Edited version of private ruling

Authorisation Number: 1011520512735

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Ruling

Subject: GST and sewerage services

Question:

Is the supply of your services GST-free under subsection 38-290(1) of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)?

Answer:

The supply of your services is not GST-free under subsection 38-290(1) of the GST Act.

Relevant facts:

You are registered for goods and services tax (GST).

You provide holding tanks to your customers as a temporary site service where no connection to sewer is available or until they run in the sewer. They are generally used in building and construction or events to go under an Ablution (toilet) blocks to collect the waste and grey water.

You confirmed that these holding tanks are not septic tanks.

Your service driver pumps waste matter into the tanker and discharges it into a sewer system via a specifically set up dump point.

Reasons for decision

According to subsection 7-1(1) of the A New Tax System (Goods and Services Tax) Act (GST Act), GST is payable on taxable supplies.

Section 9-5 of the GST Act states:

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 that you carry on; and

c) the supply is *connected with Australia; 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.

(asterisk denotes a term defined in section 195-1 of the GST Act)

Subsection 38-290(1) provides that a supply of sewerage services is GST-free.'

The term 'sewerage services' is not defined in the GST Act and takes its ordinary meaning. Goods and Services Tax ruling GSTR 2000/25 provides some guidance. Paragraphs 38 and 39 states:

38. The Macquarie Dictionary defines the following:

'sewerage' 1. the removal of waste water and refuse by means of sewers. 2. a system of sewers. 3. the pipes and fittings conveying sewage.

'sewer' an artificial conduit , usually underground, for carrying off waste water and refuse, as from a town or city.

'sewage' the waste matter which passes through sewers. ^F12

39. The supply of a service that enables an end recipient to discharge waste water, including water containing human waste, into a network of sewer pipes connected to the recipient's premises is the supply of a sewerage service. The discharge may be of either domestic or commercial trade waste origin. The carriage of the discharge through the network to a treatment plant, and the treatment of the sewage, are also sewerage services. The supply commences at the point where an end recipient's pipes connect with or feed into the supplier's network. This is the point of supply to end recipients. The system for the supply of sewerage services to end recipients may be the responsibility of more than one supplier. For example, a supplier of bulk sewage removal services may supply those services to another supplier who makes retail supplies of sewerage services to end recipients.

Thus in order to come within the meaning of the definition of 'sewerage services' it must enables an end recipient to discharge waste water, including water containing human waste, into a network of sewer pipes connected to the recipient's premises.

In your case, you advised that your customers are not connected to a system of sewer. Hence, the services that you provide do not come under subsection 38-290(1) of the GST Act.

Section 38-295 of the GST Act provides that a supply of a service that consists of emptying a septic tank is GST-free.

Paragraphs 55 and 56 of Goods and Services Tax Ruling GSTR 2000/25 state:

55. Section 38-295 provides that the emptying of a septic tank is GST-free. This is regardless of whether it is on residential premises.

56. The Macquarie dictionary defines a 'septic tank' as: a tank in which solid organic sewage is decomposed and purified by anaerobic bacteria'

In your case, you confirmed that the holding tank is not a septic tank; therefore, your supply of service that consists of the emptying of a holding tank will not be GST-free under section 38-295 of the GST Act.