Annotated GST Act – Chapter 3 – Part 3-1 – Division 40

Division 40 – Input taxed supplies

40.1     What this Division is about

Subdivision 40A – Financial supplies

40.5     Financial supplies

Rulings and Determinations

GSTD 2013/3 ‘Goods and services tax: does item 32 of the table in subregulation 70-5.02(2) of the A New Tax System (Goods and Services Tax) Regulations 1999 apply 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?

GSTD 2007/1 – Austlii – Goods and services tax: is a credit card provider entitled to a reduced input tax credit under item 27 of the table in subregulation 70.5.02(2) of the A New Tax System (Goods and Services Tax) Regulations 1999 for the acquisition of services from a co-branking partner where it pays commission for those services?

GSTR 2004/1 – Austlii – Goods and services tax: reduced credit acquisitions

GSTR 2002/2 – Austlii – Goods and services tax: GST treatment of financial supplies and related supplies and acquisitions

GST Regulations – Subdivision 40A

40.5.01   Object of Subdivision 40-A

40.5.02   Interests


Commissioner of Taxation v American Express Wholesale Currency Services Pty Limited [2010] FCAFC 122 – at [146]: considering the text of the GST Act (especially ss 9-10 and 11-10) and the Regulations, the term “interest” is referable to a very broad conception of property. The words “anything” and “in any form” in regulation in 40-5.02 highlight this extensive scope. Further, the examples of financial supplies in the table in regulation 40-5.09(3) include a range of items that would not fit the narrower definition of property urged by the respondents. The same can be said of the “examples of interest” attached to regulation 40-5.02 – at [148]: a cardholder’s rights under the card terms and conditions – (1) to possess the card during its currency; (2) to tender the card as payment; and (3) not to make payment to Amex Intl until the date of the statement – together constitute an interest under regulation 40-5.02, supplied to the cardholder – Amex supplies cardholders with an “interest” within the meaning of regulation 40-5.02 when cardholders agree to the cards’ terms and conditions – cardholders agreeing to the terms gain a bundle of rights in relation to the card, the most important of which is the right to present the card as payment and incur a corresponding obligation to pay Amex Intl at a later date. This is sufficient to constitute an interest under the broad definition of “interest” in the Regulations – first instance – [2009] FCA 683

40.5.03   Provision

40.5.04   Disposal

40.5.05   Acquisition

40.5.06   Financial supply providers

40.5.07   Financial supply facilitators

40.5.08   When supply may be a financial supply (Act s 40-5)

40.5.09   What supplies are financial supplies


SVYR and Commissioner of Taxation [2022] AATA 3994 – mobile telephone and tablet accessories – where telecommunications provider granted credit to customer of its licensed retail mobile telephone and accessories outlet for purchases of accessories – where account paid by telecommunications provider to retail outlet less than financed price repaid by customer – whether creditable acquisition by retail outlet – whether retail outlet has decreasing adjustment – significance of contractual terms – no taxable supply by telecommunications provider to retail outlet – not creditable acquisition – no desecrating adjustment – decision affirmed

Australian Style Investments Pty Ltd as Trustee for the Australian Style Investments Unit Trust and Commissioner of Taxation [2013] AATA 847 – the grant of an irrevocable proxy by a unit holder was the input taxed supply of an “interest in or under…securities” for the purposes of regulation 40-5.09 of the GST Regulations

Commissioner of Taxation v American Express Wholesale Currency Services Pty Limited [2010] FCAFC 122 – the supply of the right to use a charge card is the supply of an interest in or under a credit arrangement or right to credit within the meaning of the regulation

AXA Asia Pacific Holdings Limited v Commissioner of Taxation [2008] FCA 1834 – at [91]-[92]: the acquisition of units in a unit trust because it acquired the units for consideration because it made a payment “in connection with” its deemed supply of the units – a supply, including an “acquisition supply”, is “for consideration” so long as there is a payment, act or forbearance “in connection with” the acquisition. It suffices that there is a payment, act or forbearance furnished by the actual acquirer even though, by reason of the supply being an “acquisition supply”, the actual acquirer is a deemed supplier.

