Edited version of your written advice

Authorisation Number: 1012771309010

Ruling

Subject: GST and the application of Divisions 81 and 82 to Government fees and charges

Question

Is the Department making a taxable supply when an entity pays or discharges a liability to make a payment of a contribution to the department?

Answer

No.

This ruling applies for the following period(s)

N/A

The scheme commences on

N/A

Relevant facts and circumstances

The Department is a government agency registered for goods and services tax (GST).

The Department manages and assesses impacts.

The Department administers an Act which requires entities to make contributions which are enforceable by law

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

A New Tax System (Goods and Services Tax) Act 1999 Section 81-15

A New Tax System (Goods and Services Tax) Act 1999 Section 82-5 and

A New Tax System (Goods and Services Tax) Act 1999 Section 82-15

Reasons for decision

Unless otherwise stated, all legislative references in this Ruling are to the A New Tax System (Goods and Services Tax) Act 1999 (GST Act).

Sections 81-10 and 81-15 consider the effect of certain fees and charges and state:

81-10 Effect of payment of certain fees and charges

Certain fees and charges not consideration

(1) 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 subsection (4) or (5).

Prescribed fees and charges treated as consideration

(2) However, a payment you make, or a discharging of your 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, or is of a kind, prescribed by the regulations.

(3) For the purposes of subsection (2), 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 you.

Fees or charges paid for permissions etc.

(4) This subsection covers a fee or charge if the fee or charge:

(a) relates to; or

(b) relates to an application for;

the provision, retention, or amendment, under an *Australian law, of a permission, exemption, authority or licence (however described).

Fees or charges relating to information and record-keeping etc.

(1) This subsection covers a fee or charge paid to an *Australian government agency if the fee or charge relates to the agency doing any of the following:

(a) recording information;

(b) copying information;

(c) modifying information;

(d) allowing access to information;

(e) receiving information;

(f) processing information;

(g) searching for information.

81-15 Other fees and charges that do not constitute consideration

The regulations may provide that the payment of a prescribed *Australian fee or charge, or of an Australian fee or charge of a prescribed kind, or the discharging of a liability to make such a payment, is not the provision of *consideration.

The term 'Australian fee or charge' is defined in section 195-1 as:

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.

The term 'Australian law' is defined in section 995-1 of the Income Tax Assessment Act 1997. It includes acts and law making powers which are delegated by parliaments, such as regulations, by-laws, proclamations and orders made under Acts.

Of relevance to the contributions are subsections 81-10(1) and 81-10(4). There is a payment, or the discharging of a liability to make a payment in relation to the provision of a permission under an Australian law.

The contribution may also come within section 81-15 by virtue of paragraph 81-15.01(1)(f) of the GST Regulations which states:

(f) a fee or charge for a supply of a regulatory nature made by an Australian government agency;

Division 82 applies to supplies of in kind developer contributions in return for the supply by an Australian government agency of a right to develop land.

Sections 82-5 and 82-10 state:

82-5 Supplies of rights to develop land do not constitute consideration in certain cases

(1)  The supply, by an *Australian government agency, of a right to develop land is not treated as *consideration for another supply if the other supply complies with requirements imposed by or under an *Australian law.

(2)  It does not matter whether the other supply made is made to the *Australian government agency.

(3)  This section has effect despite section 9-15 (which is about consideration).

82-10 Supplies by Australian government agencies of rights to develop land are not for consideration

(1)  The supply, by an *Australian government agency, of a right to develop land is treated as a supply that is not made for *consideration to the extent that it is made in return for another supply that complies with requirements imposed by or under an *Australian law.

(2)  It does not matter whether the other supply is made to the *Australian government agency.

(3)  If the other supply constitutes the payment of:

(a) an *Australian tax prescribed by regulations made for the purposes of subsection 81-5(2); or

(b) an *Australian fee or charge prescribed by regulations made for the purposes of subsection 81-10(2);

 this section overrides those regulations in relation to the payment.

this section has effect despite section 9-15 (which is about consideration).

A contribution is made for the grant of development approval is also exempt under Division 82. Under subsections 82-5(1) and 82-10(1), a supply made in return for the supply by an Australian government agency of a right to develop land is not treated as consideration for each other. Both the supply of the in kind contribution and the right to develop land are exempt