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Edited version of private advice
Authorisation Number: 1051752729020
Date of advice: 29 September 2020
Ruling
Subject: GST and transition of a government scheme to local arrangement
Question1
Is there a taxable supply made under section 9-5 of the A New Tax System (Goods and Services Tax) Act 1999 (GST) Act in return for the payments made by the entity?
Answer
No, the payments made by the entity are not consideration for a taxable supply made.
Question 2
Is there a taxable supply (under section 9-5 of the GST Act) or creditable acquisition (under section 11-5 of the GST Act) made where assets/liabilities are transferred?
Answer
No, there is no taxable supply (under section 9-5 of the GST Act) or creditable acquisition (under section 11-5 of the GST Act) made where assets/liabilities are transferred.
This ruling applies for the following period
Starting on the date of issue of the private ruling
Relevant facts and circumstances
You are registered for goods and services tax.
The assets and liabilities of a scheme were transferred to you.
You received a payment from an entity at the time of transition to ensure the scheme was financially viable.
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 11-5
Reasons for decision
Section 9-5 of the GST Act provides that you make a taxable supplyif:
· you make the supply for consideration
· the supply is made in the course or furtherance of an enterprise that you carry on
· the supply is connected with the indirect tax zone (Australia), 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.
Section 11-5 of the GST Act provides that you make a creditable acquisition if, among other requirements, the supply of the thing to you is a taxable supply and you provided or liable to provide consideration for the supply.