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Edited version of private advice
Authorisation Number: 1052116712431
Date of advice: 16 June 2023
Ruling
Subject: GST and restaurant tips
A ruling issued to a restaurant that tips paid on a purely voluntary basis and passed on to the employees who provided the service are not consideration for the supply of the restaurant meal.
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 subsection 9-15(2)
A New Tax System (Goods and Services Tax) Act 1999 paragraph 9-20(2)(a)
ATO View:
GSTR 2006/9 Goods and services tax: supplies
Goods and Services Tax Industry Issues: Tourism and Hospitality Industry Partnership: Restaurant Tips.