Edited version of private advice

Authorisation Number: 1052316633822

Date of advice: 14 October 2024

Ruling

Subject: Goods and services tax

Question 1

Is there a requirement for you to issue a third-party adjustment note under section 134-15 to a cashback recipient, prior to making a decreasing adjustment under Division 134, where the value of the GST decreasing adjustment is less than $75?

Answer 1

Where the GST decreasing adjustment, under section 134-15, does not exceed the $75 threshold, there is no requirement for you to issue an adjustment note as low value transactions under subsection 29-80(2) are excluded from section 134-15.

Question 2

Are you required to issue a third-party adjustment note to a cashback recipient prior to making a decreasing adjustment under Division 134 where multiple payments are aggregated and the sum of the decreasing adjustment exceeds $75?

Answer 2

No. The requirement to issue an adjustment note under section 134-15 is based on the value of a thing/item supplied and not the aggregated total where multiple things/items are claimed on one application.

The scheme commences on:

The date this private ruling is issued

Relevant facts and circumstances

•                You supply white goods to recognised stockists, who on-sell the white goods to end consumers.

•                You offer redemption offers to the eligible end consumers when they purchase an eligible white good.

•                The redemption offer consists of gift cards depending on the white good model code.

•                The end consumer submits a claim to you, using an online form, to claim the gift card relevant to the white goods purchased.

•                The gift cards are valid for 12 months from the date the cards are provided and are not transferrable or exchangeable and cannot be redeemed for cash.

•                You have engaged third parties, to administer the promotions on your behalf.

Relevant legislative provisions

A New Tax System (Goods and Services Tax) Act 1999 subsection 29-80(2)

A New Tax System (Goods and Services Tax) Act 1999 section 134-15

A New Tax System (Goods and Services Tax) Act 1999 section 134-20

A New Tax System (Goods and Services Tax) Act 1999 subsection 134-20(3)

Reasons for decision

Under Division 134, decreasing adjustments may arise if you make a payment to an entity that acquires something that you had supplied to another entity.

Subsection 134-5(1) states that:

You have a decreasing adjustment if:

(a) you make a payment to an entity (the payee) that acquires a thing that you supplied to another entity (whether or not that other entity supplies the thing to the payee); and

(b) your supply of the thing to the other entity:

(i) was a taxable supply; or

(ii) would have been a taxable supply but for a reason to which subsection (3) applies; and

c) the payment is in one or more of the following forms:

(i) a payment of money;

(ii) an offset of an amount of money that the payee owes to you;

(iii) a crediting of an amount of money to an account that the payee holds; and

(d) the payment is made in connection with, in response to or for the inducement of the payee's acquisition of the thing; and

(e) the payment is not consideration for a supply to you.

If the provision of a cashback offer to an end consumer meets all of the requirements of subsection 134-5(1), then you would have a decreasing adjustment.

In this case, by providing a cashback eftpos gift card to an eligible claimant you are making a payment to an entity, (the eligible claimant) who acquired a thing/item (eligible white good) that you supplied to another entity (the recognised stockist), paragraph 134(1)(a) is satisfied.

Your supply of the eligible white good to the recognised stockist is a taxable supply as the requirements of a taxable supply under section 9-5 of the GST Act are met. Hence, paragraph 134-5(1)(b) is satisfied.

Your provision of a cashback eftpos gift card is a payment of money, an offset of an amount that the payee owes you or a crediting of an amount of money to an account that the payee holds, therefore, paragraph 134-5(1)(c) is satisfied which warrants a decreasing adjustment pursuant to subsection 134-5(1) of the GST.

Your provision of a cashback eftpos gift card is made in connection with, in response to or for the inducement of the claimant's acquisition of the eligible white good. Thus, paragraph 134-5(1)(d) is satisfied.

There are certain steps and conditions that the end consumer must fulfill in order to be successful in claiming a cashback eftpos gift card. However, the successful claimant is not required provide you with anything or do or refrained from doing anything. Therefore, your provision of a cashback eftpos gift card is not consideration for a supply to you. This means paragraph 134-5(1)(e) is satisfied.

As such, all of the provisions of subsection 134-5(1) are satisfied.

Section 134-15 provides that if you have a decreasing adjustment under section 134-5 then the adjustment (or part) is attributable to the first tax period for lodging a GST return when you hold a third-party adjustment note.

Subsection 134-20(3) provides that third-party adjustments notes are not required where an adjustment of an amount does not exceed the amount provided for under subsection 29-80(2).

Section 29-80 provides that adjustment notes are not required for low value transactions, and subsection 29-80(2) provides that provided the decreasing adjustment of an amount that does not exceed $50. Or such higher amount as the regulations specify.

Regulation 29-80.02 specifies the amount for which an adjustment note is not required is $75.

In this case, you offer redemption offers to the eligible end consumers when they purchase an white good. The redemption offers consist of gift cards ranging from $XX to $YY depending on the white good model code.

In order for a decreasing adjustment to require an adjustment note to be issued by you, the redemption offer would have to be $825 or more for a single white good.

Therefore, there is no requirement under subsection 134-20(3) to issue adjustment notes to the recognised stockist in relation to the cashback/gift cards offered.

Question 2

An eligible consumer can combine more than one eligible thing/items from a recognised supplier when making an application for the cashback eftpos cards. Provided the claim is valid and each of the eligible things/items qualify for the cashback promotion, the aggregated amount of the claim is not relevant when determining whether an adjustment note is required to be issued to the recognised supplier.

As a result, the requirement to issue an adjustment note under section 134-15 to a recognised supplier is based on the value of a thing/item supplied and not the aggregated total where multiple eligible things/items are claimed on one application. In this case, no adjustments notes are required to be issued by you to recognised suppliers when a valid claim is made by an eligible consumer.