GST Ruling 2006/9 - Supplies
Goods and Services
Tax Ruling
GSTR 2006/9
FOI
status: may be released
Preamble
What this Ruling is about 1. This Ruling examines the meaning of
'supply' in the A New Tax System (Goods and Services Tax) Act 1999
(GST Act). The ' Background ' section of the Ruling discusses the
general context of the GST Act and outlines how this informs the meaning of
the term 'supply' in the GST Act including its relevance to input tax credit
entitlements. It also discusses the use of the term supply in the context of
United Kingdom Value Added Tax and New Zealand GST regimes and highlights
some differences and similarities to the GST Act. 2. Part 1 of the 'Ruling with
Explanation' section discusses the concept of 'supply' in the GST Act and the
meaning of 'supply' in section 9-10. This part lists the special rules that
qualify or affect that meaning in the GST Act. The special rules are set out
in paragraph 47 of this Ruling. 3. Part 2 focuses on the
characteristics of 'supply' in the context of a two party transaction. Part 2
discusses ten propositions that are considered relevant in analysing a
transaction in relation to a supply. 4. Part 3 builds on the ten
propositions. It discusses six further propositions which also apply to analysing
more complex multi-party arrangements, commonly known as tripartite
arrangements. 5. The Ruling concludes with two case
studies in Part 4 which are used to illustrate several of the
propositions. 6. This Ruling focuses on analysing the
various arrangements in which supplies are made. An arrangement may be
evidenced by various written agreements, oral agreements, legal instruments,
or combinations of such things. Unless a particular type of agreement is
mentioned by name, such as a contract, the Ruling uses 'the agreement' to
refer to these things collectively. They include but are not limited to: · written and oral contracts; · various deeds, assignments
and options; · licence or permit
conditions; · memoranda of understanding;
and · legislative instruments,
Ministerial directions and Departmental guidelines. 7. Unless otherwise stated in this
Ruling: · all legislative references
are to the GST Act; and · all Explanatory Memorandum
references are to the Explanatory Memorandum to the A New Tax System (Goods
and Services Tax) Bill 1998 (the EM). Date of effect 8. This Ruling explains the
Commissioner's view of the law as it applied from 1 July 2000. You can rely
upon this Ruling on and from its date of issue for the purposes of section
105-60 of Schedule 1 to the Taxation Administration Act 1953 . Goods
and Services Tax Ruling GSTR 1999/1 explains the GST rulings system and the
Commissioner's view of when you can rely on our interpretation of the law in
GST public and private rulings. 9. If this Ruling conflicts with a
previous private ruling that you have obtained or a previous public ruling,
this public ruling prevails. However, if you have relied on a previous
ruling, you are protected in respect of what you have done up to the date of
issue of this public ruling. This means that if you have underpaid an amount
of GST, you are not liable for the shortfall prior to the date of issue of
this later ruling. Similarly, you are not liable to repay an amount overpaid
by the Commissioner as a refund. Background The meaning of supply in the context
of the GST Act 10. GST is a broad based indirect tax
payable on consumption in Australia. Generally, GST is payable on the value
added at each stage of the commercial chain of dealings with goods, services
and other things. The GST Act describes these dealings as 'supplies'. In the
absence of a supply (or importation) GST cannot arise.F1 The Full
Federal Court noted the importance of supply in Sterling Guardian Pty Ltd
v. Commissioner of Taxation (Sterling Guardian) :F2 In economic terms it may be correct to call the GST a consumption
tax, because the effective burden falls on the ultimate consumer. But as a
matter of legal analysis what is taxed, that is to say what generates the tax
liability (and the obligations of recording and reporting), is not
consumption but a particular form of transaction, namely supply; see
generally HP Mercantile Pty Ltd v Commissioner of Taxation (2005) 143 FCR 553
at [10]-[15]. The meaning of 'supply' is given in section
9-10. 11. Chapter 2 of the GST Act has the
basic rules dealing with liability for GST and the obligations for recording
and reporting GST noted in Sterling Guardian . The basic rules provide
for when and how GST arises, who is liable to pay GST and how input tax
credits arise. 12. The basic rules require an entity,
the supplier, to make the supply and generally another entity, the recipient,
to acquire the supply. GST on a taxable supply is payable by the supplier who
is registered or required to be registered for GST. The requirements for a
taxable supply are stated in section 9-5. 13. A recipient who is registered for
GST is generally able to claim input tax credits for acquisitions it makes in
the course of its business. By providing for input tax credits the GST Act
ensures that there ordinarily is no cascading of GST for taxable and GST-free
supplies. It provides that tax will be payable by each supplier in a chain
only upon the value added by that supplier. Subject to some exceptions, input
tax credits are not available for acquisitions in relation to making input
taxed supplies so that the inputs to these supplies will be taxed and not the
value added by the supplier.F3 14. Supply is important in relation to
input tax credits because if a supply is not made an entity cannot acquire
anything for a creditable purpose, as required by paragraph 11-5(a). Making
an acquisition of something is the first element to be considered in
determining whether you make a creditable acquisition under section 11-5. The
meaning of acquisition is given in section 11-10. The second element is the
requirement in paragraph 11-5(b) that the supply of the thing to you is a
taxable supply. 15. You make an acquisition if you are
the recipient of a supply. That is, the supply is made to you. In most
transactions concerning GST the recipient of a supply is the entity that is
also provided with that supply. In contrast, some supplies are made to the recipient,
but provided to another entity. Arguably, such provisions are also supplies.
However, these are not relevant because there is no contractual or reciprocal
relationship between the supplier and the entity being provided with the
supply. An entity must have made an acquisition of a thing to satisfy the
requirements of section 11-10. It is not sufficient that an entity has merely
been provided with the supply. Also, an entity does not make an acquisition
merely by paying for a supply. 16. Chapter 3 of the GST Act covers the
exemptions from GST, being those supplies that are GST-free or input taxed.
Chapter 4 has special rules that can apply in particular cases to modify the
basic rules. Both Chapters 3 and 4 provide exceptions to the basic rules. 17. Because GST is intended to be broad
based a supply may manifest itself in various ways. For example, a supply may
be mixed, composite or neither and an analysis of a transaction may indicate
one or more supplies. However, the scheme of the GST Act is not so broad as
to embrace the notions of: an entity making a supply to itself; a supply
being made by more than one entity; a supply arising out of the creation of
expectations alone without more; or a supply without the supplier doing
something. Judicial approach to context 18. The High Court has considered the
relevance of context both in a broad sense and in relation to the text of
specific provisions within an Act. The judgment of Brennan CJ, Dawson, Toohey
and Gummow JJ in CIC Insurance Ltd v. Bankstown Football Club Ltd F4
indicates it is appropriate to consider the context '...in its widest sense
to include such things as the existing state of the law and the mischief
which, by legitimate means such as those just mentioned, one may discern the
statute intended to remedy.' The Court went on to add that '...inconvenience
or improbability of result may assist the court in preferring to the literal
meaning an alternative construction which, by the steps identified above, is
reasonably open and more closely conforms to the legislative intent.' 19. However, consideration of the
context of supply in its broadest sense in the GST Act does not obviate the
need for close attention to the text of the provisions chosen by Parliament
under consideration and the context of the provision in the GST Act. As the
High Court noted in the judgment of Gleeson CJ, Gummow, Hayne and Heydon JJ
in Stevens v. Kabushiki Kaisha Sony Computer Entertainment F5
'No particular theory or "rule" of statutory interpretation,
including that of "purposive" construction, can obviate the need
for close attention to the text and structure of [the relevant part of the
legislation].'F6 Ultimately, the task of the courts and the
Commissioner is to construe the language of the statute.F7 20. Further, as has been noted by Kirby
J in The Queen v. Lavender F8 it is important to take a
consistent approach to issues of statutory interpretation and not '...pluck
out considerations of "context", "purpose" and
"history" arbitrarily, so as to sustain the outcomes of
interpretation ... in some, but not other cases.' Propositions for characterising and
analysing supplies 21. The propositions for characterising
supplies and analysing more complex transactions in Parts 2 and 3 of this
Ruling flow from the concept of supply in the context of both a broad based
GST and the text and structure of the GST Act. The propositions are not
universal as they may have exceptions or be qualified by the operation of
particular provisions of the GST Act. The length of discussion of a
proposition is not intended to indicate a difference in importance of the
proposition in relation to other propositions. Some propositions are obvious
and so little has been said, whereas other propositions require a more
in-depth explanation. 22. The propositions discussed in Part
2 are:
23. The propositions discussed in Part
3 are:
Comparison with the United Kingdom
and New Zealand 24. The concept of supply is also
fundamental to value added tax regimes in other countries and, as such,
foreign law may shed light on the meaning of supply. However, it needs to be
appreciated that differences exist between the Australian GST and value added
tax regimes in other countries. Relevant places in this Ruling explain some
of the differences contained in the United Kingdom Value Added Tax Act
1994 (the UK VAT Act), the Sixth VAT Directive of the European Council
(the Sixth Directive),F9 and the New Zealand Goods and Services
Tax Act 1985 (the NZ GST Act). 25. The Ruling recognises the context
in which these differences appear and their relevance to our GST Act. As the
characteristics of supply in two party situations and in tripartite
arrangements have been the subject of extensive judicial consideration in the
United Kingdom and New Zealand, the Ruling discusses several of these cases.
The Ruling also considers some relevant Australian decisions. Supply of goods 26. A supply of goods is defined under
subparagraph 1(1) of Schedule 4 to the UK VAT Act as 'any transfer of the
whole property in goods', with the exception that the transfer 'of any
undivided share of property' or 'of the possession of goods' is a supply of
services. The transfer of possession of goods is further qualified in that
there will be a supply of goods if possession is transferred under an
agreement for sale or an agreement that provides that at some future point
(no later than when the goods are paid for) ownership will transfer (see
subparagraph 1(2) of Schedule 4 to the UK VAT Act). 27. Under article 5(1) of the Sixth
Directive, a supply of goods is 'the transfer of the right to dispose of
tangible property as owner'. Both this and the UK VAT Act's definition of a
supply of goods are in this sense more restricted than the definition in our
GST Act. 28. 'Goods' is defined under subsection
2(1) of the NZ GST Act to mean 'all kinds of personal or real property; but
does not include choses in action or money, or a product that is transmitted
by a non-resident to a resident by means of a wire, cable, radio, optical or
other electromagnetic system or by means of a similar technical system'. This
definition in embracing real property is in that sense much wider than the
definition in our GST Act. Supply of services 29. Under subsection 5(2) of the UK VAT
Act 'anything which is not a supply of goods but is done for consideration
(including, if so done, the granting, assignment or surrender of any right)
is a "supply of services"'. Under article 6(1) of the Sixth
Directive, a supply of services is defined as 'any transaction which does not
constitute a supply of goods' and the term includes 'obligations to refrain
from an act or to tolerate an act or situation'. 30. Under subsection 2(1) of the NZ GST
Act 'services' means 'anything which is not goods or money'. In Case S65
F10 Willy DJ warned that there are limits to this definition. In
that case a costs order was made against a solicitor who was struck off the
roll by the New Zealand Law Practitioners Disciplinary Tribunal. The costs
order required the solicitor to pay amounts to the New Zealand Law Society
and the District Law Society for their costs and expenses relating to the
disciplinary proceedings. Willy DJ held that these payments were not
consideration for a supply of services by the Law Societies to the solicitor.
