Edited version of your written advice

Authorisation Number: 1012673430349

Ruling

Subject: Valid tax invoice

Question 1

Is either the Trade-in Details or Trade-in Shipping Manifest, the recipient created tax invoice (RCTI) issued by X Services Pty Ltd (as billing agent for X Ltd) and either handed or emailed to a Business Seller, or the tax invoice issued weekly by X Services Pty Ltd (as billing agent for X Ltd) to A Ltd a document that complies with the requirements for a valid tax invoice set out in subsection 29-70(1) of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) in respect of the supply of a device to A Ltd pursuant to a retail trade-in or a business trade-in made in accordance with the Agreement between X Ltd and A Ltd?

Answer 1

No, the Trade-in Details or Trade-in Shipping Manifest, the RCTI issued by X Services Pty Ltd (as billing agent for X Ltd) and either handed or emailed to the Business Seller, or the tax invoice issued weekly by X Services Pty Ltd (as billing agent for X Ltd) to A Ltd is not a document that complies with the requirements for a valid tax invoice set out in subsection 29-70(1) of the GST Act in respect of the supply of a device to A Ltd pursuant to a retail trade-in or a business trade-in made in accordance with the Agreement.

Question 2

Can either the Trade-in Details or Trade-in Shipping Manifest, the RCTI issued by X Services Pty Ltd (as billing agent for X Ltd) and handed or emailed to the Business Seller, or the tax invoice issued weekly by X Services Pty Ltd (as billing agent for X Ltd) to A Ltd be treated as a valid tax invoice pursuant to subsection 29-70(1A) of the GST Act in respect of the supply of a device to A Ltd pursuant to a retail trade-in or a business trade-in made in accordance with the Agreement on the basis that that document complies with the requirements for a valid tax invoice but for the fact that it does not contain certain information and all of that information can be clearly ascertained from other documents given by X Ltd to A Ltd?

Answer 2

Yes, the tax invoice issued weekly by X Services Pty Ltd (as billing agent for X Ltd) to A Ltd can be treated as a valid tax invoice pursuant to subsection 29-70(1A) of the GST Act in respect of the supply of a device to A Ltd pursuant to a retail trade-in or a business trade-in made in accordance with the Agreement on the basis that that document complies with the requirements for a valid tax invoice but for the fact that it does not contain certain information and all of that information can be clearly ascertained from other documents given by X Ltd to A Ltd.

Question 3

Will the Commissioner treat either the Trade-in Details or Trade-in Shipping Manifest, the RCTI issued by X Services Pty Ltd (as billing agent for X Ltd) and handed or emailed to the Business Seller, or the tax invoice issued weekly by X Services Pty Ltd (as billing agent for X Ltd) to A Ltd as a valid tax invoice pursuant to subsection 29-70(1B) of the GST Act in respect of the supply of a device to A Ltd pursuant to a retail trade-in or a business trade-in made in accordance with the Agreement?

Answer 3

As Question 2 has been answered in the affirmative it is not necessary to consider whether the Commissioner will treat a document as a valid tax invoice pursuant to subsection 29-70(1B) of the GST Act in respect of the supply of a device to A Ltd pursuant to a retail trade-in or a business trade-in made in accordance with the Agreement.

Question 4

Is either the Trade-in Details or Trade-in Shipping Manifest, the RCTI issued by X Services Pty Ltd (as billing agent for X Ltd) and either handed or emailed to the seller, or the tax invoice issued weekly by X Services Pty Ltd (as billing agent for X Ltd) to A Ltd a document that complies with the requirements for a valid RCTI set out in subsection 29-70(1) of the GST Act in respect of the supply of a device to A Ltd pursuant to a retail trade-in or a business trade-in made in accordance with the Agreement?

Answer 4

As Question 2 has been answered in the affirmative it is not necessary to consider whether a document is a valid RCTI in respect of the supply of a device to A Ltd pursuant to a retail trade-in or a business trade-in made in accordance with the Agreement.

Question 5

Can either the Trade-in Details or Trade-in Shipping Manifest, the RCTI issued by X Services Pty Ltd (as billing agent for X Ltd) and either handed or emailed to the Business Seller, or the tax invoice issued weekly by X Services Pty Ltd (as billing agent for X Ltd) to A Ltd be treated as a valid RCTI pursuant to subsection 29-70(1A) of the GST Act in respect of the supply of a device to A Ltd pursuant to a retail trade-in or a business trade-in made in accordance with the Agreement on the basis that that document complies with the requirements for a valid RCTI but for the fact that it does not contain certain information and all of that information can be clearly ascertained from other documents given by X Ltd to A Ltd?

Answer 5

As Question 2 has been answered in the affirmative it is not necessary to consider whether a document can be treated as a valid RCTI pursuant to subsection 29-70(1A) of the GST Act in respect of the supply of a device to A Ltd pursuant to a retail trade-in or a business trade-in made in accordance with the Agreement.

Question 6

Will the Commissioner treat either the Trade-in Details or Trade-in Shipping Manifest, the RCTI issued by X Services Pty Ltd (as billing agent for X Ltd) and either handed or emailed to a Business Seller, or the tax invoice issued weekly by X Services Pty Ltd (as billing agent for X Ltd) to A Ltd as a valid RCTI pursuant to subsection 29-70(1B) of the GST Act in respect of the supply of a device to A Ltd pursuant to a retail trade-in or a business trade-in made in accordance with the Agreement?

Answer 6

As Question 2 has been answered in the affirmative, it is not necessary to consider whether a document can be treated as a valid RCTI pursuant to subsection 29-70(1B) of the GST Act in respect of the supply of a device to A Ltd pursuant to a retail trade-in or a business trade in made in accordance with the Agreement.

Question 7

If the answers to Questions 1 to 6 are 'no', will the Commissioner issue a determination pursuant to subsection 29-70(3) of the GST Act that any one or more of the documents referred to above may be issued to A Ltd as a valid RCTI in respect of the supply of a device to A Ltd pursuant to a retail trade-in or a business trade-in made in accordance with the Agreement?

Answer 7

As Question 2 has been answered in the affirmative it is not necessary to consider whether the Commissioner will issue a determination pursuant to subsection 29-70(3) of the GST Act in respect of the supply of a device to A Ltd pursuant to a retail trade-in or a business trade-in made in accordance with the Agreement.

Question 8

Are the answers to Questions 1 to 7 the same in respect of the supply of a device to A Ltd on or after June 2014 pursuant to the trade-in of that device by a Business Seller under a Business Collection Contract in accordance with the Agreement dated June 2014 between X Ltd and A Ltd varying an earlier Trade-In Agreement (Varied Trade-In Agreement)?

Answer 8

Yes, the answers to Questions 1 to 7 are the same in respect of the supply of a device to A Ltd pursuant to the trade-in of that device by a Business Seller under a Business Collection Contract in accordance with the Varied Trade-In Agreement.

Relevant facts and circumstances:

Applicant

A Ltd carries on a business which includes acquiring used devices for the purpose of resale.

Main Agreement:

In 2013 A Ltd entered into a Device Trade-in Agreement (Main Agreement) with X Ltd.

