Edited version of private advice

Authorisation Number: 1052180606464

Date of advice: 3 November 2023

Ruling

Subject: GST - taxable supply

Question 1

Is the transfer of rights to sell tickets from the non-resident entity to the Australian entity a taxable supply under section 9-5 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)?

Answer

No.

Question 2

Is the transfer of rights to sell tickets from the non-resident entity to the Australian entity a taxable supply under section 84-5 of the GST Act?

Answer

No.

Question 3

Is the supply of tickets by the Australian entity to the general public customers a taxable supply under section 9-5 of the GST Act?

Answer

Yes, where the ticket is for an event is held in Australia or the location of the event is unknown at the time of sale.

No, where the ticket is for an event held outside of Australia as it will be GST-free under table item 4 of subsection 38-190(1) of the GST Act.

Question 4

Is the supply of tickets by the non-resident entity to participating entities a taxable supply under section 9-5 of the GST Act?

Answer

Yes, where the ticket is for an event is held in Australia or the location of the event is unknown at the time of sale.

No, where the ticket is for an event held outside of Australia as it will be GST-free under table item 4 of subsection 38-190(1) of the GST Act.

Question 5

Is the supply of the resale service of tickets by the non-resident entity to arrange the resale of tickets a taxable supply under section 9-5 of the GST Act?

Answer

Yes, where the customer is an Australian resident.

The supply of resale services by the Australian entity to non-resident resellers will be GST-free under table item 2 of subsection 38-190(1) of the GST Act

Question 6

Is the supply of rickets to resale customers by the Australian entity a taxable supply under section 9-5 of the GST Act?

Answer

Yes, where the ticket is for an event is held in Australia or where the location of the event is unknown at the time of sale.

No, where the ticket is for an event held outside of Australia as it will be GST-free under table item 4 of subsection 38-190(1) of the GST Act.

Question 7

Is the non-resident entity, as agent or electronic distribution platform (EDP) liable for GST on the resale of the ticket through the Australian entity's website from the reseller to the new customer under section 57-5 or section 84-55 of the GST Act?

Answer

No. the Australian entity will be liable for GST under section 9-5 of the GST Act as the reseller of the ticket, not the customer reselling the ticket.

Question 8

Does the refund provided by the Australian entity for a cancelled ticket for a taxable supply result in a decreasing adjustment under section 19-55 of the GST Act?

Answer

Yes.

Question 9

Is the supply of membership by the non-resident entity to other entities a taxable supply under section 9-5 of the GST Act?

Answer

No.

This ruling applies for the following period

1 June 2021 to 31 May 2025

Relevant facts and circumstances

A non-resident entity ("you") is supplying the right to sell tickets that allows entry to an event to an Australian entity.

The non-resident entity is not registered for GST or required to be registered for GST.

The Australian entity is registered for GST.

The event will take place both in Australia and outside of Australia.

The Australian entity will sell tickets to the general public in its own name on its own account (as principal and not as agent for the non-resident entity) and hold a contractual relationship with the purchasers.

The non-resident entity will not make any ticket sales directly to purchasers.

The Australian entity will sell a range of ticket products to Australian resident and non-resident customers for the event held in Australia and outside of Australia.

The Australian entity will operate a resale platform to enable customers to submit their ticket products for resale.

The Australian entity is the only authorised reseller of the ticket products and will operate the resale platform on its own account. Reselling customers cannot directly transfer their tickets to a third party.

When a ticket is resold, a new ticket will be supplied to the resale purchaser by the Australian entity for the resale price elected by the reseller. The supplier of the new ticket will be the Australian entity (not for or on behalf of the reseller).

The Australian entity will receive funds from the resale purchase, on its own account. The reseller's original tickets will be immediately cancelled and the Australian entity will provide a refund of the resale price to the reseller less a service fee for access to the resale platform, equal to 10% of the resale price.

Tickets issued by the Australian entity may be cancelled and the purchaser may be eligible for a full refund. For circumstances out of the customer's control a full refund may be issued. Cancellations due to the customer breaching the terms and conditions of the sale may result in full cancellation and no refund.

The Australian entity will not issue any partial refunds or impose and penalties for ticket cancellation.

