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Edited version of private advice
Authorisation Number: 1051625659368
Date of advice: 10 January 2020
Ruling
Subject: Goods and services tax and funding payments
Question
Are payments made by one government authority to another under a funding agreement subject to GST?
Answer
No, the payments are not subject to GST. There is an insufficient nexus between the supply of services and the payments received under the funding agreement.
This ruling applies for the following period:
2018 - 2022
The scheme commences on:
2018
Relevant facts and circumstances
Funding Agreement
· In order to increase efficiencies a Funding Agreement was entered into. A copy of this agreement was provided;
· Liabilities under the Act can be discharged through such agreements by making payments on a collective rather than individual basis;
· The terms of the Funding Agreement set out the way in which the entities will manage and administer the funding of services;
· The Funding Agreement provides the cost basis for which the funding provided has been calculated. A copy of this schedule was provided with the Funding Agreement.
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 9-17
A New Tax System (Goods and Services Tax) Act 1999 Division 11