TSC 2000 Pty Ltd and Commissioner of Taxation [2007] AATA 1629 – at [93]-[97]: “annuity” means the investment of a capital sum by an investor to produce a return to the annuitant, calculated by reference to that capital sum to which is applied an agreed or defined percentage sum

International cases

Target Group Ltd v Revenue and Customs [2019] UKUT 340  – whether supplies of loan administration services made by appellant to a bank are exempt – Article 135(1)(d) PVD – Items 1 and 8 Group 5 Schedule 9 VATA – whether loan accounts are current accounts – whether services are transactions concerning payments or transfers – whether services are debt collection – appeal dismissed.

Canadian Imperial Bank of Commerce v The Queen 2018 TCC 109 – whether fees paid to Visa were consideration for a financial service and an exempt supply – at [55]: supply agreed to be a single compound supply comprised of several distinct but indivisible components that are “intertwined, interdependent and integral to one another” – held fees consideration for a taxable supply

 Applewood Holdings Inc v The Queen 2018 TCC 231 – whether services provided pertaining to the sale of insurance products to car dealership customers was a financial supply – whether single financial supply

Target Group Ltd v Revenue and Customs [2018] UKUT 226 – whether supplies made by appellant of loan administration services to a bank are exempt supplies under Article 135(1)(d) PVD or Item 1 or 8 Group 5 Schedule 9 VATA, or are standard rated either as debt collection or on another basis – whether loan accounts are current accounts – held supplies standard rated as debt collection and accounts are not current accounts – appeal dismissed

Blackrock Investment Management (UK) Ltd v Revenue and Customs [2017] UKFTT 633 – exemption for management of special investment funds – reverse charge – supply of services delivered by means of a computerised fund management platform – whether supply exempt – whether consideration for a single supply consisting of predominantly non-exempt services can be “apportioned” between non-exempt and exempt use – appeal dismissed

Great-West Life Assurance Company v Canada [2016 FCA 316 – whether fees for services provided in connection with group health benefit plans offered to employees were consideration for a financial supply

Coinstar Ltd v Revenue and Customs [2016] UKFTT 610 – kiosks at supermarkets exchanging coins for a voucher redeemable the same day in the supermarket for cash or against purchases – whether supply of financial services exempt from VAT – yes – upheld on appeal – Revenue and Customs v Constar Limited [2017] UKUT 256

Sports and Leisure Group Ltd v Revenue and Customs [2016] UKFTT 27 – exemption – granting of credit – membership subscriptions to a sports club – charge for credit in first year exempt – terms on which membership continued after first year – no charge for credit – appeal dismissed

Revenue & Customs v DPAS Limited [2015] UKUT 585 – exemption – whether dental payment plan administrator provided services to patients for consideration – whether services exempt transactions concerning payments or transfers or standard rated debt collection – whether to refer questions to CJEU or stay case pending decision in Bookit II and NEC – if exempt whether change in contractual arrangements from 1 January 2012 abuse of law – appeal allowed in part and stayed – first instance – [2013] UKFTT 676

Hedqvist [2015] EUECJ C-264/14 (European Court of Justice) – bitcoin transactions are constitute the supply of services for consideration – the transactions are exempt transactions as they are to be treated the same as the exchange of traditional currencies

Revenue & Customs v National Exhibition Centre [2015] UKUT 23 – exemption – financial services – Art 13B(d)(3), Sixth Directive – Group 5, Sch 9 VATA 1994 – booking fees on concert ticket purchases – whether for “card processing services” – effect of Scottish Court decision on English tribunal

Bookit Ltd v Revenue & Customs [2014] UKFTT 856 – financial transactions – exemption – Article 135(1)(d) Principal VAT Directive – card handling services – nature of services – whether transactions concerning payments – scope of exemption – questions to be referred to the CJEU for a preliminary ruling – whether in any event to be excluded from exemption as debt collection