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 9-25

A New Tax System (Goods and Services Tax) Act 1999 section 19-55

A New Tax System (Goods and Services Tax) Act 1999 section 38-190(1)

A New Tax System (Goods and Services Tax) Act 1999 section 84-5

Reasons for decision

Is the transfer of rights to sell tickets from you to the non-resident entity a taxable supply under section 9-5 of the GST Act?

Section 9-5 of the GST Act, states that you make a taxable supply if:

a)    you make the supply for consideration; and

b)    the supply is made in the course or furtherance of an enterprise that you carry on; and

c)    the supply is connected with the indirect tax zone; and

d)    you are registered or required to be registered.

However, a supply is not a taxable supply to the extent that it is GST-free or input taxed.

One of the requirements of a taxable supply is that the supply should be connected with the indirect tax zone (Australia).

Subsection 9-25(5) of the GST Act provides that a supply of anything other than goods or real property is connected with Australia if:

a)    the thing is done in the indirect tax zone; or

b)    the supplier makes the supply through an enterprise that the supplier carries on in the indirect tax zone; or

c)    all of the following apply:

                      i.        neither paragraph (a) nor (b) applies in respect of the thing;

                     ii.        the thing is a right or option to acquire another thing;

                    iii.        the supply of the other thing would be connected with the indirect tax zone; or

d)    the recipient of the supply is an Australian consumer.

To satisfy whether the supply of rights to sell tickets from you to the resident entity is connected with Australia, one of the listed elements in subsection 9-25(5) of the GST Act must be met.

The supply of the rights to sell the tickets to the resident entity did not occur in Australia.

You do not and will not have any presence in Australia (whether by way of a fixed or permanent place of business or relevant personnel in Australia for more than 183 days in a 12-month period). Therefore, the supply is not made through an enterprise that you carry on in Australia.

The resident entity is an Australian-based business recipient under subsection 9-26(2) of the GST Act as:

•         it is registered for GST; and

•         it carries on its enterprise in Australia; and

•         the acquisition of the rights to sell the tickets is not of a private or domestic nature.

Therefore, the resident entity is not an Australian consumer under subsection 9-25(7) of the GST Act.

As none of the requirements under subsection 9-25(5) are satisfied, the supply of rights to sell tickets from you to the resident entity is not a taxable supply as paragraph section 9-5(c) of the GST Act is not met.

Furthermore, you are not registered or required to be registered for GST and therefore paragraph 9-5(d) of the GST Act is also not satisfied.

Question 2

Is the transfer of rights to sell tickets from you to the non-resident entity a taxable supply under section 84-5 of the GST Act?

Section 84-5(1) of the GST Act states that:

A supply is a taxable supply (except to the extent that it is *GST-free or *input taxed) if:

a)    the supply is for *consideration; and

b)    the *recipient of the supply is *registered or *required to be registered; and

c)    the supply is covered by the third column of this table.

The supply of rights to sell tickets to the resident entity is made for consideration and the recipient, the resident entity is registered for GST.

We will need to consider whether table item 1 of subsection 84-5(1) of the GST Act (item 1) applies.

Item 1 provides that a supply of anything other than goods or real property is taxable if:

a)    the supply is not connected with Australia; and

b)    the recipient of the supply satisfies the purpose test in subsection (1A).

The purpose test referred to in item 1 is that:

a)    the recipient of the supply acquires the thing supplied solely or partly for the purpose of an enterprise that the recipient carries on in the indirect tax zone; and

b)    the recipient does not acquire the thing supplied solely for a creditable purpose.

As established in the response to Question 1, the supply of rights to sell tickets to the resident entity is not connected with Australia.

However, the resident entity acquires the rights to sell tickets solely for a creditable purpose under section 11-15 of the GST Act as:

•         the acquisition is not input taxed; and

•         the acquisition is not of a private or domestic nature.

Therefore, the supply of rights to sell tickets by you to the resident entity will not be a taxable supply as it does not satisfy the requirements set out in the purpose test under subsection 84-5(1A) of the GST Act

Question 3

Is the supply of tickets by the non-resident entity to the general public customers a taxable supply under section 9-5 of the GST Act?

Section 9-5 of the GST Act provides that you make a taxable supply if:

a)    you make the supply for consideration; and

b)    the supply is made in the course or furtherance of an enterprise that you carry on; and

c)    the supply is connected with the indirect tax zone; and

d)    you are registered or required to be registered.

