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Edited version of your written advice
Authorisation Number: 1051441559056
Date of advice: 17 October 2018
Ruling
Subject: GST
The Commissioner has ruled on the following question:
Question
Is the payment of excess by a protection holder to Entity A, in connection with a claim being settled under a protection issued by Entity A, consideration for a taxable supply by Entity A?
Answer
No, the payment of excess by a member is not consideration for a taxable supply made by Entity A.
This includes where Entity A debits the member’s account for the amount of the excess, or the member pays a third party (e.g. a repairer) the excess at Entity A’s direction. It also includes when the member does not pay the excess, but bears the first part of the relevant loss, for example, when the excess is deducted by Entity A in calculating the cash settlement paid to the member.
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 paragraph 9-15(1)(a)
A New Tax System (Goods and Services Tax) Act 1999 Division 78
A New Tax System (Goods and Services Tax) Regulations 1999 subregulation 40-5.09(3)