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Edited version of your private ruling
Authorisation Number: 1012568614728
Ruling
Subject: GST and company registration fees
Question
Do you have to include the company registration fee, which you collect from your clients on behalf of the Australian Securities and Investment Commission (ASIC), at Label G3 of your quarterly business activity statements (BAS) as other GST-free supplies?
Decision
No, you do not have to include the company registration fee at any label in your quarterly BAS.
Relevant facts and circumstances
§ You provide a service of online registration of new companies with ASIC. You are an ASIC registered agent.
§ A client who needs to register a new company accesses your website and completes the Form 201 - Application for Company Registration. Form 201 requires the following data - company name, directors, shareholders, members, their addresses, share structure etc.
§ After finalising the application, the client makes a payment to you online and gets a receipt with fees listed separately. The fees constitute the ASIC company registration fee and your service fee.
§ You consider that, under current GST legislation, the registration fee is not subject to GST. However, your service fee is inclusive of GST.
§ You receive an email from your website in respect of the payment made by your client. You import the relevant data and submit it to ASIC using your desktop software.
§ After lodgment and approval, ASIC issues the company registration certificate as a pdf format file, which you submit to your client by email.
§ After the company registration, ASIC takes the registration fee out of your business account by direct debit, as per a direct debit agreement signed with you.
§ That completes the company registration process. After completion of the registration process, you do not supply any further services to the client. You do not keep any records of the client.
§ As per the current ASIC fee structure, there is no option for your client to pay the registration fee directly to the ASIC account, without channelling it through your account.
§ The client registers the new company with their names as directors, shareholders etc. You do not provide shelf company services.
§ Our records indicate that you are registered for GST.
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 81-10
Reasons for the decision
We consider that as an authorised agent of ASIC, you supply registration services to your clients through your website. When your client registers a new company using your website, the client incurs a liability to pay the registration fee of $xxx to ASIC. As mentioned above, there is no provision for the client to pay this amount directly to the bank account of ASIC. It has to be channelled through your business account.
We consider that the company's registration fee collected by you from a client is not consideration for any supply by you to the client. It is simply the collection of a fee levied by ASIC for registering a company. In other words you collect the registration fee of $xxx on behalf of ASIC. We are of the view that the $xxx is not your money. Hence, you do not have to include this payment at any label of your BAS.
This principle is illustrated in Goods and Services Tax Ruling GSTR 2000/37 (GSTR 2000/37).
This conclusion aligns with the income tax ruling issued to you which states that you are merely acting as an agent on behalf of ASIC and the fee you collect is not your income.