Global Cash Access (Canada) Inc and The Queen 2013 FCA 269 – whether commissioner paid to corporations that operated casinos were consideration for a financial supply

Skandinaviska Enskilda Banken AB Momsgrupp v Skatteverket (Case C-540/09) [2011] STC 1125 – the supply of an underwriting guarantee was an exempt supply

Canadian Medical Protective Assn v Canada 2009 FCA 115 – whether research and analysis undertaken by investment managers used by the Canadian Medical Protective Association were the provision of a financial service – held a financial service as the research and analysis was done in service of the end result, which was the purchase and sale of financial instruments

Costco Wholesale Canada Ltd v The Queen 2009 TCC 134 – whether the supply by Costco to American Express was a financial service – an exclusivity agreement between American Express and Costco, whereby in exchange for paying Costco an agreed upon percentage of the sales using American Express, only American Express was accepted at Costco. The agreement also required Costco to give American Express its membership list, as well as assist in the promotion and sale of the Co-Branded Amex/Costco card – The essence of the supply being provided by Costco to American Express was found by the Court to be the promotion of the co-branded card – this was a financial service

Leadx v Revenue & Customs [2008] UKVAT V20904 – VAT – EXEMPT SUPPLIES –CREDIT – Appellant provided an open market for the selling and buying by brokers of leads on potential customers for credit and insurance – did the Appellant’s supplies constitute negotiation of credit? – no – the supplies could not be characterised as the granting or the negotiation of credit, and had no link with the negotiation of credit – Appeal dismissed.

Bookit Ltd v Revenue & Customs [2006] EWCA Civ 550 – whether the taxpayer made the exempt supply of card handling services to movie-goers or a composite supply of a pre-booking service

Smarter Money Ltd v Revenue & Customs [2006] UKVAT V19632 – Exempt Supply – services via internet introducing customers to potential lenders – no direct input by taxpayer into any actual contract concluded – whether exempt – yes

The Commissioner of Inland Revenue v Gulf Harbour Development Limited [2004] NZCA 263 – sales of shares in golf club, whether supply of financial services

Commissioner of Inland Revenue v Databank Systems Ltd Co (New Zealand) [1990] UKPC 37 – whether services of providing a financial clearing system to banks were “financial services” and exempt from tax – exemption restricted to financial services provided to customers and the consideration paid by customers to the banks

Rulings and Determinations

GSTR 2014/3 ‘Goods and services tax: the GST implications of transactions involving bitcoin’

GSTR 2014/2 ‘Goods and services tax: treatment of ATM service fees, credit card surcharges and debit card surcharges’

GSTR 2006/1 – Austlii – Goods and services tax: guarantees and indemnities

GSTD 2005/3 – Austlii – Goods and services tax: are contracts for difference and financial spread betting contracts financial supplies?

GSTR 2004/4 – Austlii – Goods and services tax: assignment of payment streams including under a typical securitisation arrangement

40.5.10   Incidental financial supplies

40.5.11   Examples of supplies that are financial supplies

Schedule 7 – Examples of financial supply

40.5.12   What supplies are not financial supplies (Act s 40-5)


Commissioner of Taxation v American Express Wholesale Currency Services Pty Limited [2010] FCAFC 122 – at [181]: Even assuming Amex operates a “payment system”, Amex does not supply cardholders with an interest, enforceable at law or equity in or under that system

International Cases

Bookit II v HMRC [2016] EUECJ C-607/14 – Purchase of cinema tickets by telephone or via the Internet — Payment by debit card or credit card–  ‘Card handling’ services’ not exempt

Bloomsbury Wealth Management LLP v Revenue & Customs [2012] UKFTT 379 – VAT – EXEMPT SUPPLIES – finance – whether appellant supplied intermediary services or services of management and advice – held, advice ancillary and predominant supply of intermediary services – whether intermediary services in relation to item 6 (exempt) or item 9 (standard rated) – held, in relation to item 6 appeal allowed

