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Subject: GST and Australian fees and charges

Question 1

Are the list of specified fees and charges imposed by you excluded from GST under Division 81 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)?

Answer

Yes

Question 2

Are the list of specified fees and charges imposed by you excluded from GST under Division 81 of the GST Act?

Answer

No

Question 3

Is the fee or charge imposed by you for a certain report a mixed supply as some components are excluded from GST under Division 81 and some components are taxable supplies under section 9-5 of the GST Act?

Answer

Yes

Relevant facts and circumstances

You are a state government agency and have statutory responsibilities for registering and maintaining information.

You carry out a variety of important regulatory functions including collecting, collating and maintaining information. You maintain current and historic records in publicly available registers. You also have statutory responsibilities to make specified information available from the public registers and can, by virtue of legislation and supporting regulations, charge fees in respect of your functions.

Access to records are provided by you to the public via various forms. The public can conduct their own searches of these registers, they can request your staff to conduct a search on their behalf or they can access the information through the use of information brokers or private search firms.

Copies of documents forming part of the register can be obtained electronically or by a customer attending your offices personally. Where a customer cannot obtain a copy electronically and is unable to attend personally, a customer can request a search company, or some other person, to obtain the information for them or can request your staff to obtain a copy and provide the copy by post, facsimile or some other means.

You must make the information that is maintained in these registers available to the public in a prescribed manner and for a prescribed fee, if any.

You also provide reports to the public. Components of the reports are listed on the 2011 Determination.

Relevant legislative provisions

A New Tax System (Goods and Services Tax) Act 1999 Division 81

A New Tax System (Goods and Services Tax) Act 1999 Section 9-5

A New Tax System (Goods and Services Tax) Act 1999 Section 9-10

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

A New Tax System (Goods and Services Tax) Regulations 1999 Regulation 81-10.01

A New Tax System (Goods and Services Tax) (Exempt Taxes Fees and Charges) Determination 2011 (No 1)

Reasons for decision

Question 1

The GST treatment of Australian fees and charges that are not currently entered on the A New Tax System (Goods and Services Tax) (Exempt Taxes Fees and Charges) Determination 2011 (No 1) (2011 Determination) will be self assessed under the legislative amendments to Division 81 that apply from 1 July 2011.

The reasoning to question 1 applies to specific fees and charges.

The requirements for a taxable supply are stated in section 9-5 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act).

A supply is taxable if:

· you make the supply for consideration,

· the supply is made in the course or furtherance of an enterprise that you carry on,

· the supply is connected with Australia, 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.

The first requirement under section 9-5 of the GST Act is that you make a supply for consideration. Where the supply is not for consideration then it is not captured by section 9-5 of the GST Act and is not taxable.

Division 81 of the GST Act excludes certain fees or charges from GST as it provides that these fees or charges will not be treated as consideration for a supply. We will consider whether the fees and charges that you impose are excluded from GST under Division 81.

Subsection 81-10(1) of the GST Act provides that:

· A payment, or the discharging of a liability to make a payment, is not the provision of consideration to the extent the payment is an Australian fee or

· charge that is of a kind covered in subsection (4) or (5).

The payment will not be the provision of consideration to the extent the payment is of a kind covered by subsection 81-10(4) or subsection 81-10(5) of the GST Act.

Section 195-1 of the GST Act provides that an 'Australian fee or charge' means a fee or charge (however described), other than an Australian tax, imposed under an Australian law and payable to an Australian government agency.

The relevant fees or charges listed above are imposed under an Australian law because they are imposed under state law.

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 provides that 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 a local governing body established by State law. Accordingly, you meet the definition of an Australian government agency.

It follows that the payments made to you are an Australian fee or charge.

Subsection 81-10(4) of the GST Act covers a fee or charge if the fee or charge:

(a) relates to; or

(b) relates to an application for;

· the provision, retention, or amendment, under an Australian law, of a permission, exemption, authority or licence (however described).

We consider that the specific fees or charges are not of a kind covered by subsection 81-10(4) of the GST Act.

Subsection 81-10(5) of the GST Act covers a fee or charge paid to an Australian government agency if the fee or charge relates to the agency doing any of the following:

(a)  recording information;

(b)  copying information;

(c)  modifying information;

(d)  allowing access to information;

(e)  receiving information;

(f)  processing information;

(g)  searching for information.

We consider that the specific fees or charges relate to information and record keeping of a kind covered by subsection 81-10(5) of the GST Act. The fees or charges in question allow access to information under paragraph 81-10(5)(d).

As the payments of these fees to you are of the kind covered by subsection 81-10(5) of the GST Act, subsection 81-10(1) applies and these payments are 'not the provision of consideration.'

However, subsection 81-10(2) of the GST Act provides that a payment you make, or a discharging of your liability to make a payment, is treated as the provision of consideration to the extent the payment is an Australian fee or charge that is, or is of a kind, prescribed by the A New Tax System (Goods and Services Tax) Regulations 1999 (GST Regulations).