He ruled that the ordinary meaning of the word supply limited the
breadth of the phrase 'supply of services', which was only so wide as to
include activities where the provider has done something for , not against
, the recipient. To rule otherwise would lead to absurdity because it would
allow the concept of a supply to encompass situations where a person sues for
recovery of property, or steals something from someone else. The analysis in Case
S65 is consistent with the Commissioner's analysis of the effect of
payments made under court orders or out-of-court settlements in GSTR 2001/4.F11
31. The wide meaning of supply in
section 9-10 and differences in the structure of our legislation mean that
overseas cases should be considered with some caution. Ruling with Explanation Part 1: The concept of 'supply' in
the GST Act Section 9-10 32. Section 9-10 states: 9-10 Meaning of supply (1) A supply is
any form of supply whatsoever. (2) Without limiting subsection
(1), supply includes any of these: (a) a supply of goods; (b) a supply of services; (c) a provision of advice or
information; (d) a grant, assignment or
surrender of real property; (e) a creation, grant, transfer,
assignment or surrender of any right; (f) a financial supply; (g) an entry into, or release
from, an obligation: (i) to do anything; (ii) to refrain from an act; (iii) to tolerate an act or
situation; (h) any combination of any 2 or
more of the matters referred to in paragraphs (a) to (g). (3) It does not matter whether
it is lawful to do, to refrain from doing or to tolerate the act or situation
constituting the supply. (3A) For the avoidance of doubt,
the delivery of: (a) livestock for slaughtering
or processing into food; or (b) game for processing into
food; under an arrangement under
which the entity making the delivery only relinquishes title after food has
been produced, is the supply of the livestock or game (regardless of when the
entity relinquishes title). The supply does not take place on or after the subsequent
relinquishment of title. (4) However, a supply does not
include a supply of money unless the money is provided as consideration for a
supply that is a supply of money. Subsection 9-10(1) 33. The words 'A supply
is any form of supply whatsoever' in subsection 9-10(1) cover all supplies
regardless of whether they concern goods or services. This obvious breadth of
the concept of supply is confirmed by the EM, which states (in reference to
subsection 9-10(1)): This is defined broadly and is intended to encompass supplies as
widely as possible.F12 Subsection 9-10(2) 34. The intended scope of subsection
9-10(1) is more fully illustrated in subsection 9-10(2), of which the EM
states: [It] provides a list of things that are included as supplies. It is
not an exhaustive list. It does not limit the possible breadth of the
definition of supply in subsection 9-10(1).F13 35. Subsection 9-10(2) does not limit
subsection 9-10(1). Something that is not listed in subsection 9-10(2) but
falls within subsection 9-10(1) will be a supply. References to paragraphs in
subsection 9-10(2) 36. The subject matter of several of
the paragraphs in subsection 9-10(2) is discussed in other GST public
rulings: · 9-10(2)(c) a provision of
advice or information: See paragraphs 71 to 73 and
195 to 201 of GSTR 2000/31 (Goods and services tax: supplies connected with
Australia). See also paragraph 90 of
GSTR 2000/11 (Goods and services tax: grants of financial assistance). · 9-10(2)(d) a grant,
assignment or surrender of real property: See paragraphs 82 to 97 of
GSTR 2003/7 (Goods and services tax: what do the expressions 'directly
connected with goods or real property' and 'a supply of work physically
performed on goods' mean for the purposes of subsection 38-190(1) of the A
New Tax System (Goods and Services Tax) Act 1999 ?). See also paragraph 18 of
GSTR 2003/3 (Goods and services tax: when is a sale of real property a sale
of new residential premises?). · 9-10(2)(f) a financial
supply: See generally GSTR 2002/2
(Goods and services tax: GST treatment of financial supplies and related
supplies and acquisitions). · 9-10(2)(g) an entry into, or
release from, an obligation: See paragraphs 26 to 36 of
GSTR 2000/11 (Goods and services tax: grants of financial assistance). · 9-10(2)(h) any combination
of any two or more of the matters referred to in paragraphs (a) to (g): See generally GSTR 2001/8
(Goods and services tax: apportioning the consideration for a supply that
includes taxable and non-taxable parts). See also paragraph 26 of
GSTR 2003/7 (Goods and services tax: what do the expressions 'directly
connected with goods or real property' and 'a supply of work physically
performed on goods' mean for the purposes of subsection 38-190(1) of the A
New Tax System (Goods and Services Tax) Act 1999 ?). Relationship between subsections
9-10(1) and (2) 37. The Full Federal Court noted in Westley
Nominees Pty Ltd v. Coles Supermarkets Australia Pty Ltd (Westley) F14
that for various reasons it thought the ordinary meaning of supply in
subsection 9-10(1) 'is arguably extended by pars (f) and (g), if not by pars
(a) - (e)' of subsection 9-10(2). Given the breadth of subsection 9-10(1)
being stated to mean 'a supply is any form of supply whatsoever', the
Commissioner is of the view that whilst paragraph 9-10(2)(f) expands
subsection 9-10(1) in relation to financial supplies, subsection 9-10(2) does
not limit the operation of subsection 9-10(1). This non-limitation is
expressly stated in the opening words of subsection 9-10(2). A 'thing' 38. As well as the supply examples
listed in subsection 9-10(2), the GST Act recognises the concept of a
'thing'. 'Thing' is defined in section 195-1 as: thing means anything that can be supplied or imported. 39. 'Thing' is used to refer to goods,
services or other matters that are the subject of supplies covered by section
9-10. For example, paragraph 11-5(b) uses the words: 'the supply of a thing
to you is a taxable supply'. The use of the term 'thing' gives further
emphasis to the breadth of the meaning of supply. Subsection 9-10(3) 40. Subsection 9-10(3) states: It does not matter whether it is lawful to do, to refrain from
doing or to tolerate the act or situation constituting the supply. Under the GST Act something that is
done illegally may constitute a supply. For example, in applying subsection
9-10(3), the Commissioner considers that a second hand car dealer who sells
cars, which the dealer has either stolen or has received knowing they have
been stolen, is making supplies.F15 41. The European Court of Justice
(ECJ), in interpreting the Sixth Directive, has held that the principle of
fiscal neutrality precluded a generalised differentiation between lawful and
unlawful transactions 'except where, because of the special characteristics
of certain products, all competition between a lawful economic sector and an
unlawful sector is precluded'.F16 The ECJ has held that there was
no liability to VAT on the illegal distribution of prohibited drugs because
their supply was subject to a total prohibition in the member states (except
within strictly controlled economic channels for medical and scientific
purposes).F17 42. In contrast to the European
position, under the GST Act something that is done illegally may still
constitute a supply even where all competition between a lawful and an
unlawful sector is precluded. For example, in applying subsection 9-10(3),
the Commissioner considers that the illegal distribution of prohibited drugs,
or the sale of 'fake' brand name handbags or clothing in breach of
intellectual property rights, would constitute supplies for our GST purposes.
Subsection 9-10(3A) 43. Subsection 9-10(3A) is an
'avoidance of doubt' provision. It provides that the delivery of livestock
for slaughtering or processing into food, or of game for processing into food
under an arrangement under which title does not pass until after food has
been produced, is the supply of livestock or game. 44. In identifying the thing supplied,
and in emphasising that the supply does not take place on or after the
subsequent relinquishment of title, subsection 9-10(3A) clarifies both the
time and character of the supply. Subsection 9-10(4) 45. Subsection 9-10(4) provides that a
supply does not include a supply of money unless the money is provided as
consideration for a supply that is a supply of money.F18 46. Money is defined by section 195-1
to include: (a) currency (whether of
Australia or of any other country); and (b) promissory notes and bills
of exchange; and (c) any negotiable instrument
used or circulated, or intended for use or circulation, as currency (whether
of Australia or of any other country); and (d) postal notes and money
orders; and (e) whatever is supplied as
payment by way of: (i) credit card or debit card;
or (ii) crediting or debiting an
account; or (iii) creation or transfer of a
debt. However, it does not
include: (f) a collector's piece; or (g) an investment article; or (h) an item of numismatic
interest; or (i) currency the market value of
which exceeds its stated value as legal tender in the country of issue. Special rules relating to supply 47. Some provisions of the GST Act
determine that: · a supply is not a taxable
supply; · there is no supply; or · a supply is made. This table sets out special rules
relating to supplies:
Part 2: Supply in the context of a
transaction 48. Part 1 of this Ruling looked at the
concept of 'supply' in the context of the GST Act. This Part of the Ruling
looks at how to identify and characterise supplies in the context of the
transactions in which they are made. 49. The Ruling uses ten propositions to
assist in analysing a transaction to identify the supply or supplies made in
that transaction. The propositions are not universal as they may have
exceptions or be qualified either by the operation of particular provisions
of the GST Act, or by the facts and circumstances of a transaction. 50. The propositions in this Part are:
51. Transactions may also require
consideration of the total fact situation. The Ruling discusses the total
fact situation as Proposition 16 in paragraphs 222 to 246. While this is discussed
in Part 3 of the Ruling, the need to consider the total fact situation is
also relevant in analysing two party transactions. The propositions explained Proposition 1: for every supply
there is a supplier 52. The Commissioner considers that for
every supply there is a supplier. The term 'supplier' is not defined in the
GST Act. However, whenever the term is used in the Act it refers to the
entity that makes a supply or is capable of making a supply. Proposition 2: generally, for
every supply there is a recipient and an acquisition 53. The meaning of 'acquisition' in
section 11-10 is the corollary of the meaning of supply in section 9-10.
Subsection 11-10(1) provides that, 'An acquisition is any form
of acquisition whatsoever'. Subsection 11-10(2) refers to the thing acquired,
such as goods, services or a right, and the means by which the thing is
acquired, such as its receipt or acceptance. 54. To make an acquisition you have to
be the 'recipient' of the supply of the thing you are acquiring. Although the
term 'recipient' does not appear in Division 11, it is defined in section
195-1 to mean the entity to which the supply was made. This definition
suggests that there is a supplier, a recipient and that something is passed
from the supplier to the recipient.F19 55. The supplier and the recipient have
to be different entities because an entity cannot make a supply to itself.F20
Also, the recipient has to be identified, as you cannot make a supply to the
world at large.F21 However, a supply can be made for no
consideration. Creditable acquisitions and input
tax credits 56. If you make an acquisition and the
other requirements of section 11-5 are met then the acquisition is a
creditable acquisition. However, if you are not the recipient of the supply
you will not have made a creditable acquisition, even if you provide
consideration for the supply. 57. An entity that is the recipient of
a supply may make a creditable acquisition of that supply and be entitled to
an input tax credit.F22 An entity makes a creditable acquisition
under section 11-5 if: · the entity acquires anything
solely or partly for a creditable purpose; · the supply of the thing to
the entity is a taxable supply; · the entity provides, or is
liable to provide, consideration for the supply; and · the entity is registered or
required to be registered. 58. Under subsection 11-15(1) an entity
acquires a thing for a creditable purpose to the extent that the entity
acquires it in carrying on its enterprise. However, under subsection 11-15(2)
an entity does not acquire a thing for a creditable purpose to the extent
that the acquisition relates to making input taxed supplies, or is of a
private or domestic nature. Subsections 11-15(4) and 11-15(5) set out circumstances
where an acquisition for the making of certain financial supplies is not
treated as relating to making input taxed supplies. 59. Division 81 deems that the payment
of a tax, fee or charge imposed under an Australian law is consideration for
a supply. This means there is a deemed supply in relation to the tax, fee or
charge and its payment. Without Division 81 it may be that no supply is made
if nothing passes from the entity receiving the payment (the deemed supplier)
to the entity making the payment. However, if the particular tax, fee or
charge is specified in a written determination of the Treasurer the payment
of it is treated as not being the provision of consideration. 60. In some cases an entity can have
something without having made an acquisition of the thing. For example, an
author of an original literary work does not make an acquisition of a right
where the Copyright Act 1968 protects the copyright in that work.
Contrast this with an inventor who needs to be granted a patent under the Patents
Act 1990 (Commonwealth) before being able to exclusively exploit their
invention. The inventor acquires those rights to exclusively exploit the
invention through the grant of the patent. 61. Paragraph 115 of GSTR 2002/2 (Goods
and services tax: GST treatment of financial services and related supplies
and acquisitions) explains that 'A financial supply consisting of the
acquisition of a financial interest is treated by the legislation as being
"made to" a recipient, so it does not matter that the recipient of
the acquisition-supply may not actually receive something. The GST
regulationsF23 treat the receipt of this interest by the acquirer
as being a supply to the provider.' Paragraphs 110 to 116 of GSTR 2002/2
provide further information on the acquisition of a financial interest. Recipient in tripartite arrangements 62. Determining the recipient of the
supply is not difficult where there are only two parties to a transaction.