The Main Agreement states that A Ltd may enter into Collection Contracts with Sellers and that a Seller may indicate to a Collection Site Representative (i.e. an employee or agent of X Ltd at a Collection Site) that the Seller wishes to sell a device of one of the types listed in a schedule to the Main Agreement. The Collection Site Representative advises the Seller of the Seller Price using a computerised system operated by A Ltd.

If the Seller accepts the price and the device is not defective, the Collection Site Representative makes a written offer (in the form of the Collection Contract) on A Ltd's behalf to purchase the device, verifies the Seller's identity, electronically inputs the Seller's Records (defined as specific information about the Seller and the device) into the computerised system operated by A Ltd, and provides a copy of the Collection Contract to the Seller.

The Main contract states that if the Seller accepts A Ltd's offer the offer becomes a Collection Contract, the Seller leaves the device at the Collection Site and A Ltd must purchase the device.

The Main Agreement also states that X Ltd shall invoice A Ltd weekly for devices delivered to A Ltd's premises in the preceding week and that an invoice shall be made up of:

100% of the Seller Price which is payable by A Ltd to the Seller via X Ltd; and

A Cost Recovery Fee equal to 10% of the Seller Price for a device or an amount agreed between X Ltd and A Ltd as being payable to X Ltd as reimbursement for X Ltd fulfilling its obligations under the Main Agreement

The Main Agreement also deals with taxes and states (in part):

(a) The parties agree that the Cost Recovery Fee is exclusive of GST payable to Optus Mobile in this respect.

(b) …

(c) …

(d) X Ltd will issue A Ltd with a valid tax invoice in respect of each taxable supply.

The Collection Contract is set out in a schedule to the Main Agreement and includes the following representation by the Seller ('you'):

You also confirm that this phone is not sold or used in carrying on a business or enterprise.

Agreement:

A Ltd and X Ltd entered into the Agreement for the purpose of a pilot program extending the device trade-in program established by the Main Agreement to certain Business Sellers (defined as a customer of X Ltd who has an ABN, owns a device, and wishes to sell that device in the course or furtherance of an enterprise the Business Seller carries on).

The Agreement allows A Ltd to enter into a Business Collection Contract (i.e. a contract which incorporates the terms attached to the Agreement as Annexure 1) with a Business Seller.

A Business Collection Contract is defined as a contract where the Business Seller accepts A Ltd's offer to purchase a device from the Business Seller

The Agreement states that, upon receipt of a weekly report, X Ltd will issue an invoice to A Ltd made up of two components:

100% of the price which is payable by A Ltd to the Business Seller via X Ltd (for the avoidance of doubt, this price is already inclusive of GST, and additional GST will not be payable on the price paid by A Ltd to X Ltd); and

a cost recovery fee equal to 10% of the GST-exclusive price for the device (or an amount otherwise agreed in writing between X Ltd and A Ltd being payable to X Ltd as reimbursement of X Ltd fulfilling its obligations under the Agreement) plus 10% GST of the cost recovery fee.

The Agreement also includes a written agreement for the purposes of section 153-50 of the GST Act which establishes a subdivision 153-B arrangement in relation to an acquisition from a Business Seller pursuant to the Agreement where X Ltd is the 'GST Intermediary' and A Ltd is the 'GST Principal' and states that if X Ltd (GST Intermediary) facilitates an acquisition from a Business Seller pursuant to the Agreement or the Main Agreement as an intermediary for A Ltd (GST Principal) then, relevantly:

X Ltd acknowledges that it will be treated, for the purposes of the GST law as making the acquisition from the Business Seller and A Ltd will be treated as making a corresponding acquisition from X Ltd;

X Ltd will issue a RCTI, tax invoice or adjustment note (as required) to the Business Seller using X Ltd's name, ABN and business letter head and A Ltd will not issue any RCTI, tax invoice or adjustment note relating to that acquisition;

Each party must notify the other party if, at any time, it ceases either to be GST registered or to comply with any taxation ruling relating to the issue of a RCTI; and

Each party acknowledges and warrants that it is registered for GST at the time the agreement was entered into and if it ceases to be GST registered the subdivision 153-B agreement will cease to have effect.

The Terms and Conditions of a Business Collection Contract set out in Annexure 1 to the Agreement include Representations and Warranties which omit the warranty in the Schedule to the Main Agreement (i.e. 'You also confirm that this device is not sold or used in carrying on a business or enterprise') and instead state:

9. Representations and Warranties

By submitting your device to A Ltd you are representing that…you are making the device sale in the course or furtherance of a GST registered enterprise…

Retail trade-in pursuant to the Agreement:

Under a retail trade-in a representative of X Ltd offers a Business Seller a purchase price for the old device based on guidelines agreed between X Ltd and A Ltd. If the Business Seller accepts that purchase price X Ltd's representative prepares and issues to the Business Seller a Trade-In Details form which records the Business Seller's name address, ABN and ACN, the order date, details of the old device, and the 'agreed device price'.

The reverse of the Trade-In Details form sets out Terms and Conditions which include the following:

1. General

These terms and conditions form part of the agreement between A Ltd and you, the customer. They apply to the terms of payment and submission of your device. By submitting/sending your device through A Ltd you are agreeing to accept these terms and conditions.

…

Representations and Warranties

By submitting your items to A Ltd you are representing that you are 18 years or older, you are the legal owner of the item and no other individual or organisation has any rights, interest or ownership of this item, you have the legal right to transfer ownership of the item to A Ltd, without and clear of any encumbrances or liens; and this item is not stolen... You acknowledge that you are making the sale in the course or furtherance of a GST registered enterprise.

The Business Seller signs and dates the reverse of the Trade-in Details Form.

It was stated in the ruling request that X Ltd's representative hands a recipient created tax invoice (RCTI) to the Business Seller after the Business Seller accepts the price offered by X Ltd's representative.

The ruling request outlined the procedure in relation to a retail trade-in: After the Business Seller hands the traded-in device to X Ltd's representative, the representative enters into A Ltd's computerised system the details of the device, the acquisition date, acquisition price, and the name, address and ABN of the Business Seller. A Ltd's system extracts a subset of this information into a daily report of all successful trade-ins for the previous day which is sent to X Ltd to allow X Ltd to apply the trade-in amount as credit to the Business Seller's account with X Ltd.

Whenever one of X Ltd's stores either holds ten traded-in devices or has held less than ten traded-in devices for seven days the store delivers those mobile phones to A Ltd together with a manifest which lists the make, model, acquisition price, acquisition date, unique transaction ID, and the name of X Ltd's representative.

Business trade-in pursuant to the Agreement:

Under a business trade-in a Business Seller other than a small business trades-in multiple devices. X Ltd's representative goes to the Business Seller's premises and obtains the Business Seller's consent to receive communications from A Ltd. A Ltd then sends the Business Seller an email which sets out the steps to be taken by the Business Seller. Attached to that email are the Trade-in Shipping Manifest and Terms and Conditions.

The Trade-in Shipping Manifest bears X Ltd's logo, sets out the name and address of the Business Seller, lists the quantity and description of the devices being traded-in and contains the following statement by the Business Seller:

I confirm all devices that appear on this manifest match the devices that have been securely packed for shipment to avoid damage in transit.