Barclays Bank Plc v Revenue & Customs [2008] UKVAT V20528 – negotiation with credit card customers in arrears – whether excluded from exemption as debt collection – yes

40.5.13   Examples of supplies that are not financial supplies

Schedule 8 – Examples of supply that is not financial supply

Subdivision 40B – Residential rent

40.35   Residential rent


FFYS and Commissioner of Taxation [2021] AATA 8844 – whereas the applicant provides rooms for rent through the AirBnB platform – whether these activities constitute a supply of commercial residential premises to guests

Paul J Castan & Son Pty Ltd ATF Castan Investments Unit Trust and Commissioner of Taxation [2016] AATA 298 – whether supply of premises in a hotel was commercial residential premises

Wynnum Holdings No 1 Pty Ltd and Commissioner of Taxation [2012] AATA 616 –   the supply of residential units in a retirement village was the supply of “residential premises” and not “commercial residential premises” (case analysis)

ECC Southbank Pty Ltd as trustee for Nest Southbank Unit Trust v Commissioner of Taxation [2012] FCA 795 – the lease of shared and studio style student accommodation was the supply of “commercial residential premises” and not “residential premises” – at [50]: the test to be applied for the purpose of determining whether the premises are commercial residential premises involves asking whether the premises is a hotel, motel, inn, hostel or boarding house or whether it is similar to – in the sense that it has a likeness or resemblance to – any of those types of establishment. The application of this test necessarily raises questions of fact involving matters of impression and degree – at [71]: the fact that such accommodation (which might as in this case take the form of either a shared apartment or a self-contained apartment) is the principal place of residence of the individual concerned does not mean that the supply is not taxable (case analysis)

South Steyne Hotel Pty Ltd v Commissioner of Taxation [2009] FCAFC 155 – the supply of apartments in a hotel is of residential premises and not commercial residential premises – at [24]: there is nothing in the GST Act or the policy underlining the GST Act that suggests that the characterisation of an individual supply can be approached by treating it as if it were the aggregate of that supply and other supplies. It is not possible to treat the supply of an individual apartment as aggregated with the supply of all of the other apartments – at [25]: may be that each apartment is part of commercial residential premises consisting of the hotel but that, of itself, does not render an individual apartment similar to a hotel – first instance – [2009] FCA 13

Karmel & Co Pty Ltd v FC of T [2004] AATA 481 – whether applicant entitled to claim input tax credits in relation to costs of supplying accommodation at premises leased to tenants – whether premises “residential premises” or “commercial residential premises” – whether premises similar to hotel, motel or boarding house

International Cases – Courts

Blue Chip Hotels Limited v Revenue and Customs [2017] UKUT 204 – Whether the separate supply by a hotel of a room for civil wedding ceremony was an exempt supply of land or standard rated as a supply of services – hotel was actively exploiting the room and adding value – not the leasing or letting of immovable property – the hotel was not merely passively leasing the land – appeal dismissed

Revenue & Customs v Zombory-Moldovan (t/a Craft Carnival) [2016] UKUT 433 – Leasing or letting of immovable property – Whether grant of right to use a stall or pitch at a craft fair exempt Craft fairs organised by appellant – General public charged admission – Space sold to stallholders to sell their products – Whether supply to stallholders an exempt supply of a licence to occupy land or composite supplies of taxable services comprising of the organisation of a craft fair – appeal allowed – first instance (Kati Zombory-Moldovan trading as Craft Carnival v Revenue & Customs [2015] UKFTT 245)

