Edited version of your private ruling

Authorisation Number: 1012293383947

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. If you have any concerns about this ruling you wish to discuss, you will find our contact details in the fact sheet.

Ruling

Subject: ATM Charges

Question 1

Is the payment you receive under the Agreement consideration for an input taxed financial supply?

Answer

No, the payment you receive under the Agreement is not consideration for an input taxed financial supply.

Question 2

Are you required to be registered for GST?

Answer

You will be required to be registered for GST if your GST turnover meets the registration turnover threshold (currently $75,000).

Relevant facts and circumstances

You are not registered for GST.

You have entered into an Agreement with Entity A whereby Entity A provides you an ATM at no upfront cost and you provide services in the capacity of a Site Owner to Entity A.

You have mounted the ATM on a trailer which you have designed and have had constructed at your own cost. This has given you the mobility to place the ATM at various fairs, markets and festivals to maximise the usage of the ATM.

You incur all costs in relation to organising the sites, the storage and the administration of your trailer with the ATM on it.

When a customer uses the ATM they are charged an ATM transaction fee. Your payment is based on each successful transaction by a customer that incurs the ATM transaction fee.

You do not own the ATM. You are not responsible for the ATM should it be stolen or damaged. You are not responsible for repairing or replacing the ATM. You report any faults that you notice with the ATM to Entity A so that they can repair it.

The ATM is owned by Entity A or if not owned by Entity A, then deployed by Entity A. Entity A keeps the ATM in working order and is responsible for any consumables such as paper and the supply of all the communication equipment and costs associated with the ATM.

Entity A is responsible for tracking all the transactions in relation to the ATM usage and ensuring your share of the ATM transaction fees are deposited into your account. Entity A is also responsible for replacing the money that has been withdrawn from the ATM.

Relevant legislative provisions

A New Tax System (Goods and Services Tax) Act 1999 section 7-1

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

A New Tax System (Goods and Services Tax) Act 1999 section 9-20

A New Tax System (Goods and Services Tax) Act 1999 section 23-5

A New Tax System (Goods and Services Tax) Act 1999 section 40-5

A New Tax System (Goods and Services Tax) Regulations 1999 sub regulation 40-5.09(1)

A New Tax System (Goods and Services Tax) Regulations 1999 sub regulation 40-5.09(3)

Reasons for decision

Question 1

Is the payment you receive under the Agreement consideration for an input taxed financial supply?

Section 40-5 of the A New Tax System (Goods and Services Tax) Act 1999 (GST) Act provides that a financial supply is input taxed and has the meaning given by the A New Tax System (Goods and Services Tax) Regulations 1999 (GST Regulations).

Subregulation 40-5.09(1) of the GST Regulations provides that the provision, acquisition or disposal of an interest mentioned in subregulation 40-5.09(3) of the GST Regulations is a financial supply if the provision, acquisition or disposal is:

· the provision, acquisition or disposal is:

· for consideration;

· in the course or furtherance of an enterprise; and

· connected with Australia; and

· the supplier is

· registered or required to be registered; and

· a financial supply provider in relation to supply of the interest.

Goods and Services Tax Ruling GSTR 2002/2 Goods and services tax: GST treatment of financial supplies and related supplies and acquisitions (GSTR 2002/2) provides the ATO view in relation to financial supplies. The GST regulations identify those supplies that are financial supplies by inclusion and exclusion. Something is a financial supply only if it is mentioned as a financial supply in regulation 40-5.09 or is an incidental financial supply under regulation 40-5.10 (see paragraph 20 of GSTR 2002/2).

You have entered into the Agreement with Entity A in its capacity as the deployer and/or owner of the ATM and yourself in the capacity as Site Owner.

The issue to be determined here is whether your supply to Entity A under the Agreement is a financial supply.

Under the Agreement, you supply to Entity A a Site on which Entity A deploys its ATM. In your case you have a trailer which you designed and have had constructed on which the ATM machine is mounted. You then place the trailer at various fairs, markets and festivals.

