The Commissioner has published Draft GST Determination GSTD 2013/D1 “Goods and Services tax: whether item 32 of the table in subregulation 70-5.02(2) of A New Tax System (Goods and Services Tax) Regulations 1999 applies to some extent in respect of an acquisition for a single fee by a managed investment fund that is a recognised trust scheme from a Responsible Entity”. This may well be the longest title for a GST Ruling or Determination.

The draft Determination deals with the entitlement of the Managed Investment Fund to a reduced input tax credit under s 70-15 of the GST Act where the Responsible Entity (RE) charges a single fee for managing the fund which is calculated as a percentage of the total asset value of the fund. The Commissioner considers that it necessary for the Fund to determine the extent to which its acquisition from the RE is covered by Item 32 (in which case the reduced input tax percentage is 55%) and the extent to which its acquisition is covered by other reduced input tax credit items (which have a reduced input tax percentage of 75%). The basis of this view is that the Commissioner considers that the single fee is properly characterised as a payment for a “mixed acquisition” from the RE, rather than a singe “composite acquisition” of investment portfolio management services and are fully excluded from Item 32 (thereby being fully entitled to the higher reduced input tax credit percentage of 75%).

The Commissioner considers that the Fund can apply any “fair and reasonable methodology” to undertake the apportionment. For example, a “deductive benchmarking methodology” is considered to be an example.

Comments on the draft Determination are due by 5 June 2013.

Also, the Commissioner issued the following Addendums to GST Rulings:

• GSTR 2000/30A3 – Goods and services tax: supplies that are GST-fre for pre-school, primary and secondary education
• GSTR 2002/3A5 – Goods and services tax: prizes.
• GSTR 2004/4A4 – Goods and services tax: assignment of payment streams including under a typical securitisation arrangement.