703008 BC Ltd v The Queen 2015 TCC 208 – whether the supply of units in an apartment complex by way of a 99 year lease with an option to purchase was a supply by way of a “lease” or a “sale” – discussion of difference between a “sale” and a “lease, licence or similar arrangement”: at [57] “regardless of when a supplier provides possession to the recipient, the supply will only constitute a sale under the GST Act if it is made under an agreement that, at the time the supply is made, binds the supplier to transfer ownership of the property and binds the recipient to acquire such ownership. If the supplier provides the recipient with possession and, at the time the supply is made, there is no agreement binding on both parties to transfer ownership, then, in most instances, the supply will be by way of lease, licence or similar arrangement” – -discussion of whether provision of option to purchase equates to a sale – at [66]: “an option that grants a lessee the ability to obtain ownership of the leased asset upon the lessee’s election to exercise the option does not convert a lease into a sale for the purposes of the GST Act. The option is not, at the time the supply is made, a binding agreement by the supplier to transfer, and by the recipient to acquire, beneficial ownership of the property. Rather, it is a clause in the lease that provides the recipient with the option of acquiring ownership of the property in the future. Further, the provision of the property by way of lease and the subsequent transfer of ownership of the property upon the exercise of the option granted under the lease are separate supplies.”

Grimsby College Enterprises Ltd [2010] UKUT 141 – whether the supply of the use of equipment and a building pursuant to a licence was a “licence to occupy land” or a right to use the equipment with the implied right of entry to the building for that purpose being merely an ancillary or subordinary part of the supply

Revenue and Customs v Abbey International Plc [2006] EWCA Civ 886 – whether arrangement which falls short of a “lease or letting of immovable property” should be treated as a lease for VAT

Commissioners of Customs and Excise v Sinclair Collis Limited [2001] UKHL 30; [2001] STC 989 – licence agreement for provision of tobacco vending machines to clubs, whether exempt as a licence to occupy land or letting of immovable property, effect of lease

Rulings and Determinations

GSTR 2012/4 GST treatment of fees and charges payable on exit by residents of a retirement village operated on a leasehold or licence basis

GSTR 2012/3 ‘Goods and Services tax: GST treatment of care services and accommodation in retirement villages and privately funded nursing homes and hostels

GSTR 2011/1 – Austlii – Goods and services tax: development, lease and disposal of a retirement village tenanted under a ‘loan-lease’ arrangement

GSTR 2007/1 – Austlii – Goods and Services tax: when retirement village premises include communal facilities for use by the residents of the premises

GSTD 2000/9 – Austlii – Goods and services tax: if you let out a residence do you need to get an ABN for PAYG purposes or register for GST?

GSTD 2000/10 – Austlii – Goods and services tax: are outgoings payable by a tenant under a commercial property lease part of the consideration for the supply of the premises?

Subdivision 40C – Residential premises

40.65   Sales of residential premises


FFYS and Commissioner of Taxation [2021] AATA 8844 – whereas the applicant provides rooms for rent through the AirBnB platform – whether these activities constitute a supply of commercial residential premises to guests

Living Choice Australia Limited and Commissioner of Taxation [2014] AATA 168 – the supply of “residential premises” by way of a lease of an independent living unit in a retirement village included communal facilities and services – at [71]: the supply of residential premises” included the premises by way or lease or licence and facilities or services that are integral, ancillary or incidental to the lease, i.e. incidental services.

The Married Couple and Commissioner of Taxation [2013] AATA 888 – at [78] an investment property to be rented out was not “residential premises” as being similar to a hotel

Sunchen Pty Ltd v Commissioner of Taxation [2010] FCAFC 138 – the sale of a house subject to a residential tenancy was input taxed as the sale of residential premises – the  operation of s 40-65(1) does not turn upon the subjective intentions of the purchaser and whether premises are ‘to be used predominantly for residential accommodation’ should be determined objectively by reference to the physical characteristics of the property – at [43]: the definition of ‘residential premises’ in s 195-1 looks to an existing state of fact: whether the land or building is occupied as a residence or for residential accommodation; or is intended to be occupied, and is capable of being occupied, as such. Again, the second, or para (b), limb of the definition, notwithstanding the phrase ‘intended to be occupied’, is looking to the characteristics or nature of the property, rather than the intention of any person. So much is to be gleaned from the phrase ‘and is capable of being occupied’

