GST and Australian tax, fee or charge not included in the Treasurer's determination

Is the entity, an Australian government department, making a taxable supply under section 9-5 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act), for its supply of administrative services for which it charges a fee that is imposed under an Australian law and is not specified in a written determination of the Treasurer?

Yes, the entity is making a taxable supply under section 9-5 of the GST Act for its supply of administrative services for which it charges a fee that is imposed under an Australian law and is not specified in a written determination of the Treasurer.

The entity is a government department. The entity supplies administrative services. The entity charges a fee for these services. The fee is imposed under an Australian law. The fee is not listed in a written determination of the Treasurer.

The entity is registered for goods and services tax (GST). The supply is made in the course of an enterprise carried on by the entity and is connected with Australia. The supply is neither GST-free under Division 38 of the GST Act nor input taxed under Division 40 of the GST Act.

Under section 9-5 of the GST Act, an entity makes a taxable supply if: • it makes the supply for consideration; and • the supply is made in the course of its enterprise; and • the supply is connected with Australia; and • the entity is 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.

In relation to the first requirement, paragraph 9-15(1)(b) of the GST Act provides that any payment for the supply of anything is consideration. The entity is receiving a payment for the supply of its services. Ordinarily, this would constitute consideration under paragraph 9-15(1)(b) of the GST Act.

However, section 9-39 of the GST Act provides special rules in relation to making taxable supplies. Item 8 in the table in section 9-39 of the GST Act provides that where there is a payment of taxes, fees and charges, the special rules in Division 81 of the GST Act may apply.

Subsection 81-5(1) of the GST Act states that the payment of any Australian tax, fee or charge or the discharging of a liability to make such a payment is to be treated as the provision of consideration for a supply made by the entity charging the payment.

An Australian tax, fee or charge, as per section 195-1 of the GST Act, is: • a tax imposed under an Australian law; or • a fee or charge imposed under an Australian law and payable to an Australian government agency.

In this case, the entity (a government department) is supplying services for which it charges a fee that is imposed under an Australian law. Therefore, the fee satisfies the definition of an Australian tax, fee or charge as per section 195-1 of the GST Act and is treated as consideration for the entity's supply under subsection 81-5(1) of the GST Act.

However, subsection 81-5(2) of the GST Act provides that the payment of any Australian tax, fee or charge that is specified in a written determination of the Treasurer is not the provision of consideration.

The fee charged by the entity is not listed in a written determination of the Treasurer. Therefore, the fee is not excluded from being consideration by subsection 81-5(2) of the GST Act. Accordingly, as the fee is consideration for the entity's supply of administrative services, the first requirement in section 9-5 of the GST Act is satisfied.

As the entity is registered for GST and the makes the supply in the course or furtherance of its enterprise that is connected with Australia, the supply also satisfies the other positive limbs 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 for its supply of administrative services for which it charges a fee that is imposed under an Australian law and is not specified in a written determination of the Treasurer.