Part 3 of this Ruling, which begins at paragraph 114, discusses how to identify
the recipient of a supply in the more difficult tripartite arrangements. Proposition 3: a supply may be
mixed, composite or neither
63. A supply may consist of separately
identifiable taxable and non-taxable parts. In GSTR 2001/8 the Commissioner
refers to this as a 'mixed supply'. Section 9-80 describes how you work out
the value of the part of a mixed supply that is a taxable supply. 64. If all of the parts in a supply
have the same GST treatment, then there is no requirement to separately identify
each part. That is, if all of the parts are taxable, then apportionment of
the consideration is not necessary as GST is payable on the total value of
the supply. Similarly, if all of the parts are non-taxable, then no GST is
payable on the supply and apportionment is not necessary. Apportionment may
still be necessary in relation to the acquisition of the supply, such as
where not all the parts of the supply are acquired for a creditable purpose. 65. A supply that contains a dominant
part, but also includes something that is integral, ancillary or incidental
to that part is a 'composite supply', being the supply of a single thing. 66. On the other hand, a supply may
simply involve something that is different to, and has a separate identity
from, its parts, for example, the supply of a cake. The cake is made from
ingredients such as flour, butter, sugar and eggs, but it is readily apparent
that it is a cake that is supplied. There are no separately identifiable
parts. Proposition 4: a transaction may
involve two or more supplies
67. In a straight forward commercial
transaction, a supply is made to a recipient, who provides consideration in
the form of money to the supplier. As the payment of money in these
circumstances is not a supply,F24 the recipient's payment of money
is not a supply. 68. However, if the recipient provides
consideration in a non-monetary form, the consideration itself is a separate
supply.F25 In a transaction of this kind between two entities,
there are two supplies, one going each way. As a result, each party to the
transaction needs to account for any GST on the supply it makes, and each
party needs to account for any input tax credit entitlement for the
acquisition it makes. 69. In GSTR 2001/6F26 the
Commissioner points out that the recipient of a supply may provide or make a
thing available for the supplier to use in making the supply. However, the
provision of such a thing is not necessarily consideration. The corollary of
this proposition is that providing or making the thing available does not
necessarily give rise to a supply. It will depend on the facts and
circumstances of the transaction between the parties whether the supplier's
use of, for instance, facilities provided by the recipient in order to make
the supply is simply part of the circumstances in which the supply is to be
made, or does in fact involve a supply by the recipient to the supplier. 70. For example, a supplier may need to
perform services on the recipient's premises. The recipient may agree to
allow the supplier to use its computer facilities and stationery in
performing the services. Depending on the particular circumstances, allowing
the use of these things could be a condition of the contract that goes to
defining the supply the supplier makes rather than being a supply of these
things to the supplier by the recipient. Proposition 5: to 'make a supply'
an entity must do something
71. In overseas jurisdictions the term
'supply' has been held to take its ordinary and natural meaning, being 'to
furnish or to serve' or 'to furnish or provide'.F27 The
Commissioner picks up this meaning in considering the meaning of supply in
the GST Act at paragraph 41 of GSTR 2004/9,F28 a ruling which is
about the assumption of liabilities: In adopting the ordinary and natural meaning of the term, 'to
furnish or provide', it follows that an entity must take some action to 'make
a supply'. This approach is consistent with the use of active phrases
throughout the examples of supplies in subsection 9-10(2), such as the normalised
verbs: 'a provision'; 'a grant'; 'a creation'; 'a transfer'; 'an entry into';
and 'an assignment'. 72. The use of the word 'make' in the
context of section 9-5 was considered by Underwood J in Shaw v. Director
of Housing and State of Tasmania (No. 2) ('Shaw')F29 in
relation to the payment of a judgment debt. His Honour was of the view that
GST only applies where the 'supplier' makes a voluntary supply and not where
a supply occurs without any action by the entity that would be the 'supplier'
had there been a supply. He considered the actions of the judgment creditor
with respect to the extinguishment of the debt when the judgment debtor made
the payment of the judgment sum to meet the judgment debtor's obligations. 73. The Commissioner agrees with Underwood
J's decision that there was no supply by the judgment creditor, as the
judgment creditor did not do any act or thing to extinguish the obligation
when the judgment debtor paid the judgment debt.F30 74. However, Underwood J was of the
view, with which the Commissioner also agrees, that an entity can still make
a supply even if the supply is made under the compulsion of statute if the
entity takes some action to cause a supply to occur. His Honour went on to
compare a supply resulting from a positive act against a situation where
there is no supply because nothing is done:F31 It seems to me that different considerations arise when considering
the meaning of 'supply' in the Act. Notwithstanding the statutory compulsion,
the liquidator's disposition in St Hubert's Island Pty Ltd (in liq)
was something that was 'made' by him and for that reason would be likely to
be considered a supply within the meaning of the Act. This is quite a
different situation from the matter at hand, for the release of the obligation
to pay a judgment sum by the payment of that sum will occur regardless of
whether the judgment creditor makes or does any act at all. It was held in Databank
Systems Ltd v. Commissioner of Inland Revenue (NZ) (1987) 9 NZTC 6213
that 'supply' means 'to furnish or provide'. Application of that proposition
to the word 'supply' as enacted in the Act, s9-10 reinforces the concept that
there is a legislative intention not to include in the word 'supply' the
release of an obligation that occurs independently of the act of the
releasor. 75. Underwood J considered the
disposition by the liquidator would have been a supply under the GST Act
because it was something 'made' by the liquidator. His Honour did not find a
supply in relation to the release of the obligation to pay a judgment sum
because the release occurred upon payment and not as a result of the judgment
creditor doing something. However, an entity may do something and make a
supply by agreeing to refrain from an act or to tolerate an act or situation.
76. In Westley the Full Federal
Court considered two questions: whether the acquisition of a property subject
to an existing lease constituted a 'supply' for the purposes of section 9-10;
and whether, for purposes of section 13 of the A New Tax System (Goods and
Services Tax Transition) Act 1999 , a review opportunity arose when the
lease provided for a rent review. The Court noted that the ordinary meaning
of 'supply' required a positive act and continued on to suggest paragraphs
9-10(2)(f) and (g), 'arguably', extend the ordinary meaning of supply. At
paragraph 16 the Court said:F32 The concept of 'supply' in its ordinary meaning in subs 9-10(1) of
the GST Act does seem to require some act of provision, furnishment,
conferral or giving of some thing. The inclusions in subs 9-10(2)
specifically identify some of these things, without limitation to subs (1),
as goods, services, advice or information, real property and any right, (pars
(a) - (e) inclusive). On the other hand, the concept of 'financial supply' in
par (f) is defined in the GST Regulations 1999 (40-5.09) to include, amongst
other things, the acquisition of an interest in or under specified
financial instruments and par (g) extends the concept of 'supply' to include
the entry into an obligation to do something, to refrain from doing something
or to tolerate an act or situation. For these reasons, the ordinary meaning
of 'supply' is arguably extended by pars (f) and (g), if not by pars (a) -
(e) inclusive.F33 77. The Court concluded, at paragraphs
22 and 23: While the matter is not free from doubt, we have concluded that
when the appellants purchased the reversion they assumed the obligation of
Lake Eerie to honour the lease according to its terms and in that sense
entered into an obligation to tolerate an act or situation and in
consequence, made a 'supply' by virtue of s 9-10(2)(g). The fact that the
obligation arises by operation of law does not, in our view, impede this
conclusion; after all, the reference to 'obligation' in s 9-10(2)(g) must be
a legal obligation, although not necessarily one sourced in contract.F34
In the circumstances, it is unnecessary for us to determine whether
there is a '... "supply" by way of lease of the exclusive
possession of the demised property in accordance with the lease' as her
Honour below concluded in reliance of the ordinary meaning of the word
'supply' in s 9-10(1). However, the indications discussed at [16] above tend
to point away from that construction. 78. The Court's wider comments about
'supply' and 'obligation' in paragraphs 16, 22 and 23 of its decision were
expressed with some caution. With respect, the Commissioner does not consider
the Court has stated a general principle, contrary to our proposition, that a
supply can be brought about by operation of law in the absence of an entity
taking any positive action. The Commissioner distinguishes something brought
about solely by operation of law where there is no supply, from something
done by an entity as a consequence of a legal requirement where there may be
a supply, as was the situation noted by Underwood J in Shaw citing the
example of the liquidator's actions in St Hubert's Island.F35 The
Commissioner also distinguishes an action that results in obligations arising
by operation of law, as the Full Court found in Westley , where there
may be a supply by the entity taking the action. 79. Also, the Court did not discuss
whether Westley made an ongoing supply in relation to honouring the
existing lease, as this question was not central to its conclusion that Westley
assumed the obligation to honour the lease. Our view is that an owner who has
acquired a reversion interest in a lease is making a positive act by
continuing to tolerate the lessee's occupation subject to the terms of the
existing lease and is also making a supply of real property. The owner is
making a supply under paragraph 9-5(a) and if all of the other requirements
of section 9-5 are satisfied, the action of tolerating the occupation in
return for the consideration of the lease payments is a supply for a period
for the purposes of Division 156. Extinguishment of real property
rights 80. Various government authorities are
empowered by legislation to acquire an interest in real property. Two common
mechanisms employed by legislation are: · the vesting of the interest
in the relevant government authority and extinguishing any previous interests
in the real property; and · the particular statute may
allow the government authority to acquire the real property by agreement. Vesting in the government
authority 81. An example of vesting is provided
by section 20 of the Land Acquisition (Just Terms Compensation) Act 1991
(NSW), where the required acquisition notices are gazetted, the relevant land
is: · 'vested in the authority of
the State acquiring the land'; and · 'freed and discharged from
all estates, interests, trust, restrictions, dedications, reservations,
easements, rights, charges, rates and contracts in, over or in connection
with the land'. The entity whose interest in the land
is extinguished is compensated for the loss of that interest. That entity may
agree to the compensation determined by the Valuer-General and execute a form
of release. If the entity disputes the compensation amount, there is
provision for payment of 90% of the initial valuation until the matter is
resolved. 82. The effect of the gazettal notice
is that the legal ownership of the land, described in the notice, is vested
in the authority acquiring the land, and that the land becomes freed from any
other interests. The entity's interest in the land, whether legal or
equitable, is extinguished. In this case the entity does not make a supply
because it takes no action to cause its legal interest to be transferred or
surrendered to the authority. 83. Some statutes provide that land
remaining, where only part of the land (the 'target land') is to be
compulsorily acquired, will also be compulsorily acquired if the owner and
the acquiring authority agree that the remaining land will be of no practical
use or value to the owner. Although the owner requests the remaining land be
also acquired, it is by operation of the statute that the remaining land is
compulsorily acquired with the 'target' land. The actual transfer of the
interest is made by statute rather than by the owner. 84. Mere acceptance by an owner of an
amount of compensation payable on the compulsory acquisition does not provide
a sufficient nexus between the land which passes and the means by which it
passes. The fact that the owner does not dispute the acquisition is not an
activity that effects the supply of the land. Even if the owner agrees to the
terms of the acquisition and the amount of compensation, the land is acquired
by operation of the statute, upon publication of the acquisition notice, not
by an action taken by the landowner. Example 1: compulsory acquisition 85. A government authority is
compulsorily acquiring land and interests relating to that land, including
the native title rights under a particular statute. The effect of compulsory
acquisition is that every registered and unregistered interest in the land is
extinguished, and each person who formerly held such an interest has that
holding converted into a claim for compensation. 86. As required by the statute, the
authority has made a public announcement that it is acquiring the land, and
as a result, a number of groups of claimants have registered their respective
native title over the land. 87. The authority has negotiated
with each of the claimant groups as required by the statute, as to just
compensation for the extinguishment of their rights over the land, and has
entered into a deed with them. The deed sets out, among other things, that:
· the claimants accept the
compulsory acquisition and extinguishment of any and all native title rights
and interests in the land and agree to withdraw a related objection made
under the statute to compulsory acquisition; and · the authority undertakes to
provide compensation to the native title claimants in the form of funding,
land and certain services. 88. Although the claimants have
agreed to accept the compulsory acquisition and the amount of the
compensation, the agreement does not cause claimants' rights to be
extinguished. These rights over the land are extinguished when all the
limitations, reservations and restrictions over the land are revoked by the
operation of the statute. The claimants are not making a supply of
surrendering their rights. 89. It may be argued that the native
title claimants are making a supply of entering into an obligation to
withdraw any objections made under the relevant native title statute.
However, no part of the compensation is consideration for a supply of
withdrawing objections to the compulsory acquisition. The compensation
relates to the loss suffered by the claimants on the extinguishment of their
interest in the land. 90. In contrast, the extinguishment of
an owner's interest by statute needs to be distinguished from the doing of a
thing that is compelled by statute.F36 Acquisition by agreement 91. It may transpire that, before a
compulsory acquisition under a statute is initiated, an owner and an
authority enter into negotiations that result in the owner selling land under
a standard land contract. The land in this case is not vested in the
authority through the compulsory acquisition process. Instead, the interest
in the land transfers as a result of settlement of the contract and execution
of a transfer instrument. As such, the owner makes a supply of land to the
authority. Proposition 6: 'supply' usually,
but not necessarily, requires something to be passed from one entity to
another 92. The fact that 'supply' requires
something to be passed from one entity to another is largely self-evident in
a transaction based tax. However, not all forms of supply have this
characteristic. For instance, paragraph 9-10(2)(e) includes a creation of a
right as a supply. The 'creation' of a right does not involve a passing of
the right from one entity to another. In this case, the action of the
supplier causes the recipient to make an acquisition but without anything
passing between them. 93. Also, a comparison of subsection
9-10(2) with its corresponding provision, subsection 11-10(2), shows that the
thing supplied is not necessarily the thing acquired. For example, a supply
that is 'an entry into an obligation' is mirrored by an acquisition that is
'an acquisition of a right'. The obligation remains with the supplier, while
the 'right' is created in the hands of the recipient, rather than there being
a thing that passes from one entity to another. 94. A 'financial supply' includes the
acquisition of an interest, as defined in the GST regulations. An acquisition
is not a supply in the ordinary sense as it focuses on the receipt of a thing
rather than the passing of a thing from one to another. Nonetheless, because
the acquisition is deemed to be a supply, the entity from which it is made is
deemed to have made an acquisition of the acquisition-supply, even though
nothing passes from one entity to the other. Proposition 7: an entity cannot
make a supply to itself 95. The proposition that an entity
cannot make a supply to itself flows from the proposition 'supply usually,
but not necessarily, requires something to be passed from one entity to
another'. It also seems self evident in a transaction based tax. 96. An exception to this proposition is
provided in Division 54 which allows an entity to register its branches
separately for GST. Paragraph 54-40(2)(c) deems all transfers of anything by
the GST branch to the parent entity (including other GST branches of the
parent), that would have been supplies made by the branch if it were an
entity, to be supplies made by the branch as a separate entity. This has
effect for working out the parent's additional net amount in relation to the
branch. Without this specific provision a 'supply' from the branch to the
parent entity would not be a supply for GST purposes as they are not separate
entities. 97. The GST Act recognises that an
entity can act in more than one capacity. Subsection 184-1(3) states that: A legal person can have a number of different capacities in which
the person does things. In each of those capacities, the person is taken to
be a different entity. 98. For example, a company that is the
trustee of a trading trust acts in a different capacity when it supplies
administrative services to the trust. Because the entity is a different
entity in relation to each capacity in which it acts, the provision of
trustee services by the company to itself as trustee of the trust is a supply
between two entities, the company and the trustee/trust. Proposition 8: a supply cannot be
made by more than one entity
99. This proposition has been stated by
Millet LJ in C & E Commrs v. Wellington Private Hospital Ltd
[1997] BVC 251 at 252: Where supplies are made by different suppliers, they cannot be
fused together to make a single supply... 100. As part of its judgment, the House
of Lords in The Trustees of the Nell Gwynn House Maintenance Fund v.
