Issue
Does the entity, a government related entity, continue to satisfy the government GST group membership requirements in section 149-25 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act), when other government agencies that are members of the entity's government GST group transfer to a different government portfolio?
Decision
Yes, the entity does continue to satisfy the government GST group membership requirements in section 149-25 of the GST Act when other government agencies that are members of the entity's government GST group transfer to a different government portfolio.
Facts
The entity is a government related entity that is in a particular government portfolio. The entity is registered for goods and services tax (GST).
The entity satisfied the government GST group membership requirements in section 149-25 of the GST Act and formed a government GST group with other government agencies that met the grouping requirements. At the time of forming the GST group, the entity and the other government agencies were attached to the same government portfolio.
The other government agencies are now transferring to a different government portfolio.
Reasons for Decision:
Section 149-25 of the GST Act sets out the requirements that a government related entity must satisfy to be a member of a government GST group.
The entity satisfied the government GST group membership requirements as set out in section 149-25 of the GST Act and formed a government GST group with other government agencies. The other government agencies are now transferring to a different government portfolio while the entity will remain in the same government portfolio. Therefore, it is necessary to determine whether government related entities need to be in the same government portfolio for the purposes of section 149-25 of the GST Act.
Under section 149-25 of the GST Act, a government related entity satisfies the membership requirements for a GST group, or a proposed GST group, of government related entities if the entity: • is registered for GST • is not a member of any other GST group • has the same tax periods applying to it as the tax periods applying to all the other members of the GST group or proposed GST group • accounts on the same basis as all those other members, and • all those members are government related entities.
The requirements of section 149-25 of the GST Act do not require that a government related entity must be in the same government portfolio as other members of the GST group.
Therefore, the entity continues to satisfy the government GST group membership requirements in section 149-25 of the GST Act when the other government agencies transfer to a different government portfolio. Note: Where all members of a government GST group satisfy the membership requirements of section 149-25 of the GST Act, the group will be subject to the GST group provisions contained in Subdivisions 48-B and 48-C of the GST Act.