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Ruling

Subject: GST and Australian government fees or charges

Question

Are payments of the specified fees and charges imposed after 1 July 2013 excluded from GST under Division 81 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)?

Answer

Yes. The payments of the specified fees or charges are excluded from GST under Division 81 of the GST Act or GST does not apply to the fee or charge.

Relevant facts and circumstances

You are a government entity. You seek a ruling in relation to specified fees or charges imposed from 1 July 2013. You are registered for GST and all fees are payable to you.

You impose fees or charges for:

o the provision of certain licences and permits

o access to information

o late lodgement of certain forms.

These fees or charges are imposed under state legislation.

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 section 9-10.

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

A New Tax System (Goods and Services Tax) Act 1999 Division 38.

A New Tax System (Goods and Services Tax) Act 1999 Division 40.

A New Tax System (Goods and Services Tax) Act 1999 section 81-5

A New Tax System (Goods and Services Tax) Act 1999 section 81-10.

A New Tax System (Goods and Services Tax) Act 1999 subsection 81-10(2).

A New Tax System (Goods and Services Tax) Act 1999 subsection 81-10(4).

A New Tax System (Goods and Services Tax) Act 1999 subsection 81-10(5).

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

A New Tax System (Goods and Services Tax) Regulations 1999 regulation
81-10.01(1)

Reasons for decision

Section 9-5 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) provides that you make a taxable supply 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 term 'supply' is defined in section 9-10 of the GST Act as 'any form of supply whatsoever' and includes amongst other things, a supply of goods, a supply of services, a provision of advice or information, an entry into, or release from, an obligation to do anything, to refrain from an act or to tolerate an act or situation.

Subsection 9-15(1) of the GST Act provides that consideration includes:

· any payment, or any act or forbearance, in connection with a supply of anything

· any payment, or any act or forbearance, in response to or for the inducement of a supply of anything.

The circumstances in which a supply is GST-free or input taxed are explained in Division 38 and Division 40 of the GST Act respectively.

Section 9-39 of the GST Act provides special rules in relation to making taxable supplies. In particular, item 8 in the table in section 9-39 of the GST Act provides that where there is a payment of taxes, fees and charges, the special rules in Division 81 of the GST Act may apply.

Division 81 of the GST Act

Until 1 July 2011, payment of Australian taxes, fees or charges were treated as consideration for a supply, except to the extent that the Australian tax, fee or charge was listed in the A New Tax System (Goods and Services Tax) (Exempt Taxes, Fees and Charges) Determination 2011 (No. 1) (Treasurers Determination).

Division 81 of the GST Act was amended with effect from 1 July 2011 to allow entities to self assess the GST treatment of a payment of an Australian tax or an Australian fee or charge.

As a transitional measure, taxes, fees or charges listed in the Treasurer's Determination as at 30 June 2011 remain exempt where they are imposed before 1 July 2013.

Section 81-5 of the GST Act states 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 tax.

An Australian tax and an Australian fee or charge is defined in section 195-1 of the GST Act as:

Australian tax means a tax (however described) imposed under an Australian law.

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.

An Australian government agency and an Australian law are terms defined in section 995-1 of the Income Tax Assessment Act 1997 (ITAA 1997) as:

Australian law means a Commonwealth law, a State law or a Territory law.

Australian government agency means:

(a) a Commonwealth, a State or a Territory or

(b) an authority of the Commonwealth or of a State or a Territory.

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 by subsections 81-10(4) or (5) of the GST Act.

However, under subsection 81-10(2) of the GST Act a payment made by an entity, or the discharge of a 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 prescribed by the A New Tax System (Goods and Services Tax) Regulations 1999 (GST Regulations). The consideration is taken to be provided to the entity to which the fee or charge is payable, for a supply that the entity makes to the paying entity pursuant to subsection 81-10(3) of the GST Act.