The Trade-in Shipping Manifest then advises the Business Seller to contact X Ltd by email or telephone to arrange collection of the devices.

The Terms and Conditions on the reverse of the Trade-in Shipping Manifest are identical or similar to the Terms and Conditions appearing on the reverse of the Trade-in Details form used for a retail trade-in:

These terms and conditions form part of the agreement between A Ltd and you, the customer. They apply to the terms of payment and submission of your devices. By submitting/sending your electronic devices through A Ltd you are agreeing to accept these terms and conditions.

…

9. Representations and Warranties

By submitting your items to A Ltd you are representing that…you are making the phone sale in the course or furtherance of a GST registered enterprise

The ruling request described the Trade-in Shipping Manifest and Terms and Conditions as an offer made by A Ltd to the Business Seller to collect the devices for technical reviews and security checks before A Ltd sends the Business Seller an offer to purchase the devices at the specified price. The contract to purchase the phones is made when the offer to purchase is accepted and signed by the Business Seller.

Weekly report provided by A Ltd to X Ltd:

A Ltd provides X Ltd with a weekly report of devices which A Ltd has agreed to purchase from Business Sellers.

Tax invoice issued to A Ltd pursuant to Agreement:

Under a retail trade-in and a business trade-in X Services Pty Ltd (as billing agent for X Ltd) issues a tax invoice to A Ltd pursuant to the Agreement. A Ltd's adviser confirmed that the form of tax invoice attached to the ruling request as Appendix I is issued in respect of both a retail trade-in and a business trade-in.

It was explained in the ruling request that the 'Trade-in Device Charge' appearing on the tax invoice is the total price (including GST) of the device acquired from a Business Seller and that the 'Cost Recovery Fee', being 10% of the Trade-in Device Charge, is consideration for the supply of facilitation services by X Ltd to A Ltd.

Payment of tax invoice:

A Ltd pays X Ltd the full amount of the tax invoice.

Disposal of old devices:

A Ltd sells the old devices to either an Australian recycler or an overseas recycler.

Submissions made in the ruling request:

It was stated in the ruling request that X Ltd facilitates an agreement whereby the Business Seller sells the old device to A Ltd and the submissions began by considering whether there was a document which might be treated as a valid tax invoice in respect of that supply. There were a number of alternative submissions, relying on either subsection 29-70(1) of the GST Act (the requirements for a valid tax invoice), subsection 29-70(1A) (a document issued by an entity may be treated as a valid tax invoice where it does not contain certain information required by subsection 29-70(1) but all of that information can be clearly ascertained from other documents issued by that entity), or subsection 29-70(1B) (exercise of the Commissioner's discretion to treat a document as a valid tax invoice).

First, it was submitted that the Trade-in Details and Terms and Conditions (in relation to a retail trade-in) and the Trade-in Shipping Manifest and Terms and Conditions (in relation to a business trade-in) satisfied the requirements in subsection 29-70(1) for a valid tax invoice.

In the alternative it was submitted that the Trade-in Details and Terms and Conditions or Trade-in Shipping Manifest and Terms and Conditions together with all or any of:

the RCTI handed to the Business Seller by X Ltd's representative (in the case of a retail trade-in) or produced by A Ltd on behalf of X Ltd and emailed to the Business Seller by A Ltd (in the case of a business trade-in);

the tax invoice issued weekly by X Ltd to A Ltd which shows the Trade-in Device Charge (inclusive of GST), Cost Recovery Fee, and GST on the Cost Recovery Fee; and/or

the electronic transaction records supplied by X Ltd to A Ltd

constitute a valid tax invoice for the purposes of subsection 29-70(1) of the GST Act. It was submitted that in paragraphs 48 to 50 of Goods and Services Tax Ruling GSTR 2000/35 the ATO accepted that two documents combined may constitute a valid tax invoice and that as a valid tax invoice is only required to be held by a recipient, there is no reason why two documents held by the recipient of a supply cannot together constitute a valid tax invoice even where one of those documents is not issued to or seen by the supplier. It was further submitted that in paragraphs 10 and 11 of Goods and Services Tax Ruling GSTR 2013/1 the ATO accepts that a single document can represent a tax invoice and a RCTI and in paragraph 96 of GSTR 2000/35 that the ATO also accepts that a recipient may claim an input tax credit where the relevant document is held by the recipient's agent. Further, per A New Tax System (Goods and Services Tax) Waiver of Tax Invoice Requirements (Acquisitions under and Agency Relationship) Legislative Instrument 2013, a recipient is not required to hold a tax invoice for a creditable acquisition where the recipient makes an acquisition through an agent who holds the tax invoice (clause 3(a)) or the recipient makes an acquisition through an agent who holds a tax invoice issued by the supplier's agent (clause 4(a)(iii)).

For the purposes of subsection 29-70(1A) of the GST Act it was submitted that all of the information required for a valid tax invoice and which does not appear in either the Trade-in Details or Trade-in shipping Manifest can be ascertained from other documents. Reference was made to paragraphs 19 and 20 of Law Administration Practice Statement PSLA 2004/11 and it was submitted that the only information required by subsection 29-70(1) which is not given to A Ltd by a Business Seller is that required by sub-paragraph 29-70(1)(vi) (the amount of GST (if any) payable in relation to each supply to which the document relates) and that that information is given to A Ltd by X Ltd (in the case of a retail trade-in) or produced by A Ltd and given to the Business Seller (in the case of a business trade-in).

As a further alternative, it was submitted that the Commissioner should exercise the discretion under subsection 29-70(1B) of the GST Act to treat the documents alone or in combination as a valid tax invoice. The submissions referred to paragraph 8(b)(iv) in Goods and Services Tax Ruling GSTR 2000/10 which states that there are mutual efficiencies for a supplier and a recipient in conducting their business on the basis that the recipient notifies the supplier of the value of the supply. It was submitted that to require A Ltd to hold a tax invoice issued by each Business Seller would impose a disproportionate burden on both parties because A Ltd would have to request numerous tax invoices from Business Sellers with which A Ltd otherwise has no direct contact.

In relation to whether any of the documents qualify as a valid RCTI it was submitted that the facts fell within legislative determinations made in respect of tax invoices issued by entities which acquire goods for recycling (RCTI 2000/4), selling agents where the recipient of the supply determines the price that the seller will receive (RCTI 2000/13), tax invoices issued by a recipient who receives goods on a sale or return basis (RCTI 2000/14), vehicle dealers which receive goods by way of trade-in (RCTI 2000/46), and tax invoices issued by the seller of reconditioned motor vehicle parts which receive a taxable supply of a worn part (RCTI 2005/1).

Finally, it was submitted that the Commissioner should issue a RCTI determination pursuant to subsection 29-70(3) of the GST Act to A Ltd in respect of a class of transactions/invoices within an infant industry where there is no current industry association but likely to be a number of competitors.

Varied Trade-In Agreement:

In July 2014 A Ltd's adviser provided copies of a Variation to Trade-In Agreement (Variation) which stated that on and from June 2014 the Main Agreement was varied and restated as set out in the Varied Trade-In Agreement.