However, a supply is not a taxable supply to the extent that it is GST-free or input taxed.

The supply of tickets by the resident entity to the general public satisfies paragraph (a), (b) and (d) of subsection 9-5 of the GST Act as:

•         the supply of the tickets is made to the general public for consideration; and

•         the supply is made in the course or furtherance of an enterprise that the non-resident entity carries on; and

•         the non-resident entity is registered for GST.

We need to consider whether the supply of tickets to the general public is connected with Australia under paragraph 9-5(c) of the GST Act.

Subsection 9-25(5) of the GST Act provides that a supply of anything other than goods or real property is connected with Australia if:

a)    the thing is done in Australia; or

b)    the supplier makes the supply through an enterprise that the supplier carries on in Australia; or

c)    all of the following apply:

                             i.        neither paragraph (a) nor (b) applies in respect of the thing;

                            ii.        the thing is a right or option to acquire another thing;

                           iii.        the supply of the other thing would be connected with Australia; or

d)    the recipient of the supply is an Australian consumer.

The supply of tickets to the general public purchaser for events held in Australia and overseas is connected with Australia under paragraph 9-25(5)(b) of the GST Act as the non-resident entity makes the supply of tickets to the purchaser through an enterprise that it carries on in Australia.

The resident entity's supply of tickets to the general public purchaser will be a taxable supply as it meets all the requirements under section 9-5 of the GST Act, unless the supply is input taxed or GST-free. The supply of tickets will not be input taxed. However, we will need to consider whether the supply of tickets is GST-free.

Supply of tickets (events held in Australia and events with an unknown location)

Paragraph 138 of Goods and Services Tax Ruling GSTR 2009/3, Cancellations (GSTR 2009/3) states:

138. A ticket grants the right, entitlement or permission that the customer has to be supplied with something else. For example, a ticket to attend a theatre to see a play grants to the customer permission to enter upon the land and occupy a particular seat and to receive the supply of the performance (which is the intended supply).

The resident entity grants to the purchaser of the ticket the right to attend the event. This right will be redeemed at the venue (either in Australia or overseas) on the date of the event. The supply of the ticket is a taxable supply by virtue of subsection 38-190(2) as it is a supply of a right to acquire something the supply of which would be connected with Australia (as the event will be or may be held in Australia) and will not be GST-free.

GST-free supply of tickets (events held overseas)

Subsection 38-190(1) of the GST Act provides that the supplies of things other than goods or real property for consumption outside Australia will be GST-free.

Table item 4 of subsection 38-190(1) of the GST Act states that a supply that is made in relation to rights is GST-free if:

a)    the rights are for use outside Australia; or

b)    the supply is to an entity that is not an Australia resident and is outside Australia when the thing supplied is done.

The right to attend a event held overseas will satisfy table item 4(a) of subsection 38-190(1) of the GST Act. Therefore, the supply of tickets to general public purchasers by the non-resident entity to attend events held in overseas will be GST-free under table item 4 of subsection 38-190(1) of the GST Act.

Conclusion

The supply of tickets by the resident entity to the general public for events held in Australia and events with an unknown location at the time of sale will be a taxable supply under section 9-5 of the GST Act.

The supply of tickets by the resident entity to the general public for events held overseas will be GST-free under table item 4 of subsection 38-190(1) of the GST Act.

Note: where the event location in unknown and is later determined to be overseas or the seat does not crystalise, the resident entity will be entitled to a decreasing adjustment under paragraph 19-10(1)(c) of the GST Act subject to the application of Division 142.

Question 4

Is the supply of tickets by the resident entity to the participating teams a taxable supply under section 9-5 of the GST Act?

(Refer to the response to Question 3)

The supply of tickets by the resident entity to the participating teams for events in held in Australia and events with an unknown location at the time of sale will be a taxable supply under section 9-5 of the GST Act.

The supply of tickets by the resident entity to the participating teams for events held overseas will be GST-free under table item 4 of subsection 38-190(1) of the GST Act.

Note: where the event location is unknown and is later determined to be overseas or the seat does not crystalise, the resident entity will be entitled to a decreasing adjustment under Division 19 subject to the application of Division 142.

