| Disclaimer This edited version has been archived due to the length of time since original publication. It should not be regarded as indicative of the ATO's current views. The law may have changed since original publication, and views in the edited version may also be affected by subsequent precedents and new approaches to the application of the law. You cannot rely on this record in your tax affairs. It is not binding and provides you with no protection (including from any underpaid tax, penalty or interest). In addition, this record is not an authority for the purposes of establishing a reasonably arguable position for you to apply to your own circumstances. For more information on the status of edited versions of private advice and reasons we publish them, see PS LA 2008/4. |
Edited version of private advice
Authorisation Number: 1012683574712
Ruling
Subject: GST and Solar Generated Electricity
Question
Is GST payable by you on your supply of excess electricity generated from a 30 kilowatt capacity solar power unit?
Answer
Yes.
This ruling applies for the following periods:
August 2014 onwards.
Relevant facts and circumstances
• You are a partnership registered for goods and services tax (GST)
• You operate a business in Amamoor Queensland.
• You) signed an Agreement with your 'supply authority' for the installation of three (3) Inverters totalling a maximum power generation of 30 kilowatt (solar generated electricity).
• The solar units have been installed and power generated from these units supply the business needs only.
• You have received a certain amount of dollars in solar rebates and/or feed-in amounts from your Energy Retailer.
• One eleventh of those amounts have been reported by your accountant as GST payable in your quarterly business activity statements.
Relevant legislative provisions
A New Tax System (Goods and Services Tax) Act 1999
Section 9-5
Section 9-10
Section 9-15
Section 29-70
Reasons for decision
Summary
The supply of electricity from your solar panels is a 'taxable supply' as it satisfies the criteria in section 9-5 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act). You are therefore liable for GST on your supply of electricity to your Energy Retailer.
Detailed reasoning
The supply of solar generated electricity from a solar owner to an electricity retailer is a supply for GST purposes.
You entered into an agreement with your 'supply authority' to install solar panels on your farm shed. You also entered into an agreement to supply electricity generated from the solar panels to your 'energy retailer'.
The supply of electricity (generated from your solar panels) to your 'energy retailer' is a supply for GST purposes. Your supply is for consideration and is in the course of your enterprise.
Therefore, there is a requirement to report and pay GST in your activity statement for any supply fed-in electricity made to your Energy Retailer.
The total amounts you receive for your supplies to the retailer are referred to as 'refunds' in your electricity account and the remittance advice that you receive. This incorporates all rebates in relation to your supply of electricity. These amounts are all in connection with your supply of the electricity.
The amount of GST you must pay to the ATO for your supply is one eleventh of the total consideration received.