The Varied Trade-In Agreement states that A Ltd may enter into Collection Contracts with Sellers initiated through X Ltd's retail channel via Collection Sites, via X Ltd's digital sales channel via Digital Sales Contact, or via X Ltd's Small and Medium Business sales channel.

'Collection Contract' is defined as the Consumer Collection Contact or Business Collection Contract.

'Seller' is defined as a customer of X Ltd who is the owner of a device which is sold by the Seller to A Ltd and includes a Consumer Seller and a Business Seller. 'Business Seller' is defined as a Seller classified by X Ltd as a small or medium business customer who has an ABN and who wishes to sell devices to A Ltd in the course or furtherance of a business.

The Varied Trade-In Agreement deals separately with an offer made to a Seller by A Ltd via a Collection Site, via Digital Sales Contact, or via Business Channel.

In the case of an offer to a Seller via a Collection Site the Collection Site Representative (defined as an employee or agent of X Ltd) ascertains the price for the Seller's device using A Ltd's computerised system, electronically inputs the Sellers Records into that system and, if the Seller accepts A Ltd's offer, provides a either a Consumer Collection Contract or Business Collection Contract to the Seller (who must leave the device at the Collection Site).

In the case of an offer to a Seller via Digital Sales Contact the Digital Sales Representative (an employee or agent of X Ltd) obtains the Seller's Records and Seller's Description (of the device) by phone or online, and provides an Indicative Quote (using a Price List provided to X Ltd by A Ltd). If the Seller agrees to the Indicative Quote the Digital Sales Representative allows A Ltd to conclude the trade-in of the device with the Seller and sends a pre-paid post satchel to the Seller with a copy of either a Consumer Collection Contract or a Business Collection Contract. When the Digital Sales Contact receives the relevant device and executed Collection Contract from the Seller then the Collection Contract is formed.

In the case of an offer to a Business Seller via Business Channel a Business Representative advises the Business Seller of the likely price of the device using A Ltd's Price List and transmits the Business Seller's Records to A Ltd to enable A Ltd to conclude the trade-in of the device and arrange for the Business Seller to enter into a Business Collection Contract.

The Varied Trade-In Agreement states that X Ltd will invoice A Ltd weekly for devices delivered to A Ltd's premises in the preceding week that are the subject of a Collection Contract and that an invoice will be made up of the following components:

100% of the Seller Price which is payable by A Ltd to the Seller via X Ltd; and

A cost recovery fee equal to 10% of the Seller Price for a Good(s) or an amount agreed between X Ltd and A Ltd being payable to X Ltd as reimbursement of X Ltd fulfilling its obligations under Appendix A.

The Varied Trade-In Agreement also states:

For the avoidance of doubt, where an invoice relates to a Business Collection Contract:

The Seller Price is already inclusive of GST and additional GST will not be payable on the Seller Price by A Ltd to X Ltd; and

The Cost Recovery Fee is equal to 10% of the GST exclusive price for a Good(s) (or an amount otherwise agreed in writing between X Ltd and A Ltd being payable to X Ltd as reimbursement of X Ltd fulfilling its obligations under this Agreement) plus 10% GST of the Cost Recovery Fee.

The Varied Trade-In Agreement states that the Cost Recovery Fee is exclusive of GST and:

X Ltd will issue A Ltd with a valid tax invoice in respect of each taxable supply.

The Varied Trade-In Agreement contains a clause similar to the clause in the Agreement which creates a subdivision 153-B arrangement in respect of the acquisition of devices by A Ltd through X Ltd from a Business Seller:

(a) If X Ltd (in this clause the 'GST Intermediary') makes or facilitates supplies and/or acquisitions from or to Business Sellers pursuant to this Agreement as an intermediary of A Ltd (in this clause the 'GST Principal'):

(i) The GST Intermediary acknowledges that it will be treated, for the purposes of the GST law, as making or facilitating the supplies and/or acquisitions from or to the Business Seller and the GST Principal will be treated as making or facilitating corresponding supplies to and or acquisitions from the GST Intermediary;

(ii) The GST Intermediary will issue a recipient created tax invoice (RCTI), tax invoice and adjustment note (as required) to the Business Seller using the GST Intermediary's name, ABN, and business letterhead and the GST Principal will not issue any recipient created tax invoice, tax invoice, or adjustment note relating to these supplies or acquisitions;

(b) Each party must notify the other party if, at any time, it cease to be registered for GST or it cease to comply with any of the requirements of any taxation ruling issued by the Australian Taxation Office relating to the issuing of RCTIs; and

(c) Each party acknowledges and warrants that at the time of entering into this Agreement it is registered for GST. If the GST Intermediary or the GST Principal ceases to be registered for GST, this sub-clause will cease to have effect.

The Consumer Collection Contract is annexed to the Varied Trade-In Agreement and includes a representation by the Seller 'that this device is not sold or used in carrying on a business or enterprise. The Business Collection Contract is also annexed to the Varied Trade-In Agreement and includes a representation by the Seller that the Seller is 'making the phone sale in the course or furtherance of a GST registered enterprise'.

Relevant legislative provisions

A New Tax System (Goods and Services Tax) Act 1999 section 29-70.

A New Tax System (Goods and Services Tax) Act 1999 subdivision 153-B

Reasons for decision

Questions 1 and 2

Summary

The ruling request is based on the view that a Business Seller supplies a traded-in device to A Ltd and seeks confirmation that there is a document that constitutes a valid tax invoice in respect of a supply by the Business Seller to A Ltd.

As the Agreement creates a valid subdivision 153-B arrangement, subsection 153-60(1) of the GST Act deems an acquisition of a device made by A Ltd from a Business Seller through X Ltd to be a creditable acquisition made by X Ltd from the Business Seller and subsection 153-60(2) deems X Ltd to make a taxable supply of the device to A Ltd. Thus the issue is whether there is a document that constitutes a valid tax invoice in respect of the supply of a device by X Ltd to A Ltd.

In relation to a retail trade-in we consider that the tax invoice issued by X Services Pty Ltd (as billing agent for X Ltd) may be treated as a valid tax invoice by A Ltd pursuant to subsection 29-70(1A) of the GST Act on the basis that it would comply with the requirements for a tax invoice but for the fact that it does not contain the information required by paragraph 29-70(1)(c) of the GST Act but all of that information can be clearly ascertained from another document given by X Ltd to A Ltd, i.e. the information which X Ltd's representative enters into A Ltd's system and which A Ltd can extract in a daily report.

In relation to a business trade-in the other document which contains the information required by paragraph 29-70(10)(c) is the weekly report of traded-in devices which A Ltd has agreed to purchase. However, as that report is provided by A Ltd to X Ltd, not by X Ltd, it does not satisfy subsection 29-70(1A). That leaves for consideration whether the Trade-In Shipping Manifest qualifies as the other document given by X Ltd to A Ltd which contains the information required by sub-paragraph 29-70(1)(c)(iii). On the basis that X Ltd's representative attending at the Seller's premises fills in the 'Quantity' and 'Description' fields in the Trade-In shipping Manifest with details similar to those appearing on the Trade-In Details form, we accept that the information required by sub-paragraph 29-70(1)(c) can be clearly ascertained from another document given by X Ltd to A Ltd.