Vidler v Commissioner of Taxation [2010] FCAFC 59 – the supply of vacant land which was zoned residential low density was not the input taxed supply of residential premises – at [28]: “residence” connotes a dwelling, abode or house in which a person may reside – at [31]: “occupied” in the phrase “capable of being occupied” connotes living within or inhabiting a structure. It is quite artificial to speak of someone “occupying” vacant land “as a residence or for residential accommodation” – at [34]: the definition is not concerned with “land” in the abstract, but with “land that …is capable of being occupied as a residence or for residential accommodation”.

Toyama Pty Ltd v Landmark Building Developments Pty Ltd [2006] NSWSC 83 – whether the sale of land with a house but with a development approval for the construction of a 14 unit development on the land was a taxable supply or the input taxed supply of residential premises – whether question whether premises are “to be used predominantly for residential accommodation” determined by reference to physical characteristics of the premises – at [92]: legislation requires a prediction of future use of the premises and the most important factor is the intention of the future owner or lessee, to be assessed having regard to objective circumstances such as the physical condition of the premises, the zoning or any restrictive covenants

Marana Holdings Pty Ltd v Commissioner of Taxation [2004] FCAFC 307 – first instance – [2004] FCA 233 – whether sale of strata units in a motel complex input taxed – whether the strata units were “new residential premises” within the meaning of s 40-75 – discussion of meaning of “residence” and “residential”

Rulings and Determinations

GSTR 2012/7 Goods and Services tax: long-term accommodation in commercial residential premises

GSTR 2012/6 – Goods and Services tax: commercial residential premises

GSTR 2012/5 – Goods and Services tax: residential premises

GSTD 2012/2 – Goods and Services tax: what are the goods and services tax consequences following the sale of commercial premises that are subject to a lease?

GSTD 2012/1 – Goods and Services tax: what are the goods and services tax consequences following the sale of residential premises that are subject to a lease?

GSTD 2006/3 – Austlii – Goods and services tax: are settlement adjustments taken into account to determine the consideration for the supply or acquisition of real property?

GSTR 2000/20 – Austlii – Goods and services tax: commercial residential premises

40.70   Supplies of residential premises by way of long-term lease

40.75   Meaning of new residential premises


Commissioner of Taxation v Gloxinia Investments (Trustee) [2010] FCAFC 46 – the sale of strata lots were input taxed under s 40-65 as the strata lots were not “new residential premises” as they had previously been the subject of a long-term lease (being a strata lot lease) – at [89]: the “social and economic reality” or the “practical business point of view” cannot elevate above the legal effect of the transaction – first instance – [2009] FCA 641

International cases

Boxmoor Construction Ltd v Revenue & Customs [2016] UKUT 91 – supplies in course of construction following demolition of building except for part of façade – whether retention of façade condition of planning consent or similar permission – no – whether part of façade retained disregarded as de minimis – no – whether works reconstruction, alteration, enlargement and extension to existing building – yes – appeal dismissed

Rulings and Determinations

GSTR 2009/4 – Austlii – Goods and services tax: new residential premises and adjustments for changes in extent of creditable purpose

GSTR 2003/3 – Austlii – Goods and services tax: when is the sale of real property a sale of new residential premises

Subdivision 40D – Precious metals

40.100 Precious metals

Rulings and Determinations

GSTR 2003/10 – Austlii – Goods and services tax: what is ‘precious metal’ for the purposes of GST

Subdivision 40E – School tuckshops and canteens

40.130 School tuckshops and canteens

Subdivision 40F – Fund raising events conducted by charities etc

40.160 Fund-raising events conducted by charities etc

40.165 Meaning of fund-raising event

Subdivision 40-G – Inbound intangible consumer supplies

40.180  Inbound intangible consumer supplies

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