Customs and Excise Commissioners [1999] 1 All ER 385 ( Nell Gwynn
) endorsed Millett LJ's statement above.F37 In Nell Gwynn the
House of Lords considered whether maintenance fees paid to an entity other
than the lessor or the lessor's agent were consideration for the grant of the
lease. The trustees submitted that the grant of the lease and provision for
the supply of maintenance services all formed part of a single economic
transaction and should be treated as one exempt supply. 101. The House of Lords rejected this
approach. The court held that it was not possible to view the supply of the
services and the supply of the lease as a single supply because the supply of
services was separate from the supply of the lease and they could not be a
single supply because the services and the lease were supplied by different
taxpayers.F38 Proposition 9: creation of
expectations alone does not establish a supply 102. The Commissioner considers that an
agreement that does not bind the parties in some way is not sufficient to
establish a supply by one party to the other. This requirement was emphasised
by the New Zealand Court of Appeal in C of IR v. New Zealand Refining Co.
Ltd (1997) 18 NZTC 13,187 (New Zealand Refining). The case concerned
payments made by the New Zealand Government to the New Zealand Refining
Company, which were only to be made on condition that the refinery remained
operational. 103. The New Zealand Court of Appeal
noted there was an expectation among the parties that the refinery would
continue to operate, but that there was no contractual obligation to that
effect.F39 The Government's only recourse in the event that the
refinery ceased to be operational was to stop making payments. Although the
payments were intended as an inducement to keep the refinery open, they were
not linked to any identifiable supply: In our view the payments related to the structure or framework
within which supplies of services were expected to be made. They were to
compensate NZRC for the removal of the protections given by the Support
Letters and its exposure to the hot winds of competition. It was compensation
directed to the same purpose as the grants which repaid the loans. The
payments were received in course of the taxable activity of NZRC but they
were not in consideration for any supply made by it. Accordingly, they are
not subject to GST.F40 Supply and consideration 104. In Europe for a supply to occur
there is a requirement for a pre-existing framework of a reciprocal legal
relationship between the supplier and the recipient. This is illustrated in
former Article 2(a) of the Sixth Directive, replaced by Article 2(1), under
which taxable transactions within the framework of the VAT system presuppose
the existence of a transaction between the parties in which a price or
consideration is stipulated.F41 That is, the linkage between the
supply and consideration is worked out between the parties in advance. 105. In the European Court of Justice
(ECJ) case Town & County Factors Ltd v. Customs & Excise
Commissioners [2002] BVC 645 the ECJ held there was reciprocal
performance between the organiser of a 'spot-the-ball' competition and the
competitors. The entry fees received by the organiser were consideration for
the services the organiser supplied to the competitors. The existence of this
reciprocal relationship did not depend on the obligations of the supplier of
the services being enforceable. It was agreed between the parties to the
transaction that the obligations created for the organiser were not legally
enforceable but binding in honour only. 106. The relationship between a supply
and consideration in Australia is less strict than in Europe. Paragraph
9-5(a) states that 'you make the supply for consideration'. If read alone,
'making a supply for consideration' arguably suggests the existence of
enforceable obligations, be they written or oral, between the supplier and
recipient. However, this is not an absolute prerequisite to making a supply
for consideration. 107. The definition of consideration in
section 195-1 states: consideration , for a supply or acquisition, means any
consideration within the meaning given by section 9-15, in connection with
the supply or acquisition. Hence, consideration for a supply is
defined as being any consideration in connection with a supply. Consideration
in section 9-15 relevantly means: (1) Consideration
includes: (a) any payment, or any act or
forbearance, in connection with a supply of anything; and (b) any payment, or any act or
forbearance, in response to or for the inducement of a supply of anything. (2) It does not matter whether
the payment, act or forbearance was voluntary ... The Commissioner takes the view that
the words 'in connection with the supply or acquisition' in section 195-1,
and the phrases 'in connection with a supply of anything' and 'it does not
matter whether the payment, act or forbearance was voluntary' in section 9-15
mean that there does not have to be an enforceable relationship for there to
be a sufficient nexus between the supply and a payment. Nor does the
consideration have to be agreed in advance. 108. For GST purposes you may still
make a supply in the absence of enforceable obligations, provided there is
something else, such as goods, services or some other thing, passing from the
supplier to the recipient.F42 For the supply to be a taxable
supply there must also be consideration and a sufficient nexus between the
supply and the consideration.F43 The Ruling considers 'sufficient
nexus' further in paragraph 180. Example 2: voluntary payments for
restaurant supplies 109. A restaurant run by a sole
trader accepts tips from its customers, including tips on bills paid by
credit card. These tips are unsolicited and are in addition to the price
stipulated by the restaurant in the bills presented to the customers. The
sole trader does not pass these tips on to the restaurant's employees. 110. The tips are voluntary payments
made in connection with the restaurant supplies made by the sole trader to
its customers. Although there is no obligation on the customers to make these
payments, the tips form part of the consideration for the restaurant supplies
by the sole trader to its customers. 111. On the other hand, if the sole
trader passes the tips on to the restaurant's employees, the payments are not
for the restaurant supplies by the sole trader. The tips constitute income of
the restaurant employeesF44 and such payments are not subject to
GST as the employees are not carrying on an enterprise for GST purposes.F45
If the bill is paid by credit card and the amount of a tip is marked on the
payment slip the restaurateur would need to demonstrate that the tip is
passed on to the employee. Proposition 10: it is necessary
to analyse the transaction that occurs, not a transaction that might have
occurred 112. There may be a number of different
ways by which an entity could achieve a desired end result. In determining
whether the entity has made a supply, and the true character of any supply it
has made, what is relevant is what the entity actually did, rather than what
it might have done. 113. For example, A could provide B
with money so that B can pay to receive a particular service from another
entity. A has not made a supply as the provision of money in this example is
not a supply (subsection 9-10(4)). If A itself provides the service to B, A
has made a supply of the service. It is not open to A to argue what it could
have done. That is, it is not open to A to argue that if it had provided cash
it would not have made a supply for GST purposes and, therefore, it should
not be considered to be making a supply when it provides those services
directly. Similarly, if A did provide money to B so B can pay to receive a
particular service from another entity, it would not be open to B to argue
that A could have provided the service and B should be considered to have
made an acquisition from A. Part 3: Supply in the context of a
tripartite arrangement Analysing a tripartite arrangement 114. In a two party transaction, a
thing supplied to an entity is typically also provided to that entity. 115. In more complex arrangements
involving more than two entities, which the Commissioner refers to as
tripartite arrangements, analysis may reveal: · a supply made to one entity
but provided to another entity; · two or more supplies made;
or · a supply made and provided
to one entity and consideration paid by a third party. 116. As with two party transactions,
the GST consequences of tripartite arrangements turn on identifying: · one or more supplies; · consideration (a payment,
act or forbearance); · a nexus between the supply
and the consideration; and · to whom the supply is made. 117. The propositions used to
characterise two party transactions hold true for characterising tripartite
arrangements. But, as Lord Millett points out in Customs and Excise
Commissioners v. Plantiflor Ltd [2002] UKHL 33 ( Plantiflor )F46,
the involvement of a third entity in a tripartite arrangement calls for close
analysis. This part of the Ruling uses some further propositions to analyse
the transaction. They are:
Grandma's flowers 118. The scenario of Grandma's
flowers illustrates some of the tripartite propositions. A enters into a contract with B for
B to provide goods to C. A is an individual, B is a florist, the goods are
flowers, and C is A's grandmother:
Proposition 11: the agreement is
the logical starting point when working out the entity making the supply and
the recipient of that supply
119. Examining the agreement or other
reciprocal legal relationships is the starting point in analysing an
arrangement to determine who is making a supply to whom. 120. In Grandma's flowers there
is no contractual relationship between A and C. Also, there is no contractual
relationship between B and C. B simply provides flowers to C on A's behalf. 121. If you take a contractual approach
in analysing the arrangement in Grandma's flowers , then the only
contractual relationship is between A and B. Under this contract B makes a
supply of flowers to A and consideration is paid by A to B. That supply is
provided by B to C:
122. The analysis of Grandma's
flowers raises the following propositions for identifying supplies in
tripartite arrangements: · transactions that are
neither based in an agreement that binds the parties in some way nor involve
a supply of goods, services, or some other thing, do not establish a supply;
and · when A has an agreement with
B for B to provide a supply to C, there is a supply made by B to A
(contractual flow) that B provides to C (actual flow). These two propositions are discussed
next. Proposition 12: transactions that
are neither based in an agreement that binds the parties in some way nor
involve a supply of goods, services, or some other thing, do not establish a
supply 123. The Commissioner explained in Part
2 of this Ruling at paragraphs 102 to 103 how an agreement that does not bind
the parties in some way is not sufficient to establish a supply by one party
to the other unless there is something else, such as goods, services, or some
other thing, passing between the parties. 124. The following example examines a
transaction (in a tripartite arrangement) that is not based in an agreement
that binds the parties and does not involve a supply of goods, services, or
some other thing. Example 3: loyalty payment with no
supply of goods, services, or some other thing 125. M is a manufacturer of goods. M
supplies goods to authorised dealers who on-supply those goods to end users.
M makes a standing offer to end users that if an end user's purchases from an
authorised dealer reach a certain level, M will pay the end user a 'loyalty
payment'. 126. D is a dealer and E is an end
user. The supply chain is that M supplies goods to D and D supplies goods to
E. E receives a loyalty payment from M.
127. There is no supply from E to M
in relation to the loyalty payment. There is a contract between M and E as a
result of E's acceptance of M's standing offer to make the loyalty payment.
However, E is not under any binding obligation to M to purchase goods through
D and does not make a supply to M simply by making acquisitions from D. 128. It is E's entry into the
contract with D for supply of the goods to E that constitutes E's acceptance
of M's standing offer and the contract between M and E is formed at this
time. Although M is obliged to make the loyalty payment to E, at no point can
M compel E to complete the contract of sale with D. 129. In the absence of any entry
into an obligation by E to complete a contract of sale with D, E also does
not provide or furnish anything else to M that may be considered to be a
supply. There is no supply of goods, services or some other thing by E to M.