Detailed reasoning

The entity which supplies a device to A Ltd:

The ruling request is predicated on the view that a Business Seller supplies a traded-in device to A Ltd.

We disagree with that view. We consider that the Agreement creates an arrangement of the kind described in subsection 153-50(1) of the GST Act (subdivision 153-B arrangement).

As a consequence, subsection 153-60(1) states that an acquisition of a device made by A Ltd from a Business Seller through X Ltd is taken to be a creditable acquisition made by X Ltd from the Business Seller and subsection 153-60(2) states that X Ltd is taken to make a taxable supply of the device to A Ltd.

Thus the issue is whether any of the documents referred to in the ruling request constitutes a valid tax invoice in respect of the supply of a device by X Ltd to A Ltd.

Below we explain why we consider that there is a valid subdivision 153-B arrangement, the implications of that subdivision 153-B arrangement for creditable acquisitions, acquisitions that are not creditable acquisitions, and on arrangements involving both creditable acquisitions and acquisitions that are not creditable acquisitions.

Is there a valid subdivision 153-B arrangement?

Paragraph 76 of Goods and Services Tax Ruling GSTR 2000/37 sets out the requirements for a valid subdivision 153-B arrangement:

To enter this arrangement there must be a written agreement under which:

the intermediary arranges to make supplies and/or acquisitions to or from third parties on behalf of the principal;

the kinds of supplies and/or acquisitions to which the arrangement applies are specified;

the intermediary is treated for the purposes of GST law as a principal in making those supplies or acquisitions;

the intermediary will issue all tax invoices and adjustment notes relating to those supplies to third parties in the intermediary's name and the principal will not issue such documents; and

both parties must be registered.

In our view the Agreement meets the requirements set out in paragraph 76:

Clause 1 of the Agreement provides for a Business Seller to indicate to a Collection Site Representative (defined in the Main Agreement as an employee or agent of X Ltd) that the Business Seller wishes to sell a device to A Ltd, in which case X Ltd arranges to make that acquisition from the Business Seller on behalf of A Ltd.

The kinds of acquisitions are specified, i.e. devices which are listed in Schedule 2 and such other devices as are agreed by X Ltd and A Ltd.

The Agreement states that X Ltd acknowledges that X Ltd will be treated, for the purposes of the GST law as making the acquisition from the Business Seller and A Ltd will be treated as making a corresponding acquisition from X Ltd.

The Agreement states that X Ltd will issue a tax invoice to the Business Seller and A Ltd will not issue any tax invoice relating to that acquisition.

The Agreement also states that each party warrants that at the time of entering into the Agreement it is registered for GST and agrees that the subdivision 153-B arrangement shall cease to have effect if either party ceases to be registered for GST.

X Ltd and A Ltd are both registered for GST.

The effect of a subdivision 153-B arrangement on acquisitions:

The effect of a subdivision 153-B arrangement on acquisitions is set out in section 153-60 as follows (substituting 'X Ltd' for 'intermediary', 'A Ltd' for 'principal', and 'Business Seller' for 'third party'):

Subsection 153-60(1) states that, provided that an acquisition is of a kind to which the subdivision 153-B arrangement applies, is made in accordance with that arrangement, and both X Ltd and A Ltd are registered for GST, an acquisition of a device made by A Ltd from a Business Seller through X Ltd is taken to be a creditable acquisition made by X Ltd from the Business Seller.

Subsection 153-60(2) states that, in addition, X Ltd is taken to make a taxable supply of the device to A Ltd. Paragraph 153-60(2)(a) states that this supply is taken to be a supply of the same thing as is acquired in the 'intermediary's acquisition' that X Ltd is taken to make. Paragraph 153-60(2)(b) states that the supply X Ltd is taken to make to A Ltd is taken to have a value equal to 10/11 of the amount that is payable to X Ltd by A Ltd in respect of the 'intermediary's acquisition'.

Subsection 153-60(2) further states that A Ltd is taken to make a corresponding acquisition from X Ltd and that that acquisition is taken to be a creditable acquisition if A Ltd's acquisition from the Business Seller would have been a creditable acquisition.

This is modified by subsection 153-60(3) which states that if A Ltd pays X Ltd an amount 'as a commission or similar payment' for X Ltd's acquisition from the Business Seller then:

For the purposes of paragraph 153-60(2)(b) the amount payable by A Ltd to X Ltd is taken to be increased by the amount that A Ltd pays; and

The supply by X Ltd to A Ltd to which that payment relates is not a taxable supply.

We do not consider that the 'Cost Recovery Fee' payable by A Ltd to X Ltd is a 'commission or similar payment'. In our view the Cost Recovery Fee is consideration for a supply of services by X Ltd to A Ltd as the Agreement describes the Cost Recovery Fee 'as reimbursement of X Ltd fulfilling its obligations under this Agreement'.

Effect of a subdivision 153-B arrangement on creditable acquisitions:

The Terms and Conditions attached to the Trade-in Details (for a retail trade-in) and Trade-in Shipping Manifest (for a business trade-in) both contain a representation by the Business Seller that the Business Seller is 'making the sale in the course or furtherance of a GST registered enterprise'. Consequently the corresponding acquisition of the device will be a creditable acquisition.

The effect of section 153-60 on creditable acquisitions is explained in paragraphs 87 to 89 of GSTR 2000/37:

87. The intermediary is taken to make a taxable supply to the principal of the same thing that the intermediary is taken to acquire. The value of that supply is determined by reference to the amount that the principal is required to pay the intermediary. This amount is the amount the third party charged for the supply, plus the amount the intermediary is permitted (under the contract with the principal) to charge as a commission or similar payment for the intermediary services. However, the intermediary's supply of services is not a taxable supply in its own right and the principal is not entitled to claim input tax credits relating to the payment of the commission or similar payment.

88. As the supply by the intermediary to the principal is a taxable supply under the arrangement, the intermediary is required to account for the amount of GST payable on the supply, being 10% of the value discussed in the previous paragraph, to the Commissioner. The principal can claim 10% of the value as an input tax credit (if they would have otherwise been making a creditable acquisition from the third party had Subdivision 153-B not applied).

89. In some cases, the principal pays the intermediary the entire amount that the third party charged for the supply. Then, in a separate transaction, the principal pays the intermediary a commission or similar payment for the intermediary services. If this situation occurs, subsection 153-60(3) provides that the amount the principal has already been required to pay is increased by the amount of the commission or similar payment for intermediary services. The intermediary's supply of services is then not considered to be a taxable supply in its own right so that the principal is not entitled to claim the input tax credits relating to the payment of the commission or similar payment. The basic attribution rules apply to the supply from the third party to the intermediary and from the intermediary to the principal.

As stated above, we do not consider the Cost Recovery Fee to be 'a commission or similar payment' for the purposes of section 153-60. Consequently, for the purposes of paragraph 87 the value of the supply that is taken to be made by X Ltd to A Ltd is determined by reference to the Trade-in Device Charge which appears on the tax invoice.

