Issue
Is the entity, an agricultural show competition organiser, making a taxable supply under section 9-5 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act), when it receives an entry fee from each participant of the competition?
Decision
Yes, the entity is making a taxable supply under section 9-5 of the GST Act when it receives an entry fee from each participant of the competition.
Facts
The entity is registered for goods and services tax (GST) and organises competitions in Australia for the exhibition of animals or produce. It receives an entry fee from each participant that enters the competition and provides a monetary prize to the winner of the competition.
Reasons For Decision
Section 9-5 of the GST Act sets out the requirements that must be met for an entity to make a taxable supply. The requirement that the supply must be for consideration is of particular relevance as the entity otherwise meets the remaining requirements of section 9-5 of the GST Act. 'Supply' is defined in paragraph 9-10(2)(e) of the GST Act to include a creation or grant of any right. The granting of the right to enter the competition would be a supply by the entity. 'Consideration' is defined in paragraph 9-15(1)(a) of the GST Act to include a payment or any act or forbearance in connection with a supply of anything. The payment of entry fee is consideration for the entity's supply of the right to enter the competition.
Therefore, the grant of the right to enter to competition is a supply for which the consideration is the payment of the entry fee.
The entity is registered for GST and the supply meets all the requirements of section 9-5 of the GST Act. Furthermore, the supply is neither GST-free under Division 38 of the GST Act nor input taxed under Division 40 of the GST Act. Therefore, the entity is making a taxable supply under section 9-5 of the GST Act. [Note: The supply of the monetary prize cannot be a supply by the show organiser as subsection 9-10(4) of the GST Act specifically states that a supply does not include a supply of money unless the money is provided as consideration for a supply that is a supply of money.]