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Edited version of private advice
Authorisation Number: 1051588580317
Date of advice: 10 October 2019
Ruling
Subject: GST and supply of rights and obligations
Question
Does the Commissioner agree that except to the extent any monetary consideration (directly and indirectly) is provided for the supply of certain rights under a contract that the relevant rights and obligations do not constitute supplies made by the parties to the contract for any other monetary or non-monetary consideration?
The Commissioner ruled:
Yes. Where,
· any monetary consideration that is payable for these rights and obligations (either directly or indirectly) exists and sufficiently represents the market value reasonably payable for such rights and obligations; and
· these rights and obligations do not provide any other enduring commercial benefits to either party under the contract beyond the purpose for which they are granted to carry out the necessary work as required under the contract; and
· these rights and obligations do not have any other economic value, independent identity attached beyond that represented by any monetary consideration (if any),
· the Commissioner agrees that that these rights and obligations do not constitute supplies made by either party for any other monetary or non-monetary consideration.
Note: the Commissioner has not assessed whether:
· any monetary consideration that may be payable for these rights and obligations (either directly or indirectly) sufficiently represents the market value reasonably payable for such rights and obligations,
· these rights and obligations provide any other enduring commercial benefits to either party under the contract beyond the purpose for which they are granted to carry out the necessary work as required under the contract, and
· these rights and obligations do not have any other economic value, independent identity attached beyond that represented by any monetary consideration (if any).
Relevant legislative provisions
Section 9-5 of the A New Tax System (Goods and Services Tax) 1999