include:

· Additional standard collection service

· Additional recycling service by providing additional bins readily identifiable as for recycling specific type of rubbish

The fees for these additional services are levied under a specific legislation, and will be included in the rates notice.

Reasons for decision

GST is payable on taxable supplies. A taxable supply is defined under section 9-5 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act). Section 9-5 of the GST Act states:

· You make a taxable supply if:

o you make the supply for *consideration; and

o the supply is made in the course or furtherance of an *enterprise that you *carry on; and

o the supply is *connected with Australia; and

o 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 term defined in section 195-1 of the GST Act)

One of the requirements of a taxable supply under section 9-5 of the GST Act is that there must be a supply for consideration as per the requirement in paragraph 9-5(a) of the GST Act.

Paragraph 9-15(1)(a) of the GST Act provides that 'consideration' includes any payment in connection with a supply of anything. In this case you receive consideration from the ratepayers for the supply of a waste collection service as detailed in the facts.

Subsection 81-5(1) of the GST Act states that the payment of any Australian tax, fee or charge (other than GST) is to be treated as the provision of consideration to the entity to which tax, fee or charge is payable, for a supply that the entity makes to you.

However, subsection 81-5(2) of the GST Act states that the payment of any Australian tax, fee or charge that is specified in a written determination of the Treasurer is not the provision of consideration. As such any Australian tax, fee or charge that is specified in a written determination of the Treasurer will not be subject to GST.

Australian tax, fee or charge

Section 195-1 of the GST Act includes the following definitions:

Australian Tax Fee or Charge means … a fee or charge (however described) imposed under an Australian law and payable to an Australian government agency.

Australian government agency has the meaning given by section 995-1 of the Income Tax Assessment Act 1997 (ITAA 1997).

Section 995-1 of the ITAA 1997 includes the following definitions:

Australian government agency means:

(a)  the Commonwealth, a State or a Territory; or

(b) an authority of the Commonwealth, a State or a Territory

Australian law means a Commonwealth law, a State law or a Territory law.

You, being the local government, are an authority of the State. You impose taxes, fee and charges under the specific legislation, which is an Australian law, as defined above.

So, if the tax, fee or charge imposed is specified in the Treasurer's Determination, that payment or the discharging of that liability for that tax, fee or charge is not the provision of consideration.

Treasurer's written determination

Based on the information provided, the fees for the additional waste standard collection service and the additional recycling service including the provision of additional bins are included in the Treasurer Determination because they are charged under the specific legislation on ratepayers. These fees will appear on the rate notice, to be a payment that is compulsory when it has been included on a rate notice notwithstanding that the service itself may be optional.

Therefore where a ratepayer chooses to request for additional waste collection service and the additional service fee is charged on a rate notice, the service fee will be considered compulsory and deemed not to be consideration by virtue of subsection 81-5(2) of the GST Act. Therefore, as the requirement in paragraph 9-5(a) of the GST Act is not met, the supply of additional waste collection service is not a taxable supply and no GST is payable on these charges.