The loyalty payment made by M to E cannot be consideration for a supply from
E to M because E does not make a supply to M. Further, the payment does not give
rise to an adjustment event for either M or E. F47 Proposition 13: when A has an
agreement with B for B to provide a supply to C, there is a supply made by B
to A (contractual flow) that B provides to C (actual flow) 130. In Grandma's flowers pursuant
to the contract between A and B, B makes the supply to A but provides the
flowers to C. 131. 'Made' in the context of 'a supply
made' takes its meaning from the definition of 'recipient' in section 195-1: recipient , in relation to a supply, means the entity to which the supply
was made. 132. 'Provide' is used to contrast with
'made' - it distinguishes between the contractual flow of the supply to the
recipient (the entity to which the supply is made) and the actual flow of the
supply to another entity (the entity to which the supply is provided). 133. The Commissioner uses 'made' and
'provide' in analysing tripartite arrangements in the sense given to those
words by the subsection 38-190(3) context, similar to the sense in which
those words were used by Neuberger LJ in WHA Ltd & Anor v. Customs
& Excise [2004] EWCA Civ 559 (WHA). At paragraph 38, Neuberger LJ
said 'the services in question are "supplied" to WHA...[T]he fact
that they are also provided to the vehicle owner does not, to my mind, prevent
them from being treated as "supplied" to WHA'. WHA is discussed in
more detail at paragraphs 50 to 54 of GSTR 2006/10 Goods and services tax:
insurance settlements and entitlement to input tax credits. 134. In contrast, 'provided' is used
elsewhere in the GST Act in a number of other senses, for example: · 'provision' as the action by
which advice or information is supplied (paragraph 9-10(2)(c)); · consideration being
'provided' (subsection 11-30(3)); · the day 'provided for'
(subsection 151-20(3)); · fringe benefits 'provided'
(in the headings in Division 71); and · information to be 'provided'
(subsection 31-20(2)). Redrow and related cases 135. The UK House of Lords' case Customs
and Excise Commissioners v. Redrow Group plc [1999] BVC 96 (Redrow) has
been cited by others in support of the view that when A contracts with B for
a supply to be provided to C, B makes two distinct supplies: · B supplies to A a right
to have a supply made to C; and · B makes a supply of the
thing to C. 136. The Commissioner does not accept
that Redrow supports this view.F48 As pointed out in GSTR
2003/8:F49 Rights are created under executory contracts and although the
creation of such rights is supported by valuable consideration, the supply
may not be characterised as a supply that is made in relation to rights if,
for example, those rights contribute to the supply as a whole but cannot be
identified as the dominant part of the supply. 137. The grant of a right or entry into
an obligation may be a term or condition of a larger transaction. Where the
grant of the right or entry into the binding obligation is the substance of
the transaction it will be the subject matter of a supply.F50 138. The Commissioner considers the
proposition to be derived from Redrow is no broader than: the entity
that has an agreement with a supplier for a supply is the recipient of that
supply (even if that supply is provided to a third party). This proposition
is consistent with our proposition here, that when A has an agreement with B
for B to provide a supply to C, there is a supply made by B to A that B
provides to C. The proposition finds support in UK cases before and after Redrow
and is also endorsed in NZ cases. Redrow 139. In Redrow , a builder,
Redrow, constructed new houses for sale. Most prospective Redrow purchasers
could not purchase a Redrow home unless they had a buyer for their existing
home. To expedite sales of its homes Redrow instructed an estate agent to
value the prospective purchaser's existing home and to handle the sale. 140. Redrow monitored progress in the
marketing of the property, maintaining pressure on the agent to achieve a
sale. Redrow entered into an agreement with both the agent and the
prospective purchaser that it would pay the estate agent's fee plus VAT if
the prospective purchaser bought a Redrow home. Redrow was not liable to pay
the agent's fee if the prospective purchaser did not purchase a Redrow home. 141. Redrow advised the agent to enter
into a separate agreement in the normal terms with the prospective purchaser,
to provide cover in the event that Redrow was not liable to pay the fee if
the prospective purchaser bought elsewhere. The instructions to the agent
could not be changed without Redrow's agreement. 142. The agent made a supply of
services on which it was obliged by subsection 2(1) of the UK VAT Act to
charge VAT. The issue was whether Redrow's expenditure was consideration for
services supplied by the agent to Redrow. Redrow was only entitled to deduct
the tax which it paid as input tax if the estate agent supplied services to
Redrow. The UK Commissioners contended that the estate agent was only
supplying services to the prospective purchaser. 143. The House of Lords held that estate
agent services were supplied to Redrow. Lord Hope of Craighead said, at 100: The service is that which is done in return for the
consideration...Questions such as who benefits from the service or who is the
consumer of it are not helpful. The answers are more likely to differ
according to the interest which various people have in the transaction...The
fact that someone else - in this case, the prospective purchaser - also
received a service as part of the same transaction does not deprive the
person who instructed the service and who has had to pay for it of the
benefit of the deduction. 144. Lord Millett said, at 105: Everything which the agents did was done at the taxpayer's request
and in accordance with its instructions and, in the events which happened, at
its expense. The doing of those acts constituted a supply of services to the
taxpayer. 145. Redrow is unusual because
both Redrow and the prospective purchaser contracted for a supply of services
from the agent. Usually when an entity arranges for a supply to be provided
to another entity, it is only the first entity that contracts for the supply.
British Airways 146. Redrow was applied in British
Airways plc [2000] BVC 2207 ( British Airways) . British Airways
had an arrangement where food outlets provided food to passengers of delayed
flights. When there was a flight delay, an announcement was made to
passengers that vouchers of a specified amount were available for passengers'
use at food outlets. Passengers could use their boarding pass when a voucher
was not available. 147. For British Airways to succeed in
claiming a deduction for the VAT included in the charge to it for the
refreshments provided to delayed passengers there must have been a supply of
something by the outlets to British Airways. The issue was did British
Airways obtain 'anything - anything at all?' The VAT tribunal followed Redrow
and found the answer to be, at paragraph 9: Yes - it obtained the right to have its delayed passengers fed at
its expense - and that was clearly for the purpose of its business. That is
enough to enable it to succeed. 148. The tribunal held that there was a
supply of services made to British Airways. Under subsection 5(2) of the UK
VAT Act 'anything which is not a supply of goods but is done for consideration
(including, if so done, the granting, assignment or surrender of any right)
is a "supply of services"'. 149. The Commissioner agrees there is a
supply made to British Airways, but, respectfully, it is considered that the
character of the supply made by the food outlets to British Airways is a
supply of a meal. The meal is provided to the passengers. In this case there
is a contract between two entities, British Airways and the food outlet,
under which a third entity is to be provided with the thing that is the
subject of the supply between the first two entities. That is, British
Airways and the food outlet have contracted for the food outlet to provide a
meal to the passengers. For GST purposes the Commissioner considers British
Airways is analogous to the scenario in Grandma's flowers . 150. The British Airways case above was
not the first time British Airways disputed the VAT treatment of this
arrangement. Before Redrow, British Airways had argued a case in the VAT
tribunal and on appeal to the High Court.F51 Those earlier
decisions focused on whether there was a supply of goods rather than services
to British Airways. The definition of supply of goods under both the Sixth
Directive and the UK VAT Act required a transfer of dispositive power. As
British Airways never had dispositive power over the supply of food, the
tribunal and the court could not hold that a supply of goods had been made to
British Airways. 151. As stated in paragraph 27 of this
Ruling, the definition of supply in section 9-10 in relation to a supply of
goods is not restricted in this way. Section 9-10 places supplies of goods
and services alongside things like rights and obligations. This reduces the
need to resort to creative language in analysing a transaction as a supply of
services. The differences in the structure of our legislation mean that the
characterisation of a supply as being a supply of goods or a supply of
services in the VAT tripartite cases should be treated with caution when
being examined in an Australian context. Other UK cases 152. The arguments accepted in Redrow
have been unsuccessfully argued in two subsequent cases: · Poladon Ltd
[2001] BVC 4046; and · London Borough of Camden
[2001] BVC 4139. In each of these cases the relevant
entity failed in its Redrow type argument because it did not contract
for the supply from the supplier. This proposition, Proposition 13, was at
work in the UK VAT before Redrow . For example, the proposition was
successfully argued in P&O European Ferries (Dover) Ltd [1992] BVC
955 where it was found on the evidence that the company instructed the
relevant solicitors and was the contractual recipient of the solicitors'
services 'notwithstanding that the individual employee also received the
benefit of those services'. New Zealand cases 153. The courts in New Zealand have
also adopted the proposition that the entity that has an agreement with a
supplier for a supply is the recipient of that supply (even if that supply is
provided to a third party). 154. Durie J in C of IR v. Capital
Enterprises Ltd (2001) 20 NZTC 17,511 (at paragraph 50), after stating
that the core provisions of the NZ GST Act 'are directed to contractual
arrangements between the suppliers and the recipients of the supply', said
that GST 'attaches to the supply to the person who at contract can require
its performance'. Certain supplies of health services 155. Under the GST health provisions in
Subdivision 38-B (except for sections 38-45 and 38-47 dealing with particular
supplies of goods and section 38-55 dealing with private health insurance and
ambulance insurance), the supply is only GST-free where an individual
receiving that service or specific health treatment is the recipient of that
supply. This outcome results from the specific wording in some health
provisions, whilst in other provisions it is due to the nature of the
services themselves. This means that a GST-free supply of a health service
cannot be made to a business entity or a non-profit body. 156. In some fiduciary relationships it
may be necessary for one party to give consent to the supply of a health
service for another party. For example, a custodial parent gives consent for
the medical treatment of a child. The Commissioner accepts in these
circumstances that the other party, the child, is the recipient of the
supply. Examples applying the
proposition: when A has an agreement with B for B to provide a supply to C,
there is a supply made by B to A (contractual flow) that B provides to C
(actual flow) Example 4: ambulance services
supplied to hospital 157. A, a supplier of ambulance
services, enters into an agreement with B, a hospital, under which A agrees
to provide ambulance services as and when B requests them and B agrees to pay
for the services. The obligations under the agreement between A and B are
binding. 158. Pursuant to the agreement, A
transfers C, a patient, from hospital B to another hospital. The transfer of
C is in the course of C's treatment and B pays A to provide A's services to
C. 159. The recipient of A's supply of
ambulance services is hospital B. A's supply is made to B and provided to C.
160. One of the requirements under
subsection 38-10(5) for a supply of an ambulance service to be GST-free is
that the service is supplied in the course of treating the recipient of the
supply. As hospital B is the recipient of the supply, not the patient, and
there is no treatment of the hospital, the supply of the ambulance service is
not GST-free. Example 5: occupational therapist 161. A, an occupational therapist,
is engaged by B, a company, to assess the needs of C, its employee. C suffers
from multiple sclerosis and needs to use a wheelchair. A and B enter into an
agreement which requires A to undertake an assessment of C's condition, to
give recommendations in a report to B and for B to pay for the service. 162. A's supply of services is made
to B. Although C may benefit from these services, it is B who contracts for
the supply of these services and is the recipient of the supply.
163. This supply is not GST-free
under subsection 38-10(1). This is because paragraph 38-10(1)(c) requires the
supply to be generally accepted in the relevant profession as being necessary
for the appropriate treatment of the recipient of the supply. B is the
recipient of the supply. The supply is not for the treatment of B. Paragraph
38-10(1)(c) is not satisfied. 164. If C engages the occupational
therapist to supply its services and B merely pays the therapist on behalf of
C, the recipient of the occupational therapist's services is C. This supply
will be GST-free if all of the requirements of subsection 38-10(1) are
satisfied.
Example 6: teaching services 165. A, a supplier of teaching
services, enters into a contract with B, a course provider, to provide
teaching services to B's students. 166. B conducts professional or
trade courses that are GST-free under section 38-85. Students enrol with, and
pay fees directly to, B. When a student completes the course, B is authorised
by the relevant State or Territory authority to conduct a test. If a student
passes the test, B facilitates the issuing of the qualification/licence by
the relevant State or Territory authority. 167. A has no contractual
relationship with the students. 168. A makes a supply of the
teaching services to B and A provides this supply to the students. A's supply
is not a GST-free supply of a professional or trade course.
169. However, B does make a GST-free
supply of a professional or trade course to the students. The students enter
into contractual arrangements with B for the supply of the professional or
trade course. B makes a supply of the course to the students. It does not
matter whether B's employees do the actual teaching or B subcontracts the
teaching to another entity (in this case A). 170. Based upon these contractual
arrangements, the students are the recipients of the supply of the
professional or trade course made by B, and B is the recipient of the supply
of teaching services made by A. Example 7: community care 171. A, a community care provider,
receives Health and Community Care funding to provide home and maintenance
services to people living at home, who are frail and have a moderate or
severe disability. A sets the fees for its services according to the care
recipient's ability to pay. 172. C, a client of A, is the care
recipient. C is assessed by A as being entitled to receive a lawn-mowing
service every fortnight at the subsidised rate of $10. There is a contractual
relationship between A and C for the supply of the lawn-mowing service at the
subsidised rate of $10. 173. A engages B, an independent
contractor, to provide the lawn mowing service to C. A agrees to pay B $44
for its service. 174. C is required to pay A $10 for
the service, but A directs C to pay the amount to B on A's behalf. A then
pays B the balance of $34. 175. There is no contractual relationship
between B and C. 176. B is making a supply of the
lawn-mowing service (S1) for $44 to A but providing that service to C. A is
also making a supply of a lawn mowing service (S2). A's supply is to C at the
subsidised rate of $10. F52
Proposition 14: a third party may
pay for a supply but not be the recipient of the supply Payment for a supply 177. Subsection 9-15(1) provides that
the consideration for a supply includes any payment 'in connection with', 'in
response to' or 'for the inducement of' a supply of anything. Subsection
9-15(2) provides that the payment does not have to come from the recipient of
the supply. Similarly, section 2 of the NZ GST Act states that consideration
in relation to a supply to anyone includes any payment made 'by any other
person'. 178. This point was confirmed in the
New Zealand case Turakina Maori Girls College Board of Trustees & Ors
v. C of IR (1993) 15 NZTC 10,032. That case considered whether attendance
dues paid by parents and guardians were consideration for supplies made by
the proprietors of the school property. In its decision the NZ Court of
Appeal stated (at 10,036) that the NZ GST Act 'does not require that the
supply be to the person who pays the consideration' and went on to say (at
10,036) that 'the identity of the recipient is not significant, as long as
there is a supply and the provision by some person of consideration in
respect of it'. 179. It makes no difference to the GST
liability of the supplier which entity provides the consideration, though
there are clear ramifications for the recipient of the supply in determining
whether they have made a creditable acquisition. Sufficient nexus 180. In other GST rulings the
Commissioner discusses the close coupling between supply and consideration in
the GST Act.F53 In determining whether a payment is consideration
under section 9-15 and whether there is a 'supply for consideration' those
rulings take the view that: · the test is whether there is
a sufficient nexus between the supply and the payment made;F54
this test is objective; · regard needs to be had to
the true character of the transaction; and · an arrangement between
parties will be characterised not merely by the description that the parties
give to the arrangement, but by looking at all of the transactions entered
into and the circumstances in which the transactions are made. Creditable acquisition 181. You make a creditable acquisition
if you satisfy the requirements of section 11-5. Two of the requirements of
section 11-5 are that you are the recipient of a taxable supply (paragraph
11-5(b)) and that you provide or are liable to provide consideration for the
supply (paragraph 11-5(c)). Third party payer 182. The objective test discussed in
paragraph 180 of this Ruling may determine that a payment an entity makes is:
· consideration for a supply
made to the payer and the payer is the recipient of that supply;F55
· not consideration for a
supply;F56 or · consideration for a supply
but the paying entity is not the recipient of that supply. 183. If you provide or are liable to
provide consideration for a supply, but you are not the recipient of the
supply, you are referred to in this Ruling as a 'third party payer'. As a
third party payer you do not make a creditable acquisition in relation to
your payment because the supply is not made to you as required by section
11-5. Making a payment for a supply that is made to another entity is not
sufficient to make you the recipient of that supply. 184. The third party payer proposition
is demonstrated in the decision of London Borough of Camden [2001] BVC
4139 where the UK VAT tribunal considered whether the Borough was entitled to
deduct input tax on legal fees it funded for a prospective adopter. Under the
UK Adoption Act 1976 the Council was obliged to run an adoption
service. If a prospective adopter was not eligible for legal aid, the Council
would normally pay the prospective adopter's legal costs. 185. The Council would provide the
prospective adopter with a list of solicitors; the adopter would instruct the
solicitor and the Council would pay the legal costs:
186. The Council was willing to
consider other solicitors who were on the Law Society's children panel. The
Council was to receive progress reports and give authorisation for
expenditure on counsel and any unusual expenditure. The Council could
terminate the agreement to pay for future work if the solicitors were not
performing to their satisfaction or if a conflict of interest with the
adopters arose. 187. The proposition in Redrow F57
could not apply because only the prospective adopters contracted for the
solicitors' services, not the Council who only agreed to pay for those
services under certain circumstances. The Council's payment was not
consideration for a supply to the Council. The liability to pay for the
services still rested with the prospective adopters. At paragraph 9 of the
judgment the VAT tribunal distinguished Redrow and found: In our view, this case is far away from Redrow. The Appellant did
not contract with the solicitors for the service to be supplied by the
solicitors. The adopters contracted with the solicitors of their choosing,
subject to the solicitors being acceptable to the Appellant, and the adopters
gave them instructions...The Appellant merely contracted with the solicitors
(assuming that they did so, about which there is also no evidence) to pay
their bill on certain terms...The adopters were the sole clients of the
solicitors. The Appellants were merely payers, just as in the case of the
grant in the Ashfield District Council case, although technically the payment
of solicitors may not have been a grant. 188. Ashfield District Council v.
