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Edited version of your written advice
Authorisation Number: 1051193992763
Date Of Advice: 23 February 2017
Ruling
Subject: GST and Feed In Tariff (FiT) Support Payments
Question
Are FiT support payments you receive subject to GST?
Answer
No, FiT support payments are not subject to GST.
Relevant facts and circumstances
You commenced business in 2017.
The majority of your revenue comes from two sources.
The first source of revenue if for electricity that is to be uploaded into the national grid network and then sold at spot prices. These payments are subject to GST as the electricity supplies are taxable supplies.
The second source of revenue is from the (FiT) support payments to be received.
You signed a (FiT) Entitlement Agreement under which listed you as the FiT entitlement holder.
Agent Entity will make the FiT support payments to you.
You issue invoices to your agent Entity for the amount of the FiT support payments. You don't include (charge) GST on the invoiced amount.
Under the agreement the FiT support payments are referring to the difference in the spot prices versus the fixed FiT prices, times the electricity supply.
The FiT support payments will be high if spot prices were low and vice versa. The FiT support payments will be zero if spot prices are higher than or equal to the agreed FiT price.
Under section 8 Meaning of FiT entitlement of the Electricity Feed-in (Large-scale Renewable Energy Generation) Act 2011:
FiT entitlement means a right for the holder of a FiT entitlement to receive FiT support payments under part 4 for the holder's eligible electricity.
Relevant legislative provisions
A New Tax System (Goods and Services Tax) Act 1999 section 9-5
Reasons for decision
Under section 9-5 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act), a supply is a taxable supply if the supply is made for consideration, in the course or furtherance of an enterprise that you carry on, the supply is connected with the indirect tax zone and you are registered or required to be registered for GST. However, the supply is not a taxable supply to the extent that it is GST-free or input taxed.
It is considered that all of the requirements of section 9-5 of the GST Act are met by you apart from the requirement of 'the supply is made for consideration'. That is, the payment received from agent Entity will only subject to GST if you have made a supply to agent Entity in return for the FiT support payment.
The FiT support payments are provided for under the Electricity Feed-in (Large-scale Renewable Energy Generation) Act 2011. Entities that are FiT Entitlement Holders are entitled to a FiT support payment. As a FiT entitlement you have a right to receive FiT support payments under the Electricity Feed-in (Large-scale Renewable Energy Generation) Act 2011.
Agent Entity has a responsibility to pay FiT support payments to you.
While each month you need to provide certain information to agent Entity in relation to your FiT support payment entitlement for that month, you do not do anything further or supply anything to agent Entity for the actual payment of the FiT support payments.
It is considered that you do not 'make a supply for consideration' and as a result you do not make a taxable supply for the purposes of section 9-5 of the GST Act, when you invoice agent Entity and receive FiT support payments.
Therefore, FiT support payments are not subject to GST.