Question 5

Is the supply of the resale service by the resident entity to resellers to arrange the resale of tickets a taxable supply?

The supply of the resale service by the resident entity will satisfy paragraphs 9-5(a), (b) and (d) of the GST Act as:

•         it supplies the resale service to the resellers for consideration; and

•         it supplies the resale service in the course or furtherance of an enterprise that it carries on; and

•         it is registered for GST.

The resident entity's supply of resale services will also satisfy paragraph 9-5(c) of the GST Act as the resident entity makes the supply through an enterprise that it carries on in Australia as per paragraph 9-25(5)(b) of the GST Act.

Therefore, the supply of resale services by the resident entity to resellers will be a taxable supply unless it is input taxed or GST-free. The supply of the resale services will not be input taxed. However, we will need to consider whether the GST-free provisions apply.

GST-free supply of resale services

Table item 2 of subsection 38-190(1) (item 2) of the GST Act may apply to the supply of resale services to non-residents outside Australia when the services is supplied if:

a)    the supply is neither a supply of work physically performed on goods situated in Australia when the work is done nor a supply connected with real property situated in Australia; or

b)    the non-resident acquires the services in carrying on their enterprise but is not registered or required to be registered.

The supply of resale services is not a supply of work physically performed on goods situated in Australia nor a supply connected with real property. Therefore, the resident entity's supply of resale services to non-resident resellers will be GST-free as it satisfies paragraph (a) of item 2.

The GST-free provisions do not apply to the supply of resale services to Australian residents. The supply of resale services by the resident entity to Australian resident resellers will be a taxable supply.

Question 6

Is the supply of tickets to resale customers by the non-resident entity a taxable supply under section 9-5 of the GST Act?

(Refer to response in Question 3)

The supply of tickets by the resident entity to the resale customers for events in held in Australia and events with an unknown location at the time of sale will be a taxable supply under section 9-5 of the GST Act.

The supply of tickets by the resident entity to the resale customers for events held overseas will be GST-free under table item 4 of subsection 38-190(1) of the GST Act.

Question 7

Is the resident entity, as agent or electronic distribution platform (EDP), liable for the GST on the resale of the ticket through their website from the reseller to the new customer?

The resident entity has revised its resale structure so that it is now the supplier of the resale tickets, not the reseller. As such the agency and EDP rules are not applicable.

The resale of tickets by the resident entity to new customers for events held in Australia or with an unknown location at the time of sale (as explained in the response to Question 3) will be taxable under section 9-5 of the GST Act.

The resale of tickets by the resident entity to new customers for events held overseas will be GST-free under table item 4 of subsection 38-190(1) of the GST Act.

Question 8

Does the refund provided by the resident entity for a cancelled ticket for a taxable supply result in a decreasing adjustment under section 19-55 of the GST Act?

Section 19-55 of the GST Act provides that if the corrected GST amount is less than the previously attributed GST amount, the resident entity will have a decreasing adjustment equal to the difference between the previously attributed amount and the corrected amount.

The cancellations of tickets (including through the resale platform) will trigger an adjustment event under subsection 19-10(1) of the GST Act and give rise to a decreasing adjustment for the resident entity equal to 1/11th of the ticket price (being the full consideration for the supply, where it provides a full refund for the ticket).

In circumstances where no refund is provided (for example, a customer fails to attend the event), there will be no adjustment event. This is because there has been a facilitation supply of the right to attend the event even if the intended supply does not occur and consideration will be for the facilitation supply rather than for the intended supply as explained in paragraphs 23-26 of GSTR 2009/3.

Question 9

Is the supply of membership by you to member associations a taxable supply under section 9-5 of the GST Act?

Section 9-5 of the GST Act provides that you make a taxable supply if:

a)    you make the supply for consideration; and

b)    the supply is made in the course or furtherance of an enterprise that you carry on; and

c)    the supply is connected with the indirect tax zone; and

d)    you are registered or required to be registered for GST.

However, a supply is not a taxable supply to the extent that it is GST-free or input taxed.

Your supply of membership to member associations does not meet the requirements of section 9-5 of the GST Act as you are not registered or required to be registered under paragraph 9-5(d) of the GST Act.

Therefore, the supply of membership by you to member associations will not be a taxable supply.