Customs and Excise Commissioners [2002] BVC 212 is another UK case which
considered a payment made by a third party. 189. The Council was a local housing
authority charged with the administration in its area of a scheme for the
renewal of private sector housing. Under the scheme an applicant would apply
to the Council for a grant. The applicant could elect for the Council to pay
the grant directly to the builders doing the work. The applicant could also
choose an agency of the local council (CNHIA) to supervise this work. 190. As the Court phrased it, the
question at issue was 'to whom did the builders supply their services: the
person whose application for the grant has been approved by Ashfield or
Ashfield as the person who paid the builders?' In holding that the applicant
was the recipient of the builders' services, the Court held that it was the
applicant that contracted for the services and thereby came under an
immediate liability to pay for those services. At paragraph 23 of the
decision the High Court stated: It is also necessary to consider who, immediately before payment,
was liable for the builders' account. It is clear from the speeches of Lord
Millett and Lord Hope of Craighead in Redrow that the person making
the relevant payment must be the person who is liable in respect of the
underlying obligation...In this case, on the facts found by the Tribunal,
CNHIA acted throughout as agent for the owner. Accordingly neither CNHIA nor
the Council were liable to the builders. 191. The Court held that the grant did
not give rise to any right the Council could exercise against the builders.
The builders' obligations were due to the applicant under the contract
between them and it was the applicant that was liable to pay the builder.
This led to the conclusion that the Council was paying the builder as agent
of the owner.F58 The Council was not entitled to an input tax
deduction for the VAT included in the payment to a builder. Further, even if
the payment was not made as agent of the owner, it was held that there was no
supply from the builder to the Council for which the payment was
consideration.F59 Examples of the third party payer
proposition 192. These examples are practical
applications of the third party payer proposition. Example 8: requisite health service 193. C, a Government Department,
advises the health profession that it will pay for certain health servicesF60
performed for a class of persons requiring those services. 194. A, a supplier of those health
services, supplies a health service to B, who falls within the required class
of persons. C pays A for this service. There is no binding obligation between
A and C regarding the performance of this service. 195. C is paying for the supply of
health services made by A to B. The supply (for the appropriate treatment of
B) will be GST-free if the requirements of section 38-10 are met. C is not
the recipient of this supply:
196. If C contracted A to provide
the health services to the class of persons that includes B, there would be
different GST consequences. There would be a supply of professional services
by A to C and a provision of health services by A to B:
197. The supply of professional
services to C is not GST-free under section 38-10 as C is the recipient of
the supply and it is not necessary for the appropriate treatment of C as
required under paragraph 38-10(1)(c). As the recipient of the supply and the
payer of the consideration, C will make a creditable acquisition if all the
other requirements of section 11-5 are met. Example 9: hospital services and
preferred provider 198. A is a provider of hospital
services and admits B, a patient, to its hospital for treatment. 199. A is a preferred provider of
hospital services under an agreement with health fund C(1). The purpose of
the agreement is to establish the level of fees payable by the health fund
when a fund member receives treatment from the preferred provider. The
agreement does not require A to perform health services for C's health fund members.
B is one of C's fund members. 200. A and C agree that a 'bed fee'
will cover a range of things including use of a room, meals, certain
medication and certain related health services. 201. To enable A to provide the
hospital services covered by the bed fee, A enters into an agreement with D
(2) which creates a binding obligation for D to perform the related health
services as and when requested by A and for payment of those services by A.
202. C is paying (3) for the supply
of hospital services made by A to B (4).F61 B is the recipient of
this supply, not C:
203. The existence of the agreement
between A and C does not change the fact that the recipient of A's supply of
services is the patient B (4), not the health fund C. 204. However, in relation to the
supply by D (5), the recipient of this supply is A. D's supply is made to A
and provided to B (6).F62 As the recipient of the supply and payer
of the consideration, A will make a creditable acquisition if all the other
requirements of section 11-5 are met. Example 10: legal services and third
party payer arrangement contrasted with a recipient arrangement 205. A Government Department
administers a funding arrangement under which it agrees to pay for legal
services supplied to a successful grantee by a solicitor. The grantee chooses
the solicitor from a list provided by the Department and instructs the
solicitor. 206. The funding arrangement does
not bind the grantee to expend the funds in a particular way and as the
Department makes any payments direct to the solicitor the grantee does not
receive the funds directly. The solicitor issues a written itemised account
to the Department which makes the payment if the services delivered to the
grantee are within the scope of the funding arrangement. F63 207. In this case the solicitor
makes a supply of legal services to the grantee not to the Department as the
contract for the legal services is between the solicitor and the grantee. The
Department is not the recipient of the supply of legal services but is making
a third party payment for that supply. It makes no difference to the GST
treatment of the supply whether the grantee or the Department makes the
payment for the supply, but it can affect the analysis of whether the
Department or the grantee has made a creditable acquisition. 208. As a third party payer, the
Department has not made a creditable acquisition because the solicitor made
the supply to the grantee not to the Department. The Department is not
entitled to an input tax credit. 209. The grantee has not made any
supply to the Department because it does not have a contractual arrangement
in relation to the grant, and nothing has passed from the grantee to the
Department in return for the funds, nor has the grantee created any right in
the Department. There is not a reciprocal legal relationship between the two
parties. The grantee has done nothing more than complete an application for
funding. 210. In another arrangement, the
Department fulfils a legislative function that requires it to ensure the
provision of legal services to an eligible group of individuals. In this
arrangement, the Department chooses a solicitor from its list and sends a
letter of offer to the solicitor. This letter explains the requirement that
the solicitor provide legal services to an eligible individual, the extent of
those services and the rates at which payment will be made if the offer is
accepted. The legal liability for the payment of these services is with the
Department. 211. When the offer is accepted the
Department has entered into a contractual relationship with the solicitor
under which the solicitor is required to perform the legal services. The
Department is the recipient of the supply made by the solicitor. The supply
is provided to the eligible individual. As the recipient of the supply and
the payer of the consideration, the Department will make a creditable
acquisition if all the other requirements of section 11-5 are met. 212. The third party payer situation is
different from the situation of a paying agent. A third party payer provides
or is liable to provide consideration for a supply made to another entity. A
paying agent makes a payment on behalf of the entity to which the supply is
made. Example 11: legal services and third
party disbursements 213. L, a legal firm, is engaged by
C, a client, to provide legal services. As part of the service agreement,
prior to the provision of the legal services, C deposits money into L's trust
account. This money is treated as an advance for later disbursements made by
L on behalf of C and as security for payment for future services. 214. L then advises C to seek the
service of a third party, T. C contracts with this third party directly. 215. L, acting as agent for C, pays
for T's services using funds from the trust account:
216. The recipient of the supply of
the service by T is C, not L. L is merely paying for a supply on behalf of C.
As the recipient of the supply and the payer of the consideration, C will
make a creditable acquisition if all the other requirements of section 11-5
are met. Proposition 15: one set of
activities may constitute the making of two (or more) supplies 217. Examining the levels of
contractual or reciprocal relationships between the entities in a tripartite
arrangement may reveal two or more supplies being made based upon the one set
of activities. 218. Redrow has been referred to
as authority for the proposition that 'one set of acts can constitute two
different supplies'F64 or 'a single course of conduct by one party
may constitute two or more supplies to different persons'.F65 In Redrow
, both Redrow and the prospective purchaser contracted for the estate agent's
services. The agent's activities resulted in the agent making a supply of
services to both RedrowF66 and the prospective purchaser. 219. The New Zealand Court of Appeal in
Suzuki New Zealand Ltd v. C of IR (2001) 20 NZTC 17,096 ( Suzuki
) also highlighted this proposition (at paragraph 23 of the judgment): This is simply an instance of the common enough situation in which
performance obligations under two separate contracts with different
counter-parties overlap, so that performance of an obligation under one
contract also happens to perform an obligation under another. In such case a
supply can simultaneously occur for GST purposes under both contracts. 220. An example of Proposition 15 is an
Australian horse race caller's services. The caller has agreements with a
racing club and a radio station to supply broadcast services of the same race
program to each. The caller supplies the racing club with an 'on-course'
service and the radio station with an 'off-course' service of the same race
calls. The caller's one set of activities results in two supplies being made
to two different entities. 221. Where there are two supplies made
based on one set of acts, it is possible that one of those supplies may be
made to one entity and provided to another. For example, for a claim under an
insurance policy, the insured may be required to pay an insurance excess to a
repairer, who is not acting as agent of the insurer. The one set of acts, the
repairs by the repairer, can, depending on the particular facts, result in a
supply made by the repairer to the insurer and provided to the insured, and a
supply made and provided by the repairer to the insured. This is consistent
with the UK Court of Appeal decision in Brown & Davis Ltd v. Galbraith
F67 where it was held that, although the primary contract was
between the insurance company and the repairer for a supply of repair
services, there was a second contract between the insured and the repairer
requiring the insured to pay for the repairs only to the extent of the excess
under the policy.F68 Proposition 16: the total fact
situation will determine the nature of a transaction, the entity that makes a
supply and the recipient of the supply 222. Where the parties to a transaction
have reduced their understanding of the transaction to writing, that
documentation is the logical starting point in determining the supplies that
have been made. An examination of any relevant documentation and the surrounding
circumstances, which together form the total fact situation, is also
important in determining whether the documentation captures the nature of a
transaction for GST purposes. 223. Australian courts have held that
an arrangement between the parties will be characterised not merely by the
description the parties give to the arrangement, but by looking at the
transactions entered into and the circumstances in which the transactions are
made. This was made clear by McTiernan J in Radaich v. Smith (1959)
101 CLR 209 at 214:F69 ...the parties cannot by the mere words of their contract turn it
into something else. Their relationship is determined by the law and not by
the label they choose to put on it. and by Gray J in Re Porter; Re
Transport Workers Union of Australia (1989) 34 IR 179 at 184: A court will always look at all of the terms of the contract, to
determine its true essence, and will not be bound by the express choice of
the parties as to the label to be attached to it. ...the parties cannot
create something which has every feature of a rooster, but call it a duck and
insist that everybody else recognise it as a duck. However, that is not to say that the
parties' characterisation of the arrangement will always be entirely
irrelevant. As Wilcox, Conti and Stone JJ held in ACT Visiting Medical
Officers Association v. Australian Industrial Relations Commission [2006]
FCAFC 109, at paragraph 32: Each of the VMO contracts contained an express stipulation that the
contract did not create an employer and employee relationship. The Full Bench
[of the Australian Industrial Relations Commission] correctly accepted that
such a stipulation is not conclusive of the position it postulates; the
parties cannot by their agreement change the nature of their relationship.
