Today the Commissioner issued GSTR 2012/2 – Goods and services tax: financial assistance payments. The Ruling replaces GSTR 2000/11 Goods and Services Tax: grants of financial assistance.
The Ruling was previously issued in draft as GSTR 2011/D4. For my analysis of the draft ruling, click here.
In my analysis of the draft Ruling, I considered the following issues to be noteworthy:
- the draft ruling helpfully seeks to deal with matters not directly covered by GSTR 2000/11, such as sponsorship and tripartite agreements;
- the draft ruling appears to take a narrower view on what constitutes a taxable supply for a financial assistance payment than in GSTR 2000/11; and
- the draft ruling sets out detailed transitional rules which appear to envisage the potential for refund claims for those taxpayers who have relied on the broader scope of taxable supply in GSTR 2000/11.
A more detailed analysis of the Ruling will follow next week, as at present preparation for the High Court appeal in the Qantas case (which is being heard on Monday 4 June 2012 in Brisbane) is occupying my time. However, based on a preliminary review of the Ruling it appears that the comments in my analysis of the draft Ruling remain relevant and there is scope to seek refunds of GST, which seems to be acknowledged by the Commissioner, given paragraphs 88-91 of the Ruling which state as follows:
88. As this final ruling can apply before its date of issue, where there is a discrepancy between GSTR 2000/11 and this Ruling, taxpayers can choose to apply this Ruling.
89. Where entities have relied on GSTR 2000/11 to treat a supply as a taxable supply before the date of issue of this Ruling and the supply is not a taxable supply under the views expressed in this Ruling, they may choose to seek a refund for past overpaid GST if it is within relevant time limits and the payer is first refunded the overpaid amount.
90. Where entities have relied on GSTR 2000/11 to determine that they did not make a taxable supply and the supply is a taxable supply under the views expressed in this Ruling, they may choose to pay GST on that supply. If GST is paid on the supply the payer may be entitled to an input tax credit.
91. Where, entities rely or have relied on this Ruling or GSTR 2000/11 to determine that there is no GST payable on that supply, there is no input tax credit available to the entity making the payment.
I look forward to your updates. You indicated on 30 May that “A more detailed analysis of the Ruling will follow next week,” Will you have time for an update soon. I am particularly interested in the Example 3 and what constitutes “a binding agreement under which it is obligated” , Generally in government there is a funding agreement but if the “not for profit” does not do what they said but return the money we are not going to sue them for not undertaking the “obligation”.. For example if a footy club does not put up a CCT camera to protect its community club house from crime etc.provided we get the money back what was the supply to us anyway.
Garry, thankyou for your comments. My analysis of the ruling has just been posted.