Subdivision 153-B arrangements and tax invoices:

Where the requirements in subsection 153-60(1) are satisfied, (i.e. an acquisition is made by a principal from a third party through an intermediary and the acquisition is of a kind to which a subdivision 153-B arrangement applies, the acquisition is made in accordance with the subdivision 153-B arrangement and both the principal (A Ltd) and intermediary (X Ltd) are GST registered) the final paragraph in subsection 153-60(2) states:

The principal is taken to make a corresponding acquisition from the intermediary, and the acquisition is taken to be a creditable acquisition if, apart from this section, the principal's acquisition from the third party would have been a creditable acquisition.

Subsection 153-60(4) states that section 153-60 has effect despite section 11-5 (which is about what are creditable acquisitions), despite section 11-10 (which is about what are acquisitions), despite section 9-5 (which is about what are taxable supplies) and despite section 9-75 (which is about the value of taxable supplies). Subsection 153-60(4) does not suggest that section 153-60 has effect despite Division 29 of the GST Act and paragraph 153-50(1)(d) deals only with the issue of a tax invoice to the third party in respect of a supply made to that third party by the intermediary on behalf of the principal. This suggests that the requirement in subsection 29-10(3) of the GST Act to hold a tax invoice in order to attribute that creditable acquisition to a tax period is unaffected by section 153-60.

We therefore consider that where A Ltd makes a creditable acquisition of a device, A Ltd is required to hold a valid tax invoice in respect of the acquisition of that device which A Ltd is deemed make as a principal pursuant to the final paragraph in subsection 153-60(2), i.e. an acquisition 'from the intermediary', i.e. from X Ltd, not from the Business Seller where the corresponding supply made by X Ltd to A Ltd has a value calculated in accordance with subsection 153-60(2) of the GST Act.

The document most likely to constitute such a valid tax invoice is the tax invoice issued by X Services Pty Ltd (as billing agent for X Ltd) to A Ltd, an example of which was attached to the ruling request as Appendix I.

Is Appendix I a valid tax invoice?

Below we consider whether Appendix I meets the requirements in subsection 29-70(1) of the GST Act for a valid tax invoice.

Paragraph 29-70(1)(a) of the GST Act requires the tax invoice to be issued by the supplier of the supply. As noted above, X Services Pty Ltd issues the tax invoice as billing agent for X Ltd. We therefore consider that paragraph 29-70(1)(a) is satisfied.

Paragraph 29-70(1)(b) requires the tax invoice to be in the approved form. Paragraph 7 of Goods and Services Tax Ruling GSTR 2013/1 states that a document is in the approved form for a tax invoice if it meets the requirements of subsection 29-70(1) of the GST Act.

Sub-paragraph 29-70(1)(c)(i) states that a valid tax invoice must contain enough information to enable the supplier's identity and supplier's ABN to be clearly ascertained. Appendix I contains X Services Pty Ltd's name and ABN, states that X Services Pty Ltd is billing agent for a number of companies, including X Ltd, and contain X Ltd's name and ABN. Paragraph 96 of GSTR 2013/1 acknowledges that an agent can issue a tax invoice. We therefore consider that sub-paragraph 29-70(1)(c)(i) is satisfied.

If the total price of the supply is at least $1,000, sub-paragraph 29-70(1)(c)(ii) requires the tax invoice to contain enough information to enable the recipient's identity or ABN to be clearly ascertained. Appendix I satisfies the requirement in sub-paragraph 29-70(1)(c)(ii) by showing A Ltd's name.

Sub-paragraph 29-70(1)(c)(iii) requires a tax invoice to contain enough information to enable what is supplied, including the quantity (if applicable) and the price of what is supplied to be clearly ascertained. Paragraph 28 of GSTR 2013/1 states that a tax invoice must contain sufficient information to identify the thing or things supplied, including the quantity supplied. Appendix I states:

*Goods and/or services supplied are subject to terms and conditions of agreement

# indicates that the item is subject to GST.

In our view the descriptions in Appendix I do not satisfy the requirements set out in paragraph 28 of GSTR 2013/1. However, subsection 29-70(1A) of the GST Act states:

A document issued by an entity to another entity may be treated by the other entity as a *tax invoice for the purposes of this Act if:

(a) it would comply with the requirements for a tax invoice but for the fact that it does not contain certain information; and

(b) all of that information can be clearly ascertained from other documents given by the entity to the other entity.

Paragraph 46 of GSTR 2013/1 states that there is no requirement for the other documents to have been intended to be a tax invoice and that other documents can include a supplier's product list, a business card, an email from the supplier or an earlier tax invoice.

In relation to a retail trade-in, X Ltd's representative enters data into A Ltd's computerised system in respect of each device acquired. A Ltd can extract this information daily and a sample of the data entered by X Ltd was attached to the ruling request (i.e. transaction ID, store, product, trade-in price, reference number, dated created, serial number, Business Seller's name, address and ABN). We therefore consider that, in relation to a retail trade-in, for the purposes of subsection 29-70(1A) Appendix I can be treated as a tax invoice which contains all of the information as to what is supplied and the quantity supplied in relation to the supply of a device by X Ltd to A Ltd on the basis that all of that information can be clearly ascertained from other documents given by X Ltd to A Ltd, i.e. data entered into A Ltd's computerised system by X Ltd.

In relation to a business trade-in the other document which contains the information required by sub-paragraph 29-70(10)(c)(iii) is the weekly report of traded-in devices which A Ltd has agreed to purchase ( also attached to the ruling request). However, as that report is provided by A Ltd to X Ltd rather than by X Ltd it does not satisfy subsection 29-70(1A). That leaves for consideration whether the Trade-in Shipping Manifest qualifies as the other document given by X Ltd to A Ltd which contains the information required by sub-paragraph 29-70(1)(c)(iii). On the basis that X Ltd's representative attending at the Business Seller's premises fills in the 'Quantity' and 'Description' fields in the Trade-in Shipping Manifest with details similar to those appearing on the Trade-in Details form, we accept that the information required by sub-paragraph 29-70(1)(c)(iii) can be clearly ascertained from another document given by X Ltd to A Ltd.

In relation to what is supplied, the quantity, and the price in respect of the 'Cost Recovery Fee' appearing in Appendix I, the Agreement (which is in the form of a letter from X Ltd to A Ltd) refers to a Cost Recovery fee equal to 10% of the Seller Price for a Good 'being payable to X Ltd as reimbursement of X Ltd fulfilling its obligations under this Agreement'. We therefore consider that, pursuant to subsection 29-70(1A), Appendix I can be treated as a tax invoice which contains all of the information as to what is supplied, the quantity, and the price in relation to the supply by X Ltd of fulfilling its obligations under the Agreement.

Sub-paragraph 29-70(1)(c)(iv) requires a tax invoice to contain enough information to enable the extent to which each supply to which it relates is a taxable supply. Appendix I states:

# indicates that the item is subject to GST

and adds an amount of GST to the Sub-Total in order to calculate the Total. . Appendix I shows # in front of both 'Cost Recovery Fee' and 'Trade-In Device Charge (ABN Holders)', but not in front of 'Trade In Device Charge (Non ABN)' and an amount of GST which is 10% of the sum of the 'Trade In Device Fee (ABN Holders)' plus the 'Cost Recovery Fee'.