Where, however, the nature of the relationship is otherwise ambiguous such a
provision may remove the ambiguity. Overseas approach 224. In Customs and Excise
Commissioners v. Reed Personnel Services Ltd [1995] BVC 222 Laws J said
at 229: In many situations, of course, the contract will on the facts
conclude any VAT issue, as where there is a simple agreement for the supply
of goods or services with no third parties involved. In cases of that kind
there is no space between the issue of supply for VAT purposes and the nature
of the private law contractual obligation. But that is a circumstance, not a
rule. There may be cases, generally (perhaps always) where three or more
parties are concerned, in which the contract's definition (however exhaustive)
of the parties' private law obligations nevertheless neither caters for nor
concludes the statutory question, what supplies are made by whom to whom.
...the nature of a VAT supply is to be ascertained from the whole facts of
the case. 225. In New Zealand the GST
consequences of a transaction are determined by the arrangements actually
entered into and not by any economic consequences. The Commissioner agrees
with the comment by Blanchard J in New Zealand Refining : ...in taxation disputes the Court is concerned with the legal
arrangements actually entered into and the rights and duties they create, not
with economic or other consequences of the arrangements...F70 Circumstances where you need to
consider the total fact situation
226. The circumstances in which the
agreement will not represent the total fact situation include where it: · is vague (in which case
further information will be needed); · may be varied by the action
of the parties (the actions of the parties will form part of the total factual
matrix to be taken into account); · may be prepared within, or
in accordance with, a particular statutory framework (the statutory framework
will assist in determining the factual background); · may be outcome focused
rather than looking to the supplies that are being made between the parties
(an objective analysis of what is occurring to achieve those outcomes is
necessary); · may not make reference to
principles, concepts or accepted practices within the industry (they will
need to be interpreted according to normal industry practices); · may form part of a series of
interrelated documents (a transaction should not be considered in isolation);
or · does not represent the
transactions that are taking place between the parties as the arrangement may
have progressed beyond the original agreement or the parties may simply not
be abiding by the documents, or the agreement could be a sham (the
transactions actually taking place will need to be taken into account). 227. In discussing the total fact
situation in relation to tripartite arrangements this Ruling considers three
UK VAT decisions: · the High Court decision in Customs
and Excise Commissioners v. Reed Personnel Services Ltd [1995] BVC 222 ( Reed
) that established this proposition, with which the Commissioner agrees, as a
principle in the UK; · the House of Lords decision
in Eastbourne Town Radio Cars Association v. Commissioners of Customs and
Excise [2001] BVC 271 ( Eastbourne ) which confirmed the principle
at the highest level; and · the more recent Court of
Appeal decision in Commissioners for Her Majesty's Revenue and Customs v.
Debenhams Retail plc [2005] EWCA 892 ( Debenhams ) which followed
the principle. Reed 228. In Reed the issue was
whether a nursing agency, Reed, made supplies of nurses to hospitals or
exempt supplies of nursing services to the hospitals.F71 229. Reed entered into contracts with
the nurses which provided for a degree of control over their activities by
Reed. Although it stated that the nurses were self-employed, Reed was obliged
under relevant income tax legislation to withhold tax from the nurses'
remuneration. The contracts also stated that the nurse 'shall be deemed to
have accepted the normal common law duties of an employee as far as they are
reasonably applicable', but did not specify who the employer was. 230. Reed also entered into a contract
with the relevant health authority (controlling the hospitals). The authority
was to make payments of commission to Reed and to make payments to Reed for
the nurses' salaries, which Reed passed on to the nurses. The authority did
not pay the nurses. The rates of pay to the nurses were calculated by
reference to national agreements and were not negotiable between Reed and the
authority. 231. Laws J, at 229, concluded that the
contractual documentation alone did not determine the VAT question: Where the facts only involve two parties there is necessarily
little or no room for argument over who supplies what to whom. Where there
are three (or more), the position may be very different. It should in my
judgment be recognised that in that situation the parties' contractual
arrangements, even though exhaustive for the purposes of their private law
obligations, may not - as indeed they need not - define and conclude issues
arising under the [VAT legislation]; and where they do not, the resolution of
such issues remains a question of fact for the tribunal. 232. Laws J found that the tribunal's
determination of the total fact situation that Reed supplied nurses, who in
turn supplied their services to the hospitals, could not be regarded as
unreasonable. Reed acting as a recruitment agency had supplied intermediary
services to the hospitals. Eastbourne 233. The House of Lords in Eastbourne
cited Reed with approval in characterising the transactions in that
case. 234. Eastbourne was an unincorporated
non-profit making association that provided a communications network for its
members. The members carried on business individually as private car hire
drivers. 235. Eastbourne contended that under
its new constitution it was no longer making supplies of services to its
members but that the sums paid by its members should be regarded as the
collective funding for the members' own employment of the staff and
facilities. For example, the new constitution referred to various supplies
being made to 'members as joint principals'. The employment agreements stated
the employer to be 'each of the members for the time being of Eastbourne Town
Radio Cars Association'. Payment of members' subscriptions was on the basis
of simply dividing the expenses of the association among the members pro rata
in accordance with the time for which they had been members. 236. Lord Slynn of Hadley, after citing
Reed , looked beyond the contractual arrangements and said, at
paragraph 17: If the terms of the [constitution] and the [employment agreement]
are looked at only as a matter of contract between the various drivers and
the employees it may well be that since the Association is not a legal entity
the employers would be the various drivers from time to time and the rights
and obligations of the drivers would depend only on the contract between
them. In such a case the Association would be acting as agent for the
drivers; it would hold property in trust for the drivers and the drivers
would be individually or jointly liable to third parties for what they did or
what was done on their behalf. 237. Lord Slynn then noted the effect
of the relevant provision in the VAT Act, at paragraph 18: When an Association provides, for subscription or other
consideration, facilities or advantages available to its members, such
provision is 'deemed to be the carrying on of a business'. That does not of
itself mean that the Association is automatically making a taxable supply but
it does mean that the Association is carrying on a business and can be within
the scope of VAT. The intention of the Act is plainly that the activities of
an Association should not be excluded from VAT merely because it was
unincorporated and not a legal person. 238. In the VAT context, as would be
the case in Australia, an unincorporated association was capable of making
supplies to its members. Their Lordships went on to find that Eastbourne was
supplying services to its members. Debenhams 239. The House of Lords' endorsement of
Reed was noted by the Court of Appeal in Debenhams .F72
This case concerned trading terms where, if a customer paid the retailer
Debenhams by credit or debit card, 2.5% of the payment was said to be
consideration for an exempt supply of card handling services by a separate
card issuing company (DCHS). 240. It was held that there was no
separate contract between Debenhams' customers and DCHS for which 2.5% of the
sale price was being paid:F73 Even if the documentation seen by the customer could or would
otherwise be read as indicating that the customer was required to contract with
DCHS, contracts are not made by mere assertion. The natural interpretation of
the course of events and documentation would accordingly be that any card
handling (other than that covered by the agreement between the cardholder and
his card issuer) was and remained the responsibility of the seller accepting
the card in discharge of the price. 241. Taking into account the total fact
situation, the Court of Appeal held there was no supply by DCHS to a
customer. Debenhams made a supply to the customer for 100% of the payment by
credit or debit card. Example 12: funeral service 242. Rex, a respected member of a
charitable institution, passed away. Tom, a representative of the charitable
institution, contacted the surviving spouse and made it known that the
charitable institution wanted to organise and pay for Rex's funeral service.
This was in recognition of Rex's extensive voluntary work for the charitable
institution. 243. Tom contacted the funeral
service company and organised a meeting between himself, the surviving spouse
and the funeral director. With the surviving spouse's consent, Tom made the
arrangements with the funeral director. At the direction of Tom, the
surviving spouse signed the relevant documents for the service. It was the
accepted practice that the surviving spouse was the appropriate person to
sign the relevant documents. Tom made it known to the funeral director that
the charitable institution would be responsible for all the costs of the
service. The funeral director accepted that the surviving spouse was signing
the documents on behalf of the charitable institution and that the surviving
spouse was not responsible for the costs of the service. 244. Although there is a written
contract signed by the surviving spouse as a starting point for the analysis,
it is necessary to look at all the surrounding circumstances to determine who
the recipient of the supply is. 245. The fact the charitable
institution has bound itself to pay for the supply is not sufficient in
itself to make it the recipient of the supply. It is possible that the
charitable institution is binding itself to pay for a supply made to another
entity. 246. In this case the facts and
surrounding circumstances demonstrate that it was the charitable institution
that commissioned the supply and was also the recipient of the supply
because: · the charitable institution
made it known to the supplier that it was commissioning the supply and that
it would be liable to pay for that supply; · the charitable institution
exercised complete control over how that supply was to be delivered (albeit
with the surviving spouse's agreement); and · the surviving spouse signed
the contract under the direction of Tom a representative of the charitable
institution. Part 4: Case studies Case Study 1: Plantiflor 247. The House of Lords' decision in Customs
and Excise Commissioners v. Plantiflor Ltd [2002] UKHL 33 ( Plantiflor
) is a significant UK VAT case on multiparty arrangements. Plantiflor
involves the application of several of the propositions discussed in this
Ruling. Plantiflor is examined to illustrate the analysis of
multiparty transactions. Facts 248. Plantiflor sold plant bulbs by
mail order. Customers could collect the bulbs, in which case there was no
delivery charge. Alternatively, pursuant to the contract between Plantiflor
and its customer, Plantiflor arranged delivery via Parcelforce and a charge
was made for post and packaging. 249. Plantiflor entered into a five
year contract with Parcelforce for the delivery (at a reduced rate) of bulbs
to its customers. Plantiflor's goods delivered through Parcelforce were
treated as 'postal packets' the conveyance of which qualified for exemption
from VAT.F74 Customs and Excise said that VAT was chargeable on
the total of Plantiflor's invoice price (including the postage component) for
the delivered goods to its customers. This meant that Plantiflor could not
deduct the input tax on the amounts it paid to Parcelforce as this was for
exempt supplies, but it was accountable for VAT on the postage included in
the price of the delivered goods to its customers. 250. Plantiflor's argument that it
acted as an agent for the customers in its dealings with Parcelforce found
favour in the Court of Appeal decision.F75 According to this
argument, when Plantiflor commissioned the supply from Parcelforce it did so
for undisclosed principals - their customers. As a consequence, rather than
there being a supply by Parcelforce to Plantiflor, there was a supply by Parcelforce
to the customers (an exempt supply). 251. When Plantiflor was heard
by the VAT tribunal the Commissioners conceded that there were two supplies
by Plantiflor: a sale of goods and a service of arranging delivery of those
goods. The Court of Appeal refused to allow the Commissioners to withdraw
this concession and to argue that there was only one supply by Plantiflor of
delivered goods. The House of Lords decision
considered 252. This argument that Plantiflor
acted as an agent was rejected by the majority in the House of Lords as it
did not fit the total fact situation. This illustrates Proposition 16 that is
discussed at paragraphs 222 to 246 of this Ruling. Lord Millet said, at
paragraph 61: The difficulty with this analysis, however, is that it does not fit
the facts. As Law J correctly held, Parcelforce does not deliver the goods
pursuant to the contract with the customer or his agent. It makes delivery
pursuant to its contract with Plantiflor, which both parties entered into as
principals. This is plain from the terms of the contract, [ the agreement
is the logical starting point, Proposition 11, paragraphs 119 to 122 ]
which was to last for a term of five years, contained an obligation on the
part of Plantiflor to deliver a minimum number of parcels in each year, and
provided for the annual indexation of postal charges. The minimum volume
obligation, for example, which indirectly affects the price per parcel
payable by Plantiflor, does not attach to any individual customer or to all
the customers collectively. The conclusion is inescapable that neither party
entered into the contract as agent for Plantiflor's future customers as
undisclosed principals; and the contrary has not been suggested. 253. Lord Millett went on to identify
three supplies, at paragraph 67: To sum up: there were three distinct supplies in the present case,
and it is necessary to identify the particular supply for which the payment
made by the customer was the consideration: (i) The supply by Parcelforce to
Plantiflor of the service of delivering its customer's goods. This was
supplied pursuant to a contract for delivery made between Parcelforce and
Plantiflor and was for a consideration payable by Plantiflor. It is (or would
if Parcelforce were a private carrier be) a taxable supply. (ii) The supply by Parcelforce to
the customer of the service of delivering his goods to him or his order. This
supply was also made pursuant to the contract for delivery between
Parcelforce and Plantiflor. It was made in circumstances in which the
customer incurred no liability to Parcelforce to pay a consideration and was
not (and would not even if Parcelforce were a private carrier be) a taxable
supply. (iii) The supply by Plantiflor to
the customer of an arrangement service for which Plantiflor charged £1.63 per
parcel. Whatever else was included in this supply, it was not the service of
actual delivery. That was supplied by Parcelforce. What the customer received
for his money was the benefit of the arrangements which Plantiflor had made
with Parcelforce to deliver its customer's goods to his order without
charging him in the normal way. Since Plantiflor made this supply for
consideration, it was a taxable supply. 254. Lord Slynn, at paragraphs 23 and
24, stated the appropriate question was 'whether one act (here arranging
delivery) is "ancillary or incidental to another" (here the supply
of bulbs) or is a "distinct supply"'. His Lordship's preferred
construction of the contractual documents between Plantiflor and the customer
was that there was an agreement for the supply of delivered goods. Lord Slynn
was barred from taking this approach because of the earlier concession by the
Commissioners that there were two supplies by Plantiflor: a sale of goods;
and a service of arranging delivery of those goods. 255. The Commissioner considers the
construction of the transaction between Plantiflor and the customer that
there was an agreement for the supply of delivered goods to be the better
view. If customers did not come to collect the goods, the delivery was
necessary for the customers to enjoy the goods and did not represent an end
in itself. Hence, the delivery was integral to the supply of the goods and
the supply was one of delivered goods. This is consistent with the view in
paragraph 4 of GSTD 2002/3F76 that 'You supply delivered goods
where the delivery is integral, ancillary or incidental to the supply of the
goods.' The Commissioner also considers that the supply by Parcelforce to
Plantiflor of the service of delivering its customer's goods is made to
Plantiflor and provided to Plantiflor's customer as there was no contractual
or reciprocal relationship between Parcelforce and Plantiflor's customer.
