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Edited version of private ruling
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Ruling
Subject: GST and spectrum access charges
Is the specified payment (fee) that you receive consideration for a supply that you make to the payer?
No, the fee that you receive is not consideration for a supply that you make to the payer.
Relevant facts and circumstances
This ruling is based on the facts stated in the description of the scheme that is set out below. If your circumstances are materially different from these facts, this ruling has no effect and you cannot rely on it. The fact sheet has more information about relying on your private ruling.
You are an Australian government agency.
You issue specified permits (permits) to certain entities.
You charge a fee for the issue of these permits.
The fee is imposed under a specified Australian law.
Previously the fee that you charged was not treated as the provision of consideration for a supply made by you to the payer. At that time, the fee was clearly specified in the Treasurer's determination made under Division 81 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act).
The A New Tax System (Goods and Services Tax) (Exempt Taxes, Fees and Charges) Determination 2010 (No. 2) (the current determination) is however worded differently from the previous determinations.
You are registered for GST.
Summary
The payment of the fee is not the provision of consideration for a supply that you make as the fee is in relation to issue of permits, which is specified by Treasurer's determination on exempt taxes, fees and charges.
Detailed reasoning
Section 9-7 of the GST Act provides that you must pay the GST payable on any taxable supply that you make.
Under section 9-5 of the GST Act, 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.
(* denotes a term defined in the GST Act)
Paragraph 9-5(a) of the GST Act requires that the supply is for 'consideration'.
Section 9-15 of the GST Act provides that consideration includes any payment, act or forbearance, in connection with, in response to or for the inducement of a supply of anything.
Subsection 81-5(1) of the GST Act deems that a payment of a tax, fee or charge imposed under an Australian law is consideration for a supply. It states:
The payment of any *Australian tax, fee or charge (other than the GST) that you make, or the discharging of your liability to make such a payment, is to be treated as the provision of *consideration, to the entity to which the tax, fee or charge is payable, for a supply that the entity makes to you.
Section 195-1 of the GST Act defines an 'Australian tax, fee or charge' as:
(a) a tax (however described) imposed under an *Australian law; or
(b) 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 which states:
Australian government agency means:
(a) the Commonwealth, a State or a Territory; or
(b) an authority of the Commonwealth or of a State or a Territory.
You are an Australian government agency and supply the permits for which you charge a fee under an Australian law which is payable to you.
Accordingly, the fee satisfies the definition of an 'Australian tax, fee or charge' as per section 195-1 of the GST Act and is treated as consideration for a supply pursuant to subsection 81-5(1) of the GST Act.
However, pursuant to subsection 81-5(2) of the GST Act, the payment of any Australian tax, fee or charge or the discharging of a liability to make such a payment is not the provision of consideration if the Australian tax, fee or charge is specified, by legislative instrument, by the Treasure.
We consider that the current determination covers the fee. Therefore, the fee is a charge specified, by legislative instrument, by the Treasurer for the purposes of subsection 81-5(2) of the GST Act. Accordingly, the payment of the fee is not the provision of consideration for a supply that you make to the payer.
As the payment of the fee is not the provision of consideration for a supply that you make, the requirements of paragraph 9-5(a) of the GST Act is not met. Therefore, there are no GST implications when you receive the fee as you are not making a taxable supply under section 9-5 of the GST Act.