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Edited version of your private ruling
Authorisation Number: 1012518961145
Ruling
Subject: GST and maintenance levy
Question 1
Are payments for the levy consideration for a taxable supply?
Answer
No, payments for the levy are not consideration for a taxable supply.
Relevant facts and circumstances
· You are registered for goods and services tax (GST).
· You charge a levy.
· There is no direct service provided for the levy. The levy covers certain costs for the community as a whole.
· An entity is liable to pay the levy.
· The levy is imposed under a Government Act.
· You can enforce payment of the levy.
Relevant legislative provisions
A New Tax System (Goods and Services Tax) Act 1999 section 9-39
A New Tax System (Goods and Services Tax) Act 1999 Division 81
A New Tax System (Goods and Services Tax) Act 1999 subsection 81-5(1)
A New Tax System (Goods and Services Tax) Act 1999 section 195-1
Income Tax Assessment Act 1997 section 995-1
Reasons for decision
One of the requirements of a taxable supply in the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) is that the supply is made for consideration.
Section 9-39 of the GST Act provides for special rules relating to taxable supplies and one of these is Division 81 of the GST Act.
GST does not apply to payments of taxes, fees and charges that are excluded from GST by Division 81 of the GST Act or by regulations.
Subsection 81-5(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 that the payment is an 'Australian tax'.
The term 'Australian tax' is defined in section 195-1 of the GST Act which states:
Australian tax means a tax (however described) imposed under an *Australian law.
(* Asterisked terms are defined in the Dictionary in section 195-1 of the GST Act.)
The term 'Australian law' is defined in section 195-1 of the GST Act as having the meaning given by section 995-1 of the Income Tax Assessment Act 1997 (ITAA 1997) which states:
Australian law means a *Commonwealth law, a *State law or a *Territory law.
An Australian law includes Acts and law making powers which are delegated by parliaments such as regulations, by-laws, proclamations and orders made under Acts.
The levy is imposed under an Australian law.
The usual description of a tax, as cited in the High Court case of Roy Morgan Research Pty Ltd v CMR of Taxation [2011] HCA 35 (Roy Morgan), as per Latham CJ in Matthews v Chicory Marketing Board (Vic) (1938) 60 CLR 26, is that it is:
…a compulsory exaction of money by a public authority for public purposes, enforceable by law, and is not a payment for services rendered…
The levy charged by you is a compulsory levy by a government. Legislation empowers you to charge this levy, and is applied for the general benefit of the community - that is, for public purposes.
We consider that for GST purposes the levy is a tax.
Section 81-5(2) of the GST Act provides that the A New Tax System (Goods and Services Tax) Regulations 1999 may subscribe that a payment is consideration for a taxable supply to the extent that the payment is an Australian tax. However, currently, there are no regulations that prescribe the payment of an Australian tax to be the provision of consideration.
Therefore, payments for the levy made to you are not consideration for a taxable supply.