Agency, subcontracting or
arranging 256. In Plantiflor the House of Lords
examined three competing characterisations of the relationship in tripartite
arrangements between parties such as Plantiflor and its customers: · agency - A agrees with C
that A, as agent of C, will enter into an agreement with B for B to perform
certain acts for C; · subcontracting - A pays B
(subcontractor) to perform acts for C (A's customer) which fulfils the
agreement between A and C; or · arranging - A agrees to
supply a service to C of arranging for B to make a supply to C. Agency 257. This diagram illustrates an agency
arrangement:
258. As explained in paragraph 252 of
this Ruling, the majority in the House of Lords rejected the argument (which
had found favour in the Court of Appeal) that Plantiflor acted as agent for
undisclosed principals (its customers) in contracting with Parcelforce for
the delivery of the goods. Plantiflor contracted with Parcelforce as a
principal, not as an agent for its future customers. Subcontracting and arranging 259. Further, Lord Millet and Lord
Slynn of Hadley made the distinction between a subcontracting service and an
arranging service. Lord Slynn (at paragraph 33) cited Nell Gwynn as
authority for this proposition and Lord Millett said, at paragraph 57: If Plantiflor had undertaken to deliver the goods itself, using
Parcelforce as its subcontractor to make the actual delivery, the tax
position would be straightforward. There would be two supplies: (i) a supply
by Parcelforce to Plantiflor of the service (as its subcontractor) of
delivering the customer's goods to the addressee and (ii) a supply by
Plantiflor to the customer of the service of delivering his goods to the
addressee (performed through its subcontractor). Consideration would pass
from the customer to Plantiflor and from Plantiflor to Parcelforce. This accords with Proposition 10,
discussed at paragraphs 112 to 113 of this Ruling, that it is necessary to
analyse the transaction that occurs, not the transaction that might have
occurred.F77 260. The Commissioner agrees there is a
distinction between a subcontracting arrangement and an arranging service.
The Commissioner also agrees with the analysis of a subcontracting
arrangement in Plantiflor . In a subcontracting arrangement, a
supplier contracts with a customer for the supply of something. The first
supplier then contracts with a second supplier (the subcontractor) for the
provision of the thing to the customer. This diagram illustrates a
subcontracting arrangement:
261. However, the Commissioner
considers a supply can only be a supply of arranging for a supply to be made
to the customer (or another entity) if that is what the first supplier has
been contracted to supply. If the first supplier arranges for a second
supplier to contract with the customer to supply the required thing, the
first supplier is responsible for arranging for the second supplier to supply
that thing. This was not the case in Plantiflor . This diagram
illustrates an arrangement with the supply of arranging and the supply of the
thing arranged:
262. Further, if the first supplier
arranges for a second supplier to supply a particular thing to a customer,
the customer typically has no legal recourse against the first supplier for
the second supplier's failure to supply the thing. If the second supplier
fails to supply that thing, the customer usually only has legal recourse in
respect of that failure against the second supplier. If the first supplier
promises to arrange for the supply of a thing and that promise is not carried
out, the customer then usually has legal recourse against the first supplier
for breach of its promise to arrange for the supply by the other supplier. Case study 2 - The Bus CompanyF78 Supply for consideration 263. A State Government Transport
Authority wishes to improve transport services to residents in a particular
rural locality. The authority enters into an agreement to pay the Bus Company
a grant of $5 million to enable it to purchase the buses it needs to
establish a bus service in the locality. In return for the grant, the Bus
Company agrees to use the buses to operate commercial bus services in the
locality. Passengers will pay reasonable commercial fares to the Bus Company
for trips they take. 264. The grant from the authority is
consideration for the supply to it from the Bus Company of the entry into the
obligation to operate the agreed bus service. The Transport Authority makes
an acquisition of a corresponding right and will make a creditable
acquisition if the other requirements of section 11-5 are met [ Proposition
6: 'supply' usually, but not necessarily, requires something to be passed
from one entity to another, paragraphs 92 to 94 of this Ruling ]. Payment of money - no supply 265. After the bus service has been
operating for some years the Department for Rural Industry rationalises the
main rural industry in the locality. This leads to a downturn in the
activities of businesses in the locality, including the Bus Company which has
a reduction in passenger numbers. The Department offers compensation to the
Bus Company and other affected businesses in the locality. The Department and
the Bus Company agree that if the company is still operating a business in
the locality it will receive a payment from the Department of $50,000 at the
end of each of the following three financial years.F79 266. The Bus Company does not make a
supply to the Department in return for the payments from the Department [ Proposition
9: creation of expectations alone does not establish a supply, paragraphs 102
to 111of this Ruling ]. The Bus Company does not enter into an obligation
to operate a business in the rural locality [ Proposition 12: transactions
that are neither based in an agreement that binds the parties in some way nor
involve a supply of goods, services, or some other thing, do not establish a
supply, paragraphs 123 to 129 of this Ruling ]. If the Bus Company is operating
a business in the locality at the end of the relevant financial year it
qualifies for the $50,000 payment. None of the annual payments have a
connection with any supplies made by the Bus Company in operating its
business. The Department does not make a creditable acquisition as it is not
the recipient of a supply. Supply made and provided 267. The Department's support has
enabled the Bus Company to ride out the downturn in business and the payments
have now ended. However, the Bus Company has never been able to provide
services for the locality's three schools. Under its initiatives to support
rural education the State Education Department enters into an agreement to
pay the Bus Company $1 million per year to run school buses. In return for
the payments the Bus Company agrees to service the locality's three schools. 268. The Bus Company makes the supply
of the bus service to the Education Department and this supply is provided to
the particular schools [ Proposition 13: when A has an agreement with B
for B to provide a supply to C, there is a supply made by B to A (contractual
flow) that B provides to C (actual flow), paragraphs 130 to 176 of this
Ruling ]. As the recipient of the supply, the Education Department will
make a creditable acquisition if the other requirements of section 11-5 are
met. Third party payment in connection
with a supply - no input tax credit 269. The Bus Company also agrees with
the Department to provide free school trips to the students of the locality's
three schools. Under the agreement each student will be issued with a swipe
card which the student is required to swipe on boarding a school bus. The Bus
Company must keep records of the swipes and submit a monthly claim to the
Department after the end of each month. The formula agreed for payment is
(the child's fare for non-school transport provided by the Bus Company x the
number of school trips swiped in the previous month). 270. The payments from the Department
are consideration for the supplies of transport made to the students. The
Department is not the recipient of the supplies of transport and does not
make creditable acquisitions in connection with the payments [ Proposition
14: a third party may pay for a supply but not be the recipient of the
supply, paragraphs 177 to 216 of this Ruling ]. Reimbursement not consideration
for a supply 271. In the next year the Environmental
Protection Agency introduces a scheme to reimburse costs incurred by bus
operators who convert their buses to be powered by natural gas. Under the
scheme, operators will be required to submit evidence of any conversion
expenses to the agency for payment. The Bus Company decides to have its buses
converted by a specialist contractor and submits copies of tax invoices held
by it to the agency. 272. The consequent reimbursement
payments to the Bus Company from the agency are not made in connection with
the supply to the Bus Company of converting the buses and as such are not
consideration for the supply. The consideration for that supply has been paid
by the Bus Company. The Bus Company acquired, and provided the consideration
for, the supply of converting the buses and will be entitled to an input tax
credit for that acquisition. The Bus Company does not make any undertaking or
other supply to the agency in return for the reimbursements, it merely
accepts the agency's unilateral standing offer for reimbursement. Also, as
the Bus Company has not made any supplies to the agency, the agency has not
made creditable acquisitions in connection with the reimbursement payments [ Proposition
6: supply usually, but not necessarily, requires something to be passed from
one entity to another, paragraphs 92 to 94 of this Ruling; Proposition 12:
transactions that are neither based in an agreement that binds the parties in
some way nor involve a supply of goods, services, or some other thing, do not
establish a supply, paragraphs 123 to 129 of this Ruling ]. Detailed contents list 273. Below is a detailed contents list
for this draft Goods and Services Tax Ruling:
Commissioner of
Taxation
25 October 2006 Footnotes [F1] [F2] [F3] [F4] [F5] [F6] [F7] [F8] [F9] [F10] [F11] [F12] [F13] [F14] [F15] [F16] [F17] [F18] [F19] [F20] [F21] [F22] [F23] [F24] [F25] [F26] [F27] [F28] [F29] [F30] [F31] [F32] [F33] [F34] [F35] [F36] [F37] [F38] [F39] [F40] [F41] [F42] [F43] [F44] [F45] [F46] [F47] [F48] [F49] [F50] [F51] [F52] [F53] [F54] [F55] [F56] [F57] [F58] [F59] [F60] [F61] [F62] [F63] [F64] [F65] [F66] [F67] [F68] [F69] [F70] [F71] [F72] [F73] [F74] [F75] [F76] [F77] [F78] [F79] Previously issued in draft form as GSTR
2005/D8
ISSN: 1443-5160 Related Rulings/Determinations: Subject References: Legislative References: Case References: Ashfield District Council v. Customs
and Excise Commissioners Berry v. FC of T British Airways plc British Airways plc British Airways plc v. Customs &
Excise Commissioners Brown & Davis v. Galbraith C & E Commrs v. Wellington Private
Hospital Ltd Carlton Lodge Club v. Customs and
Excise Commissioners Case M74 Case S65 CIC Insurance Ltd v. Bankstown
Football Club Ltd C of IR v. Capital Enterprises Ltd C of IR v. New Zealand Refining Co.
Ltd Commissioners for Her Majestys
Revenue and Customs v. Debenhams Retail plc Customs and Excise Commissioners v.
Oliver Customs and Excise Commissioners v.
Plantiflor Ltd Customs and Excise Commissioners v.
Redrow Group plc Customs and Excise Commissioners v.
Reed Personnel Services Ltd Databank Systems Ltd v. Commissioner
of Inland Revenue (NZ) Eastbourne Town Radio Cars
Association v. Commissioners of Customs and Excise Facchini v. Bryson Federal Commissioner of Taxation v.
St Hubert's Island Pty Ltd (in liq)
HP Mercantile Pty Ltd v.
Commissioner of Taxation Lange v. Finanzamt Furstenfeldbruck London Borough of Camden Marac Finance v. Virtue Mol v. Inspecteur der Invoerrechten
en Accijnzen P & O European Ferries (Dover)
Ltd Parker Hale Ltd v. Customs and
Excise Commissioners Poladon Ltd Radaich v. Smith Re Porter; Re Transport Workers
Union of Australia Shaw v. Director of Housing and
State of Tasmania (No. 2) St Huberts Island Pty Ltd (in liq) Sterling Guardian Pty Ltd v.
Commissioner of Taxation Stevens v. Kabushiki Kaisha Sony
Computer Entertainment Stingel v. Clark Suzuki New Zealand Ltd v. C of IR Telewest Communications plc v.
Customs and Excise Commissioners
The Queen v. Lavender The Trustees of the Nell Gwynn House
Maintenance Fund v. Customs and Excise Commissioners Tolsma v. Inspecteur der Omzetbelasting
Leeuwarden Town & County Factors Ltd v.
Customs & Excise Commissioners
Turakina Maori Girls College Board
of Trustees & Ors v. C of IR
Vereniging Happy Family
Rustenburgerstraat v. Inspecteur der Omzetbelasting Walter Construction Group Ltd v.
Walker Corporation Ltd Westley Nominees Pty Ltd v. Coles
Supermarkets Australia Pty Ltd WHA Ltd & Anor v. Customs &
Excise Other References |
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