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

· relates to or

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

Subsection 81-10(5) of the GST Act applies to fees or charges relating to information and record keeping. A payment is not the provision of consideration to the extent that the fee or charge is paid to an Australian government agency and relates to the agency recording, copying, modifying, allowing access to, receiving, processing or searching for information.

Are the items listed in the table an Australian fee or charge?

The fees for A,B,C,D,E and F are not considered to be an Australian tax as services are provided in relation to the fees.

In addition you satisfy the definition of Australian government agency in section 995-1 of the ITAA 1997. Accordingly, the fees or charges are Australian fees or charges as they are imposed under an Australian law and are payable to an Australian government agency.

Consideration will be given to the question of whether subsections 81-10(4) or 81-10(5) apply to the specified fees or charges.

Fees for A,B,C

Subsection 81-10(4) covers a fee or charge that relates to, or relates to an application for the provision, retention or amendment of a permission, exemption, authority or licence (however described).

Paragraph 4.27 of the Explanatory Memorandum to the Tax Laws Amendment (2011 Measures No.2) Act 2011 provides examples of fees or charges that are covered by subsection 81-10(4) of the GST Act. In summary, the examples in paragraph 4.27 include application fees, licences, permits and certifications that are required by government prior to undertaking an occupation and regulatory charges imposed to undertake an activity.

We consider that the listed fees or charges relate to, or relate to an application for the provision, retention or amendment of a permission or licence (however described). On this basis, the listed fees or charges are covered by subsection 81-10(4) of the GST Act.

Subsections 81-10(2) and (3) of the GST Act narrow the operation of subsection 81-10(1) by treating fees or charges that are prescribed in regulation 81-10.01 of the GST Regulations as the provision of consideration for a supply. Regulation 81-10.01 makes fees or charges that would otherwise be exempt from GST under the operation of subsections 81-10(4) and (5) of the GST Act potentially taxable. We consider that the fees or charges prescribed in regulation 81-10.01 of the GST Regulations do not apply to the listed fees or charges. Therefore subsection 81-10(2) of the GST Act does not apply.

Fees for D

The specified fee is covered by subsection 81-10(5) of the GST Act as this fee is paid in order to obtain information from a government agency. The fee relates to you allowing access to information under subsection 81-10(5) of the GST Act. Further, we consider that subsection 81-10(2) of the GST Act does not apply because these fees or charges are not prescribed in GST Regulation 81-10.01.

Fees for E and F

The specified fee for access to information is clearly covered by subsection 81-10(5) of the GST Act.

In relation to the other specified fee we consider that this is also access to information that is covered by subsection 81-10(5) of the GST Act.

The term 'information' is not defined in the GST Act or the GST Regulations and therefore take its ordinary meaning in the context in which it is used.

The definition of 'information' in the Macquarie Dictionary, (Multimedia), version 5.0.0, defines information as: knowledge communicated or received concerning some fact or circumstance.

On the basis of the definition of information, we hold the view that the other specified fee allows access to information. Accordingly, the fees for access to information are covered by subsection 81-10(5) of the GST Act as the fee relates to you allowing access to information. Further, we consider that subsection 81-10(2) of the GST Act does not apply to the fees listed in item D because these fees or charges are not prescribed in GST Regulation 81-10.01.

Summary

The fees for A,B,C,D,E and F are covered by subsections 81-10(4) or 81-10(5) of the GST Act. Accordingly, subsection 81-10 (1) applies to treat these payments as not the provision of consideration.

As the payment of these fees are not consideration for a supply, the supplies for these payments will not be a taxable supply because section 9-5 of the GST Act requires that the 'supply is for consideration'. Accordingly, GST does not apply to these fees or charges.

Fee for G

The specified fees that you charge are considered to be a penalty because no supply is provided in return for the charge. Therefore there is no 'supply for consideration' as defined in section 9-15 of the GST Act. This means that the payment of these funds is not in connection with a supply for the purposes of section 9-5 of the GST Act. Consequently GST does not apply to these fees.