Edited version of private ruling

Authorisation Number: 1011645720102

This edited version of your ruling will be published in the public Register of private binding rulings after 28 days from the issue date of the ruling. The attached private rulings fact sheet has more information.

Please check this edited version to be sure that there are no details remaining that you think may allow you to be identified. Contact us at the address given in the fact sheet if you have any concerns.

Ruling

Subject: GST and contribution made

Question

Are you required to collect and in turn remit the GST on each selected team member's annual contribution for participating in international competitions?

Advice/Answer

Yes, you are required to collect and remit the GST on each selected member's annual contribution for participating in international competitions.

Relevant facts

You are a not-for-profit association incorporated and you are registered for GST.

You field teams to represent Australia at various international competitions.

In addition to the standard membership fees, members who are selected to represent Australia at international competitions, pay an annual contribution to participate in competitions during the year. There is usually only one international event per year, but there may be more.

You invoice the selected team members for their contribution. You have provided a sample invoice that you issue to the team members.

You carry out research to determine what arrangements are required (as it involves the transport of firearms). You arrange registration, accommodation, do all the domestic travel bookings and arrange for all ground transport. You use a travel agent to make the international flight bookings.

You pay for the costs of all registrations, air fares, accommodation, ground transport, etc. The invoices are made out to you and you are liable to pay for these costs. You claim the input tax credits for the expenses incurred.

The costs you incur are substantially more than the contribution provided by the team members.

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 Paragraph 9-10(2)(e).

A New Tax System (Goods and Services Tax) Act 1999 Section 9-15.

A New Tax System (Goods and Services Tax) Act 1999 Subsection 9-25(5).

A New Tax System (Goods and Services Tax) Act 1999 Section 195-1.

Reasons for decision

Under the A New Tax System (Goods and Services Tax) 1999 (GST Act), an entity is liable for GST on all the taxable supplies it makes.

Section 9-5 of the GST Act states that:

You make a taxable supply if:

(a) you make the supply for consideration

(b) the supply is made in the course or furtherance of an enterprise that you carry on

(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.

In your situation, association members selected to participate in the various international competitions are required to pay an annual contribution to you in order to participate.

In return they receive a package of services from you, which includes:

· you engaging a travel agent to organise the international flights

· you organising and booking domestic travel, ground transport and accommodation

· you organising registration

· you making any special arrangements for transport of the equipment and tools, and

· you paying the costs of these services.

The payment by the participant is not commensurate with the costs that you incur as a consequence of their participation. You do not attempt to itemise their account. It is simply a single charge for participation.

Although the participants are provided with travel and accommodation (which, depending on the venue, may include international travel and accommodation) these services are supplied to you, but provided to the participants. This is similar to example 4 at paragraphs 157 to 160 of Goods and Services Tax Ruling GSTR 2006/9 'Goods and services tax: supplies' (GSTR 2006/9), which is available on our website.

The invoices for the air fares, accommodation, etc are made out to you and you are liable to pay for these costs. The international component of the travel and accommodation may be GST-free when supplied to you. However, to the extent that the costs are paid for from the participants' contributions, it is simply part of the cost of the participation 'package' that you supply to the participant.

Based on the facts:

· you are supplying a package of services to the participants, which allows them to participate in the events, for which you receive an annual consideration.

· the supply is made in the course or furtherance of your enterprise,

· the supply is connected with Australia, as your enterprise is in Australia and you are supplying to an individual who is in Australia, and

· you are registered for GST.

In your situation, there are no provisions in the GST Act that will make your supply GST-free or input taxed.

Therefore, your supply of the 'packaged services' meets all the requirements of section 9-5 of the GST Act and is a taxable supply. Accordingly, you are required to collect and remit the GST from the contributions to the ATO.