Paragraph 36 of GSTR 2013/1 states that the requirement in sub-paragraph 29-70(1)(c)(iv) will be satisfied by using a reference mark that denotes each taxable supply with a corresponding statement of the extent to which the supply is a taxable supply. We therefore consider that Appendix I satisfies sub-paragraph 29-70(1)(c)(iv). We note that the 'Trade In Device Charge (Non ABN)' in Appendix I is not marked with '#'. We consider this to be correct as subsection 153-60(2) states that, pursuant to a subdivision 153-B arrangement a principal is taken to make a creditable acquisition from the intermediary only if, apart from section 153-60, the principal's acquisition from the third party would have been creditable.

Sub-paragraph 29-70(1)(c)(v) requires a tax invoice to contain enough information to enable the date the document is issued to be clearly ascertained. Appendix I shows a date and therefore satisfy sub-paragraph 29-70(1)(c)(v).

Sub-paragraph 29-70(1)(c)(vi) requires a tax invoice to contain enough information to enable the amount of GST (if any) payable in relation to each supply to which it relates to be clearly ascertained. Paragraph 13 of GSTR 2013/1 states that that information does not have to be specifically stated or in a particular format as long as it can be determined from the document. Appendix I identifies each taxable supply and beneath the Sub-Total separately states the total amount of GST. We therefore consider that the amount of GST payable in relation to each supply can be determined from that document, although the amount of GST payable in relation to the supply of each device can be ascertained by applying subsection 29-70(1A) of the GST Act and relying on the data entered into A Ltd's computerised system by X Ltd's employee or agent in relation to a retail trade-in and the Trade-in Shipping Manifest in relation to a business trade-in as discussed above in relation to sub-paragraph 29-70(10)(c)(iii).

Paragraph 29-70(1)(d) requires a tax invoice to comply with the requirement that it can be clearly ascertained from the document that the document was intended to be a tax invoice. Appendix I satisfies this requirement as the words 'Tax Invoice' appear near the top of the document.

For the reasons set out above we consider that the weekly tax invoice issued by X Ltd to A Ltd may be treated as a valid tax invoice for the purposes of the GST Act pursuant to subsection 29-70(1A) of the GST Act, i.e. it would comply with the requirements for a tax invoice but for the fact that it does not contain certain information but all of that information can be ascertained from other documents given by X Ltd to A Ltd.

Question 3

As Question 2 has been answered in the affirmative it is not necessary to consider whether the Commissioner will treat a document as a valid tax invoice pursuant to subsection 29-70(1B) of the GST Act in respect of the supply of a device to A Ltd pursuant to a retail trade-in or a business trade-in made in accordance with the Agreement.

Question 4

As Question 2 has been answered in the affirmative it is not necessary to consider whether a document is a valid RCTI in respect of the supply of a device to A Ltd pursuant to a retail trade-in or a business trade-in made in accordance with the Agreement.

Question 5

As Question 2 has been answered in the affirmative it is not necessary to consider whether a document can be treated as a valid RCTI pursuant to subsection 29-70(1A) of the GST Act in respect of the supply of a device to A Ltd pursuant to a retail trade-in or a business trade-in made in accordance with the Agreement.

Question 6

As Question 2 has been answered in the affirmative, it is not necessary to consider whether a document can be treated as a valid RCTI pursuant to subsection 29-70(1B) of the GST Act in respect of the supply of a device to A Ltd pursuant to a retail trade-in or a business trade in made in accordance with the Agreement.

Question 7

As the answer to Question 2 is in the affirmative it is not necessary to consider whether the Commissioner will issue a determination pursuant to subsection 29-70(3) of the GST Act in respect of the supply of a device to A Ltd pursuant to a retail trade-in or a business trade-in made in accordance with the Agreement.

Question 8

Summary

The Varied Trade-In Agreement creates a valid subdivision 153-B arrangement between A Ltd and X Ltd in respect of the acquisition of devices from Business Sellers with effect from June 2014. Although we were not provided with a copy of a tax invoice issued by X Ltd to A Ltd pursuant to the Varied Trade-In Agreement, we assume that such a tax invoice would be in the same form as Appendix I to the ruling request. On that basis the Reasons for Decision in relation to Question 1 which confirm that Appendix I can be treated as a valid tax invoice pursuant to subsection 29-70(1A) of the GST Act also apply to a tax invoice issued by X Ltd to A Ltd pursuant to the Varied Trade-In Agreement in relation to the trade-in of a device by a Business Seller.

Detailed reasoning

Entity which supplies the Good to A Ltd:

As noted in Question 1, the ruling request is predicated on the view that a Business Seller supplies a device to A Ltd. In the Reasons for Decision for Question 1 we disagreed with that view on the ground that the Agreement created a valid subdivision 153-B arrangement between X Ltd and A Ltd which meant that an acquisition of a device by A Ltd through X Ltd is taken to be a creditable acquisition of a device by X Ltd from the Seller followed by a taxable supply of the device by X Ltd to A Ltd so that the issue is whether there was a document that constituted a valid tax invoice in respect of the taxable supply made by X Ltd to A Ltd.

In our view the Varied Trade-In Agreement satisfies the requirements set out in paragraph 76 of GSTR 2000/37 for a valid subdivision 153-B arrangement in respect of a device acquired by A Ltd through X Ltd from a Business Seller:

The Varied Trade-In Agreement provide for a Business Seller to indicate to either a Collection Site Representative, Digital sales Representative or a Business Representative that the Business Seller wishes to sell a device Goods (in which case the Business Collection Contract is used);

The kinds of acquisitions are specified via the definition used in clause 1.1 and Schedule 2 to the Varied Trade-In Agreement;

The Varied Trade-In Agreement states that the GST Intermediary (X Ltd) acknowledges that the GST Intermediary will be treated for the purposes of the GST law as making the acquisition from the Business Seller and the GST Principal (A Ltd) will be treated as making a corresponding acquisition from the GST Intermediary;

The Varied Trade-In Agreement also states that the GST Intermediary (X Ltd) will issue a tax invoice or RCTI (as required) to the Business Seller and the GST Principal (A Ltd) will not;

The Varied Trade-In Agreement states that each party warrants that it is registered for GST at the time of entering into the Varied Trade-In Agreement and that the subdivision 153-B arrangement ceases to have effect if either party cease to be GST registered; and

Both parties are registered for GST.

Effect of a subdivision 153-B arrangement on acquisitions:

Subsection 153-60(1) states that the effect of an acquisition of a device from a Business Seller by A Ltd through X Ltd in accordance with a subdivision 153-B arrangement is that that acquisition is taken to be a creditable acquisition made by X Ltd from the Business Seller, not by A Ltd.

