Edited version of private advice

Authorisation Number: 1051867189214

Date of advice: 14 July 2021

Ruling

Subject: GST and energy efficient certificates

Question

What is the amount of the goods and services tax (GST) payable for each energy efficient certificate under the contract between Entity A and Entity B?

Answer

The GST payable for each energy efficient certificate is 1/11 of the price of $XX.00.

Relevant facts and circumstances

Entity A (you) is registered for goods and services tax (GST).

You replace energy inefficient lamps with efficient lamps for residential customers.

Energy efficiency certificates can be created under the program.

After analysing the requirements at a customer's home, you issue an invoice to the customer. This invoice is always for a nil amount regardless of the number of lamps to be replaced. No money is paid by the customer to you.

You bear all the costs including the lamps and the installation.

Upon completion of the assigned job by an accredited electrician, the residential customer will be requested to sign an assignment form. This alongside with all other relevant information (example photos, proof of work signoff, etcetera) is then uploaded to an aggregator's online platform.

The aggregator in your case is Entity B with which you have entered into a Contract.

The Contract price, based on Clause 1 of the Contract, is $XX.00 per energy efficient certificate.

Upon processing the job, energy efficient certificates can be created. Based on the number of certificates created, Entity B remits the relevant payment to your bank account and sends through a Remittance Advice to you.

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 9-40

A New Tax System (Goods and Services Tax) Act 1999 section 9-70

A New Tax System (Goods and Services Tax) Act 1999 section 9-75

Reasons for decision

Section 9-40 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) provides that you must pay the GST payable on any taxable supply that you make.

Section 9-5 of the GST Act provides that you make a taxable supply where 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 and you are registered, or required to be registered. However, the supply is not a taxable supply to the extent that it is GST-free or input taxed.

Your supply to Entity B meets all the requirements of section 9-5 of the GST Act and is not GST-free or input taxed and therefore is a taxable supply.

The Contract states the energy efficient certificate price is $XX.00 per each energy efficient certificate.

Section 9-75 of the GST Act provides that the value of a taxable supply is as follows:

Price x 10/11

In your case this would translate to $XX.00 x 10/11 = $YY.00.

Section 9-70 of the GST Act provides that the amount of GST on a taxable supply is 10% of the value of the taxable supply.

In your case this would translate to $YY.00 x 10% = $Z.00.

Therefore, in your case, the GST amount payable per each energy efficient certificate is $Z.00.