For subsection 81-10(2) of the GST Act, the following kinds of Australian fee or charge are prescribed in GST Regulation 81-10.01:

(a)    a fee for parking a motor vehicle in a ticketed or metered parking space;

(b)    a toll for driving a motor vehicle on a road;

(c)    a fee for hire, use of, or entry to a facility, except for an entry fee to a national park;

(d)    a fee for the use of a waste disposal facility;

(e)    a fee for pre-lodgment advice if:

(i)    the advice relates to an application to which subsection 81-10(4) of the Act applies; and

(ii)    it is not compulsory to seek the advice;

(f)    a fee for the provision of information if the information is not required to be provided under an Australian law.

We consider that the specified fees or charges you impose are not prescribed by GST Regulation 81-10.01. Although the fees or charges which satisfy paragraph 81-10(5)(d) of the GST Act may be regarded as the provision of information for the purposes of subregulation 81.10.01(f), the fee for this information is required to be provided under an Australian law. Therefore, subsection 81-10(2) of the GST Act does not apply.

Accordingly the supply will not be subject to GST because the relevant fees and charges are not consideration for a supply. This means that the supply to which the fees or charges relate will not be a taxable supply under section 9-5 of the GST Act.

The specified fees and charges are excluded from GST under Division 81 of the GST Act from 1 July 2011.

The fees and charges for the reports are listed in the 2011 Determination. Consequently these fees are excluded from GST until 30 June 2012. Therefore the exclusion from GST under the legislative amendments to Division 81 is effective from 1 July 2012.

Question 2

Detailed reasoning

The reasoning for question 2 relates to certain fees and charges.

As stated in the reasoning to question 1, the fees and charges imposed by you may be excluded from GST if these fees and charges satisfy subsection 81-10(4) or 81-10(5) of the GST Act.

We consider that for the purposes of subsection 81-10(1) of the GST Act this specific fee is not an Australian fee or charge as it is not imposed under an Australian law. This fee or charge is paid under an agreement and not a law. Therefore, section 81-10 will not apply to this fee.

For the purposes of subsection 81-10(2) of the GST Act, a fee or charge prescribed in GST Regulation 81-10.01 is treated as the provision of consideration. Subregulation 81.10.01(f) provides that fees that are imposed for the provision of information that is not required to be provided under an Australian law is to be treated as the provision of consideration. Therefore, subsection 81-10(2) of the GST Act operates to treat the payment as the provision of consideration.

Accordingly, the supply for the fee will be a taxable supply provided that all of the conditions in section 9-5 of the GST Act are satisfied.

The services provided by you do in relation to a specific fee do not relate to the agency recording, copying, modifying, allow access to, receiving, processing or searching for information. These fees are not registration or lodgement fees to record a transfer or a change in the registers.

These fees or charges do not satisfy subsection 81-10 (4) or subsection 81-10(5) of the GST Act. Therefore, they are not excluded under subsection 81-10(1) of the GST Act. Accordingly, the supply for these fees or charges will be a taxable supply subject to meeting the conditions in section 9-5 of the GST Act.

Question 3

Detailed reasoning

The reasoning for question 3 relates to the fees and charges for the report.

The provision of the report includes components which are currently listed in the 2011 Determination. As a result, these components are currently excluded from GST under Division 81 of the GST Act until 30 June 2012.

We will consider whether the report is excluded from GST from 1 July 2012 as a consequence of the legislative amendments to Division 81.

These fees or charges are imposed under an Australian law and are payable to an Australian government agency.

We consider that the fees or charges for certain components listed above relate to information and record keeping of a kind covered by subsection 81-10(5) of the GST Act.

As subsection 81-10(5) of the GST Act is satisfied, this means that subsection 81-10(1) applies and these payments are 'not the provision of consideration.' Subsection 81-10(1) is subject to subsection 81-10(2) which provides for fees and charges prescribed by the GST Regulations to be treated as the provision of consideration.

We consider that the fee or charge you impose is not prescribed by GST Regulation 81-10.01. Therefore, subsection 81-10(2) of the GST Act does not treat the payment as the provision of consideration.

Accordingly the supply will not be subject to GST from 1 July 2012 because these fees and charges are not consideration for a supply. These fees and charges will be excluded from GST because the supply to which the fees or charges relate will not be a taxable supply under section 9-5 of the GST Act.

The provision of the report includes a few components. You have advised that the fees for certain components are not imposed under an Australian law. Therefore, Division 81 does not apply to these fees or charges and the supply for the fee will be a taxable supply provided that all of the conditions in section 9-5 of the GST Act are satisfied.

We will consider whether the supply is a composite supply or a mixed supply.

A supply may consist of one or more things or parts. That is, the supply may be regarded as commercially distinct in its own right or it may be regarded as having several identifiable parts.

Paragraphs 43 and 44 of Goods and Services Tax Ruling GSTR 2001/8 state:

43. A mixed supply contains separately identifiable parts where one or more of the parts is taxable and one or more of the parts is non-taxable. None of these parts is integral, ancillary or incidental in relation to the whole supply. On the other hand, a composite supply is a supply of one dominant part that has other parts that are not treated as having a separate identity as they are integral, ancillary or incidental to the dominant part of the supply.

44. In working out whether you are making a mixed or composite supply, the key question is whether the supply should be regarded as having more than one separately identifiable part, or whether it is essentially a supply of one dominant part with one or more integral, ancillary or incidental parts

We consider that this supply has separately identifiable parts because the taxable and non-taxable parts of the supply can be individually recognised. As such the report is a mixed supply.