Subsection 153-60(2) states that in addition X Ltd is taken to make a taxable supply of that device to A Ltd which has a value equal to 10/11 of the amount that is payable to X Ltd by A Ltd and that A Ltd is taken to have made a corresponding acquisition from X Ltd which is taken to be a creditable acquisition if A Ltd's acquisition from the Business Seller would have been a creditable acquisition. This is modified by subsection 153-60(3) where there is a 'commission or similar payment', but we do not consider that the Cost Recovery Fee payable by A Ltd to X Ltd under the Varied Trade-In Agreement is a commission or similar payment as the Varied Trade-In Agreement acknowledges that the Cost Recovery Fee reimburses X Ltd for performing X Ltd's obligations under the Varied Trade-In Agreement.

Effect of a subdivision 153-B arrangement on creditable acquisitions:

Where a device is acquired from a Business Seller the Varied Trade-In Agreement requires the Collection Site Representative, Digital Sales Representative or Business Representative to use the Business Collection Contract which is between the Business Seller and A Ltd and includes a representation by the Business Seller that the Business Seller is 'making the sale in the course or furtherance of a GST registered enterprise'.

Pursuant to subsection 153-60(2) the effect of that representation is that that the acquisition which A Ltd is taken to make from X Ltd is taken to be a creditable acquisition.

Subdivision 153-B arrangements and tax invoices:

As noted in the Reasons for Decision for Question 1, subsection 153-60(4) states that section 153-60 has effect despite section 11-5, section 11-10, section 9-5 and section 9-75 but does not suggest that section 153-60 has effect despite Division 29 of the GST Act. We therefore consider that where A Ltd makes a creditable acquisition of a device from a Business Seller through X Ltd, A Ltd is required to hold a valid tax invoice in respect of the acquisition of that mobile phone which A Ltd is deemed make as a principal pursuant to the final paragraph in subsection 153-60(2), i.e. an acquisition 'from the intermediary' (i.e. X Ltd), not from the Business Seller.

Does A Ltd hold a valid tax invoice?

The sample tax invoice issued by X Services Pty Ltd (as billing agent for x Ltd) to A Ltd which was included in the ruling request as Appendix I pre-dates the Varied Trade-In Agreement (which came into effect in June 2014).

As the Varied Trade-In Agreement is a variation and restatement of the Main Agreement we assume that a tax invoice issued pursuant to the Varied trade-In Agreement in relation to an acquisition of a device from a Business Seller would be in the same format as the tax invoice attached to the ruling request as Appendix I. Our comments set out below as to whether such a tax invoice meets the requirements in subsection 29-70(1) of the GST Act for a valid tax invoice are based on that assumption.

In the Reasons for Decision in relation to Question 1 we reproduced set out the reasons why Appendix I meets the following requirements:

issued by the supplier of the supply (paragraph 29-70(1)(a));

in the approved form (paragraph 29-70(1)(b));

contains enough information to enable the supplier's identity and ABN to be clearly ascertained (sub-paragraph 29-70(1)(c)(i)); and

contains enough information to enable the recipient's identity and ABN to be clearly ascertained (sub-paragraph 29-70(1)(c)(ii)).

We consider that Appendix I does not satisfy the requirement in sub-paragraph 29-70(1)(c)(iii) to contain enough information to enable what is supplied (including the quantity if applicable) and the price of what is supplied to be clearly ascertained but that that information could be clearly ascertained from other documents given by X Ltd to A Ltd (per subsection 29-70(1A) of the GST Act), i.e. via the data entered into A Ltd's computerised system by X Ltd in the case or a retail trade-in and the Trade-In Shipping Manifest in the case of a business trade-in.

In relation to the supply of a device to A Ltd by X Ltd pursuant to the Varied Trade-In Agreement, where X Ltd acquires that device through a Collection Site the Varied Trade-In Agreement obliges the Collection Site Representative to electronically input the Seller's Records (defined to include the Seller's Price, i.e. the amount payable by Optus Mobile for the Good, and a description of the Seller's Good) into Alegre's computerised system. Where X Ltd acquires device through Digital Sales Contact the Varied Trade-In Agreement requires X Ltd to obtain the Seller's Records and transmits them to A Ltd. Where X Ltd acquires a device through the Business Channel the Varied Trade-In Agreement requires X Ltd to obtain the Business Seller's Seller's Records and transmit them to A Ltd. We therefore consider that the information required by sub-paragraph 29-70(1)(c)(iii) in relation to the device can be ascertained from other documents given to A Ltd by X Ltd per subsection 29-70(1A) of the GST Act.

X Ltd also makes a supply to A Ltd of fulfilling X Ltd's obligations under the Varied Trade-In Agreement (for which Optus Mobile charges the Cost Recovery Fee). Although Appendix I does not satisfy the requirement in sub-paragraph 29-70(1)(c)(iii) in relation to that supply, we consider that that information can be clearly ascertained from another document given by X Ltd to A Ltd, the Varied Trade-In Agreement (which states that the Cost Recovery Fee is payable to X Ltd as reimbursement of X Ltd fulfilling X Ltd's obligations under the Varied Trade-In Agreement) .

Sub-paragraph 29-70(1)(c)(iv) requires a tax invoice to contain enough information to enable the extent to which each supply to which it relates is a taxable supply. In the Reasons for Decision in relation to Question 1 we set out the reasons why we consider that Appendix I satisfies this requirement.

Sub-paragraph 29-70(1)(c)(v) requires a tax invoice to contain enough information to enable the date the document is issued to be clearly ascertained. Appendix I shows a date and therefore satisfy sub-paragraph 29-70(1)(c)(v).

Sub-paragraph 29-70(1)(c)(vi) requires a tax invoice to contain enough information to enable the amount of GST (if any) payable in relation to each supply to which it relates to be clearly ascertained. In the Reasons for Decision in relation to Question 1 we set out the reasons why this can be done either from the marking of each taxable supply with '#' and the statement of the GST amount in Appendix I or by applying subsection 29-70(1A) of the GST Act and relying on the data entered into A Ltd's computerised system by X Ltd in relation to a retail trade-in and the Trade-in Shipping Manifest in relation to a business trade-in. As discussed above, under the Varied Trade-In Agreement either a Collection Site Representative electronically inputs the Seller's Records into A Ltd's computerised system or X Ltd transmits the Sellers Records to A Ltd. We therefore consider that the information required by sub-paragraph 29-70(1)(c)(iii) in relation to a device can be ascertained from other documents given to A Ltd by X Ltd per subsection 29-70(1A) of the GST Act.

Paragraph 29-70(1)(d) requires a tax invoice to comply with the requirement that it can be clearly ascertained from the document that the document was intended to be a tax invoice. The words 'Tax Invoice' appear near the top of Appendix I.

For the reasons set out above we consider that the tax invoice issued by X Ltd to A Ltd pursuant to the Varied Trade-In Agreement may be treated as a valid tax invoice for the purposes of the GST Act pursuant to subsection 29-70(1A) of the GST Act (i.e. it would comply with the requirements for a tax invoice but for the fact that it does not contain certain information but all of that information can be ascertained from other documents given by X Ltd to A Ltd) in respect of the supply of a device by X Ltd to A Ltd on or after June 2014 pursuant to the trade-in of that device by a Business Seller under a Business Collection Contract.