Your contractual obligations under the Agreement are in relation to your supply and maintenance of the Site on which Entity A deploys its ATM. In return for this, you receive consideration which is paid in accordance with the Agreement. This consideration is based on a component of the total ATM transaction fee that is charged to the customer by the ATM owner when the customer uses the ATM.

Your supply of the Site to Entity A does not constitute a financial supply as it does not fall within any of the items in accordance with regulation 40-5.09 and regulation 40-5.10. Given this, the payment you receive from Entity A under the Agreement is not an input taxed financial supply.

Question 2

Are you required to be registered for GST?

Section 7-1 of the GST Act provides that GST is payable on taxable supplies.

Section 9-5 of the GST Act states the following in relation to taxable supplies:

You make a taxable supply if:

· you make a supply for *consideration; and

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

· the supply is *connected with Australia; and

· 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 that is defined in section 195-1 of the GST Act.

In order for a supply to be a taxable supply, all the four positive limbs of section 9-5 of the GST Act as listed from (a) to (d) above need to be met. The supply must also not be input taxed or GST-free.

We have established that your supply to Entity A under the Agreement is not an input taxed financial supply. It is also not a GST-free supply in accordance with Division 38 of the GST Act. You make the supply for consideration and the supply is connected with Australia.

The issue that remains to be determined is whether the supply is made in the course of furtherance of an enterprise you carry on and if you are required to be registered for GST.

Subsection 9-20(1) of the GST Act provides that an enterprise includes an activity, or series of activities, done in the form of a business or in the form of an adventure or concern in the nature of trade.

The ATO's view on the concept of enterprise for the purposes of entitlement to an Australian Business Number is considered in Miscellaneous Taxation Ruling MT 2006/1 The New Tax System: the meaning of entity carrying on an enterprise for the purposes of entitlement to an Australian Business Number (MT 2006/1). Paragraph 234 of MT 2006/1 provides definitions of 'business' and 'adventure or concern in the nature of trade'. It states:

234. Ordinarily, the term 'business' would encompass trade engaged in, on a regular or continuous basis. However, an adventure or concern in the nature of trade may be an isolated or one-off transaction that does not amount to a business but which has the characteristics of a business deal.

In your case, your activities in relation to the supply you make to Entity A under the Agreement would constitute an activity, or series of activities, done in the form of a business or in the form of an adventure or concern in the nature of trade. As such the supply you make to Entity A is made in the course of furtherance of an enterprise you carry on.

The registration requirements for the purposes of the GST Act are provided in Division 23 of the GST Act. In this case you are not registered for GST, however section 23-5 of the GST Act states:

You are required to be registered under this Act if:

(a) you are *carrying on an *enterprise; and

(b) your *GST turnover meets the *registration turnover threshold.

Paragraph 23-5(b) of the GST Act provides that you are required to be registered if your GST turnover meets the registration turnover threshold. The current registration turnover threshold is $75,000.

Goods and Services Tax Ruling GSTR 2001/7 Goods and services tax: meaning of GST turnover, including the effect of section 188-25 on projected GST turnover (GSTR 2001/7) provides guidance on the meaning of GST turnover.

Paragraph 11 and 12 of GSTR 2001/7 state the following in relation to current and projected GST turnover:

11. Section 188-15 defines 'current GST turnover'. Subject to the exclusions listed in paragraph 14, 'current GST turnover' at any time during a particular month is the sum of the values of all the supplies that you made, or are likely to make, during the current month and the preceding 11 months.

12. Section 188-20 defines 'projected GST turnover'. Subject to the exclusions listed in paragraph 14, 'projected GST turnover' at a time during a particular month is the sum of the values of all the supplies that you made, or are likely to make, during that month and the next 11 months.

Following on from this, where the current and projected GST turnover from all your business activities does not exceed the registration turnover threshold, you will not be required to be registered for GST.

However, where the current and the projected GST turnover from all your business activities exceed the registration turnover threshold, you will be required to be registered for GST.