Earlier this month the ATO published ATO ID 2013/1 “GST and points fee in a loyalty program” which takes the view that a loyalty program operator is making a taxable supply to a program partner where it allocates points to members in return for a points fees and those points would be redeemed by members for vouchers which are subject to the voucher provisions in Division 100 of the GST Act. The ATO ID applies the views of the Commissioner in GSTR 2012/1 that the supply of points by the program operator to the program partner is a supply of rights, being the rights that program members obtain on receiving points.

In Dandenong Motors Unit Trust and Commissioner of Taxation [2012] AATA 920 the Tribunal found that the applicant was not entitled to a refund of overpaid GST paid in respect of holdback payments beyond the four year statutory time period to the extent that the applicant’s net amount was negative.  The case dealt with the construction of s 105-55 before its amendment in 2008.  The applicant contended that the effect of the decision of the Federal Court in KAP Motors Pty Ltd v Commissioner of Taxation [2008] FCA 159 was that the limitation period in s 105-55 (prior to its amendment) only had application to GST paid on supplies – the provision did not apply to GST paid in respect of arrangements which were not supplies.  The Commissioner accepted that the applicant was entitled to a refund of overpaid GST to the extent that it reported a positive net amount in its monthly GST returns, but contended that s 105-55 operated to restrict that entitlement to the extent that its net amount was a negative amount. The Tribunal found that the applicant’s contention was based on a misunderstanding of what the amendments in s 105-55 (and s 105-65) were intended to do.  Further, at all relevant times, s 105-55 limited the right to refunds of negative net amounts.